NexPoint Diversified Real Estate Trust : NXDT Investor Update – August 2023

N Y S E : N X D T

NexPoint Diversified

Real Estate Trust

Q 2 2 0 2 3 I n v e s t o r P r e s e n t a t i o n

A D D R E S S	C O N T A C T
300 Crescent Ct	Investor Relations
Suite 700	Kristen Thomas, NexPoint
Dallas, TX 75201	[e-mail]

Disclosures

FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect the current views of management with respect to future events and financial performance. Forward looking statements can be identified by words such as "may," "ability," "target," "believe," "plan," "continue," "grow," "future," "brought," "progress," "budgeted," "estimate," "should,", "objective," "complete," "bullish," "will," "intend," "project," and "seeks" and similar expressions, and variations and negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the Company's business and industry in general, the Company's business strategy and target property types, Cityplace Tower plans, including a hotel and class A multifamily units, the budget of the construction of a hotel and class A multifamily units at Cityplace Tower, the results of renovations and remodeling at Cityplace tower, the trajectory of rents at Cityplace Tower, the internal rate of return and multiple on invested capital associated with renovations and remodeling at Cityplace Tower, estimated completion date, NXDT's net asset value and related assumptions and components, including valuation techniques, inputs, input/range values and fair values based on those techniques, VineBrook Homes Trust, Inc.'s business strategies and investment targets and the yield of our investment in NexPoint Storage Partners, Inc. Forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Company's actual results to differ materially from those indicated in these statements. For a discussion of the factors that could change these forward- looking statements, see our Annual Report on Form 10-K filed with the SEC. The statements made herein speak only as of the date of this presentation and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This presentation contains non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are net operating income ("NOI"), funds from operations attributable to common stockholders ("FFO"), adjusted FFO ("AFFO"), and net debt.

NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties. NOI is calculated by adjusting net income (loss) to add back (1) interest expense (2) advisory and administrative fees, (3) the impact of depreciation and amortization (4) corporate general and administrative expenses, (5) income tax expenses, (6) expenses associated with our conversion to a real estate investment trust, (7) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees (8) non-operating property investment revenue as it is unrelated to the performance of our properties (9) realized and unrealized gains (loses) generated from non-real estate investments and (10) equity in income (losses) of unconsolidated equity method ventures.

FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT"), as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. We compute FFO in accordance with NAREIT's definition.

AFFO makes certain adjustments to FFO. There is no industry standard definition of AFFO, and practice is divergent across the industry. AFFO adjusts FFO to remove items such as the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, equity based compensation expenses and changes in unrealized losses.

Net debt is calculated by subtracting cash and cash equivalents and restricted cash from total debt outstanding.

We believe that the use of NOI, FFO, AFFO, and net debt, combined with the required GAAP presentations, improves the understanding of operating results and debt levels of real estate investment trusts ("REITs") among investors and makes comparisons of operating results and debt levels among such companies more meaningful. While NOI, FFO, AFFO, and net debt are relevant and widely used measures of operating performance, debt levels and asset values of REITs, they do not represent cash flows from operations, net income (loss) or total debt as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity, operating performance or debt levels. NOI, FFO, and AFFO do not purport to be indicative of cash available to fund our future cash requirements. We present net debt because we believe it provides our investors a better understanding of our leverage ratio. Net debt should not be considered an alternative to total debt, as we may not always be able to use our available cash to repay debt. Our computation of NOI, FFO, AFFO, and net debt may not be comparable to NOI, FFO, AFFO, and net debt reported by other REITs.

We define Same Store as properties that are comparable between periods and that are stabilized.

ADDITIONAL INFORMATION

For additional information, see our filings with the SEC. Our filings with the SEC are available on our website, nxdt.nexpoint.com, under the "Financials" tab.

NexPoint Diversified Real Estate Trust

Company Overview

NexPoint Diversified Real Estate Trust ("NXDT") is an externally advised diversified real estate investment trust ("REIT"), with its common shares and 5.50% Series A Cumulative Preferred Shares listed on the New York Stock Exchange under the symbols NXDT and NXDT-PA, respectively. As a diversified REIT, NXDT's primary investment objective is to provide both current income and capital appreciation. NXDT seeks to achieve this objective by investing among various commercial real estate property types and across the capital structure, including but not limited to mortgage debt, mezzanine debt and common and preferred equity. Target underlying property types primarily include but are not limited to industrial, hospitality, net lease, retail, office, self-storage and, to the extent currently owned, multifamily and single-family rentals. NXDT also may, to a limited extent, hold, acquire or transact in certain non-real estate securities.

NXDT is externally advised by NexPoint Real Estate Advisors X, L.P. (the "Adviser"), a subsidiary of NexPoint Advisors, L.P.

$10.57

S H A R E P R I C E 1

NXDT Total Return1

1. BLOOMBERG. TOTAL RETURN, INCLUDING DIVIDENDS, AS OF CLOSE OF TRADING AUGUST 21, 2023
2. IMPLIED DIVIDEND YIELD IS CALCULATED USING THE 2Q DIVIDEND OF $0.15 PER COMMON SHARE, ANNUALIZED, DIVIDED BY THE SHARE PRICE AS OF CLOSE OF TRADING ON AUGUST 21, 2023
3. OF COMMON SHARES, INCLUDES OWNERSHIP BY FUNDS ADVISED OR MANAGED BY AFFILIATES OF OUR ADVISER AS OF THE CLOSE OF TRADING JUNE 30, 2023.

5.6%

I M P L I E D

D I V I D E N D Y I E L D 2

18.66%

I N S I D E R

O W N E R S H I P 3

3

Portfolio, Real Estate Owned

R E A L E S T A T E A S S E T C L A S S 1

Other	Land 3.38%
2.55%

Life

Science

6.58%Single-Family

Hospitality 8.03%

Rental 35.86%

Multifamily	$819M
10.60%	NET ASSET VALUE

Office &

Hospitality*

13.13%

Self-Storage

19.87%

Dallas

R E V E N U E 2

T E X A S

Lubbock

Las VegasT E X A S

N E V A D A

Houston

T E X A S

Denotes locations of indirectly held real estate investments

Denotes locations of directly held real estate investments

Real

Estate

35.35%

Promissory

Note

Senior 4.59% Other

Loans0.37% 6.72%

Bond 0.00%3

$28.7M

REVENUE

Equity

CLO46.62% 6.35%

1)	AS A PERCENTAGE OF REAL ESTATE DEBT AND EQUITY INVESTMENTS AS OF JUNE 30, 2023	2)	REVENUE CONTRIBUTION BY ASSET CLASS FOR THE SIX MONTHS ENDED JUNE 30, 2023
* CITYPLACE IS CURRENTLY UNDER DEVELOPMENT, AND THE COMPANY IS CONVERTING PART OF THE PROPERTY INTO A HOTEL.	3)	INDICATES A VALUE LESS THAN 0.01%

Financial Summary

(in thousands, except for per share and unit data)

Company Profile

Market capitalization

Share price (as of last day of period, common) Share price (as of last day of period, preferred) Weighted avg common shares outstanding, basic Weighted avg common shares outstanding, diluted

For the Three Months	For the Three Months	For the Six Months Ended
Ended March 31, 2023
Ended June 30, 2023	June 30, 2023
$519,145	$439,160	$519,145
$12.52	$10.38	$12.52
$16.00	$15.87	$16.00
37,172	37,172	37,172
37,755	37,172	37,465

Earnings Profile

Total Revenues	$13,880	$14,866	$28,746
Net Income (loss) attributable to common shareholders	$(15,022)	$ (20,676)	$(35,698)
NOI	$ 363	$ 952	$ 1,315
Earnings Metrics Per Common Share (diluted basis)
Earnings (loss)	$(0.40)	$ (0.56)	$(0.96)
FFO	$(0.28)	$ (0.49)	$(0.77)
AFFO	$(0.02)	$0.00	$(0.02)
Dividends declared per common share	$0.15	$0.15	$0.30
Net income (loss) coverage	-2.49x	-3.50x	-2.99x
FFO coverage	-1.85x	-3.28x	-2.56x
AFFO coverage	-0.16x	-0.02x	-0.06x
Debt Summary
Total debt payable	$183,441	$165,904	$183,441
Variable rate debt	$183,441	$165,904	$183,441
Weighted avg rate, floating	8.22%	7.83%	8.01%
Leverage ratio (total debt to market capitalization plus total debt)	26.1%	27.4%	26.1%
Leverage ratio (net debt to enterprise value)	21.1%	21.6%	21.1%	5