NexPoint Diversified Real Estate Trust : NXDT Investor Update – May 2024

NYSE: NXDT

NexPoint Diversified Real Estate Trust

Q4 and FY 2023 Investor Presentation

ADDRESS	CONTACT
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," "estimate," "should,", "objective," "complete," "bullish," "will," "intend," "project," "establishing," "forecast," "soon," and "seeks" and similar expressions, 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 results of renovations and remodeling at Cityplace Tower, the trajectory of rents at Cityplace Tower, 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, the NSP and SAFstor combination will provide scale to attract better financing, NSP continues to look to grow this vertical, and NSP's projected development yield on cost. 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

1. corporate general and administrative expenses, (5) income tax expenses, (6) conversion expenses (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 attributable to common shareholders as net income (loss), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and realized gains (losses). Our calculation of FFO differs slightly from NAREIT's definition of FFO because we exclude realized gains (losses). We believe the exclusion of realized gains (losses) is appropriate because these realized gains (losses) are not related to our real estate properties.

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 gains (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, life science 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.

NXDT Total Return1

1. BLOOMBERG. TOTAL RETURN, INCLUDING DIVIDENDS, AS OF CLOSE OF TRADING MARCH 28, 2024
2. IMPLIED DIVIDEND YIELD IS CALCULATED USING THE 4Q DIVIDEND OF $0.15 PER COMMON SHARE, ANNUALIZED, DIVIDED BY THE SHARE PRICE AS OF CLOSE OF TRADING ON MARCH 28, 2024
3. OF COMMON SHARES, INCLUDES OWNERSHIP BY FUNDS ADVISED OR MANAGED BY AFFILIATES OF OUR ADVISER AS OF THE CLOSE OF TRADING DECEMBER 31, 2023

$6.60

SHARE PRICE1

9.1%

IMPLIED DIVIDEND

YIELD2

19.07%

INSIDER OWNERSHIP3

3

Portfolio, Real Estate Owned

Dallas

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

1. AS A PERCENTAGE OF REAL ESTATE DEBT AND EQUITY INVESTMENTS AS OF DECEMBER 31, 2023
2. REVENUE CONTRIBUTION BY ASSET CLASS FOR THE YEAR ENDED DECEMBER 31, 2023
3. INDICATES A VALUE LESS THAN 0.01%

* CITYPLACE IS CURRENTLY UNDER DEVELOPMENT, AND THE COMPANY IS CONVERTING PART OF THE PROPERTY INTO A HOTEL

Real Estate Asset Class1

Office &

Hospitality*

14.71%

Single-Family

Rental 37.28%

Multifamily

11.73%

$803M

NET ASSET VALUE

Life Science 7.88%

Hospitality

6.76%

	Self-Storage
Other 6.37%	15.27%

Revenue2

Senior	Other
Loans	7.61%
6.65%

Real

Estate 32.14%

$63.3M

REVENUE

Equity

CLO40.45% 13.15%

4

Net Asset Value Estimate - Fair Value

(in thousands and as of December 31, 2023)

Investment	Asset Type	Real Estate Sector	Location	Ownership %	NXDT Fair Value
VineBrook Homes Operating Partnership, L.P.	LP Interest	Single-Family Rental	Various	11.2%	$	146,516
Cityplace Tower	Real Estate	Office/Hospitality/Multifamily	Dallas, Texas	100.0%	$	107,6901
NexPoint Real Estate Finance Operating Partnership, L.P.	LP Interest	Diversified	Various	15.6%	$	76,688
NexPoint Storage Partners, Inc.	Common stock	Self-Storage	Various	52.9%	$	68,187
NexAnnuity Holdings, Inc.	Preferred Shares	N/A	N/A	100.0%	$	66,268
Non-Real Estate Common Equities	Common stock	N/A	N/A	N/A	$	52,827
NexPoint SFR Operating Partnership, L.P.	LP Interest	Single-Family Rental	Various	30.8%	$	49,383
IQHQ Holdings Class A-1	Common stock	Life Science	Various	1.4%	$	49,109
NexPoint Storage Partners Operating Company, LLC.	LLC Interest	Self-Storage	Various	30.0%	$	37,157
NexPoint Real Estate Finance, Inc.	Common stock	Diversified	Various	12.0%	$	33,075
Senior Loans	Senior Loans	N/A	N/A	N/A	$	31,016
AM Uptown Hotel, LLC	Real Estate	Hospitality	Dallas, Texas	60.0%	$	23,1582
Convertible Notes in the Operating Partnership of NexPoint	Convertible Notes	Hospitality	Various	100.0%	$	21,437
Hospitality Trust
7.50% Convertible Notes of NexPoint SFR Operating Partnership,	Convertible Notes	Self-Storage	Various	100.0%	$	20,814
L.P.
NexPoint Dominion Land, LLC	Real Estate	Land	Plano, Texas	100.0%	$	12,9671
White Rock Center	Real Estate	Real Estate Other	Dallas, Texas	100.0%	$	12,8931
Las Vegas Land Owner, LLC	Real Estate	Multifamily	Las Vegas, Nevada	76.8%	$	12,312
Perilune Aero Equity Holdings One, LLC	LLC Interest	Aircraft	Aerospace	16.4%	$	12,2562
Sandstone Pasadena Apartments, LLC	Real Estate	Multifamily	Pasadena, Texas	50.0%	$	11,4582
LLV Holdco, LLC Revolver	Senior Loan	Land	Henderson, Nevada	100.0%	$	9,837
SFR WLIF III, LLC	LLC Interest	Single-Family Rental	Various	20.0%	$	7,0792
IQHQ Holdings Class A-2	Common stock	Life Science	Various	0.5%	$	6,684
NSP OC Promissory Note	Promissory Note	Self-Storage	Various	100.0%	$	5,000
NexPoint Hospitality Trust	Common stock	Hospitality	Various	46.2%	$	4,886
Rights and Warrants	Rights and Warrants	N/A	N/A	N/A	$	3,993
5916 W Loop 289	Real Estate	Real Estate Other	Lubbock, Texas	100.0%	$	3,8331
NexPoint Residential Trust, Inc.	Common stock	Multifamily	Various	0.3%	$	3,154

1. REPRESENTS THE NET EQUITY OF THE INVESTMENT. NET EQUITY REPRESENTS THE CARRYING VALUE OF THE INVESTMENT. FOR INVESTMENTS IN OPERATING PROPERTIES, ANY DEBT SECURED BY THE UNDERLYING REAL PROPERTY IS SUBTRACTED FROM THE CARRYING VALUE OF THE INSTRUMENT

2)	REPRESENTS THE CARRYING AMOUNT OF THE INVESTMENT FOR ITS SHARE OF EARNINGS AND LOSSES REPORTED BY THE INVESTEE, DISTRIBUTIONS RECEIVED, AND OTHER-THAN-TEMPORARY IMPAIRMENTS	5
3)	THE COMPANY OWNS 100% OF THE PREFERRED STOCK OF NEXANNUITY HOLDINGS, INC. BUT IT DOES NOT OWN ANY OF THE OUTSTANDING COMMON STOCK OF NEXANNUITY HOLDINGS, INC.

Net Asset Value Estimate - Fair Value (continued)

(in thousands and as of December 31, 2023)

Investment	Asset Type	Investment Sector	Location	Ownership %	NXDT Fair Value
LLV Holdco, LLC	LLC Interest	Land	Henderson, Nevada	26.8%	$	2,242
CLOs	CLO	N/A	N/A	N/A	$	1,215
Real Estate Common Equities	Common Stock	Real Estate Other	Various	N/A	$	1,166
SFR OP Promissory Note	Promissory Note	Single-Family Rental	Various	100.0%	$	500
Bonds	Bonds	N/A	N/A	N/A	$	30
Total Investments						$894,884
Other assets and liabilities						$ (9,810)
Preferred shares						$ (83,248)
Net Asset Value						$801,825
Shares outstanding, diluted						38,980
Estimated NAV/Share						$20.57/sh

6

Net Asset Value Estimate - Value of Assets Fair Value1

(in millions and as of December 31, 2023)
Asset Type	Valuation Technique	Inputs	Input/Range Values	Fair Value
	Discounted Cash Flow	Discount Rate	(12.5%) - (2.50%) (7.50%)	$272.6
Single-Family Rental		Capitalization Rate	4.00% - 6.80% (5.39%)
	Transaction Indication of Value	Price per Share	$21.59
	Discounted Cash Flow	Discount Rate	5.73% - 9.68% (7.22%)
	Discounted Cash Flow	Discount Rate	8.50%	110.8
Self-Storage		Capitalization Rate	5.25%
		Market Rent (per sqft)	$11.50 - $41.00 $(26.25)
	Direct Capitalization Method	Capitalization Rates	5.5%	85.9
Multifamily
Transaction Indication of Value	Bid/Ask	Various
	Transaction Indication of Value	Cost Price	N/A
Office & Hospitality*	Direct Capitalization Method	Capitalization Rates	6.8%	107.7
Discounted Cash Flow	Discount Rate	7.8%
	Multiples Analysis	Unadjusted Price/MHz-PoP	$0.10 - $0.90 $(0.478)	75.3
MidWave (fka TerreStar)	Cost of Capital	Discount Rate	13.0% - 15.0% (13.9%)
	Transaction Indication of Value	Enterprise Value $(mm)	$841
	Discounted Cash Flow	Discount Rate	12.3%
Annuities	Transaction Indication of Value	Price per Share	$1,000.00	66.3
Life Science	Transaction Indication of Value	N/A	$25.31 - $28.00 $(26.66)	55.7
	Multiples Analysis	NAV / sh multiple	1.00x - 1.25x (1.125x)
Legacy CLO	NAV Approach	Discount Rate	N/A	1.2
	Direct Capitalization Method	Capitalization Rates	6.5% - 9.5% (7.83%)	49.5
Hospitality	Discounted Cash Flow	Discount Rate	7.5% - 9.755% (8.92%)
	Discounted Cash Flow	Discount Rate	8.25% - 10.25% (9.25%)
	Black-Scholes Model	Volatility	55.00% - 65.00% (60.00%)
	Transaction Indication of Value	Offer Price per Share	$1.10	17.9
Real Estate Other		Bid/Ask	Various
	Direct Capitalization Method	Capitalization Rates	9.3%
	Transaction Indication of Value	Rent PSF	$7- $9
Land	Transaction Indication of Value	Cost Price	N/A	25.0
Aircraft	Discounted Cash Flow	Discount Rate	7.5% - 10.5%	12.3
	Discounted Cash Flow	Discount Rate	28.0% - 33.0% (30.5%)	12.6
Legacy Debt/Equity	NAV Approach	Discount Rate	10.0%
	Bid/Ask	Various
	Multiples Analysis	Multiple of EBITDA	3.00x -4.00x (3.50x)
Other assets and liabilities, net	N/A	N/A	N/A	(9.8)
(Less) Preferred shares	N/A	N/A	N/A	(83.2)
Total				$801.8

1)	PER THE COMPANY'S FAIR VALUE POLICIES AND PROCEDURES, THE FAIR VALUE POSITIONS ARE TYPICALLY ASSESSED ANNUALLY BY INDEPENDENT, THIRD-PARTY VALUATION SPECIALISTS. IF THE FAIR VALUE METHOD OF	7
	ACCOUNTING IS ELECTED FOR THESE INVESTMENTS, THESE THIRD-PARTY FAIR VALUES ARE ALSO SUBJECT TO AN INDEPENDENT AUDIT.

NXDT Net Asset Value (NAV)

NXDT Discount to NAV

$493M

61.4%

Discount

to NAV

$310M

2

Discount to NAV

Market Capitalization

1)	AS OF DECEMBER 31, 2023	8
2)	INCLUDES VINEBROOK DEBT AND EQUITY INVESTMENTS

Debt Look through of Equity Investments

(in thousands and as of December 31, 2023, and excludes non-affiliated publicly traded investments)

Investment	Total Debt per Investment	Ownership %
VineBrook Homes Operating Partnership, L.P.	$2,394,578	11.2%
Cityplace Tower	$142,305	100.0%
NexPoint Storage Partners, Inc.	$835,061	52.9%1
NexPoint SFR Operating Partnership, L.P.	$594,227	30.8%
Terrestar Corporation	Information is confidential	Information is confidential
IQHQ Holdings Class A-1	Information is confidential	1.4%
NexPoint Real Estate Finance, Inc.3	$6,558,209	12.0%1
AM Uptown Hotel, LLC (Marriott Uptown)	Information is confidential	60.0%
NexPoint Hospitality Trust2	$191,296	46.2%
White Rock Center	$-	100.0%
NexPoint Dominion Land, LLC	$13,250	100.0%
Las Vegas Land Owner, LLC	Information is confidential	76.8%
Sandstone Pasadena Apartments, LLC	Information is confidential	50.0%
Perilune Aero Equity Holdings One, LLC	Information is confidential	16.4%
SFR WLIF III, LLC	Information is confidential	20%
5916 W Loop 289	$-	100.0%
NexPoint Residential Trust, Inc.	$1,565,074	0.4%
LLV Holdco, LLC	Information is confidential	26.8%
IQHQ Holdings Class A-2	Information is confidential	0.5%

1. REFLECTS COMMON SHARES ONLY
2. AS OF 9/30/2023

3)	REFLECTS THE LIABILITIES OF THE CMBS B PIECES WHICH ARE PRESENTED SEPARATELY FOR FINANCIAL REPORTING PURPOSES	9

Q4 and FY 2023 INVESTOR PRESENTATION

Appendix