NexPoint Diversified Real Estate Trust (NXDT) Completes Transition to a Diversified REIT

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NexPoint Diversified Real Estate Trust

Jul 05, 2022, 09:00 ET

DALLAS, July 5, 2022 /PRNewswire/ -- NexPoint Diversified Real Estate Trust (NYSE: NXDT) (the "Company") announced that the Securities and Exchange Commission ("SEC") issued an order, effective July 1, 2022, enabling the Company to complete the transition of its business to a diversified real estate investment trust ("REIT").¹ The Company's common and preferred shares will continue to be traded on the New York Stock Exchange ("NYSE") under the ticker symbols NXDT and NXDT-PA, respectively.

"We are grateful for shareholders' support and recognition of the benefits of the REIT structure," said Matthew McGraner, chief investment officer of NexPoint Real Estate Advisors. "We are excited to finalize the transition and continue to grow NXDT alongside NexPoint's real estate platform."

On a net asset value basis including dividends, the Company delivered a total return of 258.65% over the past 10 years.² During that time, the Company operated as a "real estate incubator," investing in assets that represent NexPoint's top real estate themes and strategies. Management believes the REIT structure provides additional opportunities for the Company to create value for shareholders while continuing its established investment approach in real estate assets.

As a publicly traded REIT, management believes that the Company is likely to be added to REIT indices, which may enhance the liquidity of the Company's common shares and improve transparency regarding value.

There are several positions within the Company's portfolio where management sees significant upside potential. Those include Cityplace Tower, an iconic office tower located in Uptown, Dallas. NexPoint is redeveloping the property and has been negotiating lease terms with several high-profile tenants. The project includes plans to develop a five-star InterContinental® Hotel within the building. Another notable asset is the Company's position in VineBrook Homes Trust, Inc., a single-family rental company that owns over 21,000 homes in 23 markets.³ Additionally, the Company has significant positions in two private self-storage companies, including NexPoint Storage Partners, the product of NexPoint's take-private acquisition of former publicly traded self-storage REIT Jernigan Capital, Inc. in November 2020.

The Company benefits from NexPoint's robust real estate platform, which provides access to an extensive network of institutional investors, top investment banks, and competitive brokerage firms, as well as the talent and expertise of NexPoint's real estate investment team, which has significant experience in the REIT space. NexPoint also serves as the external adviser to two other publicly traded REITs: NexPoint Residential Trust, Inc. (NYSE: NXRT) and NexPoint Real Estate Finance, Inc. (NYSE: NREF). Both were largely formed within NXDT before launching as standalone public REITs. Since their launches, NXRT and NREF achieved total returns of 460.00% and 35.31% respectively.⁴

Additional information on NXDT's transition to a diversified REIT can be found in the Company's Form 8-K filed with the SEC on July 1, 2022.

Additional information on the Company can be found on NXDT's website at nxdt.nexpoint.com or in the Company's filings with the SEC available at www.sec.gov.

About NexPoint Diversified Real Estate Trust (NYSE:NXDT)
NexPoint Diversified Real Estate Trust (NYSE: NXDT) is a publicly traded diversified REIT that trades on the NYSE under the ticker symbol NXDT. The Company previously operated as a registered closed-end investment company. On August 28, 2020, shareholders approved a proposal to transition the Company from an investment company to a diversified REIT. As part of this transition, the Company changed its name from NexPoint Strategic Opportunities Fund to NexPoint Diversified Real Estate Trust, effective November 8, 2021. The Company also changed its ticker symbol from "NHF" to "NXDT." On July 1, 2022, the SEC issued a deregistration order declaring that the Company has ceased to be an investment company and that the Company's registration as an investment company under the Investment Company Act of 1940 shall immediately cease to be in effect. The order, effective July 1, 2022, allows the Company to finalize its transition to a diversified REIT and begin trading as a REIT. For more information visit nxdt.nexpoint.com.

About NexPoint Advisors, L.P.
NexPoint Advisors, L.P. is an SEC-registered adviser on the NexPoint alternative investment platform. With its affiliates, it serves as the adviser to a suite of funds and investment vehicles that primarily focus on real estate investments. For more information visit nexpoint.com.

Additional Information for NXDT Shareholders
NexPoint and other entities are investigating Stonehill Capital Management LLC and its Senior Portfolio Manager, John Motulsky, for trading in NXDT related to material non-public information received from parties not affiliated with NexPoint. Any NXDT shareholder who sold shares of NXDT on or around April 9, 2021, and September 17, 2021, may contact NexPoint's legal department at [email protected].

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions, and beliefs. Forward-looking statements can often be identified by words such as "enable," "believe," "opportunities," "view," "plans," "should," "improve," "enhance," "potential," "significant," "notable," "benefit," "allow," "likely," "may," "investigate," and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the Company's ability to complete the transition to a REIT, the REIT structure providing additional opportunities to increase shareholder value, the benefits of being a publicly traded REIT, the addition of NXDT to REIT indices, the improvement in liquidity and price transparency regarding value of the Company's common shares and the performance of positions and completion of projects, including plans to develop an InterContinental® Hotel in Cityplace Tower, within the Company's portfolio. They are not guarantees of future results and forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, (1) risks related to the real estate industry, including (a) changes in general economic and market conditions; (b) changes in the value of real estate properties; (c) risks related to local economic conditions, overbuilding and increased competition; (d) increases in property taxes and operating expenses; (e) changes in zoning laws; (f) casualty and condemnation losses; (g) variations in rental income, neighborhood values or the appeal of property to tenants; (h) the availability of financing, (i) changes in interest rates and leverage and (j) recessions or general economic downturn where properties are located and (2) risks related to non-diversification and other focused strategies, including that a significant amount of the Company's investments could be invested in the instruments of only a few companies or other issuers or that at any particular point in time one investment strategy could be more heavily weighted than the others. Readers should not place undue reliance on any forward-looking statements and are encouraged to review NXDT's filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. The statements made herein speak only as of the date of this press release and except as required by law, NXDT does not undertake any obligation to publicly update or revise any forward-looking statements.

Contacts
Jackie Graham
Director, Investor Relations
[email protected]

Lucy Bannon
Chief Communications Officer
[email protected]

¹ The order declares that the Company has ceased to be an investment company under the Investment Company Act of 1940.
² Cumulative total return including reinvestment of dividends over the last ten years as of June 30, 2022.
³ VineBrook Homes Trust, Inc. is registered with the SEC under Section 12(g) of the Securities Exchange Act of 1934. Data as of March 31, 2022.
⁴ NXRT: Cumulative total return including reinvestment of dividends since inception on April 1, 2015, as of June 30, 2022. NREF: Cumulative total return including reinvestment of dividends since inception on February 6, 2020, as of June 30, 2022.

SOURCE NexPoint Diversified Real Estate Trust