nref-20250331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2025


o			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 Incorporation or Organization)			(I.R.S. Employer Identification No.)


300 Crescent Court, Suite 700, Dallas, Texas (Address of Principal Executive Offices)			75201 (Zip Code)

(214) 276-6300

(Telephone Number, Including Area Code)

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

8.50% Series A Cumulative Redeemable Preferred Stock, par value 0.01 per share

NREF

NREF-PRA

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 x No o

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 x No o

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	o	Accelerated Filer	o
Non-Accelerated Filer	x	Smaller reporting company	x
Emerging growth company	x

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. o

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

As of May 8, 2025, the registrant had 17,713,963 shares of its common stock, par value $0.01 per share, outstanding.

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NEXPOINT REAL ESTATE FINANCE, INC.

Form 10-Q

Quarter Ended March 31, 2025

INDEX


		Page
Cautionary Statement Regarding Forward-Looking Statements		ii

	PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024	2
	Consolidated Unaudited Statements of Operations for the Three Months Ended March 31, 2025 and 2024	5
	Consolidated Unaudited Statements of Stockholders' Equity for the Three Months Ended March 31, 2025 and 2024	7
	Consolidated Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024	8
	Notes to Consolidated Unaudited Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	65

	PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	66
Signatures		67

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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:

•Our loans and investments expose us to risks similar to and associated with debt-oriented real estate investments generally;

•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;

•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;

•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;

•Risks associated with the ownership of real estate;

•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;

•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;

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

•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;

•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;

•Our Manager and its affiliates face conflicts of interest, including significant conflicts created by our Manager’s compensation arrangements with us, including compensation which may be required to be paid to our Manager if our management agreement is terminated, which could result in decisions that are not in the best interests of our stockholders;

•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;

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•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;

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

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

•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

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PART I

Item 1. Financial Statements

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NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

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	March 31, 2025		December 31, 2024
	(Unaudited)
ASSETS
Cash and cash equivalents	$	19,224	$	3,877
Restricted cash	4,264		3,176
Real estate investments, net	120,895		121,836
Loans, held-for-investment, net ($24,045 and $28,036 with related parties, respectively) (1)	489,942		497,544
Common stock investments, at fair value ($29,289 and $30,467 with related parties, respectively)	55,975		57,389
Equity method investments ($1,556 and $1,504 with related parties, respectively)	1,556		1,504
Mortgage loans, held-for-investment, net (2)	273,452		263,395
Preferred stock investments, at fair value	73,962		18,949
Accrued interest and dividends	40,316		41,208
Mortgage loans held in variable interest entities, at fair value	4,235,748		4,343,359
CMBS structured pass-through certificates, at fair value	39,852		34,979
Stock warrant investments	42,573		27,400
Accounts receivable and other assets	1,000		1,457
TOTAL ASSETS	$	5,398,759	$	5,416,073

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Secured financing agreements, net ($9,923 and $9,869 with related parties, respectively)	$	252,690	$	235,769
Master repurchase agreements	258,598		243,454
Unsecured notes, net ($6,500 and $6,500 with related parties, respectively)	221,395		221,001
Mortgages payable, net	95,390		95,464
Accounts payable and other accrued liabilities	8,725		9,458
Accrued interest payable	13,036		10,020
Bonds payable held in variable interest entities, at fair value	3,928,411		4,029,214
Total Liabilities	4,778,245		4,844,380

Redeemable Series B Preferred stock, $0.01 par value: 16,000,000 shares authorized; 8,470,908 and 6,695,715 shares issued and outstanding, respectively	188,999		149,045
Redeemable noncontrolling interests in the OP	87,808		86,164

Stockholders' Equity:
Noncontrolling interest in CMBS variable interest entities	3,273		3,255
Noncontrolling interest in subsidiary	95		95
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
Common stock, $0.01 par value: 500,000,000 shares authorized; 17,643,526 and 17,461,129 shares issued and outstanding, respectively	176		174
Additional paid-in capital	387,683		387,892
Retained earnings (accumulated deficit)	(47,536)		(54,948)
Total Stockholders' Equity	343,707		336,484
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,398,759	$	5,416,073

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(1) Includes credit allowance of $3.9 million and $0.8 million, respectively
(2) Includes credit allowance of $1.1 million and $0.6 million, respectively

See Notes to Consolidated Financial Statements

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NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)


	For the Three Months Ended March 31,
		2025		2024
Net interest income
Interest income (1)		$	22,043	$	(1,574)
Interest expense		(10,534)		(11,240)
Total net interest income (loss)		11,509		(12,814)
Other income (loss)
Change in net assets related to consolidated CMBS variable interest entities		7,084		8,416
Change in unrealized gain (loss) on CMBS structured pass-through certificates		1,172		(40)
Change in unrealized gain (loss) on common stock investments		(1,414)		(871)
Change in unrealized gain (loss) on preferred stock investments		15,173		64
Change in unrealized gain (loss) on MSCR Notes		—		(15)
Change in unrealized gain (loss) on mortgage backed securities		—		440
Reversal of (provision for) credit losses		(3,625)		420
Dividend income		1,999		500
Other income (loss)		(70)		74
Loss on extinguishment of debt		(45)		—
Equity in income (losses) of equity method investments		53		(2,000)
Revenues from consolidated real estate owned		2,409		2,211
Total other income (loss)		$	22,736	$	9,199
Operating expenses
General and administrative expenses		2,512		4,187
Loan servicing fees		321		567
Management fees		1,411		835
Expenses from consolidated real estate owned		4,039		5,437
Total operating expenses		$	8,283	$	11,026
Net income (loss)		25,962		(14,641)
Net (income) loss attributable to Series A preferred stockholders		(874)		(874)
Net (income) loss attributable to Series B preferred stockholders		(4,407)		(665)
Net (income) loss attributable to redeemable noncontrolling interests		(4,163)		1,894
Net income (loss) attributable to common stockholders		$	16,518	$	(14,286)

Weighted-average common shares outstanding - basic		17,516		17,264
Weighted-average common shares outstanding - diluted (2)		36,049		24,862

Earnings (loss) per share outstanding - basic		$	0.94	$	(0.83)
Earnings (loss) per share outstanding - diluted		$	0.70	$	(0.83)

Dividends declared per common share		$	0.5000	$	0.5000

(1) 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.

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(2) Diluted earnings per share ("EPS") calculations were higher than basic EPS and thus anti-dilutive for the three months ended March 31, 2024. As such, the Company is presenting diluted EPS as equal to basic EPS for the three months ended March 31, 2024.

See Notes to Consolidated Financial Statements

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NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(dollars in thousands)

(Unaudited)


Three Months Ended March 31, 2025	Series A Preferred 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
	Number of Shares	Par Value		Number of Shares	Par Value
Balances, December 31, 2024	1,645,000	$	16	17,461,129	$	174	$	387,892	$	(54,948)	$	—	$	—	$	3,255	$	95	$	336,484
Vesting of stock-based compensation	—	—		182,397	2		(209)		—		—		—		—		—		(207)
Noncontrolling interest in CMBS variable interest entities	—	—		—	—		—		—		—		—		18		—		18
Net income attributable to Series A preferred stockholders	—	—		—	—		—		874		—		—		—		—		874
Net income attributable to common stockholders	—	—		—	—		—		16,518		—		—		—		—		16,518
Series A preferred stock dividends declared ($0.5313 per share)	—	—		—	—		—		(874)		—		—		—		—		(874)
Common stock dividends declared ($0.5000 per share)	—	—		—	—		—		(9,106)		—		—		—		—		(9,106)
Balances, March 31, 2025	1,645,000	$	16	17,643,526	$	176	$	387,683	$	(47,536)	$	—	$	—	$	3,273	$	95	$	343,707


Three Months Ended March 31, 2024	Series A Preferred 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
	Number of Shares	Par Value		Number of Shares	Par Value
Balances, December 31, 2023	1,645,000	$	16	17,231,913	$	172	$	395,737	$	(35,821)	$	(4,195)	$	(8,567)	$	—	$	95	$	347,437
Vesting of stock-based compensation	—	—		74,344	1		1,428		—		—		—		—		—		1,429
Noncontrolling interest in CMBS variable interest entities	—	—		—	—		—		—		—		—		1,713		—		1,713
Net income attributable to Series A preferred stockholders	—	—		—	—		—		874		—		—		—		—		874
Net loss attributable to common stockholders	—	—		—	—		—		(14,286)		—		—		—		—		(14,286)
Series A preferred stock dividends declared ($0.5313 per share)	—	—		—	—		—		(874)		—		—		—		—		(874)
Common stock dividends declared ($0.5000 per share)	—	—		—	—		—		(9,211)		—		—		—		—		(9,211)
Balances, March 31, 2024	1,645,000	$	16	17,306,257	$	173	$	397,165	$	(59,318)	$	(4,195)	$	(8,567)	$	1,713	$	95	$	327,082

See Notes to Consolidated Financial Statements

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NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	For the Three Months Ended March 31,
	2025		2024
Cash flows from operating activities
Net income (loss)	$	25,962	$	(14,641)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of premiums	2,262		27,874
Accretion of discounts	(2,540)		(3,880)
Depreciation and amortization of real estate investment	1,079		2,318
Amortization of deferred financing costs	12		12
Provision for (reversal of) credit losses	3,625		(420)
Net change in unrealized (gain) loss on investments held at fair value	(15,861)		1,351
Equity in (income) losses of unconsolidated equity method ventures	(53)		2,000
Net realized (gain) loss	(46)		—
Stock-based compensation expense	1,283		1,798
Payment in kind income	(3,242)		(3,448)
Loss on extinguishment of debt	45		—
Changes in operating assets and liabilities:
Accrued interest and dividends receivable	892		(3,238)
Accounts receivable and other assets	674		215
Accrued interest payable	3,016		4,486
Accounts payable, accrued expenses and other liabilities	(1,069)		3,284
Net cash provided by operating activities	16,039		17,711

Cash flows from investing activities
Proceeds from payments received on mortgage loans held in variable interest entities	134,424		157,014
Proceeds from payments received on mortgage loans held for investment	20,665		511,169
Originations of mortgage loans, held-for-investment, net	(18,480)		—
Originations of loans, held-for-investment, net	(4,066)		(60,247)
Purchases of preferred stock	(55,013)		(3,507)
Purchases of equity method investments	—		(2,000)
Purchases of CMBS securitizations	(5,912)		—
Purchases of CMBS securitizations held in variable interest entities, at fair value	18		(26,438)
Purchases of mortgage backed securities, at fair value	—		(44,396)
Sale of mortgage backed securities, at fair value	—		14,069
Additions to real estate investments	(355)		(253)
Net cash provided by investing activities	71,281		545,411


Cash flows from financing activities
Borrowings under secured financing agreements	23,359		—
Principal repayments on borrowings under secured financing agreements	(6,500)		(466,960)
Distributions to bondholders of variable interest entities	(124,695)		(146,100)
Borrowings under master repurchase agreements	21,760		57,425
Principal repayments on borrowings under master repurchase agreements	(6,616)		(19,199)
Proceeds from the issuance of Series B preferred stock through public offering, net of offering costs	39,954		27,491
Principal repayments on mortgages payable	(86)		(61)
Payments for taxes related to net share settlement of stock-based compensation	(1,490)		(369)
Dividends paid to common stockholders	(8,771)		(8,653)
Dividends paid to Series A preferred stockholders	(874)		(874)
Dividends paid to Series B preferred stockholders	(4,407)		(665)
Distributions to redeemable noncontrolling interests in the OP	(2,519)		(2,519)
Net cash used in financing activities	(70,885)		(560,484)

Net increase (decrease) in cash, cash equivalents, and restricted cash	16,435		2,638
Cash, cash equivalents and restricted cash, beginning of period	7,053		16,649
Cash, cash equivalents and restricted cash, end of period	$	23,488	$	19,287

Supplemental Disclosure of Cash Flow Information
Interest paid	7,518		6,755
Supplemental Disclosure of Noncash Investing and Financing Activities
Increase in dividends payable upon vesting of restricted stock units	335		558
Consolidation of mortgage loans and bonds payable held in variable interest entities	—		638,451
Consolidation of noncontrolling interest in CMBS variable interest entities	18		1,713
Deconsolidation of mortgage loans and bonds payable held in variable interest entities	—		908

See Notes to Consolidated Financial Statements

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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 March 31, 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 months ended March 31, 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 three months ended March 31, 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 March 31, 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 March 31, 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

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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, 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. The beginning allowance for credit loss as of January 1, 2025 was $1.4 million. The provision for credit losses of $3.6 million for the three months ended March 31, 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 $5.0 million as of March 31, 2025.


	For the Three Months Ended March 31,
	2025		2024
Balances, December 31,	$	(1,377)	$	(2,100)
(Provision for) reversal of credit losses	(3,625)		420
Balance at March 31,	$	(5,002)	$	(1,680)

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

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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.

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 August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. The amendment also requires entities to use the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive) for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. In addition, the amendment requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. We adopted ASU 2020-06 as of January 1, 2024 using a modified retrospective method. ASU 2020-06 had no material impact upon adoption.

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.

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 March 31, 2025 and December 31, 2024, respectively (dollars in thousands):


						Weighted Average
Loan Type	Outstanding Face Amount		Carrying Value (1)		Loan Count	Fixed Rate (2)		Coupon (3)		Life (years) (4)
March 31, 2025
Mortgage loans, held-for-investment	$	271,417	$	273,452	10	44.27	%	10.16	%	2.15
Mezzanine loans, held-for-investment	133,207		134,827		22	78.31	%	9.40	%	4.11
Preferred equity, held-for-investment	219,500		215,779		17	43.62	%	11.13	%	2.11
Promissory notes, held-for-investment	3,500		3,487		1	100.00	%	15.00	%	0.28
Revolving credit facility, held-for-investment	148,600		135,849		1	100.00	%	13.50	%	2.75
	$	776,224	$	763,394	51	60.85	%	10.96	%	2.58


Loan Type	Outstanding Face Amount		Carrying Value (1)		Loan Count	Weighted Average
						Fixed Rate (2)		Coupon (3)		Life (years) (4)
December 31, 2024
Mortgage loans, held-for-investment	$	260,901	$	263,395	10	46.23	%	9.99	%	2.41
Mezzanine loans, held-for-investment	133,207		134,870		22	78.31	%	9.41	%	4.35
Preferred equity, held-for-investment	224,423		223,653		16	42.43	%	11.92	%	2.27
Promissory notes, held-for-investment	4,000		3,992		2	100.00	%	14.69	%	0.49
Revolving credit facility, held-for-investment	148,600		135,029		1	100.00	%	13.50	%	3.00
	$	771,131	$	760,939	51	61.31	%	11.15	%	2.81

(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 three months ended March 31, 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 Three Months Ended March 31,
	2025		2024
Balances, December 31,	$	760,939	$	1,004,880
Originations	22,546		60,247
Proceeds from principal repayments	(20,665)		(511,169)
PIK distribution reinvested in Preferred Units	3,242		3,448
Amortization of loan premium, net (1)	957		(25,670)
(Provision for) reversal of credit losses	(3,625)		420
Balance at March 31,	$	763,394	$	532,156

(1)Includes net amortization of loan purchase premiums.

As of March 31, 2025 and December 31, 2024, there were $7.8 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):


	March 31, 2025
Risk Rating	Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—
2	—	—		—
3	49	742,408		97.25	%
4	1	12,500		1.64	%
5	1	8,486		1.11	%
	51	$	763,394	100.00	%


Risk Rating	December 31, 2024
	Number of Loans	Carrying Value		% of Loan Portfolio
1	—	$	—	—
2	—	—		—
3	49	739,960		97.24	%
4	2	20,979		2.76	%
5	—	—		—
	51	$	760,939	100.00	%

Our loan portfolio had a weighted-average risk rating of 3.0 as of March 31, 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 March 31, 2025 and December 31, 2024 (dollars in thousands):


March 31, 2025
	Carrying Value by Year of Origination (1)
Risk Rating	Number of Loans	Outstanding Face Amount		2025		2024		2023		2022		2021		Prior		Total Carrying Value
1	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2	—	—		—		—		—		—		—		—		—
3	49	755,124		1,158		296,141		87,060		76,594		38,551		242,904		742,408
4	1	12,600		—		—		—		—		12,500		—		12,500
5	1	8,500		—		—		—		8,486		—		—		8,486
	51	$	776,224	$	1,158	$	296,141	$	87,060	$	85,080	$	51,051	$	242,904	$	763,394

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


December 31, 2024
	Carrying Value by Year of Origination (1)
Risk Rating	Number of Loans	Outstanding Face Amount		2024		2023		2022		2021		2020		Prior		Total Carrying Value
1	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2	—	—		—		—		—		—		—		—		—
3	49	750,031		284,958		94,446		74,658		38,067		19,812		228,019		739,960
4	2	21,100		—		—		8,479		12,500		—		—		20,979
5	—	—		—		—		—		—		—		—		—
	51	$	771,131	$	284,958	$	94,446	$	83,137	$	50,567	$	19,812	$	228,019	$	760,939

(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	March 31, 2025		December 31, 2024
Massachusetts	24.24	%	22.68	%
Texas	16.58	%	16.39	%
Georgia	10.97	%	8.68	%
Maryland	8.53	%	8.61	%
California	7.05	%	8.55	%
Virginia	5.21	%	5.15	%
Florida	4.47	%	5.15	%
Other (21 and 21 states each at <4%)	22.95	%	24.79	%
	100.00	%	100.00	%

*Included in "Other."

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Collateral Property Type	March 31, 2025		December 31, 2024
Life Science	35.07	%	34.57	%
Multifamily	34.26	%	34.98	%
Single Family Rental	26.58	%	26.57	%
Self-Storage	2.95	%	2.73	%
Marina	1.14	%	1.15	%
	100.00	%	100.00	%

4. CMBS Trusts

As of March 31, 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):


Trust's Assets	March 31, 2025		December 31, 2024
Mortgage loans held in variable interest entities, at fair value	$	4,235,748	$	4,343,359
Accrued interest receivable	3,533		3,877

Trust's Liabilities
Bonds payable held in variable interest entities, at fair value	(3,928,411)		(4,029,214)
Accrued interest payable	(2,916)		(3,212)

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


	For the Three Months Ended March 31,
		2025		2024
Net interest earned		$	6,119	$	5,360
Realized gain		46		3,876
Unrealized gain (loss)		919		(820)
Change in net assets related to consolidated CMBS variable interest entities		$	7,084	$	8,416

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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:


Geography	March 31, 2025		December 31, 2024
Texas	17.02	%	16.54	%
Colorado	9.71	%	10.99	%
Washington	9.50	%	9.24	%
California	9.39	%	9.26	%
Florida	7.88	%	7.65	%
Georgia	5.32	%	5.16	%
New York	5.01	%	4.87	%
North Carolina	4.88	%	4.74	%
Arizona	2.34	%	3.15	%
Other (32 and 32 states each at <4%)	28.95	%	28.40	%
	100.00	%	100.00	%

*Included in “Other.”


Collateral Property Type	March 31, 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 25.6% 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 March 31, 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 March 31, 2025, the Company valued this investment based on the Private REIT's market approach price of $19.14 per share.

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

Fair Value

Investment

Investment Date

Property Type

March 31, 2025

December 31, 2024

March 31, 2025

December 31, 2024

Common Stock

NexPoint Storage Partners

11/6/2020

Self-storage

41,963

29,289

30,467

Private REIT

4/14/2022

Ground lease

1,394,213

26,686

26,922

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


	For the Three Months Ended March 31,
		2025		2024
Change in unrealized gain (loss) on NexPoint Storage Partners		$	(1,178)	$	635
Change in unrealized gain (loss) on Private REIT		(236)		(1,506)
Change in unrealized gain (loss) on common stock investments		$	(1,414)	$	(871)

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 12.3% of the total outstanding common equity of Slater Apartments ("SK Apartments"). 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 March 31, 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 March 31, 2025, the Company valued this investment at par, 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 elect the measurement alternative. The Company owns approximately 38.3% of the total outstanding shares of the Series E as of March 31, 2025.

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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 March 31, 2025, the Company valued the investment at par as there is a continuous offering open.

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 March 31, 2025, the Company has accounted for the following investments as unconsolidated VIEs:

Entities

Instrument

Asset Type

Accounting Treatment

Percentage Ownership as of March 31, 2025

Relationship as of March 31, 2025

Unconsolidated Entities:

NexPoint Storage Partners, Inc.

Common Stock

Self-storage

Fair Value

25.6%

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

6.4%

VIE

SK Apartments

Common Equity

Multifamily

Equity Method

12.3%

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 $29.3 million NSP common stock investment. The Company's maximum exposure to loss of value for CAP is the $1.6 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 $26.7 million Private REIT common stock investment.

7. CMBS Structured Pass-Through Certificates

As of March 31, 2025, the Company held thirteen 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.

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The following table presents the CMBS I/O Strips as of March 31, 2025 (in thousands):


Investment	Investment Date	Carrying Value		Property Type	Interest Rate		Current Yield (1)		Maturity Date
CMBS I/O Strips
CMBS I/O Strip	5/18/2020	$	1,337	Multifamily	2.02	%	18.22	%	1/25/2030
CMBS I/O Strip	8/6/2020	13,787		Multifamily	2.98	%	21.59	%	6/25/2030
CMBS I/O Strip	4/28/2021	4,004		Multifamily	1.59	%	21.48	%	1/25/2030
CMBS I/O Strip	5/27/2021	2,878		Multifamily	3.38	%	21.46	%	5/25/2030
CMBS I/O Strip	6/7/2021	312		Multifamily	2.31	%	29.17	%	11/25/2028
CMBS I/O Strip	6/11/2021	1,565		Multifamily	1.13	%	17.96	%	5/25/2029
CMBS I/O Strip	6/21/2021	914		Multifamily	1.20	%	19.60	%	5/25/2030
CMBS I/O Strip	8/10/2021	1,855		Multifamily	1.89	%	21.81	%	4/25/2030
CMBS I/O Strip	8/11/2021	1,081		Multifamily	3.10	%	17.80	%	7/25/2031
CMBS I/O Strip	8/24/2021	194		Multifamily	2.61	%	19.13	%	1/25/2031
CMBS I/O Strip	9/1/2021	2,857		Multifamily	1.92	%	20.59	%	6/25/2030
CMBS I/O Strip	9/11/2021	3,098		Multifamily	2.95	%	17.58	%	9/25/2031
CMBS I/O Strip	1/16/2025	5,970		Multifamily	5.67	%	14.60	%	11/25/2034
Total		$	39,852		2.99	%	19.79	%

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

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


Investment	Investment Date	Carrying Value		Property Type	Interest Rate		Current Yield (1)		Maturity Date
CMBS I/O Strips
CMBS I/O Strip	5/18/2020	$	1,395	Multifamily	2.02	%	16.62	%	1/25/2030
CMBS I/O Strip	8/6/2020	14,188		Multifamily	2.98	%	20.73	%	6/25/2030
CMBS I/O Strip	4/28/2021	4,175		Multifamily	1.59	%	20.52	%	1/25/2030
CMBS I/O Strip	5/27/2021	2,972		Multifamily	3.38	%	20.56	%	5/25/2030
CMBS I/O Strip	6/7/2021	330		Multifamily	2.31	%	27.43	%	11/25/2028
CMBS I/O Strip	6/11/2021	1,581		Multifamily	0.61	%	9.13	%	5/25/2029
CMBS I/O Strip	6/21/2021	1,001		Multifamily	1.15	%	19.71	%	5/25/2030
CMBS I/O Strip	8/10/2021	1,925		Multifamily	1.89	%	20.89	%	4/25/2030
CMBS I/O Strip	8/11/2021	1,104		Multifamily	3.10	%	17.20	%	7/25/2031
CMBS I/O Strip	8/24/2021	199		Multifamily	2.61	%	18.42	%	1/25/2031
CMBS I/O Strip	9/1/2021	2,947		Multifamily	1.92	%	19.72	%	6/25/2030
CMBS I/O Strip	9/11/2021	3,162		Multifamily	2.95	%	17.01	%	9/25/2031
Total		$	34,979		2.49	%	19.50	%

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

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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 March 31,
		2025		2024
Net interest earned		$	(213)	$	664
Change in unrealized gain (loss) on CMBS structured pass-through certificates		1,172		(40)
Change in unrealized gain (loss) on MSCR Notes		—		(15)
Change in unrealized (loss) on mortgage backed securities		—		440
Total		$	959	$	1,049

8. Real Estate Investments, net

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

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 March 31, 2025, the components of the Company's investments in multifamily properties were as follows (in thousands):


Real Estate Investments, Net	Land		Buildings and Improvements		Intangible Lease Assets		Construction in Progress		Furniture, Fixtures and Equipment		Totals
Hudson Montford	$	10,996	$	50,199	$	—	$	15	$	1,040	$	62,250
Alexander at the District	7,806		59,378		—		—		1,288		68,472
Accumulated depreciation and amortization	—		(8,595)		—		—		(1,232)		(9,827)
Total Real Estate Investments, Net	$	18,802	$	100,982	$	—	$	15	$	1,096	$	120,895

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 Improvements		Intangible Lease Assets		Construction in Progress		Furniture, Fixtures and Equipment		Totals
Hudson Montford	$	10,996	$	50,204	$	—	$	—	$	1,018	$	62,218
Alexander at the District	7,806		59,331		—		2		1,229		68,368
Accumulated depreciation and amortization	—		(7,662)		—		—		(1,088)		(8,750)
Total Real Estate Investments, Net	$	18,802	$	101,873	$	—	$	2	$	1,159	$	121,836

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The following table reflects the revenue and expenses for the three months ended March 31, 2025 and 2024 for our multifamily properties (in thousands):


	For the Three Months Ended March 31,
		2025		2024
Revenues
Rental income		$	2,378	$	2,087
Other income		31		124
Total revenues		2,409		2,211
Expenses
Interest expense		1,820		2,088
Real estate taxes and insurance		389		452
Property operating expenses		567		176
Property general and administrative expenses		124		173
Property management fees		70		62
Depreciation and amortization		1,079		2,318
Rate cap (income) expense		(10)		169
Casualty (gain) loss		—		(1)
Total expenses		4,039		5,437
Net income (loss) from consolidated real estate owned		$	(1,630)	$	(3,226)

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9. Debt

The following table summarizes the Company’s financing arrangements in place as of March 31, 2025 (dollars in thousands):


	March 31, 2025
	Facility										Collateral
	Date issued	Outstanding face amount		Carrying value		Final stated maturity		Weighted average interest rate (1)		Weighted average life (years) (2)	Outstanding face amount		Amortized cost basis		Carrying value (3)		Weighted average life (years) (2)
Master Repurchase Agreements
CMBS
Mizuho(4)	4/15/2020	$	258,598	$	258,598	N/A	(5)	6.08	%	0.0	$	737,391	$	351,142	$	343,101	4.6
Asset Specific Financing
Single Family Rental loans
Freddie Mac	7/12/2019	109,675		109,675		7/12/2029		2.70	%	2.5	120,154		122,747		122,747		2.5
Mezzanine loans
Freddie Mac	10/20/2020	59,252		59,252		8/1/2031		0.30	%	5.0	96,817		98,543		98,543		5.0
Multifamily properties
CBRE	12/31/2021	32,480		31,890		6/1/2028	(6)	8.06	%	3.2	N/A		55,907		55,907		3.2
Argentic	10/10/2023	63,500		63,500		11/6/2025	(7)	8.59	%	0.6	N/A		64,987		64,987		0.6
Common stock investment
NexBank, SSB	4/29/2024	10,000		9,923		4/28/2026		8.57	%	1.1	N/A		N/A		26,686		N/A
Promissory note
Raymond James	5/20/2024	75,000		73,840		5/20/2025	(8)	10.82	%	0.1	151,263		150,705		150,705		1.9
Unsecured Financing
Various	10/15/2020	36,500		36,294		10/25/2025		7.50	%	0.6	N/A		N/A		N/A		N/A
Various	4/20/2021	180,000		178,601		5/1/2026		5.75	%	1.1	N/A		N/A		N/A		N/A
NFRO REIT Sub, LLC	10/18/2022	6,500		6,500		10/18/2027		7.50	%	2.6	N/A		N/A		N/A		N/A
Total/weighted average		$	831,505	$	828,073			5.95	%	1.2	$	1,105,625	$	844,031	$	862,676	4.0

(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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(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 May 20, 2025.

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


	December 31, 2024
	Facility										Collateral
	Date issued	Outstanding face amount		Carrying value		Final stated maturity		Weighted average interest rate (1)		Weighted average life (years) (2)	Outstanding face amount		Amortized cost basis		Carrying value (3)		Weighted average life (years) (2)
Master Repurchase Agreements
CMBS
Mizuho(4)	4/15/2020	$	243,454	$	243,454	N/A	(5)	6.49	%	0.0	$	740,022	$	360,427	$	350,379	4.7
Asset Specific Financing
Single Family Rental loans
Freddie Mac	7/12/2019	110,097		110,097		7/12/2029		2.70	%	2.8	120,618		124,071		124,071		2.8
Mezzanine loans
Freddie Mac	10/20/2020	59,252		59,253		8/1/2031		0.30	%	5.3	96,817		98,597		98,597		5.3
Multifamily properties
CBRE	12/31/2021	32,480		31,964		6/1/2028	(6)	8.06	%	3.4	N/A		56,348		56,348		3.4
Argentic	10/10/2023	63,500		63,500		11/6/2025	(7)	8.59	%	0.8	N/A		65,488		65,488		0.8
Common stock investment
NexBank, SSB	4/29/2024	10,000		9,869		4/28/2025		8.78	%	0.3	N/A		N/A		26,922		N/A
Promissory note
Raymond James	5/20/2024	57,520		56,550		5/20/2025	(8)	10.55	%	0.4	140,283		139,324		139,324		2.1
Unsecured Financing
Various	10/15/2020	36,500		36,205		10/25/2025		7.50	%	0.8	N/A		N/A		N/A		N/A
Various	4/20/2021	180,000		178,296		5/1/2026		5.75	%	1.3	N/A		N/A		N/A		N/A
NFRO REIT Sub, LLC	10/18/2022	6,500		6,500		10/18/2027		7.50	%	2.8	N/A		N/A		N/A		N/A
Total/weighted average		$	799,303	$	795,688			5.95	%	1.4	$	1,097,740	$	844,255	$	861,129	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.

(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.

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(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 May 20, 2025.

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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 March 31, 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 March 31, 2025, the outstanding balance on the Credit Facility was $109.7 million.

We, through the Subsidiary OPs, have borrowed approximately $258.6 million under our repurchase agreements and posted $737.4 million par value of our CMBS B-Piece and CMBS I/O Strip investments as collateral as of March 31, 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.

On November 15, 2023, the Company issued an additional $15.0 million aggregate principal amount of its 5.75% Senior Unsecured Notes ("5.75% Notes") at a price equal to 92.0% par value, including accrued interest, for proceeds of approximately $13.6 million after original issue discount and underwriting fees. As of March 31, 2025 the principal outstanding is $180.0 million.

As of March 31, 2025, the outstanding principal balances related to the levered 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

Senior loan

2/11/2020

28,564

Various

Single-family

Fixed

2.14

10/1/2025

Senior loan

2/11/2020

33,016

Various

Single-family

Fixed

2.70

11/1/2028

Senior loan

2/11/2020

9,284

Various

Single-family

Fixed

2.45

3/1/2026

Senior loan

2/11/2020

6,972

Various

Single-family

Fixed

3.51

2/1/2028

Senior loan

2/11/2020

8,630

Various

Single-family

Fixed

3.30

10/1/2028

Senior loan

2/11/2020

7,712

Various

Single-family

Fixed

3.14

1/1/2029

Senior loan

2/11/2020

5,717

Various

Single-family

Fixed

2.99

3/1/2029

Senior loan

2/11/2020

5,085

Various

Single-family

Fixed

3.14

12/1/2028

Senior loan

2/11/2020

4,695

Various

Single-family

Fixed

2.64

10/1/2028

Total

109,675

2.70

Mezzanine Loans

Mezzanine loan

10/20/2020

8,723

Wilmington, DE

Multifamily

Fixed

0.30

6/1/2029

Mezzanine loan

10/20/2020

7,344

White Marsh, MD

Multifamily

Fixed

0.30

4/1/2031

Mezzanine loan

10/20/2020

6,353

Philadelphia, PA

Multifamily

Fixed

0.30

7/1/2031

Mezzanine loan

10/20/2020

5,881

Daytona Beach, FL

Multifamily

Fixed

0.30

7/1/2031

Mezzanine loan

10/20/2020

4,523

Laurel, MD

Multifamily

Fixed

0.30

7/1/2031

Mezzanine loan

10/20/2020

4,179

Temple Hills, MD

Multifamily

Fixed

0.30

1/1/2029

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Mezzanine loan

10/20/2020

3,390

Temple Hills, MD

Multifamily

Fixed

0.30

5/1/2029

Mezzanine loan

10/20/2020

3,348

Lakewood, NJ

Multifamily

Fixed

0.30

5/1/2029

Mezzanine loan

10/20/2020

2,454

North Aurora, IL

Multifamily

Fixed

0.30

11/1/2028

Mezzanine loan

10/20/2020

2,264

Rosedale, MD

Multifamily

Fixed

0.30

10/1/2028

Mezzanine loan

10/20/2020

2,215

Cockeysville, MD

Multifamily

Fixed

0.30

7/1/2031

Mezzanine loan

10/20/2020

2,026

Laurel, MD

Multifamily

Fixed

0.30

7/1/2029

Mezzanine loan

10/20/2020

1,836

Vancouver, WA

Multifamily

Fixed

0.30

8/1/2031

Mezzanine loan

10/20/2020

1,763

Tyler, TX

Multifamily

Fixed

0.30

11/1/2028

Mezzanine loan

10/20/2020

1,307

Las Vegas, NV

Multifamily

Fixed

0.30

10/1/2028

Mezzanine loan

10/20/2020

918

Atlanta, GA

Multifamily

Fixed

0.30

8/1/2031

Mezzanine loan

10/20/2020

728

Des Moines, IA

Multifamily

Fixed

0.30

3/1/2029

Total

59,252

0.30

(1)Outstanding principal balance represents the total repurchase agreement balance outstanding as of March 31, 2025.

For the three months ended March 31, 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 Three Months Ended March 31,
	2025		2024
Balances as of January 1,	$	795,688	$	1,268,212
Principal borrowings	45,119		57,425
Principal repayments	(13,116)		(486,159)
Principal repayments on mortgages payable	(86)		(61)
Loss on extinguishment of debt	45		—
Accretion of discounts	411		366
Amortization of deferred financing costs	12		12
Balances as of March 31,	$	828,073	$	839,795

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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 March 31, 2025 are as follows (in thousands):


Year	Recourse		Non-recourse		Total
2025(1)	$	175,000	$	287,163	$	462,163
2026	190,000		9,284		199,284
2027	6,500		—		6,500
2028	32,480		66,185		98,665
2029	—		35,823		35,823
Thereafter	—		29,070		29,070
	$	403,980	$	427,525	$	831,505

(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 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 March 31, 2025 (in thousands):


			Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	19,224	$	19,224	$	—	$	—	$	19,224
Restricted cash	4,264		4,264		—		—		4,264
Loans, held-for-investment, net	489,942		—		—		500,171		500,171
Preferred stock investments, at fair value	73,962		—		—		73,962		73,962
Common stock investments, at fair value	55,975		—		—		55,975		55,975
Equity method investments	1,556		—		—		1,556		1,556
Mortgage loans, held-for-investment, net	273,452		—		—		271,083		271,083
Accrued interest	40,316		40,316		—		—		40,316
Mortgage loans held in variable interest entities, at fair value	4,235,748		—		4,235,748		—		4,235,748
CMBS structured pass-through certificates, at fair value	39,852		—		39,852		—		39,852
Stock warrant investments	42,573		—		—		42,573		42,573
Accounts receivable and other assets	1,000		889		111		—		1,000
Total Assets	$	5,277,864	$	64,693	$	4,275,711	$	945,320	$	5,285,724

Liabilities
Secured financing agreements, net	$	252,690	$	—	$	—	$	269,984	$	269,984
Master repurchase agreements	258,598		—		—		258,598		258,598
Unsecured notes, net	221,395		—		216,291		—		216,291
Mortgages payable, net	95,390		—		—		92,720		92,720
Accounts payable and other accrued liabilities	8,725		8,725		—		—		8,725
Accrued interest payable	13,036		13,036		—		—		13,036
Bonds payable held in variable interest entities, at fair value	3,928,411		—		3,928,411		—		3,928,411
Total Liabilities	$	4,778,245	$	21,761	$	4,144,702	$	621,303	$	4,787,766

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			Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	3,877	$	3,877	$	—	$	—	$	3,877
Restricted cash	3,176		3,176		—		—		3,176
Loans, held-for-investment, net	497,544		—		—		505,866		505,866
Preferred stock investments, at fair value	18,949		—		—		18,949		18,949
Common stock investments, at fair value	57,389		—		—		57,389		57,389
Equity method investments	1,504		—		—		1,504		1,504
Mortgage loans, held-for-investment, net	263,395		—		—		262,037		262,037
Accrued interest	41,208		41,208		—		—		41,208
Mortgage loans held in variable interest entities, at fair value	4,343,359		—		4,343,359		—		4,343,359
CMBS structured pass-through certificates, at fair value	34,979		—		34,979		—		34,979
Stock warrant investments	27,400		—		—		27,400		27,400
Accounts receivable and other assets	1,457		1,184		273		—		1,457
Total Assets	$	5,294,237	$	49,445	$	4,378,611	$	873,145	$	5,301,201

Liabilities
Secured financing agreements, net	$	235,769	$	—	$	—	$	250,285	$	250,285
Master repurchase agreements	243,454		—		—		243,454		243,454
Unsecured notes, net	221,001		—		213,457		—		213,457
Mortgages payable, net	95,464		—		—		92,157		92,157
Accounts payable and other accrued liabilities	9,458		9,458		—		—		9,458
Accrued interest payable	10,020		10,020		—		—		10,020
Bonds payable held in variable interest entities, at fair value	4,029,214		—		4,029,214		—		4,029,214
Total Liabilities	$	4,844,380	$	19,478	$	4,242,671	$	585,896	$	4,848,045

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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.

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 March 31, 2025 (in thousands):


	Carrying Value		Valuation Technique	Unobservable Inputs	Range		Weighted Average (1)
NexPoint Storage Partners	$	29,289	Discounted cash flow	Terminal cap rate	4.88% - 5.38%		5.13	%
				Discount rate	7.00% - 9.00%		8.00	%
IQHQ Series D	18,949		Cost approach	Price per share	$	1,000.00	100.00	%
IQHQ Series E	55,013		Cost approach	Price per share	$	1,000.00	100.00	%
Private REIT	26,686		Market approach	NAV per share multiple	0.95 - 1.15x		1.05	%

(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 three months ended March 31, 2025:


	Balances as of December 31, 2024		Additions		Change in Unrealized Gains/(Losses)		Balances as of March 31, 2025
NexPoint Storage Partners	$	30,467	$	—	$	(1,178)	$	29,289
IQHQ Series D Preferred Stock	18,949		—		—		18,949
Private REIT	26,922		—		(236)		26,686
IQHQ Series E Preferred Stock	—		39,840		15,173		55,013

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 March 31, 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 three months March 31, 2025, the Company issued 182,397 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 March 31, 2025, the Company had 17,643,526 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

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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. As of March 31, 2025, the Company has issued 8,485,120 shares of Series B Preferred Stock for gross proceeds of $207.3 million before deducting selling commissions and dealer manager fees of approximately $16.5 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 16,000,000 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 three months March 31, 2025, Series B Preferred shareholders redeemed 12,466 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 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. 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 March 31, 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), the Company’s non-employee directors, and potentially certain non-employees who perform employee-type functions, incentives and rewards for performance.

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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, and 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. 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 March 31, 2025:


	2025
	Number of Units		Weighted Average Grant Date Fair Value
Outstanding December 31, 2024	920,076		$	15.81
Granted	—		14.66
Vested	(249,902)	(1)	17.11
Forfeited	—		14.66
Outstanding March 31, 2025	670,174		$	15.33

(1)Certain key employees of the Manager elected to net the taxes owed upon vesting against the shares issued resulting in 182,397 shares being issued as shown on the consolidated statements of stockholders' equity.

The vesting schedule for the restricted stock units as of March 31, 2025 is as follows:


	Shares Vesting
	February	March	April	Total
2025	—	—	102,201	102,201
2026	54,893	110,250	91,166	256,309
2027	—	110,248	91,168	201,416
2028	—	110,248	—	110,248
Total	54,893	330,746	284,535	670,174

As of March 31, 2025, total unrecognized compensation expense on restricted stock unit awards was approximately $8.5 million, and the expense is expected to be recognized over a weighted average vesting period of 1.1 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.

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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 March 31, 2025:


Gross Proceeds	$	12,575,493
Shares of Common Stock Issued	531,728
Gross Average Sale Price per Share of Common Stock	$	23.65

Sales Commissions	$	188,655
Offering Costs	888,249
Net Proceeds	11,498,589
Average Price Per Share, net	$	21.62

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 March 31, 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 second 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):


	For the Three Months Ended March 31,
		2025		2024
Net income (loss) attributable to common stockholders		$	16,518	$	(14,286)

Earnings for basic computations
Net income (loss) attributable to redeemable noncontrolling interests		4,163		(1,894)
Net income attributable to Series B preferred stockholders		4,407		665
Net income for diluted computations		$	25,088	$	(15,515)

Weighted-average common shares outstanding
Average number of common shares outstanding - basic		17,516		17,264
Average number of common shares from assumed vesting of unvested restricted stock units		843		740
Average number of common shares from assumed conversion of OP Units		5,038		5,038
Average number of common shares from assumed conversion of Series B Preferred Stock		12,652		1,820
Average number of common shares outstanding - diluted		36,049		24,862
Earnings per weighted average common share:
Basic		$	0.94	$	(0.83)
Diluted (1)		$	0.70	$	(0.83)

(1) Diluted EPS calculations were higher than basic EPS and thus anti-dilutive for the three months ended March 31, 2024. As such, the Company is presenting diluted EPS as equal to basic EPS for the three months ended March 31, 2024.

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 three months ended March 31, 2025 and 2024 (in thousands):


	For the Three Months Ended March 31,
	2025		2024
Redeemable noncontrolling interests in the OP, January 1,	$	86,164	$	89,471
Net income attributable to redeemable noncontrolling interests in the OP	4,163		(1,894)
Distributions to redeemable noncontrolling interests in the OP	(2,519)		(2,519)
Redeemable noncontrolling interests in the OP, March 31,	$	87,808	$	85,058

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

Period End

Common Shares
Outstanding

OP Units Held by
NCI

Combined
Outstanding

March 31, 2025

17,643,526

5,038,382

22,681,908

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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 three months ended March 31, 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 March 31, 2025. Buffalo Pointe owns a stabilized multifamily property located in Houston, Texas with 92.0% occupancy as of March 31, 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

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11, 2021, our stockholders approved the issuance of such shares upon the exercise of the BP Contributors' redemption rights.

RSU Issuance

On May 8, 2020, in accordance with the LTIP, the Company granted 14,739 restricted stock units to its directors, on June 24, 2020, the Company granted 274,274 restricted stock units to its officers and other employees of the Manager, on November 2, 2020, the Company granted 1,838 restricted stock units to the sole member of the general partner of one of the Company’s subsidiaries, on February 22, 2021, the Company granted 233,385 restricted stock units to its directors, officers employees and certain key employees of the Manager and its affiliates, 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, and 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.

OP Unit Redemptions

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 three months ended March 31, 2025 and March 31, 2024, operating expenses did not exceed the Expense Cap.

For the three months ended March 31, 2025 and March 31, 2024, the Company incurred management fees of $1.4 million and $0.8 million, respectively.

NSP Guaranty

On December 8, 2022 and in connection with a restructuring of NSP, the Company, through 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 March 31, 2025. As of March 31, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $12.5 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $10.7 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

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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

On February 1, 2022, the Company, through a subsidiary (the “Trust”), purchased the Elysian at Hughes Center, a 368-unit multifamily property in Las Vegas, Nevada, for a total of $184.1 million. The Trust is managed by an affiliate of the Manager (the “Asset Manager”). Effective January 1, 2023, the Company restructured this investment such that it does not meet the requirements for consolidation under ASC 810 – Consolidation and has been deconsolidated herein as of January 1, 2023 and presented as a preferred equity investment. As of December 31, 2022, the Company owned a preferred equity investment and indirect common equity interests in Elysian at Hughes Center, which resulted in the consolidation at year end. However, the common equity interests have been transferred to the Asset Manager in exchange for $54,000 and a guarantee of payments due to the Company in respect of its preferred equity investment. The Company’s preferred investments were initially made from December 28, 2021 through July 26, 2022 and totaled $65.3 million. Following the transfer of the common equity interests, the Company no longer is the primary beneficiary of the Trust and as such does not consolidate it. The Company recognized a gain on deconsolidation of $1.5 million related to the residual effect of removing the consolidated assets and liabilities from the Consolidated Balance Sheets. The fair value of the preferred equity investment still approximates its par value so no portion of the gain on deconsolidation is related to a remeasurement of the fair value of the preferred equity investment. Management determined the fair value of the preferred equity investment using a market approach and performing a benchmarking analysis to comparable transactions. As of March 31, 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 16,000,000 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 March 31, 2025, the Company has issued 8,485,120 shares of Series B Preferred Stock for gross proceeds of $207.3 million and paid the Dealer Manager $11.4 million Selling Commissions and $5.1 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 matures 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 matures on July 10, 2025. The Company funded $0.5 million, $2.0 million and $1.0 million on October 31, 2024, November 7, 2024 and November 30, 2024, respectively. The Company's maximum commitment under the loan is $5.0 million, of which $1.5 million was unfunded as of March 31, 2025.

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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 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 matures 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 March 31, 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.

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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 $6.5 million was unfunded as of March 31, 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 March 31, 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:

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

•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 March 31, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $1.3 million was unfunded as of March 31, 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 March 31, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $1.3 million was unfunded as of March 31, 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 matures on July 10, 2025. The Company funded $0.5 million, $2.0 million and $1.0 million on October 31, 2024, November 7, 2024 and November 30, 2024, respectively. The Company's maximum commitment under the loan is $5.0 million, of which $1.5 million was unfunded as of March 31, 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. 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 is secured by a first mortgage with a first lien position and other security interests.

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

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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 Loan is $203.0 million, of which $44.2 million was unfunded as of March 31, 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 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. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, payable in kind. 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 December 31, 2027, the maturity date of the IQHQ Revolving Loan. The Company holds 49.533% of the revolving commitment under the IQHQ Revolving Loan.

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.

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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 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 Warrant is accounted for as investments in equity securities under ASC 321, Investments – Equity Securities, and the Company elected to use the measurement alternative to measure the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.

As of March 31, 2025, the Company has funded $55.0 million of the IQHQ Subscription Agreement, with an unfunded commitment balance of $105.0 million.

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


Investment Type	March 31, 2025		December 31, 2024
	Unfunded Commitments		Unfunded Commitments
Loans	$	45,737	$	64,217
Preferred Equity	6,474		7,874
Common Equity	2,536		2,536
Preferred Stock	104,987		150,000
	$	159,735	$	224,627

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 March 31, 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.

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17. Subsequent Events

Dividends Declared

The Board declared the second regular quarterly dividend of 2025 to common stockholders of $0.50 per share on April 28, 2025, to be paid on June 30, 2025, to stockholders of record as of June 13, 2025.

Series B Preferred

As of May 9, 2025, the Company has issued an additional 1,178,892 shares of Series B Preferred Stock for net proceeds of $26.5 million.

Series B Preferred Redemptions

On April 10 and April 29, 2025, the Company redeemed a total of 6,190 shares of the Series B Preferred Stock for $0.1 million, which is the share price of $25.00 per share subject to the applicable redemption fee plus any accrued but unpaid dividends.

CMBS I/O Strip Purchase

On April 15, 2025, the Company purchased a CMBS I/O strip for $5.7 million.

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 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 March 31, 2025 approximately $21.3 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 $13.9 billion of loans and debt or credit related investments as of March 31, 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.

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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 United States government has recently announced a comprehensive set of tariffs. The United States government has paused the implementation of certain of these tariffs, and the timing and scope of such tariffs is currently uncertain. Such tariffs could impact our results of operations by increasing the costs of various inputs, including construction materials. The impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemptions for certain goods, among other uncertainties.

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. Per the court’s order, the Bankruptcy Trust Lawsuit is stayed until any party provides 30 days’ notice of the intent to resume the adversary proceeding, with all pending deadlines extended for a period of time commensurate with the length of the stay. As of the date of this filing, the Bankruptcy Trust Lawsuit continues to be stayed. 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 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.

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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 March 31, 2025. The amounts in the table below are as of the purchase or investment date:


Investment	Property Type	Investment Date	Outstanding Principal Amount		Cost (% of Par Value)		Coupon (1)		Current Yield (1)		Maturity Date	Interest Rate Type
Senior Loan	Life Sciences	1/9/2025	$	18,479,968	100.0	%	14.00	%	14.00	%	2/9/2027	Floating Rate
Preferred Stock	Life Science	1/2/2025	55,012,612		100.0	%	16.50	%	16.50	%	N/A	Fixed Rate
Preferred Equity	Self-Storage	1/3/2025	480,000		100.0	%	13.64	%	13.64	%	9/1/2030	Fixed Rate
Preferred Equity	Self-Storage	2/4/2025	1,000,000		100.0	%	11.00	%	11.00	%	7/1/2027	Fixed Rate
Preferred Equity	Multifamily	1/31/2025	1,200,000		100.0	%	14.00	%	14.00	%	4/1/2028	Fixed Rate
CMBS I/O Strip	Multifamily	1/16/2025	5,911,523		100.0	%	5.67	%	5.67	%	11/25/2034	Floating Rate
Preferred Equity	Single-family	1/31/2025	1,400,000		99.0	%	13.50	%	13.64	%	4/28/2027	Floating Rate
			$	83,484,103

(1)Current yield and coupon as of March 31, 2025.

Redemptions and Sales

The following investments were redeemed or sold during the three months ended March 31, 2025:


Investment	Property Type	Investment Date	Disposition Date	Amortized Cost Basis		Redemption/Sales Proceeds		Prepayment Penalties		Net Gain (Loss) on Repayment
Preferred Equity	Life Science	4/6/2023	1/2/2025	$	10,300,000	$	10,300,000	$	—	$	—
Preferred Equity	Life Science	10/19/2022	1/8/2025	1,901,474		1,901,474		—		—
Promissory Note	N/A	3/28/2024	3/12/2025	500,000		500,000		—		—
				$	12,701,474	$	12,701,474	$	—	$	—

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.

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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 (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.

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.

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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 Months Ended March 31, 2025, and 2024

The following tables set forth a summary of our operating results for the three months ended March 31, 2025 and 2024 (in thousands):


	For the Three Months Ended March 31,
	2025		2024		$ Change		% Change
Net interest income (loss)	$	11,509	$	(12,814)	$	24,323	(189.8)	%
Other income	22,736		9,199		13,537		147.2	%
Operating expenses	(8,283)		(11,026)		2,743		(24.9)	%
Net income (loss)	25,962		(14,641)		40,603		(277.3)	%
Net (income) loss attributable to Series A Preferred stockholders	(874)		(874)		—		NA
Net (income) loss attributable to Series B Preferred stockholders	(4,407)		(665)		(3,742)		NA
Net (income) loss attributable to redeemable noncontrolling interests	(4,163)		1,894		(6,057)		(319.8)	%
Net income (loss) attributable to common stockholders	$	16,518	$	(14,286)	$	30,804	(215.6)	%

The change in our net income (loss) for the three months ended March 31, 2025 as compared to the net income (loss) for the three months ended March 31, 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 loans. Our net income (loss) attributable to common stockholders for the three months ended March 31, 2025 was approximately $16.5 million. We had approximately $11.5 million in net interest income, generated income of $22.7 million in other income, incurred operating expenses of $8.3 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $4.4 million of income to Series B Preferred stockholders, and allocated $4.2 million of income to redeemable noncontrolling interests for the three months ended March 31, 2025.

Revenues

Net interest income (loss). Net interest income was $11.5 million for the three months ended March 31, 2025 compared to net interest loss of $12.8 million for the three months ended March 31, 2024 which was an increase of approximately $24.3 million. The increase between the periods is primarily due to accelerated amortization of the premium associated with the prepayment on a senior loan during the three months ended March 31, 2024.

Other income. Other income was $22.7 million for the three months ended March 31, 2025 compared to $9.2 million for the three months ended March 31, 2024, which was an increase of approximately $13.5 million. This was primarily due to an increase in unrealized gain related to consolidated CMBS VIEs and an increase in income of equity method investments between the periods.

Expenses

G&A expenses. G&A expenses were $2.5 million for the three months ended March 31, 2025 compared to $4.2 million for the three months ended March 31, 2024, which was a decrease of approximately $1.7 million. The decrease between the periods was primarily due to $1.7 million decrease in legal expense compared to the prior period.

Loan servicing fees. Loan servicing fees were $0.3 million for the three months ended March 31, 2025 compared to $0.6 million for the three months ended March 31, 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.

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Management fees. Management fees were $1.4 million for the three months ended March 31, 2025 compared to $0.8 million for the three months ended March 31, 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 $4.0 million for the three months ended March 31, 2025, compared to $5.4 million for the three months ended March 31, 2024, which was an decrease of approximately $1.4 million. The decrease between the periods is due to a decrease in depreciation and amortization.

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):


	For the Three Months Ended March 31,
	2025		2024		% Change
Net income attributable to common stockholders	$	16,518	$	(14,286)	215.6	%
Net income attributable to redeemable noncontrolling interests	4,163		(1,894)		319.8	%
Net (income) loss attributable to Series B Preferred stockholders	4,407		665		562.7	%

Weighted-average number of shares of common stock outstanding
Basic	17,516		17,264		1.5	%
Diluted	36,049		24,862		45.0	%
Net income per share, basic	$	0.94	$	(0.83)	213.0	%
Net income per share, diluted	$	0.70	$	(0.83)	184.3	%
Dividends declared per share	$	0.5000	$	0.5000	—	%

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 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.

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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 and non-cash items, such as stock dividends. 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.

Starting in the second quarter of 2024, 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.

Prior period EAD per diluted common share and CAD per diluted common share 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 months ended March 31, 2025 and 2024 (in thousands, except per share amounts):


	For the Ended March 31,
	2025		2024		% Change
Net income (loss) attributable to common stockholders	$	16,518	$	(14,286)	215.6	%
Net income attributable to redeemable noncontrolling interests	4,163		(1,894)		319.8	%
Adjustments
Amortization of stock-based compensation	1,283		1,798		(28.6)	%
Provision for (reversal of) credit losses	3,625		(420)		(963.1)	%
Equity in (income) losses of equity method investments	(53)		2,000		(102.7)	%
Unrealized (gains) or losses (1)	(15,861)		1,351		(1274.0)	%
EAD	$	9,675	$	(11,451)	184.5	%

EAD per Diluted Common Share (2)	$	0.41	$	(0.46)	189.8	%

Adjustments
Amortization of premiums	2,262		27,874		(91.9)	%
Accretion of discounts	(2,540)		(3,880)		34.5	%
Depreciation and amortization of real estate investments	1,079		2,318		-53.5	%
Amortization of deferred financing costs	12		12		—	%
CAD	$	10,488	$	14,873	(29.5)	%

CAD per Diluted Common Share (2)	$	0.45	$	0.60	(25.1)	%

Weighted-average common shares outstanding - basic	17,516		17,264		1.5	%
Weighted-average common shares outstanding - diluted	36,049		24,862		45.0	%
Shares attributable to potential redemption of Series B Preferred	(12,652)		—		N/A
Adjusted weighted-average common shares outstanding - diluted (2)	23,397		24,862		(5.9)	%

(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. Prior periods have not been updated to reflect this adjustment because the dilutive effect of potential Series B Preferred redemptions were immaterial to prior periods. In 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.

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Book Value per Share / Unit

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


	March 31, 2025		December 31, 2024
Common stockholders' equity	$	302,829	$	295,624
Shares of common stock outstanding at period end	17,644		17,461
Book value per share of common stock	$	17.16	$	16.93

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):


	March 31, 2025		December 31, 2024
Common stockholders' equity	$	302,829	$	295,624
Redeemable noncontrolling interests in the OP	87,808		86,164
Total equity	$	390,637	$	381,788

Redeemable OP Units at period end	5,038		5,038
Shares of common stock outstanding at period end	17,644		17,461
Combined shares of common stock and redeemable OP Units	22,681		22,499
Combined book value per share / unit	$	17.22	$	16.97

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 March 31, 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 March 31, 2025 (dollars in thousands):


	Investment (1)	Investment Date	Current Principal Amount			Net Equity (2)		Location	Property Type	Coupon		Current Yield (3)		Remaining Term (4) (years)
	Senior Loans
1	Senior Loan	2/11/2020	$	8,010		$	1,143	Various	Single-family	5.35	%	5.28	%	2.84
2	Senior Loan	2/11/2020	5,108			621		Various	Single-family	5.24	%	5.04	%	3.51
3	Senior Loan	2/11/2020	31,793			3,461		Various	Single-family	4.74	%	4.71	%	0.50
4	Senior Loan	2/11/2020	9,306			1,102		Various	Single-family	6.10	%	5.83	%	3.51
5	Senior Loan	2/11/2020	35,151			3,957		Various	Single-family	5.55	%	5.28	%	3.59
6	Senior Loan	2/11/2020	5,479			652		Various	Single-family	5.99	%	5.72	%	3.67
7	Senior Loan	2/11/2020	8,456			1,077		Various	Single-family	5.88	%	5.66	%	3.76
8	Senior Loan	2/11/2020	6,328			830		Various	Single-family	5.46	%	5.28	%	3.92
9	Senior Loan	2/11/2020	10,523			1,326		Various	Single-family	4.72	%	4.68	%	0.92
10	Senior Loan	1/26/2024	151,263		(5)	150,705		Cambridge, MA	Life Sciences	14.00	%	14.05	%	1.86
	Total		271,417			164,874				10.16	%	10.11	%	2.15

	CMBS B-Pieces
1	CMBS B-Piece	2/11/2020	13,268		(6)	3,022		Various	Multifamily	8.73	%	8.73	%	0.91
2	CMBS B-Piece	2/11/2020	28,581		(6)	7,185		Various	Multifamily	6.47	%	6.47	%	1.65
3	CMBS B-Piece	7/30/2020	16,310		(6)	4,055		Various	Multifamily	6.59	%	6.59	%	2.24
4	CMBS B-Piece	4/20/2021	16,344		(6)	4,008		Various	Multifamily	10.57	%	10.57	%	5.91
5	CMBS B-Piece	6/30/2021	108,303		(6)	23,246		Various	Multifamily	—	%	9.08	%	1.75

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6	CMBS B-Piece	5/2/2022		28,203	(6)	6,553	Various	Multifamily	4.71	%	5.04	%	13.66
7	CMBS B-Piece	7/28/2022		53,785	(6)	13,230	Various	Multifamily	9.57	%	9.57	%	4.32
8	CMBS B-Piece	2/22/2024		30,869	(6)	6,453	Various	Multifamily	5.90	%	6.69	%	4.32
9	CMBS B-Piece	4/24/2024		31,931	(6)	7,413	Various	Multifamily	5.59	%	6.39	%	3.99
	Total			327,594		75,165			4.85	%	8.03	%	3.80

	CMBS I/O Strips
1	CMBS I/O Strip	5/18/2020		17,590	(7)	311	Various	Multifamily	2.02	%	18.22	%	4.82
2	CMBS I/O Strip	8/6/2020		108,643	(7)	3,449	Various	Multifamily	2.98	%	21.59	%	5.24
3	CMBS I/O Strip	4/28/2021		63,556	(7)	980	Various	Multifamily	1.59	%	21.48	%	4.82
4	CMBS I/O Strip	5/27/2021		20,000	(7)	719	Various	Multifamily	3.38	%	21.46	%	5.15
5	CMBS I/O Strip	6/7/2021		4,266	(7)	72	Various	Multifamily	2.31	%	29.17	%	3.66
6	CMBS I/O Strip	6/11/2021		91,528	(7)	673	Various	Multifamily	1.13	%	17.96	%	4.15
7	CMBS I/O Strip	6/24/2021		22,302	(7)	326	Various	Multifamily	1.20	%	19.60	%	5.15
8	CMBS I/O Strip	8/10/2021		25,000	(7)	408	Various	Multifamily	1.89	%	21.81	%	5.07
9	CMBS I/O Strip	8/11/2021		6,942	(7)	266	Various	Multifamily	3.10	%	17.80	%	6.32
10	CMBS I/O Strip	8/24/2021		1,625	(7)	46	Various	Multifamily	2.61	%	19.13	%	5.82
11	CMBS I/O Strip	9/1/2021		34,625	(7)	662	Various	Multifamily	1.92	%	20.59	%	5.24
12	CMBS I/O Strip	9/11/2021		20,902	(7)	747	Various	Multifamily	2.95	%	17.58	%	6.49
13	CMBS I/O Strip	1/16/2025		15,000	(7)	1,491	Various	Multifamily	5.67	%	14.60	%	9.66
	Total			431,979		10,150			2.21	%	20.06	%	5.13

	Mezzanine Loans
1	Mezzanine	6/12/2020		7,500		7,500	Houston, TX	Multifamily	11.00	%	11.00	%	0.25
2	Mezzanine	10/20/2020		5,470		2,224	Wilmington, DE	Multifamily	7.50	%	7.36	%	4.09
3	Mezzanine	10/20/2020		10,380		4,260	White Marsh, MD	Multifamily	7.42	%	7.26	%	6.25
4	Mezzanine	10/20/2020		14,253		5,812	Philadelphia, PA	Multifamily	7.59	%	7.44	%	4.17
5	Mezzanine	10/20/2020		3,700		1,499	Daytona Beach, FL	Multifamily	7.83	%	7.70	%	3.51
6	Mezzanine	10/20/2020		12,000		4,922	Laurel, MD	Multifamily	7.71	%	7.54	%	6.01
7	Mezzanine	10/20/2020		3,000		1,231	Temple Hills, MD	Multifamily	7.32	%	7.16	%	6.34
8	Mezzanine	10/20/2020		1,500		616	Temple Hills, MD	Multifamily	7.22	%	7.06	%	6.34
9	Mezzanine	10/20/2020		5,540		2,252	Lakewood, NJ	Multifamily	7.33	%	7.20	%	4.09
10	Mezzanine	10/20/2020		6,829		2,771	North Aurora, IL	Multifamily	7.53	%	7.40	%	3.76
11	Mezzanine	10/20/2020		3,620		1,486	Rosedale, MD	Multifamily	7.42	%	7.26	%	6.25
12	Mezzanine	10/20/2020		9,610		3,944	Cockeysville, MD	Multifamily	7.42	%	7.26	%	6.25
13	Mezzanine	10/20/2020		7,390		3,033	Laurel, MD	Multifamily	7.42	%	7.26	%	6.25
14	Mezzanine	10/20/2020		2,135		865	Tyler, TX	Multifamily	7.74	%	7.61	%	3.51
15	Mezzanine	10/20/2020		1,190		483	Las Vegas, NV	Multifamily	7.71	%	7.57	%	3.92
16	Mezzanine	10/20/2020		3,310		1,346	Atlanta, GA	Multifamily	6.91	%	6.78	%	4.25
17	Mezzanine	10/20/2020		2,880		1,168	Des Moines, IA	Multifamily	7.89	%	7.75	%	3.59
18	Mezzanine	10/20/2020		4,010		1,626	Urbandale, IA	Multifamily	7.89	%	7.75	%	3.59
19	Mezzanine	11/18/2021		12,600		12,528	Irving, TX	Multifamily	15.36	%	15.45	%	3.67
20	Mezzanine	12/29/2021		7,760		7,752	Rogers, AR	Multifamily	15.30	%	15.31	%	0.30
21	Mezzanine	6/9/2022	(8)	4,500		4,497	Rogers, AR	Multifamily	15.30	%	15.31	%	0.19
22	Mezzanine	10/5/2022		4,030		4,007	Kirkland, WA	Multifamily	15.05	%	15.14	%	2.76
	Total			133,207		75,822			9.40	%	9.31	%	4.12

	Preferred Equity
1	Preferred Equity	5/29/2020	(9)	12,735		12,735	Houston, TX	Multifamily	11.00	%	11.00	%	5.09
2	Preferred Equity	9/29/2021		19,480		19,459	Holly Springs, NC	Life Science	10.00	%	10.01	%	0.50
3	Preferred Equity	12/28/2021		11,377		11,377	Las Vegas, NV	Multifamily	10.50	%	10.50	%	6.92
4	Preferred Equity	1/14/2022		33,481		33,468	Vacaville, CA	Life Science	10.00	%	10.00	%	0.50
5	Preferred Equity	4/7/2022		3,903		3,876	Beaumont, TX	Self-Storage	14.36	%	14.46	%	5.42
6	Preferred Equity	6/8/2022		4,480		4,452	Temple, TX	Self-Storage	13.64	%	13.73	%	5.42
7	Preferred Equity	7/1/2022		10,000		9,957	Medley, FL	Self-Storage	11.00	%	11.05	%	2.25
8	Preferred Equity	8/10/2022		8,500		8,486	Plano, TX	Multifamily	—	%	—	%	0.44
9	Preferred Equity	9/30/2022		9,000		8,981	Fort Worth, TX	Multifamily	14.05	%	14.08	%	0.50

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10	Preferred Equity	10/19/2022		10,371	10,433	Woodbury, MN	Life Science	10.00	%	9.94	%	0.50
11	Preferred Equity	2/10/2023		28,207	28,204	Forney, TX	Multifamily	11.00	%	11.00	%	3.00
12	Preferred Equity	2/24/2023		27,429	27,412	Richmond, VA	Multifamily	11.00	%	11.01	%	1.98
13	Preferred Equity	4/6/2023		10,519	10,592	Temecula, CA	Life Science	17.50	%	17.38	%	0.50
14	Preferred Equity	5/16/2023		17,526	17,401	Phoenix, AZ	Single-family	13.50	%	13.60	%	2.08
15	Preferred Equity	5/17/2023		4,192	4,153	Houston, TX	Life Science	13.00	%	13.12	%	0.73
16	Preferred Equity	6/28/2024		7,100	7,069	Knoxville, TN	Marina	13.00	%	13.06	%	3.59
17	Preferred Equity	1/31/2025		1,200	1,200	Houston, TX	Multifamily	14.00	%	14.00	%	3.01
	Total			219,500	219,255			11.13	%	11.14	%	2.11

	Common Equity
1	Common Stock	11/6/2020		N/A	29,289	N/A	Self-Storage	N/A		N/A		N/A
2	Common Stock	4/14/2022		N/A	26,685	N/A	Ground Lease	N/A		N/A		N/A
3	Common Equity	2/10/2023		N/A	—	Forney, TX	Multifamily	N/A		N/A		N/A
4	Common Equity	2/24/2023		N/A	—	Richmond, VA	Multifamily	N/A		N/A		N/A
5	Common Equity	9/8/2023		N/A	—	Atlanta, GA	Multifamily	N/A		N/A		N/A
6	Common Equity	5/8/2024		N/A	—	Kirkland, WA	Multifamily	N/A		N/A		N/A
7	Membership Interest	4/9/2024		N/A	1,556	Various	Multifamily	N/A		N/A		N/A
	Total				57,530

	Preferred Stock
1	Preferred Stock	11/9/2023		N/A	18,949	Various	Life Science	10.50	%	N/A		N/A
2	Preferred Stock	1/2/2025		N/A	55,013	Various	Life Science	16.50	%	N/A		N/A
	Total				73,962

	Real Estate
1	Real Estate	12/31/2021	(10)	N/A	26,552	Charlotte, NC	Multifamily	N/A		N/A		N/A
2	Real Estate	10/10/2023	(11)	N/A	578	Atlanta, GA	Multifamily	N/A		N/A		N/A
	Total				27,130

	Promissory Note
1	Promissory Note	7/10/2024		3,500	3,500	Various	Single-family	15.00	%	15.00	%	0.28
	Total			3,500	3,500			15.00	%	15.00	%	0.28

	Revolving Credit Facility
1	Revolving Credit Facility	12/31/2024		148,600	136,019	Various	Life Science	13.50	%	13.50	%	2.75
	Total			148,600	136,019			13.50	%	13.50	%	2.75

	Stock Warrant
1	Stock Warrant	5/23/2024		N/A	42,573	Various	Life Sciences	N/A		N/A		N/A
	Total				42,573

(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 Company reclassified this investment from a mezzanine loan to senior loan effective April 1, 2024 because there was and as of March 31, 2025 there is, no senior mortgage on the property collateralized by the loan.

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

(7)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.

(8)The mezzanine loan term was extended effective April 9, 2025 to May 16, 2025.

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(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. As of March 31, 2025, the property was 96.1% occupied, with effective rent per occupied unit of $1,796 per month.

(11)Real Estate is a 280-unit multifamily property. As of March 31, 2025, the property was 98.2% occupied with effective rent per occupied unit of $1,597 per month.

The following table details overall statistics for our portfolio as of March 31, 2025 (dollars in thousands):


	Total Portfolio			Floating Rate Investments			Fixed Rate Investments			Common Equity Investments		Real Estate Investments
Number of investments	85			20			55			7		2
Principal balance (1)	$	1,152,310		$	432,198		$	720,112		N/A		N/A
Carrying value	$	1,407,273		$	431,148		$	755,126		$	57,531	$	120,895
Weighted-average cash coupon	7.05		%	10.03		%	5.27		%	N/A		N/A
Weighted-average all-in yield	9.32		%	11.82		%	7.89		%	N/A		N/A

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

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 March 31, 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.

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Asset Metrics

Debt Metrics

Investment

Fixed/Floating Rate

Interest Rate

Maturity Date

Fixed/Floating Rate

Interest Rate

Maturity Date

Net Spread

SFR Loans

Senior loan

Fixed

5.35%

2/1/2028

Fixed

3.51%

2/1/2028

1.84%

Senior loan

Fixed

5.24%

10/1/2028

Fixed

2.64%

10/1/2028

2.60%

Senior loan

Fixed

4.74%

10/1/2025

Fixed

2.14%

10/1/2025

2.60%

Senior loan

Fixed

6.10%

10/1/2028

Fixed

3.30%

10/1/2028

2.80%

Senior loan

Fixed

5.55%

11/1/2028

Fixed

2.70%

11/1/2028

2.85%

Senior loan

Fixed

5.99%

12/1/2028

Fixed

3.14%

12/1/2028

2.85%

Senior loan

Fixed

5.88%

1/1/2029

Fixed

3.14%

1/1/2029

2.74%

Senior loan

Fixed

5.46%

3/1/2029

Fixed

2.99%

3/1/2029

2.47%

Senior loan

Fixed

4.72%

3/1/2026

Fixed

2.45%

3/1/2026

2.27%

Mezzanine Loans

Mezzanine

Fixed

7.50%

5/1/2029

Fixed

0.30%

5/1/2029

7.20%

Mezzanine

Fixed

7.42%

7/1/2031

Fixed

0.30%

7/1/2031

7.12%

Mezzanine

Fixed

7.59%

6/1/2029

Fixed

0.30%

6/1/2029

7.29%

Mezzanine

Fixed

7.83%

10/1/2028

Fixed

0.30%

10/1/2028

7.53%

Mezzanine

Fixed

7.71%

4/1/2031

Fixed

0.30%

4/1/2031

7.41%

Mezzanine

Fixed

7.32%

8/1/2031

Fixed

0.30%

8/1/2031

7.02%

Mezzanine

Fixed

7.22%

8/1/2031

Fixed

0.30%

8/1/2031

6.92%

Mezzanine

Fixed

7.33%

5/1/2029

Fixed

0.30%

5/1/2029

7.03%

Mezzanine

Fixed

7.53%

7/1/2031

Fixed

0.30%

7/1/2031

7.23%

Mezzanine

Fixed

7.42%

1/1/2029

Fixed

0.30%

1/1/2029

7.12%

Mezzanine

Fixed

7.42%

7/1/2031

Fixed

0.30%

7/1/2031

7.12%

Mezzanine

Fixed

7.42%

4/1/2031

Fixed

0.30%

4/1/2031

7.12%

Mezzanine

Fixed

7.74%

10/1/2028

Fixed

0.30%

10/1/2028

7.44%

Mezzanine

Fixed

7.71%

3/1/2029

Fixed

0.30%

3/1/2029

7.41%

Mezzanine

Fixed

6.91%

7/1/2029

Fixed

0.30%

7/1/2029

6.61%

Mezzanine

Fixed

7.89%

11/1/2028

Fixed

0.30%

11/1/2028

7.59%

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 March 31, 2025, the outstanding balance on the Credit Facility was $109.7 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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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 $258.6 million under our repurchase agreements and posted approximately $737.4 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):

March 31, 2025

Facility

Collateral

Date issued

Outstanding
face amount

Carrying
value

Final stated
maturity

Weighted
average
interest
rate (1)

Weighted
average
life (years)
(2)

Outstanding
face amount

Amortized cost basis

Carrying
value (3)

Weighted
average
life (years)
(2)

Master Repurchase Agreements

CMBS

Mizuho(4)

4/15/2020

258,598

N/A

(5)

6.08

0.03

737,391

351,142

343,101

4.6

(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 March 31, 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. 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 Manager, subject to

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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 16,000,000 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 March 31, 2025, the Company has sold 8,485,120 shares of Series B Preferred Stock for total gross proceeds of $207.3 million.

Company Notes Offering

In 2022 and 2023, the Company issued a total of $35.0 million and $15.0 million in aggregate principal amount, respectively, of its 5.75% Notes for proceeds of approximately $35.1 million and $13.6 million, respectively, after original issue discount and underwriting fees.

In 2022, the Company purchased a total of $5.0 million aggregate principal amount of its 5.75% Notes for approximately $4.9 million. The purchased 5.75% notes were cancelled upon settlement.

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 March 31, 2025, our cash and cash equivalents were $19.2 million.

Cash Flows

The following table presents selected data from our Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and March 31, 2024 (in thousands):


	For the Three Months Ended March 31, 2025
	2025		2024
Net cash provided by operating activities	$	16,039	$	17,711
Net cash provided by investing activities	71,281		545,411
Net cash (used in) financing activities	(70,885)		(560,484)
Net increase (decrease) in cash, cash equivalents, and restricted cash	16,435		2,638
Cash, cash equivalents and restricted cash, beginning of period	7,053		16,649
Cash, cash equivalents and restricted cash, end of period	$	23,488	$	19,287

Cash flows from operating activities. During the three months ended March 31, 2025, net cash provided by operating activities was $16.0 million compared to net cash provided by operating activities of $17.7 million for the three months ended March 31, 2024. This decrease primarily relates to the change in unrealized gains on investments held at fair value.

Cash flows from investing activities. During the three months ended March 31, 2025, net cash provided by investing activities was $71.3 million compared to net cash provided by investing activities of $545.4 million for the three months ended March 31, 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 three months ended March 31, 2025, net cash used in financing activities was $70.9 million compared to net cash used in financing activities of $560.5 million for the three months ended March 31, 2024. The increase primarily relates to a decrease of principal repayments on borrowings under secured financing agreements.

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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.

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. On November 21, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which was paid on January 6, 2025 to stockholders of record as of December 24, 2024. On December 12, 2024, our Board declared a Series A Preferred Stock dividend to Series A Preferred stockholders of $0.53125 per share, which was paid on January 25, 2025, to Series A Preferred stockholders of record as of January 12, 2025. On December 23, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which was paid on February 5, 2025, to Series B Preferred stockholders of record as of January 24, 2025. On January 15, 2025, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on March 5, 2025, to Series B Preferred stockholders of record as of February 25, 2025. On February 19, 2025, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on April 7, 2025, to Series B Preferred stockholders of record as of March 25, 2025. Our Board declared the first quarterly dividend to common stockholders of $0.50 per share on February 24, 2025, which was paid on March 31, 2025, to common stockholders of record as of March 14, 2025. On February 24, 2025, our Board declared a Series A Preferred dividend to Series A Preferred stockholders of $0.53125 per share, which was paid on April 25, 2025, to Series A Preferred stockholders of record as of April 15, 2025. On March 20, 2025, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on May 5, 2025, to Series B Preferred stockholders of record as of April 25, 2025. On March 20, 2025, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which will be paid on June 5, 2025, to Series B Preferred stockholders of record as of May 23, 2025. On March 20, 2025, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which will be paid on July 7, 2025, to Series B Preferred stockholders of record as of June 25, 2025.

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Off-Balance Sheet Arrangements

As of March 31, 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 March 31, 2025. As of March 31, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $12.5 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $10.7 million.

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 $6.5 million was unfunded as of March 31, 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 March 31, 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:

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

•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 Richmond, Virginia, which has been fully funded as of March 31, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $1.3 million was unfunded as of March 31, 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

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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. The loan is secured by a first mortgage with a first lien position and other security interests.

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 Loan is $203.0 million, of which $44.2 million was unfunded as of March 31, 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 entered into 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. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, payable in kind. 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 December 31, 2027, the maturity date of the IQHQ Revolving Loan. The Company holds 49.533% of the revolving commitment under the IQHQ Revolving Loan.

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 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

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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.

As of March 31, 2025, the Company has funded $55.0 million of IQHQ Subscription Agreement, with an unfunded commitment balance of $105.0 million.

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


Investment Type	March 31, 2025		December 31, 2024
	Unfunded Commitments		Unfunded Commitments
Loans	$	45,737	$	64,217
Preferred Equity	6,474		7,874
Common Equity	2,536		2,536
Preferred Stock	104,987		150,000
	$	159,735	$	224,627

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 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

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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 $3.6 million for the three months ended March 31, 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 $5.0 million as of March 31, 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.

Valuation of Common Equity and Preferred Stock

As of March 31, 2025, the Company owns approximately 25.6% 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

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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 three months ended March 31, 2025, the unrealized loss related to the change in fair value estimate is $1.2 million. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of NSP.

As of March 31, 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 three months ended March 31, 2025, the unrealized loss related to the change in fair value estimate is $0.2 million. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of the Private REIT.

As of March 31, 2025, the Company owns approximately 98.0% of the total outstanding common equity of each of RFGH and RTB, 12.3% of the total outstanding common equity of SK Apartments, 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 three months ended March 31, 2025. See Notes 5 and 6 to our consolidated financial statements for additional disclosures regarding the equity method investments.

As of March 31, 2025, the Company owns 9.5% 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 March 31, 2025, the Company owns 38.3% 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.

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 large 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 three months ended March 31, 2025 and March 31, 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

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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 March 31, 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 March 31, 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 March 31, 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, Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

EXHIBIT INDEX


Exhibit Number			Description




10.1*			Assignment and Assumption and Co-Lender Agreement, effective as of January 2, 2025, by and between NREF OP IV, L.P. and The Ohio State Life Insurance Company
31.1*			Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*			Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+			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.

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)

______________________

* Filed herewith.

+ Furnished herewith.

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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
(Principal Executive Officer)

May 9, 2025

Jim Dondero

/s/ Paul Richards

Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)

May 9, 2025

Paul Richards