nexsof20260417_def14a.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to § 240.14a-12

NexPoint Diversified Real Estate Trust

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒ No fee required

☐ Fee paid previously with preliminary materials

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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NEXPOINT DIVERSIFIED REAL ESTATE TRUST

300 Crescent Court
Suite 700
Dallas, Texas 75201

April 20, 2026

Dear NXDT Shareholder:

You are cordially invited to attend the annual meeting of shareholders of NexPoint Diversified Real Estate Trust. The meeting will be held on Tuesday, June 2, 2026, beginning at 11:00 a.m. Central Time. The annual meeting will be held exclusively through a virtual format. You will not be able to attend the annual meeting in person.

If your shares are held by a financial intermediary (such as a broker-dealer), you should have received from the financial intermediary through which your shares are held instructions on how to vote or instruct the financial intermediary to vote your shares. If your shares are held by a financial intermediary and you wish to attend and vote at the annual meeting, please email EQ Fund Solutions, LLC (“EQ”) at attendameeting@equiniti.com, with “NXDT Meeting” in the subject line and provide your full name, address and proof of ownership as of March 27, 2026 from your financial intermediary. EQ will then email you the annual meeting registration link. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or the instructions that accompanied your proxy materials.

If you are a shareholder of record and wish to attend and vote at the meeting, please send an email to EQ at attendameeting@equiniti.com with “NXDT Meeting” in the subject line and provide your name and address in the body of the email. EQ will then email you the registration link for the annual meeting. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card.

Requests to attend the annual meeting must be received by EQ no later than 2:00 p.m. Central Time on June 1, 2026. On the date of the annual meeting, shareholders are encouraged to log on 15 minutes before the meeting start time. Please contact EQ at (866) 530-8636 with any questions regarding accessing the annual meeting.

Information about the meeting, nominees for the election of trustees and the other matters to be voted on at the meeting is presented in the following notice of annual meeting and proxy statement. We hope that you will plan to virtually attend the annual meeting.

It is important that your shares be represented. Whether or not you plan to virtually attend the meeting, please vote using the internet or telephone procedures described on your Notice of Internet Availability of Proxy Materials or on your proxy card, or sign, date and promptly mail a proxy card in the provided pre-addressed, postage-paid envelope. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card.

Sincerely,

James Dondero
President and Chairman

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NEXPOINT DIVERSIFIED REAL ESTATE TRUST

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 2, 2026

The 2026 Annual Meeting of Shareholders of NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the “Company”), will be held virtually, on Tuesday, June 2, 2026, at 11:00 a.m. Central Time, for the following purposes:

to elect seven trustees to serve until the 2027 annual meeting of shareholders;

to approve, on an advisory basis, the compensation of our named executive officers;

to approve the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan;

to approve, in accordance with Section 312.03(c) of the New York Stock Exchange Listed Company Manual and Section 11(g) of the Statement of Preferences of 9.00% Series B Cumulative Redeemable Preferred Shares, the issuance of common shares upon the conversion or redemption of any and all of the 9.00% Series B Cumulative Redeemable Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share, of the Company purchased by investors in a registered continuous offering, as more fully described in the proxy materials;

to ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2026;

if properly presented at the annual meeting, to vote on a shareholder proposal; and

to transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

Information concerning the matters to be voted upon at the meeting is set forth in the accompanying proxy statement. We have also made available to you the Company’s 2025 annual report.

Holders of record of the Company’s transferable units of beneficial interest, par value $0.001 per share, and 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share, as of the close of business on March 27, 2026 are entitled to notice of, and to vote at, the meeting. Accordingly, on or about April 23, 2026, we will begin mailing a Notice of Internet Availability of Proxy Materials to all shareholders of record as of March 27, 2026. We will also post our proxy materials on the website referenced on your Notice of Internet Availability of Proxy Materials at https://www.vote.proxyonline.com. All shareholders may choose to access our proxy materials online or may request to receive a printed set or e-mail of our proxy materials at no charge as described on your Notice of Internet Availability of Proxy Materials. If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy.

While you will not be able to attend the annual meeting in person, we have structured our virtual annual meeting to provide shareholders with the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting. To promote fairness and efficient conduct of the meeting, we will respond to no more than two questions from any single shareholder.

If your shares are held by a financial intermediary (such as a broker-dealer), you should have received from the financial intermediary through which your shares are held instructions on how to vote or instruct the financial intermediary to vote your shares. If your shares are held by a financial intermediary and you wish to attend and vote at the annual meeting, please email EQ at attendameeting@equiniti.com with “NXDT Meeting” in the subject line and provide your full name, address and proof of ownership as of March 27, 2026 from your financial intermediary. EQ will then email you the annual meeting registration link. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or the instructions that accompanied your proxy materials.

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If you are a shareholder of record and wish to attend and vote at the annual meeting, please send an email to EQ at attendameeting@equiniti.com with “NXDT Meeting” in the subject line and provide your name and address in the body of the email. EQ will then email you the registration link for the annual meeting. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card.

Requests to attend the annual meeting must be received by EQ no later than 2:00 p.m. Central Time on Monday, June 1, 2026. On the date of the annual meeting, shareholders are encouraged to log on 15 minutes before the meeting start time. Please contact EQ at (866) 530-8636 with any questions regarding accessing the annual meeting.

Your vote is very important. Whether or not you plan to virtually attend the annual meeting, please vote using the internet or telephone procedures described on your Notice of Internet Availability of Proxy Materials or on your proxy card, or sign, date and promptly mail a proxy card in the provided pre-addressed, postage paid envelope. If you would like to vote during the annual meeting, you may do so by entering the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card.

By Order of the Board of Trustees,

D.C. Sauter

General Counsel and Secretary

April 20, 2026
Dallas, Texas

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 2, 2026.

The Company’s Notice of Annual Meeting, Proxy Statement and 2025 Annual Report to Shareholders are

available on the internet at https://www.vote.proxyonline.com.

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Page

PROPOSAL 1 ‒ ELECTION OF TRUSTEES	4
PROPOSAL 2 – ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	8
PROPOSAL 3 – APPROVAL OF THE NEXPOINT DIVERSIFIED REAL ESTATE TRUST 2026 LONG TERM INCENTIVE PLAN	9
PROPOSAL 4 – APPROVAL OF THE ISSUANCE OF COMMON SHARES UPON THE CONVERSION OR REDEMPTION OF THE SERIES B PREFERRED SHARES, IN ACCORDANCE WITH SECTION 312.03(C) OF THE NYSE MANUAL AND SECTION 11(G) OF THE STATEMENT OF PREFERENCES	20
PROPOSAL 5 – RATIFICATION OF APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2026	22
PROPOSAL 6 – SHAREHOLDER PROPOSAL	23
THE BOARD, ITS COMMITTEES AND ITS COMPENSATION	26
EXECUTIVE OFFICERS	33
EXECUTIVE COMPENSATION	34
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS	42
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	43
POLICIES WITH RESPECT TO CERTAIN ACTIVITIES	55
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT	62
AUDIT COMMITTEE REPORT	64
SHAREHOLDER PROPOSALS FOR THE 2027 ANNUAL MEETING OF SHAREHOLDERS	65
MULTIPLE SHAREHOLDERS SHARING ONE ADDRESS	66
ANNUAL REPORT	67
OTHER MATTERS	68
APPENDIX A	A-1

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NexPoint Diversified Real Estate Trust

300 Crescent Court, Suite 700

Dallas, Texas 75201

PROXY STATEMENT

This proxy statement provides information in connection with the solicitation of proxies by the board of trustees (the “Board”) of NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the “Company,” “we,” “us” or “our”), for use at the Company’s 2026 annual meeting of shareholders or any postponement or adjournment thereof (the “Annual Meeting”). This proxy statement also provides information you will need in order to consider and act upon the matters specified in the accompanying notice of annual meeting. A Notice of Internet Availability of Proxy Materials is being mailed to shareholders on or about April 23, 2026. If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy. If you receive a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.

Record holders of the Company’s transferable units of beneficial interest, par value $0.001 per share (“Common Shares”), and 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share (“Series A Preferred Shares” and, together with the Common Shares, the “Shares”), as of the close of business on March 27, 2026 are entitled to vote at the Annual Meeting. Shareholders of the Company are entitled to one vote for each Common Share and each Series A Preferred Share held. Holders of both the Common Shares and the Series A Preferred Shares, voting as a single class, are entitled to vote on the proposals detailed herein. As of March 27, 2026, there were 50,219,590 Common Shares and 3,359,593 Series A Preferred Shares issued and outstanding.

You cannot vote your shares unless you virtually attend the Annual Meeting or you have previously given your proxy. You can vote by proxy in one of three convenient ways:

●

by internet: visit the website shown on your Notice of Internet Availability of Proxy Materials and follow the instructions;

●

by telephone: dial the toll-free number shown on your Notice of Internet Availability of Proxy Materials and follow the instructions; or

●

in writing: if you receive a paper copy of the proxy card by mail, you may sign, date and return a proxy card in the provided pre-addressed, postage paid envelope.

You may revoke your proxy at any time prior to the vote at the Annual Meeting by:

●

delivering a written notice revoking your proxy to the Company’s Secretary at the address above;

●

delivering a new proxy bearing a date after the date of the proxy being revoked; or

●

virtually attending the Annual Meeting and entering the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card.

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Unless revoked as described above, all properly executed proxies will be voted at the Annual Meeting in accordance with your directions on the proxy. If you hold your shares through a broker, bank, trust or other nominee, please refer to the information forwarded by your broker, bank, trust or other nominee for procedures on revoking your proxy. If a properly executed proxy gives no specific instructions, the Shares represented by your proxy will be voted:

●

FOR the election of the seven nominees to serve as trustees until the 2027 annual meeting of shareholders;

●

FOR the approval, on an advisory basis, of the compensation of our named executive officers;

●

FOR the approval of the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan;

●

FOR the approval, in accordance with Section 312.03(c) of the New York Stock Exchange (“NYSE”) Listed Company Manual (the “NYSE Manual”) and Section 11(g) of the Statement of Preferences of 9.00% Series B Cumulative Redeemable Preferred Shares (the “Statement of Preferences”), of the issuance of Common Shares upon the conversion or redemption of any and all of the 9.00% Series B Cumulative Redeemable Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share, of the Company (“Series B Preferred Shares”) purchased by investors in a registered continuous offering, as more fully described herein;

●

FOR the ratification of the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for 2026;

●

AGAINST the shareholder proposal; and

●

at the discretion of the proxy holders with regard to any other matter that is properly presented at the Annual Meeting.

If you own Shares held in “street name” and you do not instruct your broker how to vote your shares using the instructions your broker provides you, your shares will be voted in the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for 2026, but not for any other proposal. To be sure your shares are voted in the manner you desire, you should instruct your broker on how to vote your shares.

Holders of a majority of the outstanding Shares of the Company entitled to vote must be present, either in person (virtually) or by proxy, to constitute a quorum necessary to conduct the Annual Meeting. Abstentions and broker non-votes are counted for purposes of determining the presence of a quorum.

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The following table sets forth the voting requirements, whether broker discretionary voting is allowed and the treatment of abstentions and broker non-votes for each of the matters to be voted on at the Annual Meeting.

Proposal	Vote Necessary to Approve Proposal	Broker Discretionary Voting Allowed?	Treatment of Abstentions and Broker Non-Votes
No. 1 Election of Trustees	Plurality (that is, the largest number) of Shares present or represented by proxy (1)	No	Abstentions and broker non-votes will have no effect

No. 2 Advisory Vote to Approve the Compensation of Our Named Executive Officers	Affirmative vote of a majority of the Shares present or represented by proxy and entitled to vote on the matter	No	Abstentions will have the effect of a vote against the proposal, and broker non-votes are not considered entitled to vote on the matter and will have no effect

No. 3 Approval of the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan	Affirmative vote of a majority of the Shares present or represented by proxy and entitled to vote on the matter	No	Abstentions will have the effect of a vote against the proposal, and broker non-votes are not considered entitled to vote on the matter and will have no effect

No. 4 Approval of the Issuance of Common Shares upon the Conversion or Redemption of the Series B Preferred Shares in accordance with Section 312.03(c) of the NYSE Manual and Section 11(g) of the Statement of Preferences	Affirmative vote of a majority of the Shares present or represented by proxy and entitled to vote on the matter	No	Abstentions will have the effect of a vote against the proposal, and broker non-votes are not considered entitled to vote on the matter and will have no effect

No. 5 Ratification of the Appointment of KPMG	Affirmative vote of a majority of the Shares present or represented by proxy and entitled to vote on the matter	Yes	Abstentions will have the effect of a vote against the proposal

No. 6 Shareholder Proposal	Affirmative vote of a majority of the Shares present or represented by proxy and entitled to vote on the matter	No	Abstentions will have the effect of a vote against the proposal, and broker non-votes are not considered entitled to vote on the matter and will have no effect

(1) Shareholders may vote “FOR” or “WITHHOLD” in the election of trustees. Because trustees need only be elected by a plurality of the vote, in an uncontested election withhold votes will not affect whether any particular nominee has received sufficient votes to be elected.

Attendance at the Annual Meeting will be limited to shareholders of record and beneficial owners who provide proof of beneficial ownership as of the record date in the manner described in the accompanying notice of annual meeting.

While you will not be able to attend the Annual Meeting in person, we have structured our virtual Annual Meeting to provide shareholders the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting. To promote fairness and efficient conduct of the meeting, we will respond to no more than two questions from any single shareholder.

The Company pays the costs of soliciting proxies. We have engaged EQ Fund Solutions, LLC (our “Proxy Solicitor”) to serve as our proxy solicitor for the Annual Meeting at a base fee of $3,500 plus reimbursement of reasonable expenses. Our Proxy Solicitor will provide advice relating to the content of solicitation materials, solicit banks, brokers, institutional investors and other shareholders to determine voting instructions, monitor voting and deliver executed proxies to our voting tabulator. The Company may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of these proxy materials to the beneficial holders and to request instructions for the execution of proxies. The Company may reimburse these persons for their related expenses. Proxies are solicited to provide all record holders of Shares an opportunity to vote on the matters to be presented at the Annual Meeting, even if they cannot attend the meeting in person.

The Annual Meeting will be held exclusively through a virtual format. Please see the other information herein, including the accompanying notice of annual meeting, about how to access the Annual Meeting. As always, we encourage you to vote your shares prior to the Annual Meeting.

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PROPOSAL 1 ‒
ELECTION OF TRUSTEES

At the Annual Meeting, seven trustees will be elected to serve one-year terms expiring at our annual shareholders meeting in 2027 and until their respective successors are duly elected and qualified. This section contains information relating to the seven trustee nominees. The trustee nominees were selected by our nominating and corporate governance committee and approved by the Board for submission to the shareholders. The nominees for election are Messrs. Dondero, Mitts, Constantino, and Kavanaugh, Dr. Laffer, Dr. Swain and Ms. Wood. All currently serve as trustees.

Below is a summary of the experience and skills, age and tenure of our trustee nominees.

Mr.

Dondero

Mr.

Mitts

Mr.

Constantino

Mr.

Kavanaugh

Dr.

Laffer

Dr.

Swain

Ms.

Wood

Executive Leadership

Real Estate/REIT Experience

Business Operations

Strategic Development/Planning

Corporate Governance

Financial and Accounting

Risk Management

Capital Markets/Financial Services

Technology, including Cybersecurity and AI Governance

Sustainability, including Environmental and Human Capital

Mr.

Dondero

Mr.

Mitts

Mr.

Constantino

Mr.

Kavanaugh

Dr.

Laffer

Dr.

Swain

Ms.

Wood

Independent

Independent

Age Range

59 and under

60-64

65-69

70 and older

Tenure on Board

0-5 years

The composition of our Board reflects our belief that multiple and varied points of view facilitate more balanced, wide-ranging discussion in the boardroom and contribute to a more effective decision-making process.

The Board unanimously recommends a vote FOR the election of each of the nominees.

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Nominees to be elected for terms expiring at the Annual Meeting in 2027

James Dondero, age 63, has served as our President since 2015 and as Chairman of our Board since July 2022. Mr. Dondero also serves as President and Chairman of the board of directors of NexPoint Real Estate Finance, Inc. (“NREF”), a publicly traded commercial mortgage real estate investment trust (a “REIT”), since February 2020, as President and Chairman of the board of directors of NexPoint Residential Trust, Inc. (“NXRT”), a publicly traded multifamily REIT since May 2015, and as Chairman of the board of directors of VineBrook Homes Trust, Inc. (“VineBrook”), a single-family rental REIT, since August 2022. Mr. Dondero also previously served as President and a member of the board of directors of VineBrook from February 2019 to August 2021 and has served as a member of the board of directors of NexPoint Homes Trust, Inc. (“NXHT”), a single-family rental REIT, since June 2022. Mr. Dondero is also: founder and president of NexPoint Advisors, L.P. (our “Sponsor”), an investment advisor registered with the Securities and Exchange Commission (the “SEC”); and a member of the board of directors of NexBank, a Texas state chartered bank (“NexBank”); and Chairman of NexBank Capital, Inc. (“NexBank Capital”). Mr. Dondero co-founded Highland Capital Management, L.P. (“Highland”), in 1993 with Mark Okada and served as President from 2004 to 2020. Mr. Dondero has over 30 years of experience investing in credit and equity markets and has helped pioneer credit asset classes in structured products such as collateralized loan obligations (“CLOs”). Mr. Dondero also served as the Chief Executive Officer of NexPoint Hospitality Trust, Inc. (“NHT”), a publicly traded hospitality REIT that was listed on the TSX Venture Exchange, from December 2019 until its reorganization and merger with a subsidiary of the Company in April 2025. Mr. Dondero also served as a director of Jernigan Capital, Inc., a self-storage lending REIT, from August 2016 to November 2020. He also serves as President of NexPoint Capital, Inc. (“NexPoint Capital”) and NexPoint Real Estate Strategies Fund (“NRESF”), both of which are affiliates of NexPoint Real Estate Advisors X, L.P. (our “Adviser”). Mr. Dondero also served on the board of directors of MGM Studios from 2009 until 2020. NREF, VineBrook, NXRT, NXHT, our Sponsor, NexBank, NexBank Capital, NexPoint Capital and NRESF may be affiliates of the Company. On October 16, 2019, Highland filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware. The case was transferred to the Bankruptcy Court for the Northern District of Texas and remains open. On April 13, 2018, the Bankruptcy Court for the Northern District of Texas entered orders for relief placing Acis Capital Management, L.P. and Acis Capital Management GP, LLC in involuntary bankruptcy. Mr. Dondero served as President of Acis Capital Management GP, LLC, which is the general partner of Acis Capital Management, L.P. On January 31, 2019, the court confirmed Acis’s plan of reorganization. Mr. Dondero was selected to serve on the Board because of his prior service as a director and his experience as an executive officer.

Brian Mitts, age 55, has served as a member of our Board since July 2022 and served as our Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary from July 2022 to December 2024. Mr. Mitts co-founded NexPoint Real Estate Advisors, L.P. (“NREA”), which is the parent of our Adviser, as well as NXRT, NREF and other real estate businesses with Mr. McGraner and Mr. Dondero. Prior to co-founding NREA, NXRT and NREF, Mr. Mitts was Chief Operations Officer of Highland Funds Asset Manager, L.P., the external advisor of open-end and closed-end funds where he managed the operations of these funds and helped develop new products. Mr. Mitts was also a co-founder of our Sponsor. He worked for NREA or its affiliates from 2007 to 2024. Mr. Mitts has served as a director of NXRT since September 2014 and served as the Chief Financial Officer, Executive Vice President-Finance and Treasurer of NXRT from March 2015 to December 2024. Mr. Mitts also served as Secretary of NXRT from February 2019 to December 2024. From September 2014 to March 2015, Mr. Mitts served as President and Treasurer of NXRT. Mr. Mitts also served as the Chief Financial Officer, Executive VP-Finance, Treasurer and Corporate Secretary of NHT from December 2018 to December 2024. In addition, he has served as a director of VineBrook since July 2018 and as Chief Financial Officer, Treasurer and Assistant Secretary of VineBrook from November 2018 to August 2024, as President from February 2023 to December 2024 and as Chief Executive Officer from February 2024 to August 2024. From July 2018 to October 2018, Mr. Mitts served as President and Treasurer of VineBrook and from September 2021 to February 2023, Mr. Mitts served as Interim President of VineBrook. Additionally, Mr. Mitts has served as a member of the board of directors of NREF since June 2019 and served as the Chief Financial Officer, Executive VP-Finance, Secretary and Treasurer of NREF from June 2019 to December 2024. From November 2020 to December 2024, Mr. Mitts also served as Chief Financial Officer, Secretary and Treasurer of NexPoint Storage Partners, Inc. (“NSP”), a self-storage REIT, and has served as a member of the board of directors of NSP since March 2023. In addition, Mr. Mitts also served as President and Treasurer of NXHT from February 2022 to December 2024 and additionally as Chief Executive Officer, Chief Financial Officer, and Assistant Secretary of NXHT from June 2022 to December 2024 and has served as a member of the board of directors of NXHT since June 2022. NREF, VineBrook, NXRT, NXHT and NSP may be deemed to be affiliates of the Company. Mr. Mitts was selected to serve on our Board because of his prior service as a director and his experience as an executive officer.

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Edward Constantino, age 79, has served as a member of the Board since March 2022. Mr. Constantino has served as a member of the board of directors of NXRT since March 2015, as a member of the board of directors of VineBrook since February 2019, as a member of the board of directors of NREF since February 2020 and as a member of the board of directors of NXHT since June 2022. Mr. Constantino has over 40 years of audit, advisory and tax experience working for two major accounting firms, Arthur Andersen LLP and KPMG. Mr. Constantino retired from KPMG in late 2009, where he was an audit partner in charge of the firm’s real estate and asset management businesses. Mr. Constantino is, and since 2010 has been, a member of the board of directors of Patriot National Bancorp, Inc. Mr. Constantino has also served as a consultant for the law firm Skadden, Arps, Slate, Meagher & Flom LLP. He is a licensed CPA, a member of the American Institute of Certified Public Accountants and a member of the New York State Society of Public Accountants. He is currently a member of the board of trustees and part of the Finance and Investment Committee of St. Francis College in Brooklyn Heights, New York. He is also a board member and audit committee chair of ARC Trust, Inc. and ARC Trust III, Inc. Mr. Constantino was selected to serve on the Board because of his extensive accounting experience, particularly in the real estate field.

Scott Kavanaugh, age 65, has served as a member of the Board since July 2022. Mr. Kavanaugh has served as a member of the board of directors of NXRT since March 2015, as a member of the board of directors of VineBrook since December 2018, and as a member of the board of directors of NREF since February 2020. He has also served as a member of the board of directors of NXHT since June 2022. Mr. Kavanaugh has served as an Executive Vice President of Provident Funding Associates, L.P., a mortgage lender and servicer, since July 2025. Mr. Kavanaugh served as the CEO of First Foundation Inc. (“FFI”), a financial services company from December 2009 to November 2024. From June 2007 until December 2009, he served as President and Chief Operating Officer of FFI. Mr. Kavanaugh was the Vice-Chairman of FFI from June 2007 to November 2024. From September 2007 until November 2024, he also served as the Chairman and CEO of FFI’s wholly owned banking subsidiary, First Foundation Bank. Mr. Kavanaugh was a founding stockholder and served as an Executive Vice President and Chief Administrative Officer and a member of the board of directors of Commercial Capital Bancorp, Inc., the parent holding company of Commercial Capital Bank, from 1999 until 2003. From 1998 until 2003, Mr. Kavanaugh served as the Executive Vice President and Chief Operating Officer and a director of Commercial Capital Mortgage. From 1993 to 1998, Mr. Kavanaugh was a partner and head of trading for fixed income and equity securities at Great Pacific Securities, Inc., a west coast-based regional securities firm. Mr. Kavanaugh is, and since 2009 has been, a member of the board of directors of Colorado Federal Savings Bank and its parent holding company, Silver Queen Financial Services, Inc. Mr. Kavanaugh was selected to serve on the Board because of his expertise in investment management and his experience as both an executive officer and a director of multiple companies.

Dr. Arthur Laffer, age 85, has served as a member of the Board since July 2022. Dr. Laffer has served as a member of the board of directors of NXRT since May 2015, as a member of the board of directors of VineBrook since December 2018, and as a member of the board of directors of NREF since February 2020. He has also served as a member of the board of directors of NXHT since June 2022. Dr. Laffer is the founder and has served as chairman of Laffer Associates, an economic research and consulting firm since 1978 and served as the chairman and director of Laffer Investments, a registered investment advisor, from 1999 to 2019. Since 2017, Dr. Laffer has served as Secretary of 1065 Institute, Inc., a 501(c)(3) non-profit. A former member of President Reagan’s Economic Policy Advisory Board during the 1980s, Dr. Laffer’s economic acumen and influence have earned him the distinction in many publications as the Father of Supply-Side Economics. He has served on several boards of directors of public and private companies, including staffing company MPS Group, Inc., which was sold to Adecco Group for $1.3 billion in 2009. Dr. Laffer served as a director of VerifyMe, Inc. from 2019 to September 2025. Dr. Laffer served as a director of GEE Group, Inc., a provider of specialized staffing solutions, from 2014 to 2020. Dr. Laffer has served as a director of Brera Holdings PLC, operating under the name Solmate Infrastructure, a Solana-based crypto infrastructure company, since September 2025. Dr. Laffer was previously a consultant to Secretary of the Treasury William Simon, Secretary of Defense Donald Rumsfeld and Secretary of the Treasury George Shultz. In the early 1970s, Dr. Laffer was the first to hold the title of Chief Economist at the Office of Management and Budget under Director Shultz. Additionally, Dr. Laffer was formerly the Distinguished University Professor at Pepperdine University and a member of the Pepperdine University board of directors. He also served as Charles B. Thornton Professor of Business Economics at the University of Southern California and as Associate Professor of Business Economics at the University of Chicago. Dr. Laffer was selected to serve on the Board because of his expertise in economics and his experience as a director of multiple companies.

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Dr. Carol Swain, age 72, has served as a member of the Board since August 2022. In addition, she has served as a member of the board of directors of NXRT, as a member of the board of directors of VineBrook and as a member of the board of directors of NREF since August 2022. She has also served as a member of the board of directors of NXHT since August 2022. Dr. Swain is an author, speaker, political commentator and entrepreneur. She founded REAL Unity Training Solutions LLC in November 2020 and founded Carol Swain Enterprises, LLC in October 2014. Dr. Swain previously was a professor at Vanderbilt University from August 1999 to 2017. Dr. Swain has also served on the Tennessee Advisory Committee to the U.S. Civil Rights Commission, the National Endowment for the Humanities, and the 1776 Commission. Dr. Swain received her Bachelor of Arts from Roanoke College, a master’s degree in political science from Virginia Tech, a Ph.D. in political science from the University of North Carolina at Chapel Hill and a Master of Legal Studies from Yale Law School. Dr. Swain was selected to serve on our Board because of her experience in the fields of political science, law and government.

Catherine Wood, age 70, has served as a member of the Board since August 2022. In addition, she has served as a member of the boards of directors of NREF and VineBrook since July 2020, and as a member of the board of directors of NXRT since July 2020. She has also served as a member of the board of directors of NXHT since June 2022. Ms. Wood is currently Chief Executive Officer, Chief Investment Officer and a board member of ARK Investment Management LLC (“ARK”), an SEC-registered investment advisor, which she founded in January 2014. Ms. Wood is also currently Chief Executive Officer, Chief Investment Officer and a board member of ARK ETF Trust. Prior to ARK, Ms. Wood spent 12 years at AllianceBernstein as Chief Investment Officer of Global Thematic Strategies. Ms. Wood joined AllianceBernstein from Tupelo Capital Management, a hedge fund she co-founded. Prior to her tenure at Tupelo Capital Management, Ms. Wood worked for 18 years at Jennison Associates LLC as Chief Economic Officer and several other positions. Ms. Wood started her career in Los Angeles at The Capital Group as an Assistant Economist. Ms. Wood received her Bachelor of Science, summa cum laude, in Finance and Economics from the University of Southern California. Ms. Wood was selected to serve on the Board because of her experience as it relates to disruptive technologies, business models and processes, which provides an important perspective to the Board.

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PROPOSAL 2 –
ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are submitting the compensation of our named executive officers, as disclosed in this proxy statement, to our shareholders for an advisory vote.

As described below under the heading “Executive Compensation,” we are externally managed by our Adviser through an agreement dated July 1, 2022 (as amended, the “Advisory Agreement”) by and among the Company and our Adviser. Our Adviser conducts substantially all of our operations and provides asset management services for our real estate investments. Our named executive officers for fiscal year 2025 currently serve as officers of our Adviser and we have no employees as of March 27, 2026. Because our Advisory Agreement provides that our Adviser is responsible for managing our affairs, our named executive officers for fiscal year 2025 did not receive any cash compensation from us or any of our subsidiaries for serving as our executive officers. Additionally, we do not have any agreements with any of our named executive officers with respect to their cash compensation and do not intend to directly pay any cash compensation to them. However, from time to time we may grant to our named executive officers equity-based awards pursuant to our equity incentive plans, which we believe serve to align the interests of our named executive officers with the interests of our shareholders.

We do not determine the cash compensation payable by the Adviser to our named executive officers. The Adviser and its affiliates determine the salaries, bonuses and other wages earned by our named executive officers from our Adviser and its affiliates. The Adviser and its affiliates also determine whether and to what extent our named executive officers will be provided with employee benefit plans.

In 2025, our shareholders approved the compensation of our named executive officers by 88.6% of the votes cast. The vote on this proposal is not intended to address any specific element of compensation. Rather, the vote relates to the overall compensation of our named executive officers, as described under the heading “Executive Compensation” in this proxy statement. We are asking our shareholders to approve the following advisory resolution at our Annual Meeting:

“RESOLVED, that the compensation of the Company’s named executive officers, as disclosed pursuant to the rules of the Securities and Exchange Commission, including the overview of executive compensation, compensation tables and narrative discussion is hereby APPROVED.”

This vote is advisory and is not binding on the Company, our Board or the compensation committee. However, the compensation committee expects to consider the outcome of this advisory vote in evaluating whether any actions are appropriate with respect to our compensation programs for our executive officers. At the 2023 annual meeting of shareholders, a majority of the Company’s shareholders voted in favor of holding advisory votes on the Company’s executive compensation on an annual basis, and, in light of this vote, the Board adopted a policy of holding such advisory votes annually. Unless the Board determines otherwise, we will continue to hold advisory votes on the Company’s executive compensation on an annual basis, and the next advisory vote following this year’s vote will be held at the 2027 annual meeting of shareholders.

The Board unanimously recommends a vote FOR the approval of the compensation of our named executive officers.

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PROPOSAL 3 ‒
APPROVAL OF THE NEXPOINT DIVERSIFIED REAL ESTATE TRUST

2026 LONG TERM INCENTIVE PLAN

Executive Summary and Selected Plan Information

*Introduction*	We are asking our shareholders to approve the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan (the “2026 LTIP”). The 2026 LTIP is intended to replace the NexPoint Diversified Real Estate Trust 2023 Long Term Incentive Plan (as amended and restated, the “2023 LTIP”). The 2023 LTIP is our only existing compensatory plan under which equity awards relating to our Common Shares can currently be granted. On February 23, 2026, the compensation committee of the Board recommended that the Board approve the 2026 LTIP, and the Board unanimously approved the 2026 LTIP, determined that the 2026 LTIP was advisable and in the best interests of the Company and the Company’s shareholders and directed that approval of the 2026 LTIP be submitted for consideration by our shareholders at the annual meeting.

*Proposed Share Reserve*	The number of Common Shares that will be authorized for issuance pursuant to the 2026 LTIP will not exceed in the aggregate, 1,872,000 shares (the “Share Reserve”).

*Governance* *Highlights and Best Practices of the 2026 LTIP*	The 2026 LTIP incorporates certain compensation governance provisions that reflect best and prevalent practices. These include:
	●	Minimum one-year vesting period for all awards, subject to certain exceptions described in the 2026 LTIP.
	●	Annual limit of $350,000 compensation (including, but not limited to, cash fees and equity awards under the 2026 LTIP) that may be paid or awarded to a non-employee trustee with respect to his or her trustee service in any period of one calendar year.
	●	No “liberal” share counting for any awards.
	●	No acceleration of vesting of awards outside of death or disability, in the event of a double-trigger change in control of the Company (as described below) or where such awards are not assumed or converted into replacement awards (as described below).
	●	Prohibition on discounted option rights and stock appreciation rights (“SARs”).
	●	No repricing of option rights or SARs and no cash buyout of underwater option rights and SARs without shareholder approval.
	●	No dividends or dividend equivalents paid out currently on unvested awards.
	●	No dividends or dividend equivalents on option rights or SARs.
	●	No evergreen features.
	●	“Double-trigger” vesting for change in control benefits.
	●	No tax “gross-ups” for excise taxes payable in connection with a change in control.
	●	Clawback provisions.

*Expected Duration* *and Impact on* *Dilution (as measured* *through burn rate and overhang)*	The Company recognizes the impact of dilution on our shareholders and has evaluated the request for Common Shares under the 2026 LTIP very carefully in the context of the need to motivate, retain and ensure our leadership team is focused on our strategic and long-term growth priorities. Equity is an important component of a compensation program that aligns with our strategy of achieving long-term, sustainable growth.

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	Based on current expectations for possible future awards, the Company is recommending that 1,872,000 Common Shares be made available for issuance under the 2026 LTIP. Based on the closing price on the NYSE for our Common Shares on March 27, 2026 of $4.25 per share, the aggregate market value as of March 27, 2026 of Common Shares requested under the 2026 LTIP was $7,956,000. The Company anticipates these Common Shares will be sufficient to cover equity awards for the next few years. Despite this estimate, the duration of the Share Reserve may be shorter or longer depending on various factors such as share price, aggregate equity needs and equity award type mix. Common measures for the use of share incentive plans include the burn rate and the overhang rate. The burn rate measures the annual dilution from equity awards granted during a particular year. We have previously issued awards under the 2023 LTIP. The three-year average burn rate from fiscal year 2023 to 2025 is 2.48%. The following table provides information regarding our annual burn rate over the past three completed fiscal years. The amounts shown in the table reflect awards granted and Common Shares outstanding.

	Year	Time-Based RSUs Granted (#)	Weighted Avg. Shares Outstanding (#)	Burn Rate (%)
	2023	603,486	37,333,522	1.62%
	2024	1,033,787	40,228,781	2.55%
	2025	1,510,235	46,251,816	3.27%

	The overhang rate is a measure of potential dilution to holders of Common Shares. As of March 27, 2026, there were 50,219,590 Common Shares outstanding, 2,869,669 Common Shares subject to full-value outstanding equity awards, zero outstanding options or SARs and 25 Common Shares remaining under the 2023 LTIP. These 25 shares remaining under the 2023 LTIP shall be cancelled upon enactment of the 2026 LTIP. Any Common Shares issued from March 27,2026 through the effective date of the 2026 LTIP shall be subtracted from the 2026 LTIP Share Reserve upon shareholder approval of the 2026 LTIP. If we exclude the impact of the Share Reserve request, the Company’s overhang rate as of March 27, 2026 is 5.4% on a fully diluted basis. If the Company includes the Share Reserve request of 1,872,000 Common Shares, the Company’s overhang rate with respect to Common Shares will be approximately 8.6% on a fully diluted basis. The Company believes this is a reasonable level of dilution and provides the Company with the appropriate flexibility to ensure meaningful equity awards in future years to executives and other key service providers to better align their interests with the interests of shareholders.

*Plan Term*	The 2026 LTIP will expire on the tenth anniversary of the date the 2026 LTIP was approved by the Company’s shareholders, unless earlier terminated by the compensation committee. Awards granted under the 2026 LTIP prior to such expiration date shall continue to be controlled by its terms.

Board Recommendation

The Board recommends that the Company’s shareholders vote in favor of the 2026 LTIP. The 2026 LTIP affords the compensation committee the ability to design compensatory awards that are responsive to the Company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the Company by attracting, retaining and motivating officers, key employees, non-employee trustees and other eligible service providers of the Company Group (as defined below).

If the 2026 LTIP is approved by shareholders, it will be effective as of the day of the annual meeting and we will not issue any new awards under the 2023 LTIP on or after the date of such shareholder approval. Awards previously granted under the 2023 LTIP would be unaffected by the adoption of the 2026 LTIP, and such awards would remain outstanding under the terms pursuant to which they were granted. If the 2026 LTIP is not approved by our shareholders, no awards will be made under the 2026 LTIP and the 2023 LTIP will remain in effect in its current form.

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In evaluating this proposal, shareholders should consider all of the information in this proposal.

The Board unanimously recommends a vote FOR the approval of the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan.

Summary of Material Terms of the 2026 LTIP

The following description of the 2026 LTIP is only a summary of its principal terms and provisions and is qualified in its entirety by reference to the full copy of the 2026 LTIP, attached as Appendix A to this proxy statement.

Purpose

The 2026 LTIP is designed to provide competitive incentives intended to attract, retain, incentivize and reward eligible participants.

Eligibility for Participation

Certain individuals selected by the compensation committee who are an officer or other key employee of the Company Group (or have agreed to serve in such capacity within 90 days of the grant date), an individual providing services to the Company Group (provided he or she satisfies the Form S-8 definition of “employee”) or a non-employee trustee of the Company at the time of an award’s grant are eligible to participate in the 2026 LTIP. Under the 2026 LTIP, “Company Group” includes (i) the Company and any of its affiliates or subsidiaries, including our Adviser and the OP, (ii) any entity, directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with our Adviser, or (iii) the successors of any of the entities in romanettes (i) and (ii) (together, the “Company Group” and any member of the Company Group, a “Company Group Member”).

As of March 27, 2026, there were approximately 41 employees of our Company Group and six non-employee trustees of the Company expected to participate in the 2026 LTIP. As of March 27, 2026, there were zero consultants expected to participate in the 2026 LTIP.

Plan Administration

The 2026 LTIP will generally be administered by the compensation committee (or its successor), or any other committee of the Board designated by the Board to administer the 2026 LTIP. As plan administrator, the compensation committee has broad authority to determine the terms of the awards granted under the 2026 LTIP (subject to the terms thereof) and to make all other determinations it deems necessary or advisable to administer the 2026 LTIP properly. The interpretation and construction by the compensation committee of any provision of the 2026 LTIP or of any award agreement or related document, and any determination by the compensation committee pursuant to any provision of the 2026 LTIP or of any such agreement, notification or document, will be final and conclusive.

The compensation committee may also delegate its authority under the 2026 LTIP: (i) to a subcommittee of the compensation committee; (ii) if permitted by applicable law and with respect to the committee’s administrative duties and powers, to one or more committee members, officers, agents or advisors of the Company as it deems advisable; and (iii) by resolution to one or more officers of the Company with respect to selecting eligible employee participants (provided they are not subject to Section 16 of the Exchange Act reporting requirements) and determining award size, subject to certain additional limitations in the 2026 LTIP.

Shares Available for Awards and ISOs

Subject to adjustment as provided in the 2026 LTIP, the number of Common Shares that may be issued or transferred under the 2026 LTIP shall not exceed the Share Reserve. The maximum number of Common Shares that may be issued pursuant to an “incentive stock option” (as defined in Section 422 of the Internal Revenue Code (the “Code”)) (an “ISO”) may not exceed 1,872,000 Common Shares.

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Share Counting Provisions

The Share Reserve shall be reduced by one Common Share for every Common Share ultimately issued or transferred under the 2026 LTIP. If any award granted under the 2026 LTIP or the 2023 LTIP is cancelled or forfeited, expires, is settled for cash (in whole or in part) or otherwise does not result in the issuance or transfer of all or a portion of the Common Shares subject to such award under the 2026 LTIP or the 2023 LTIP, as applicable, then in each case, the Common Shares subject to such award shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, be added to the number of Common Shares available for issuance or transfer under the Share Reserve on a one-for-one basis. Each profits interest unit issued pursuant to an award agreement shall reduce the Share Reserve by one Common Share. In addition, the following types of Common Shares have been issued or transferred pursuant to an award, have been deducted from the Share Reserve, and will not become available again for issuance or transfer under the 2026 LTIP: (a) Common Shares withheld by the Company, tendered or otherwise used in payment of the exercise price of an option right; (b) Common Shares withheld by the Company or tendered or otherwise used to satisfy tax withholding obligations; (c) Common Shares subject to a SAR that are not actually issued or transferred in connection with its settlement of Common Shares on the exercise thereof and (d) Common Shares that are reacquired by the Company on the open market or otherwise using option rights proceeds.

Allowances for Conversion Awards and Assumed Plans

Common Shares issued or transferred under awards granted under the 2026 LTIP in substitution for or conversion of, or in connection with an assumption of, shares or share-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any of its subsidiaries will not count against (or be added back to) the aggregate share limit or other 2026 LTIP limits described above (“Substitute Awards”). Additionally, shares available under certain plans that we or our subsidiaries may assume in connection with corporate transactions from another entity may be available for certain awards under the 2026 LTIP, under the circumstances further described in the 2026 LTIP, but will not count against the aggregate share limit or other 2026 LTIP limits described above (“Assumed Plan Awards”).

Minimum Vesting Requirement

Notwithstanding anything else contained in this proposal to the contrary (except in the case of Substitute Awards, Assumed Plan Awards and cash incentive awards), awards that are granted under the 2026 LTIP will be subject to a minimum vesting and exercise period of one year from the grant date (“Minimum Vesting Requirement”). Notwithstanding the foregoing, the award may provide for acceleration of vesting and/or exercise solely in the event of a participant’s death or disability, in the event of a double-trigger change in control of the Company (as described below) or where such awards are not assumed or converted into replacement awards (as described below). The compensation committee may grant awards covering up to 5% of the maximum number of Common Shares reserved for issuance under the 2026 LTIP (subject to adjustment as provided in the 2026 LTIP) without regard to the Minimum Vesting Requirement.

Types of Awards Under the 2026 LTIP

Pursuant to the 2026 LTIP, the Company may grant option rights (including ISOs), SARs, restricted shares, restricted share units (“RSUs”), performance shares, performance units, cash incentive awards, profits interest units and certain other awards based on or related to our Common Shares.

Each grant of an award under the 2026 LTIP will be evidenced by an award agreement or agreements which will contain such terms and conditions as the compensation committee may determine, consistent with the 2026 LTIP. Each award may be subject to time-based, service-based or performance-based vesting. A brief description of the types of awards which may be granted under the 2026 LTIP is set forth below.

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Option Rights	An option right is a right to purchase Common Shares of the Company upon the exercise of the option right. Option rights granted under the 2026 LTIP may consist of ISOs, nonqualified options that are not intended to qualify as an ISO or a combination of both. ISOs may only be granted to participants who meet the definition of employee under Section 3401(c) of the Code. Except with respect to Substitute Awards and Assumed Plan Awards, option rights must have an exercise price per share that is not less than the fair market value of a share on the date of grant, and with respect to ISOs granted to holders of more than 10% of the Company’s Common Shares, such ISOs must have an exercise price per share that is not less than 110% of the fair market value of a share on the date of grant. The term of an option right may not extend more than ten years after the date of the grant; provided, that in the case of ISOs granted to holders of more than 10% of the Company’s Common Shares, no such option right shall be exercisable more than five years from the date of the grant.

	Each grant of an option right will specify the applicable terms of the option right, including the number of Common Shares subject to the option right and the applicable vesting and forfeiture provisions (whether based on service, performance or otherwise), as determined by the compensation committee.

	In addition, each grant will specify the form of consideration to be paid in satisfaction of the exercise price, which may include: (a) cash or check acceptable to the Company, or wire transfer of immediately available funds; (b) the actual or constructive transfer to the Company of Common Shares owned by the participant (or certain other consideration permitted under the 2026 LTIP) with a value at the time of exercise that is equal to the total exercise price; (c) subject to any conditions or limitations established by the compensation committee, by a net exercise arrangement pursuant to which the Company will withhold Common Shares otherwise issuable upon exercise of an option right; (d) by a combination of the foregoing methods; and (e) such other methods as may be approved by the compensation committee. To the extent permitted by law, any option right may provide for deferred payment of the exercise price from the proceeds of a sale through a bank or broker of some or all of the Common Shares to which the exercise relates. Option rights granted under the 2026 LTIP may not provide for dividends or dividend equivalents.

SARs	The 2026 LTIP provides for the grant of SARs. A SAR is a right to receive from us an amount equal to 100%, or such lesser percentage as the compensation committee may determine, of the spread between the base price and the value of our Common Shares on the date of exercise.

	Each grant of a SAR will be evidenced by an award agreement which specifies the applicable terms and conditions of such award, including any vesting and forfeiture provisions (whether based on service, performance or otherwise), as specified by the compensation committee. A SAR may be paid in cash, Common Shares or any combination thereof. Except with respect to Substitute Awards and Assumed Plan Awards, the base price of a SAR may not be less than the fair market value of a Common Share on the date of grant. The term of a SAR may not extend more than ten years from the date of grant. SARs granted under the 2026 LTIP may not provide for dividends or dividend equivalents.

Restricted Shares	Restricted shares constitute an immediate transfer of the ownership of Common Shares to the participant in consideration of the performance of services, entitling such participant to distribution, voting and other ownership rights, subject to certain vesting conditions and forfeiture conditions (whether based on service, performance or otherwise) determined by the compensation committee and set forth in an award agreement specifying the terms and conditions of the award. Each such grant or sale of restricted shares may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per Common Share on the date of grant.

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	Any grant of restricted shares shall require that any or all dividends or distributions paid on the restricted shares during the period of such restrictions shall be automatically deferred and paid on a contingent basis based on the participant earning the restricted shares with respect to which such dividends are paid.

Restricted Share Units	RSUs awarded under the 2026 LTIP constitute an agreement by the Company to deliver Common Shares, cash, or a combination thereof, to the participant in the future. Each grant of an RSU award will be evidenced by an award agreement, which specifies the applicable terms and conditions of such award, including any vesting and forfeiture provisions (whether based on service, performance or otherwise) as determined by the compensation committee. Each grant or sale of RSUs may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per Common Share on the date of grant. During the restriction period applicable to RSUs, the participant will have no right to transfer any rights under the award and will have no rights of ownership in the Common Shares underlying the RSUs and no right to vote them or receive dividends thereon. Rights to dividend equivalents may be extended to and made part of any RSU award at the discretion of and on the terms determined by the compensation committee, subject to deferral and payment on a contingent basis based on the participant earning the RSUs with respect to which such dividend equivalents are paid.

Performance Shares, Performance Units and Cash Incentive Awards	Performance shares, performance units and cash incentive awards may also be granted to participants under the 2026 LTIP. A performance share is a bookkeeping entry that records the equivalent of one Common Share, and a performance unit is a bookkeeping entry that records a unit equivalent to $1.00 or such other value as determined by the compensation committee. Each grant will specify the applicable terms of the award, including the number or amount of performance shares or performance units, or the amount payable with respect to cash incentive awards, and the applicable vesting and forfeiture provisions (whether based on service, performance or otherwise), as determined by the compensation committee.

	In addition, each grant will specify the time and manner of payment of performance shares, performance units or cash incentive awards that have been earned, and any grant may further specify that any such amount may be paid or settled by the Company in cash, Common Shares, restricted shares, RSUs or any combination thereof. Performance shares, performance units and cash incentive awards are not entitled to receive dividends. Any grant of performance shares may provide for the payment of dividend equivalents in cash or in additional Common Shares, subject to deferral and payment on a contingent basis based on the participant’s earning of the performance shares with respect to which such dividend equivalents are paid.

Profits Interest Units	A profits interest unit is a unit of the OP which is intended to constitute a “profits interest” within the meaning of Revenue Procedures 93-27 and 2001-43. Profits interest units are a form of appreciation award that is valued by reference to the value of a limited partnership interest in the OP. Each grant of profits interest units shall be evidenced by an award agreement setting forth the award’s applicable terms and conditions, including the applicable vesting and forfeiture provisions (whether based on service, performance or otherwise), as determined by the compensation committee.

	A profits interest unit may only be issued to a participant for the performance of services to, or for the benefit of, the OP in the participant’s capacity as a partner of the OP, in anticipation of becoming a partner of the OP, or otherwise as determined by the compensation committee; provided, that, the profits interest units are intended to constitute “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43. Profits interest units granted under the 2026 LTIP may not provide for dividends or dividend equivalents of the Company, but may be eligible to receive distributions from the OP in accordance with the OP’s partnership agreement.

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Other Awards

The compensation committee may grant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Shares, factors that may influence the value of such Common Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares, awards with value and payment contingent upon performance of the Company or specified subsidiaries, affiliates or other business units or any other factors designated by the compensation committee, awards valued by reference to the book value of Common Shares or the value of securities of, or the performance of the subsidiaries, affiliates or other business units of the Company, awards that are membership interests in a subsidiary or operating partnership, and interests in the OP. The terms and conditions of any such awards will be determined by the compensation committee. Common Shares delivered under an award in the nature of a purchase right granted under the 2026 LTIP will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, Common Shares, other awards, notes or other property, as the compensation committee determines.

Additionally, the compensation committee may grant cash awards as an element of any other award, Common Shares as a bonus, or may grant other awards in lieu of obligations of the Company or a subsidiary to pay cash or deliver other property under the 2026 LTIP or under other plans or compensatory arrangements, subject to terms determined by the compensation committee in a manner that complies with Section 409A of the Code.

Awards in the category of “other awards” under the 2026 LTIP shall not be entitled to dividends. Rights to dividend equivalents may be extended to and made part of such other awards at the discretion of and on the terms determined by the compensation committee, subject to deferral and payment on a contingent basis based on the participant earning the award with respect to which such dividend equivalents are paid.

Adjustments; Corporate Transactions

If there is any change in the Company’s capitalization (including resulting from a stock split) or a corporate transaction (including a merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, redomestication, partial or complete liquidation or other distribution of assets, or issuance of rights or warrants to purchase securities), the compensation committee will adjust the number and kind of Common Shares or other securities permitted to be delivered under the 2026 LTIP, adjust the terms of outstanding awards, including the number and kind of Common Shares or other securities subject to outstanding awards, in each case as and to the extent the compensation committee determines an adjustment to be appropriate and equitable, to prevent dilution or enlargement of rights.

In the event of any such transaction or event, or in the event of a change in control of the Company, the compensation committee may provide in substitution for any or all outstanding awards under the 2026 LTIP such alternative consideration (including cash), if any, as it may in good faith determine to be equitable under the circumstances and will require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code.

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“Double-Trigger” Accelerated Vesting upon Change in Control

In the event of a change in control, the 2026 LTIP provides that the vesting of awards will accelerate in connection therewith only where the award is not assumed or converted into a “replacement award” (as defined under the 2026 LTIP). To constitute a replacement award, in addition to providing substantially the same economic rights and benefits, the award must also provide that if a participant’s continuous service is involuntarily terminated by the Company Group (including a successor) without cause or the participant terminates his or her continuous service for good reason following the grant of the replacement award, the award will fully vest, subject to any modifications provided in the 2026 LTIP to comply with Code Section 409A.

If an award is not assumed or converted into a replacement award as described above, (a) all awards with time-based vesting conditions or restrictions will become fully vested (and option rights and SARs exercisable) at the time of the change in control; (b) all awards with respect to which the vesting or amount is based on the satisfaction of certain management objectives or other performance-based criteria will be deemed to be achieved or fulfilled at the greater of (i) the performance achieved (as determined by the compensation committee) or (ii) at the target level of performance applicable to the award, prorated based on the elapsed proportion of the performance period as of the date of the change in control; and (c) all awards will be paid or settled on the date of the change in control. In addition, for each option right or SAR with an option price or base price greater than the consideration offered in connection with such change in control, the compensation committee may elect to cancel such option right or SAR without any payment to the participant.

The 2026 LTIP includes a definition of “change in control.” In general, except as may be otherwise prescribed by the compensation committee in any award agreement, a change in control will be deemed to have occurred if: (a) individuals who constitute the Board on the effective date of the 2026 LTIP cease for any reason to constitute at least a majority of the Board, unless their replacements are approved as described in the 2026 LTIP (subject to certain exceptions described in the 2026 LTIP); (b) a person or group becomes the beneficial owner of 35% or more of the then-outstanding Common Shares or the combined voting power of our then-outstanding securities entitled to vote generally in the election of trustees, subject to certain exceptions; (c) the Company closes a reorganization, merger, consolidation, significant sale or purchase of assets, in each case which causes the persons or groups who are the beneficial owners of 35% or more of the then-outstanding Common Shares or the combined voting power of our then-outstanding securities entitled to vote generally in the election of trustees to cease to be such beneficial owners of the entity resulting from such transaction, in substantially the same proportions of ownership as immediately prior to such transaction, as further described in the 2026 LTIP; (d) the Company’s shareholders approve its complete liquidation or dissolution; or (e) the Adviser is terminated.

Management Objectives

The 2026 LTIP permits the Company to grant awards subject to the achievement of certain specified management objectives. Management objectives are defined as the measurable performance objective or objectives established pursuant to the 2026 LTIP for participants who have received grants of performance shares, performance units or cash incentive awards or, when so determined by the compensation committee, option rights, SARs, restricted shares, RSUs, dividend equivalents or other awards. Management objectives may be described in terms of company-wide objectives or objectives that are related to the performance of the individual participant or of one or more of the subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its subsidiaries. The management objectives may be made relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves.

Detrimental Activity and Recapture

Any award agreement may provide for the cancellation or forfeiture and repayment to the Company of any award or gain related to an award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the compensation committee from time to time or as may be required by the compensation committee or under Section 10D of the Exchange Act and any applicable rules and regulations promulgated by the SEC or any national securities exchange or national securities association on which our Common Shares may be traded.

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Effective Date and Term of the 2026 LTIP

The 2026 LTIP will become effective on the date it is approved by the Company’s shareholders and will terminate as to future awards on the tenth anniversary thereof.

If the 2026 LTIP is approved by shareholders, we will not issue any new awards under the 2023 LTIP on or after the date of such shareholder approval. Awards previously granted under the 2023 LTIP would be unaffected by the adoption of the 2026 LTIP, and such awards would remain outstanding under the terms pursuant to which they were granted.

Amendment and Termination of the 2026 LTIP

The Board may amend the 2026 LTIP at any time, but no amendment, alteration or termination of the 2026 LTIP may impair the rights of any participant with respect to outstanding awards without the participant’s consent or permit the Board to amend awards in violation of the 2026 LTIP’s prohibition on repricing underwater option rights and SARs. In addition, the Board would need shareholder approval of an amendment if it (a) would materially increase the benefits accruing to participants under the 2026 LTIP, (b) would materially increase the number of securities which may be issued under the 2026 LTIP, (c) would materially modify the requirements for participation in the 2026 LTIP, or (d) must otherwise be approved by the Company’s shareholders in order to comply with applicable law or the rules of the stock exchange(s) on which the Common Shares are traded. Shareholder approval will be obtained to increase the Share Reserve (subject to adjustment as described above), and for any amendment that would require such approval to comply with any rules of the stock exchange(s) on which the Common Shares are traded or other applicable law. The Board may, in its discretion, terminate the 2026 LTIP at any time. Termination of the 2026 LTIP will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination.

Limitation on Acceleration of Earning, Vesting or Elimination of Restrictions Applicable to Awards

For the avoidance of doubt, the compensation committee and any award agreement may only provide for the earlier exercise of option rights or SARs, the earlier termination of restrictions on restricted shares, the earlier lapse or modification of the restricted period applicable to RSUs, the earlier lapse or modification of the performance period with respect to cash incentive awards, performance shares and performance units, the earlier vesting of profits interest units or the earlier earning, vesting or elimination of restrictions with respect to other awards in the event of a participant’s death or disability, in the event of a double-trigger change in control of the Company (as described above) or where such awards are not assumed or converted into replacement awards (as described above).

Material U.S. Federal Income Tax Consequences

The following discussion of certain relevant United States federal income tax effects applicable to certain awards granted under the 2026 LTIP is only a summary of certain of the United States federal income tax consequences applicable to United States residents under the 2026 LTIP, and reference is made to the Code for a complete statement of all relevant federal tax provisions. No consideration has been given to the effects of foreign, state, local and other laws (tax or other) on the 2026 LTIP or on a participant, which laws will vary depending upon the particular jurisdiction or jurisdictions involved. In particular, participants who are located outside the United States may be subject to foreign taxes as a result of the 2026 LTIP.

Tax Consequences to Participants

Nonqualified Option Rights: An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon the grant of a nonqualified stock option. Rather, at the time of exercise of the nonqualified stock option, the optionee will recognize ordinary income, and the Company will be entitled to a deduction, in an amount equal to the excess of the fair market value of the Common Shares on the date of exercise over the exercise price. If the Common Shares acquired upon the exercise of a nonqualified stock option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee), depending upon the length of time such shares were held by the optionee.

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Incentive Stock Options: An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon the grant of an ISO (within the meaning of Section 422 of the Code) and the Company will not be entitled to a deduction at that time. If the ISO is exercised during employment or within 90 days following the termination thereof (or within one year following termination, in the case of a termination of employment due to death or disability, as such terms are defined in the 2026 LTIP), the optionee will not recognize any income and the Company will not be entitled to a deduction. The excess of the fair market value of the Common Shares on the exercise date over the exercise price, however, is includible in computing the optionee’s alternative minimum taxable income.

Generally, if an optionee disposes of shares acquired by exercising an ISO before the later of two years from the date of grant or one year from the date of exercise, the optionee will recognize ordinary income, and the Company will be entitled to a deduction, in an amount equal to the excess of the fair market value of the shares on the date of exercise (or the sale price, if lower) over the exercise price. The balance of any gain or loss will generally be treated as a capital gain or loss to the optionee. If the Common Shares are disposed of after the two-year and one-year periods described above, the Company will not be entitled to any deduction, and the entire gain or loss for the optionee will be treated as a capital gain or loss.

SARs: A participant subject to United States federal income tax who is granted a SAR will not recognize ordinary income for United States federal income tax purposes upon receipt of the SAR. At the time of exercise, however, the participant will recognize ordinary income equal to the value of any cash received and the fair market value on the date of exercise of any Common Shares received. The Company will not be entitled to a deduction upon the grant of a SAR, but generally will be entitled to a deduction for the amount of income the participant recognizes upon the participant’s exercise of the SAR. The participant’s tax basis in any Common Shares received will be the fair market value on the date of exercise and, if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of the shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant.

Restricted Shares: A participant subject to United States federal income tax generally will not be taxed upon the grant of a restricted shares award, but rather will recognize ordinary income for United States federal income tax purposes in an amount equal to the fair market value of the shares at the time the restricted shares are no longer subject to a substantial risk of forfeiture (within the meaning of the Code). The Company generally will be entitled to a deduction at the time when, and in the amount that, the participant recognizes ordinary income on account of the lapse of the restrictions. A participant’s tax basis in the shares will equal the fair market value of those shares at the time the restrictions lapse, and the participant’s holding period for capital gains purposes will begin at that time. Any cash dividends paid on the shares before the restrictions lapse will be taxable to the participant as additional compensation (and not as dividend income). Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the restricted shares are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such shares are subject to restrictions and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the restricted shares equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. The Company generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant.

Restricted Share Units: A participant subject to United States federal income tax who is granted a restricted share unit will not recognize ordinary income for United States federal income tax purposes upon the receipt of the restricted share unit, but rather will recognize ordinary income in an amount equal to the fair market value of the Common Shares at the time of settlement, and the Company will have a corresponding deduction at that time.

Performance Shares, Performance Units, Other Share-Based and Cash-Based Awards: In the case of other share-based and other cash-based awards, depending on the form of the award, a participant subject to United States federal income tax will not be taxed upon the grant of such an award, but, rather, will recognize ordinary income for United States federal income tax purposes when such an award vests or otherwise is free of restrictions. In any event, the Company will be entitled to a deduction at the time when, and in the amount that, a participant recognizes ordinary income.

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Profits Interest Units: A participant subject to United States federal income tax who is granted a profits interest unit generally is not expected to recognize taxable income at the time of grant or the vesting of those units, provided that (a) the award qualifies as “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43; (b) the participant does not dispose of the units within two years of issuance; and (c) certain other requirements are met. Participants generally would make the election provided for under Section 83(b) of the Code, recognizing zero income at the time of grant, in which case the profits interest units could be disposed of within two years of issuance. As a holder of profits interest units, however, a participant will be required to report on his or her income tax return his or her allocable share of the OP’s income, gains, losses, deductions and credits in accordance with the OP’s partnership agreement, regardless of whether the OP actually makes a distribution of cash to the participant. Distributions of money by the OP to the participant, will generally be taxable to the participant to the extent that such distributions exceed the participant’s tax basis in the OP. Any such gain generally will be capital gain, but a portion may be treated as ordinary income, depending on the assets of the OP at that time. Generally, no deduction is available to the Company upon the grant, vesting or disposition of the units.

Tax Withholding: The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including employment taxes) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of grants under the plans.

Certain Tax Code Limitations on Deductibility: Our ability to obtain a deduction for future payments could be limited by Section 280G of the Code, which provides that certain payments made in connection with a change in control are not deductible by the Company (and may be subject to additional taxes for the participant).

Section 409A: Some awards under the plans may be considered to be deferred compensation subject to Section 409A of the Code. Failure to satisfy the applicable requirements under this provision for awards considered deferred compensation would result in the acceleration of income and additional income tax liability to the recipient, including certain penalties.

New Plan Benefits

As of the date hereof, no awards have been granted under the 2026 LTIP. The aggregate number of shares and aggregate total dollar value of potential future awards under the 2026 LTIP that may be made to any of our named executive officers or to our executive officers, non-executive officer employees or non-employee trustees as a group is subject to the discretion of the compensation committee and is not yet determinable. Grants under the 2023 LTIP in 2025 to our named executive officers and non-employee trustees are described in the “Executive Compensation” and “The Board, Its Committees and Its Compensation” sections below.

Clawback and Post-Vesting Holding Policies

All awards granted under the 2026 LTIP will be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, including to the extent applicable, the Supplemental Clawback Policy (as defined below). In addition, equity and equity-based awards granted to the Company’s President under the 2026 LTIP will be subject to the Post-Vesting Holding Policy (as defined below). For a more detailed discussion of the Clawback Policies and the Post-Vesting Holding Policy, see “Executive Compensation—Clawback Policies” and “Executive Compensation—Post-Vesting Holding Policy.”

Registration with the SEC

If the 2026 LTIP is approved by our shareholders and becomes effective, we intend to file a Registration Statement on Form S-8 relating to the issuance of Common Shares under the 2026 LTIP with the SEC pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the 2026 LTIP by our shareholders.

The Board unanimously recommends a vote FOR the approval of the NexPoint Diversified Real Estate Trust 2026 Long Term Incentive Plan.

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PROPOSAL 4 ‒
APPROVAL OF THE ISSUANCE OF COMMON SHARES UPON

THE CONVERSION OR REDEMPTION OF THE SERIES B PREFERRED SHARES

IN ACCORDANCE WITH SECTION 312.03(C) OF THE NYSE MANUAL AND

SECTION 11(G) OF THE STATEMENT OF PREFERENCES

Conversion and Redemption of the Series B Preferred Shares

As previously disclosed, on January 30, 2025, the Company launched a continuous registered offering of up to 16,000,000 Series B Preferred Shares (the “Offering”).

Beginning on the first day of the month following the third anniversary of the date of original issuance of the Series B Preferred Shares, the Series B Preferred Shares will be convertible at the option of the holder thereof into Common Shares if the 5-day volume weighted average price of our Common Shares on the NYSE ending on the trading day immediately preceding the date the holder delivers a duly completed conversion notice to the Company (such 5-day VWAP, the “Market Price”) represents a 15.0% premium to the estimated fair market NAV of the Company per Common Share as most recently published by the Company at the time of issuance of the applicable Series B Preferred Share (the “Minimum Market Price Trigger”). If the Minimum Market Price Trigger is satisfied, the Series B Preferred Shares will be convertible at a 6%, 10% or 12% discount to the Market Price beginning on the first day of the month following the third, fourth and fifth anniversary of the date of original issuance of the shares to be converted, respectively.

Beginning on the first day of the month following the date of original issuance of the Series B Preferred Shares, the holders of the Series B Preferred Shares will have the right to require the Company to redeem the Series B Preferred Shares at a redemption price equal to the stated value less a redemption fee calculated thereon, plus an amount equal to accrued but unpaid cash dividends thereon, if any, to but not including the date of redemption. For so long as the Common Shares are listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system, the Company has the right, in its sole discretion, to pay the redemption price in cash or in equal value of Common Shares, based on the closing price per Common Share for the single trading day prior to the date of redemption.

Additionally, beginning on the first day of the first quarter following the second anniversary of the date of original issuance of the Series B Preferred Shares to be redeemed, the Company will have the right (but not the obligation) to redeem all or some portion of outstanding Series B Preferred Shares at a redemption price equal to 100% of the stated value, plus an amount equal to accrued but unpaid cash dividends thereon, if any, to but not including the date of redemption. If the Company chooses to redeem any Series B Preferred Shares, for so long as the Common Shares are listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system, the Company has the right, in its sole discretion, to pay the redemption price in cash or in equal value of Common Shares, based on the closing price per share of the Common Shares for the single trading day prior to the date of redemption.

Further, subject to certain restrictions, in the event of death or disability, the Series B Preferred Shares held by such person may be redeemed beginning on the first day of the month following the first anniversary of the date of original issuance of such Series B Preferred Shares. Beginning on the first day of the month following the first anniversary of the date of original issuance of the Series B Preferred Shares to be redeemed, the Company will redeem such shares at a redemption price equal to 95% of the stated value, and beginning on the first day of the month following the second anniversary of the date of original issuance of the Series B Preferred Shares to be redeemed, the Company will redeem such shares at a redemption price equal to 100% of the stated value, in each case, plus an amount equal to accrued but unpaid cash dividends thereon, if any, to but not including the date of redemption. For so long as our Common Shares are listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system, the Company has the right, in its sole discretion, to pay the redemption price in cash or in equal value of Common Shares, based on the closing price per share of the Common Shares for the single trading day prior to the date of redemption.

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Shareholder Approval Required

Our Common Shares are listed on the NYSE and, as a result, are subject to the rules of the NYSE.

Section 312.03(c) of the NYSE Manual requires shareholder approval prior to any issuance of Common Shares or securities convertible into or exercisable for Common Shares, in any transaction or series of related transactions if (1) the Common Shares have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such Common Shares or securities convertible into or exercisable for Common Shares or (2) if the number of Common Shares to be issued, or will be upon issuance, equal to or in excess of 20% of the number of Common Shares outstanding before the issuance of the Common Shares or of the securities convertible into or exercisable for Common Shares.

Section 11(g) of the Statement of Preferences provides that the Series B Preferred Shares shall not be convertible, in aggregate, into more than 19.99% of the number of Common Shares of voting power outstanding prior to the initial issuance of any Series B Preferred Shares (subject to appropriate adjustment in relation to any recapitalizations, share dividends, share splits, share combinations, reclassifications or other similar events) (the “Conversion Cap”) prior to obtaining approval of the Company’s shareholders in accordance with Section 312.03(c) of the NYSE Manual. If the Company’s shareholders do not approve this proposal, the Conversion Cap will remain in place.

Because the issuance of Common Shares in connection with the conversion of any and all of the Series B Preferred Shares (the “Preferred Conversions”) may exceed the thresholds established by Section 312.03(c) of the NYSE Manual and Section 11(g) of the Statement of Preferences, the Preferred Conversions must be approved by a majority of the shares present or represented by proxy and entitled to vote on the matter. Further, because the issuance of Common Shares in connection with redemptions of any and all of the Series B Preferred Shares (the “Preferred Redemptions”) may exceed the thresholds established by Section 312.03(c) of the NYSE Manual, the Preferred Redemptions must be approved by a majority of the Shares present or represented by proxy and entitled to vote on the matter.

As a result, we are asking our shareholders to approve the following resolution at our Annual Meeting:

“RESOLVED, that the Preferred Conversions and the Preferred Redemptions be, and hereby are, approved in all respects, including, for the avoidance of doubt, for purposes of Section 312.03(c) of the NYSE Manual and Section 11(g) of the Statement of Preferences.”

The Board unanimously recommends a vote FOR the approval of the issuance of Common Shares upon the Preferred Conversions and the Preferred Redemptions in accordance with Section 312.03(c) of the NYSE Manual and Section 11(g) of the Statement of Preferences.

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PROPOSAL 5 –
RATIFICATION OF APPOINTMENT OF
KPMG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2026

The audit committee has appointed KPMG as the Company’s independent registered public accounting firm for 2026. The Board is asking shareholders to ratify this appointment. SEC regulations and the NYSE listing requirements require the Company’s independent registered public accounting firm to be engaged, retained and supervised by the audit committee. However, the Board considers the selection of an independent registered public accounting firm to be an important matter to shareholders. Accordingly, the Board considers a proposal for shareholders to ratify this appointment to be an opportunity for shareholders to provide input to the audit committee and the Board on a key corporate governance issue.

Representatives of KPMG are expected to virtually attend the Annual Meeting and will have the opportunity to make a statement. They will also be available to respond to appropriate questions.

Selection. KPMG served as the Company’s independent registered public accounting firm for 2025 and has been selected by the audit committee to serve as the Company’s independent registered public accounting firm for 2026.

Audit and Non-Audit Fees. The following table presents fees for audit services rendered by KPMG for the audit of the Company’s annual financial statements for 2025 and 2024, and fees billed for other services rendered by KPMG.

	DECEMBER 31, 2025		DECEMBER 31, 2024
Audit Fees⁽¹⁾	$	1,340,000	$	1,265,000
Audit-Related Fees		-		-
Tax Fees ⁽²⁾		265,680		250,210
All Other Fees		-		-
Total	$	1,608,680	$	1,515,210

(1)

Includes fees for audits of our annual financial statements, reviews of the related quarterly financial statements, and services that are normally provided by the independent accountants in connection with statutory and regulatory filings or engagements, including comfort letters and consents issued in connection with SEC filings and reviews of documents filed with the SEC.

(2)	Includes fees billed for professional services rendered for tax compliance, tax advice and tax planning.

Pursuant to the charter of the audit committee, the audit committee is responsible for the oversight of our accounting, reporting and financial practices. The audit committee has the responsibility to select, appoint, engage, oversee, retain, evaluate and terminate our external auditors; pre-approve all audit and non-audit services to be provided, consistent with all applicable laws, to us by our external auditors; and establish the fees and other compensation to be paid to our external auditors.

The audit committee has adopted a policy to pre-approve all audit and permitted non-audit services provided by our principal independent accountants. All audit and non-audit services for 2025 were pre-approved by the audit committee.

The Board unanimously recommends a vote FOR the ratification of the appointment of KPMG as the Company’s

independent registered public accounting firm for 2026.

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PROPOSAL 6 ‒
SHAREHOLDER PROPOSAL

The Company has received a shareholder proposal (the “Shareholder Proposal”) from Jeffrey Pontiff, whose address and share ownership will be furnished by the Company promptly upon written request, and has requested that the Company include the Shareholder Proposal in the Company’s proxy materials. The non-binding shareholder proposal and supporting statement, exactly as received by the Company, are set forth below and are followed by the Board’s explanation of its reasons for opposing the Shareholder Proposal.

The Board unanimously recommends that you vote AGAINST the Shareholder Proposal.

Proposal:

RESOLVED, the shareholders of NexPoint Diversified Real Estate Trust (“NXDT” or the “Company”) urge the Board of Trustees to evaluate and pursue an orderly liquidation of the Company’s assets and distribute the net proceeds to shareholders, seeking to maximize the value realized for all equity holders in accordance with their respective rights and priorities.

Supporting Statement:

1. Chronic Destruction of Common Shareholder Value. The status quo at NXDT is no longer tenable. For over a decade, shareholders have experienced a staggering erosion of capital. In March 2015, the Company’s stock price (adjusted for the 4-to-1 reverse split) exceeded $49.00. By 2025, the price collapsed to a low of $2.55—a decline of nearly 95%. This performance represents a fundamental failure to preserve, let alone grow, shareholder capital.

2. Extraordinary Discount to Net Asset Value (NAV). As of the September 30, 2025, 10-Q filing, the Company estimated its NAV at $12.17 per common share. At a market low of $2.55, the stock trades at a 79% discount to its reported NAV. The market clearly does not value NXDT as a “going concern” under its current structure. Liquidation would allow shareholders to capture the significant spread between the current pennies-on-the-dollar market price and the actual value of the underlying real estate.

3. A Valuation Outlier in the REIT Universe. NXDT’s failure is not a result of general market conditions. Among a peer group of 170 REITs covered by Fidelity Investments, NXDT recently ranked as having the 6th lowest price-to-book (P/B) ratio. Furthermore, this distress has moved up the capital stack: the Series A Preferred Shares, which have a $25.00 liquidation preference, have traded as low as $13.19 (a 47% discount). When even preferred equity is deeply impaired, a radical change in strategy is required.

4. Misalignment of Incentives and Guaranteed Fees. While shareholders have seen the value of their holdings nearly vanish, the external Advisor remains insulated from this performance. According to the 2024 Annual Report, NexPoint (through its wholly-owned Advisor) received $14.2 million in advisory and administrative fees. This externally advised structure creates a perverse incentive to maintain assets under management for the sake of fee generation, rather than maximizing the value of the assets for the true owners—the shareholders.

5. Conclusion. The Board has had ample time to close the valuation gap, yet the stock remains an extreme outlier among its peers. By liquidating the Company, the Board can finally unlock the $12.17 per share in underlying value that the public market refuses to recognize under current management.

Vote FOR this proposal to stop the erosion of your capital and return the Company’s remaining value to its shareholders.

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OPPOSITION STATEMENT OF THE BOARD OF TRUSTEES

The Board has carefully reviewed and considered the Shareholder Proposal and, for the reasons discussed below, has concluded that the proposal is not in the best interests of the Company or its shareholders. As a result, the Board unanimously opposes the Shareholder Proposal and urges all shareholders to vote AGAINST the proposal.

Current Market Conditions Make Liquidation Particularly Unfavorable

The Shareholder Proposal arrives at a moment of significant dislocation in the commercial real estate markets. Elevated interest rates, compressed transaction volumes, and tightened credit availability have collectively reduced liquidity and suppressed asset valuations across the real estate industry. These conditions are not unique to the Company, they reflect a broad structural environment in which institutional investors, private equity firms and public REITs alike are experiencing difficulty executing asset sales at values reflective of underlying fundamentals.

In this environment, forcing a liquidation of the Company’s portfolio would require selling assets into a market where buyers are scarce, financing is constrained, and bid-ask spreads are wide. Industry transaction data consistently shows that distressed or compelled sellers in illiquid markets realize significant discounts to appraised or modeled values. The Board does not believe it would be prudent to accept such discounts on behalf of shareholders when a more patient, orderly disposition strategy is available.

Real Estate Assets Are Inherently Illiquid and Require Time to Monetize

Unlike publicly traded securities, real estate investments, particularly those involving complex, partially developed or operationally intensive properties, cannot be readily sold at fair value on short notice. This is a well-understood characteristic of the asset class and is not specific to the Company’s circumstances.

Across the industry, real estate owners seeking rapid disposition of office, mixed-use, and value-add assets have encountered prolonged marketing timelines, limited buyer pools and price adjustments driven by elevated financing costs. The Company’s portfolio includes assets that require strategic capital investment to maximize value. These assets, if sold prematurely, would transfer the upside of that investment to buyers rather than shareholders.

A controlled, market-sensitive disposition timeline, rather than a forced liquidation, is the appropriate way to navigate the current environment and preserve value for shareholders of the Company.

Illiquid and Private Investments Cannot Be Marked-to-Market in a Sale

A meaningful portion of the Company’s assets are held in private, non-traded structures whose fair values are derived from internal models, net asset value (“NAV”) approaches, or discounted cash flow analyses. These methodologies reflect intrinsic value, but a forced sale does not guarantee that a third-party buyer will pay amounts approximating those values. In illiquid markets, the delta between modeled value and realized proceeds widens considerably.

This dynamic is prevalent across the broader non-traded REIT and private real estate fund universe, where net asset values reflect appraised or modeled carrying amounts rather than immediately realizable liquidation values. Shareholders should be aware that the proceeds of a liquidation would be governed by what the market will bear at the time of sale, not what the Company’s books reflect.

Liquidation Priorities May Limit Recovery for Common Shareholders

In any liquidation, preferred shareholders and debt holders have priority over common shareholders. The Company has outstanding Series A Preferred Shares and Series B Preferred Shares with substantial aggregate liquidation preferences, in addition to secured debt obligations. Only after satisfying all such obligations in full would holders of our Common Shares receive any distribution. Given the likelihood of discount-to-NAV proceeds in a forced sale environment, the residual available to holders of our Common Shares may be materially lower than the proponent’s reference to NAV per share implies.

The Board Is Actively Pursuing Strategies to Enhance Shareholder Value

The Board has articulated a deliberate and value-focused strategic plan. This includes an active program to opportunistically sell non-core legacy assets as market conditions permit, with the proceeds to be redeployed into target sectors where the Company’s management team has deep expertise. This approach is designed to improve the quality and liquidity profile of the portfolio over time without forcing asset sales at cyclically depressed prices.

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The Board has also authorized a share repurchase program and has access to preferred equity capital through an ongoing preferred equity offering, providing financial flexibility to pursue these strategies without being compelled to sell assets at inopportune times. These tools allow the Company to act opportunistically rather than reactively.

A Long-Term Strategy Is the Appropriate Path Forward

The Company’s investment portfolio is comprised of long-duration strategies (single-family rental, self-storage, hospitality, life sciences, and multifamily housing) that are designed to generate income and capital appreciation over time. Liquidating these positions today, in a market defined by elevated rates and reduced transaction activity, would crystallize losses and eliminate the potential for shareholders to benefit from an eventual market recovery.

The Board expects that improving capital market conditions, including a more accommodative interest rate environment and increased transaction liquidity, will provide a significantly better backdrop for asset monetization in the near to medium term. Patience and discipline are in shareholders’ best interests.

Procedural Requirements

The Shareholder Proposal is advisory only. Any actual liquidation of the Company’s assets would require approval by the affirmative vote of at least 80% of the Board and the affirmative vote of shareholders holding not less than 75% of the outstanding Common Shares and Series A Preferred Shares at a subsequent meeting of shareholders.

For the foregoing reasons, the Board unanimously recommends that shareholders vote AGAINST the Shareholder Proposal.

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THE BOARD, ITS COMMITTEES AND ITS COMPENSATION

Board of Trustees

The Board presently consists of seven members, six of whom are non-management trustees, and five of whom are considered independent in accordance with applicable NYSE rules. Each trustee serves a one-year term expiring at each annual meeting of shareholders and lasting until his or her respective successor is duly elected and qualified.

Trustee Compensation in 2025

The Company provides the following compensation for non-management trustees:

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each non-management trustee receives an annual trustee’s fee payable in cash equal to $20,000 and an annual grant of RSUs;

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the chair of our audit committee receives an additional annual fee payable in cash equal to $15,000;

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the chair of our compensation committee receives an additional annual fee payable in cash equal to $7,500;

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the chair of our nominating and corporate governance committee receives an additional annual fee payable in cash equal to $7,500; and

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the lead independent trustee receives an additional annual fee payable in cash equal to $10,000.

We also reimburse expenses incurred in attending Board and committee meetings. Trustees who are officers of the Company do not receive compensation for their service as trustees.

Trustee Compensation Table

The following table provides the compensation paid to or accrued by our non-management trustees during the fiscal year ended December 31, 2025.

Name	Fees Earned or Paid in Cash			Stock Awards(1)		Total
James Dondero(2)	$	-		$	-	$	-
Brian Mitts	$	20,000		$	49,098	$	69,098
Edward Constantino	$	35,000		$	49,098	$	84,098
Scott Kavanaugh	$	37,500		$	49,098	$	86,598
Dr. Arthur Laffer	$	27,500		$	49,098	$	76,598
Dr. Carol Swain	$	20,000		$	49,098	$	69,098
Catherine Wood	$	-	(3)	$	49,098	$	49,098

(1)

These RSUs were granted on April 3, 2025 and June 10, 2025 and, with respect to the RSUs granted on April 3, 2025, vested on April 3, 2026, the first anniversary of the grant date. The RSUs granted on June 10, 2025 will vest on June 10, 2026, the first anniversary of the grant date. The grant date fair value of each award was equal to the closing price of our Common Shares on the date of the grant as calculated in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Pursuant to the rules of the SEC, the amounts shown in this column exclude the impact of estimated forfeitures related to service-based vesting conditions. See Note 11 to our consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for information regarding the assumptions made in determining these values. As of December 31, 2025, our non-management trustees each held 12,643 RSUs and Mr. Mitts held an additional 30,997 RSUs received during his service as an executive officer of the Company.

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(2)	During the year ended December 31, 2025, Mr. Dondero served as an executive officer of the Company and did not receive any compensation for his service as a trustee. Accordingly, his compensation is described in the Summary Compensation Table below.

(3)	Ms. Wood has waived the annual trustee’s fee payable in cash.

Trustee Independence

The Board will review at least annually the independence of each trustee. During these reviews, the Board will consider transactions and relationships between each trustee (and his or her immediate family and affiliates) and the Company and its management to determine whether any such transactions or relationships are inconsistent with a determination that the trustee is independent. This review will be based primarily on responses of the trustees to questions in a trustees’ and officers’ questionnaire regarding employment, business, familial, compensation and other relationships with the Company and our management. Our Board has determined that each of Edward Constantino, Scott Kavanaugh, Dr. Arthur Laffer, Dr. Carol Swain and Catherine Wood is independent in accordance with NYSE rules. As required by NYSE, our independent trustees will meet in regularly scheduled executive sessions at which only independent trustees are present.

Corporate Governance

We believe that good corporate governance is important to ensure that, as a public company, we will be managed for the long-term benefit of our shareholders. We and our Board have reviewed the corporate governance policies and practices of other public companies, as well as those suggested by various authorities in corporate governance. We have also considered the provisions of the Sarbanes-Oxley Act and SEC and NYSE rules.

Based on this review, we have established and adopted charters for the audit committee, compensation committee and nominating and corporate governance committee, as well as corporate governance guidelines and a code of business conduct and ethics applicable to all of our trustees, officers and employees.

Our committee charters, code of business conduct and ethics and corporate governance guidelines are available on our website, nxdt.nexpoint.com, in the Governance section. Copies of these documents are also available upon written request to our Corporate Secretary at c/o NexPoint Diversified Real Estate Trust, 300 Crescent Court, Suite 700, Dallas, Texas 75201, Attn: Corporate Secretary. We will post information regarding any amendment to, or waiver from, our code of business conduct and ethics on our website in the Governance section.

Furthermore, our insider trading policy, which is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards, (1) governs the purchase, sale and/or other disposition of the Company’s securities by trustees, officers, employees of the Company and the Company itself, and (2) prohibits our trustees and certain employees, including all of our executive officers, from engaging in hedging transactions with respect to our securities, including entering into options, warrants, puts, calls or similar instruments or selling our securities short.

The Board periodically reviews its corporate governance policies and practices. Based on these reviews, the Board may adopt changes to policies and practices that are in the best interest of our shareholders and as appropriate to comply with any new SEC or NYSE rules.

Board Leadership Structure and the Board’s Role in Risk Oversight

James Dondero, our President, serves as Chairman of the Board. The Board believes that combining these positions is the most effective leadership structure for the Company at this time. As President, Mr. Dondero is involved in day-to-day operations and is familiar with the opportunities and challenges that the Company faces at any given time. With this insight, he is able to assist the Board in setting strategic priorities, lead the discussion of business and strategic issues and translate Board recommendations into the Company’s operations and policies.

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The Board has appointed Scott Kavanaugh as its lead independent trustee. His key responsibilities in this role include:

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developing agendas for, and presiding over, the executive sessions of the non-management or independent trustees;

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reporting the results of the executive sessions to the Chairman;

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providing feedback from executive sessions to the Chairman;

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serving as a liaison between the independent trustees and the Chairman (provided that each trustee will also be afforded direct and complete access to the Chairman at any such time such trustee deems necessary or appropriate);

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presiding at all meetings of the Board at which the Chairman is not present;

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approving information sent to the Board;

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approving agendas for Board meetings;

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approving Board meeting schedules to ensure that there is sufficient time for discussion of all agenda items;

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calling meetings of the independent trustees; and

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if requested by major shareholders, ensuring that he is available for consultation and direct communication.

Risk is inherent with every business and we face a number of risks. Management is responsible for the day-to-day management of risks, while the Board, as a whole and through our audit committee, is responsible for overseeing our management and operations, including overseeing its risk assessment and risk management functions. The Board has delegated responsibility for reviewing our policies with respect to risk assessment and risk management to our audit committee through its charter. The Board has determined that this oversight responsibility can be most efficiently performed by our audit committee as part of its overall responsibility for providing independent, objective oversight with respect to our accounting and financial reporting functions, internal and external audit functions, systems of internal controls over financial reporting and legal, ethical and regulatory compliance. Our Board has also delegated the oversight of risks related to cybersecurity to our audit committee and risks related to environmental, social and governance matters to our nominating and corporate governance committee. Our audit and nominating and corporate governance committees regularly report to the Board with respect to its oversight of these areas.

Board Meetings

The Board held five meetings during the fiscal year ended December 31, 2025. Each trustee serving on the Board in 2025 attended at least 75% of the total number of meetings of the Board and the total number of meetings of the committees on which he or she served during the time they served on the Board. Under our corporate governance guidelines, each trustee is expected to devote the time necessary to appropriately discharge his or her responsibilities and to prepare for, and, to the extent possible, attend and participate in all Board meetings and meetings of committees on which he or she serves.

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Trustee Attendance at Annual Meetings of Shareholders

Under our corporate governance guidelines, each trustee is expected to attend the annual meeting of shareholders. All of the Company’s trustees at the time of the 2025 annual meeting of shareholders attended the 2025 annual meeting, except for Dr. Swain.

Board Committees

Our Board has an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the Board.

Audit Committee

Our audit committee consists of Mr. Constantino, Mr. Kavanaugh, Dr. Laffer, Dr. Swain and Ms. Wood, with Mr. Constantino serving as chair of the committee. The Board has determined that each of Mr. Constantino, Mr. Kavanaugh, Dr. Laffer and Dr. Swain qualify as an “audit committee financial expert” as that term is defined by the applicable SEC regulations. The Board has also determined that each of Mr. Constantino, Mr. Kavanaugh, Dr. Laffer, Dr. Swain and Ms. Wood is “financially literate,” as required by the NYSE rules and is independent as defined by NYSE rules and SEC requirements relating to the independence of audit committee members. Our Board has determined that Mr. Constantino’s, Mr. Kavanaugh’s, Dr. Laffer’s, Dr. Swain’s and Ms. Wood’s simultaneous service on the audit committees of more than three public companies would not impair his or her ability to effectively serve on our audit committee. The audit committee met five times during the fiscal year ended December 31, 2025. Our audit committee charter details the principal functions of the audit committee, including oversight related to:

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our accounting and financial reporting processes;

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the integrity of our consolidated financial statements;

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our systems of disclosure controls and procedures and internal control over financial reporting;

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our compliance with financial, legal and regulatory requirements;

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the performance of our internal audit function;

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our overall risk assessment and management; and

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our process for assessing, identifying and managing risks from cybersecurity threats as well as any material effects, or reasonably likely material effects, of risks from cybersecurity threats and previous cybersecurity incidents.

The audit committee is also responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, including all audit and non-audit services, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. The audit committee also prepares the audit committee report required by SEC regulations to be included in our annual proxy statement. A copy of the audit committee charter is available under the Governance section of the Company’s website at nxdt.nexpoint.com.

Compensation Committee

Our compensation committee consists of Dr. Laffer, Mr. Kavanaugh, Mr. Constantino, Dr. Swain and Ms. Wood, with Dr. Laffer serving as chair of the committee. The Board has determined that each of Dr. Laffer, Mr. Kavanaugh, Mr. Constantino, Dr. Swain and Ms. Wood is independent as defined by NYSE rules and SEC requirements relating to the independence of compensation committee members. The compensation committee met five times during the fiscal year ended December 31, 2025. Our compensation committee charter details the principal functions of the compensation committee, including:

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reviewing our compensation policies and plans;

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implementing and administering a long-term incentive plan;

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evaluating the terms of the Advisory Agreement, and the performance of the Adviser thereunder;

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assisting management in complying with our proxy statement and annual report disclosure requirements;

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producing a report on compensation to be included in our annual proxy statement, as required; and

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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for trustees.

The compensation committee will review and approve, at least annually, corporate goals and objectives relevant to the compensation of the President and the other executive officers of the Company. The compensation committee will, either as a committee or together with other independent trustees (as directed by the Board), evaluate the performance of the President and the other executive officers in general and in light of those corporate goals and objectives and set compensation levels for the President and the other executive officers based on those evaluations and any other factors as it deems appropriate. The compensation committee will also make recommendations to the Board with respect to the approval, adoption and amendment of all cash- and equity-based incentive compensation plans in which any executive officer of the Company participates. In determining the long-term incentive component of the President’s compensation, the compensation committee will consider the Company’s performance and relative shareholder return, the value of similar incentive awards to the President at comparable companies and the awards given to the Company’s President in past years. In addition, in accordance with the Company’s corporate governance guidelines, the compensation committee will periodically review trustee compensation in relation to other comparable companies and in the light of such other factors as the compensation committee may deem appropriate. The compensation committee will discuss this review with the Board.

The compensation committee has the sole authority to retain and terminate compensation consultants to assist in the evaluation of our compensation and the sole authority to approve the fees and other retention terms of such compensation consultants. The compensation committee may, in its discretion, delegate specific duties and responsibilities to a subcommittee or an individual committee member, to the extent permitted by applicable law. The compensation committee is also able to retain independent counsel and other independent advisors to assist it in carrying out its responsibilities. A copy of the compensation committee charter is available under the Governance section of the Company’s website at nxdt.nexpoint.com.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Mr. Kavanaugh, Mr. Constantino, Dr. Laffer, Dr. Swain and Ms. Wood, with Mr. Kavanaugh serving as chair of the committee. The Board has determined that each of Mr. Kavanaugh, Mr. Constantino, Dr. Laffer, Dr. Swain and Ms. Wood is independent as defined by NYSE rules. The nominating and corporate governance committee met five times during the fiscal year ended December 31, 2025. Our nominating and corporate governance committee charter details the principal functions of the nominating and corporate governance committee, including:

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reviewing the characteristics of current Board members, determining if any characteristics are lacking and using these measures in identifying and recommending to the full Board qualified candidates for election as trustees;

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developing and recommending to the Board corporate governance guidelines and implementing and monitoring such guidelines;

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reviewing and making recommendations on matters involving the general operation of the Board, including board size and composition, and committee composition and structure;

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recommending to the Board nominees for each committee of the Board;

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annually facilitating the assessment of the Board’s performance, as required by applicable law, regulations and the NYSE corporate governance listing standards;

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annually reviewing and making recommendations to the Board regarding revisions to the corporate governance guidelines and the code of business conduct and ethics;

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overseeing succession planning; and

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overseeing the Company’s strategy, initiatives, risks, opportunities and reporting on material environmental, social and governance matters.

The nominating and corporate governance committee has the sole authority to retain and terminate any search firm to assist in the identification of trustee candidates and the sole authority to set the fees and other retention terms of such search firms. The committee is also able to retain independent counsel and other independent advisors to assist it in carrying out its responsibilities. A copy of the nominating and corporate governance committee charter is available under the Governance section of the Company’s website at nxdt.nexpoint.com.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our trustees and executive officers, who are employees of our Adviser. Among other matters, our code of business conduct and ethics is designed to deter wrongdoing and to promote:

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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

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full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;

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compliance with laws, rules and regulations;

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prompt internal reporting of violations of the code to appropriate persons identified in the code; and

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accountability for adherence to the code of business conduct and ethics.

A copy of our code of business conduct and ethics is available under the Governance section of the Company’s website at nxdt.nexpoint.com. We will also provide a copy to any person, without charge, upon written request to our Corporate Secretary at c/o NexPoint Diversified Real Estate Trust, 300 Crescent Court, Suite 700, Dallas, Texas 75201, Attn: Corporate Secretary. We will post information regarding any amendment to, or waiver from, our code of business conduct and ethics on our website under the Governance section.

Qualifications for Trustee Nominees

The nominating and corporate governance committee is responsible for reviewing with the Board, at least annually, the appropriate skills and experience required for members of the Board. This assessment includes factors such as judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board.

In connection with this assessment, the nominating and corporate governance committee will identify individuals believed to be qualified to become Board members and recommend candidates to the Board to fill new or vacant positions. The nominating and corporate governance committee will also review the qualifications of, and make recommendations to the Board regarding, trustee nominations submitted to the Company by shareholders in accordance with the Company’s bylaws or otherwise using the same assessment process described above. In addition, the nominating and corporate governance committee will evaluate whether an incumbent trustee should be nominated for re-election to the Board as part of its annual review and selection process. The nominating and corporate governance committee will use the same factors established for new trustee candidates to make its evaluation and will also take into account the incumbent trustee’s performance as a Board member.

The nominating and corporate governance committee does not have a formal policy regarding the consideration of diversity for trustee candidates. The nominating and corporate governance committee does, however, consider diversity as part of its overall selection strategy. The nominating and corporate governance committee considers diversity in its broadest sense, including diversity in professional and life experiences, education, skills, perspectives and leadership. Importantly, the nominating and corporate governance committee considers how the experiences and skill sets of each trustee nominee complements those of fellow trustees and trustee nominees to create a balanced Board with diverse viewpoints and deep expertise. The Company believes that the inclusion of diversity as one of many factors considered in selecting trustee nominees is consistent with the Company’s goal of creating a board of trustees that best serves our needs and those of our shareholders.

Trustee Candidate Recommendations by Shareholders

The nominating and corporate governance committee will review and evaluate any trustee nominations submitted by shareholders, including reviewing the qualifications of, and making recommendations to the Board regarding, trustee nominations submitted by shareholders in the same manner as described under “Qualifications for Trustee Nominees.” See “Communications with the Board of Trustees” below for additional information on how to submit a trustee nomination to the Board.

Communications with the Board of Trustees

Any shareholder or other interested party who wishes to communicate directly with the Board or any of its members may do so by writing to: Board of Trustees, c/o NexPoint Diversified Real Estate Trust, 300 Crescent Court, Suite 700, Dallas, Texas 75201, Attn: Corporate Secretary. The mailing envelope should clearly indicate whether the communication is intended for the Board as a group, the non-management trustees or a specific trustee.

Shareholder Nominations

The Company’s bylaws provide that, with respect to an annual meeting of our shareholders, or at any special meeting in lieu of an annual meeting of our shareholders, nominations of individuals for election to the Board may be made only (a) by or at the direction of the Board (or any duly authorized committee thereof) or (b) by any shareholder of record, or group of shareholders of record, who was a shareholder of record both at the time of giving the notice required by our bylaws and at the time of the determination of shareholders entitled to notice of and to vote at the meeting, who has held beneficially and “at risk” (within the meaning of our bylaws), continuously through the period referred to in our bylaws and for at least one year prior to the date such shareholder gives notice required by our bylaws, at least $5,000 in market value of the Company’s shares, and has provided notice to us within the time period, and containing the information, certifications and other materials, specified in the advance notice provisions of our bylaws and who has complied with the other procedural requirements set forth in our bylaws.

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EXECUTIVE OFFICERS

The following sets forth information regarding the executive officers of the Company as of April 20, 2026:

Name	Age	Position(s)
*Executive Officers*
James Dondero	63	President and Trustee
Paul Richards	37	Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary
Matt McGraner	42	Executive VP and Chief Investment Officer
Dennis Charles Sauter, Jr.	51	General Counsel and Secretary
Dustin Norris	42	Executive Vice President

Information regarding Mr. Dondero is included above under “Proposal 1-Election of Trustees.”

Paul Richards has served as our Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary since January 2025. Mr. Richards has also served as a director for our Sponsor since 2019 and joined in 2017. Mr. Richards has also served as Chief Financial Officer, Assistant Secretary and Treasurer of VineBrook since August 2024, as Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary of NXRT and NREF since January 2025 and as Chief Financial Officer and Corporate Secretary of NHT from January 2025 until its reorganization and merger with a subsidiary of NXDT in April 2025. Mr. Richards also served as Vice President of Asset Management and Financing of VineBrook from 2018 to August 2024, as Vice President of Asset Management of NHT from March 2019 to December 2024 and as VP of Originations and Investments of NREF from February 2020 to January 2025. Currently, Mr. Richards leads our financial reporting and accounting teams and is integral in financing and capital allocation decisions. From 2016 to 2017, Mr. Richards served as a Product Strategy Associate at NexPoint Asset Management, L.P. (“NexPoint Asset Management”), formerly known as Highland Capital Management Fund Advisors, L.P., where he was responsible for evaluating and optimizing the registered product lineup. Mr. Richards was hired by a former affiliate of our Sponsor in 2014. VineBrook, NXRT, NREF, our Sponsor and NexPoint Asset Management may be affiliates of the Company. Previously, Mr. Richards was also employed with Deloitte & Touche LLP’s state and local tax practice where he served as a tax consultant specializing in state strategic tax reviews, voluntary disclosure agreements, state tax exposure research, and overall state tax compliance.

Matt McGraner has served as our Executive VP and Chief Investment Officer since July 2022 and served as our Secretary from July 2022 to January 2025. Mr. McGraner co-founded NREA, an affiliate of the Company, as well as NXRT, NREF and other real estate businesses with Mr. Mitts and Mr. Dondero. Mr. McGraner has also served as the Executive VP and Chief Investment Officer of NXRT since March 2015, as Executive VP, Chief Investment Officer and Secretary of VineBrook since February 2019, as Executive VP and Chief Investment Officer of NREF since January 2020, as a member of the board of directors and President of NSP since November 2020, and as Chief Investment Officer and Secretary of NXHT since June 2022. From September 2014 to March 2015, Mr. McGraner served as NXRT’s Secretary, from October 2018 to February 2019, Mr. McGraner served as Chief Executive Officer, President and Secretary of VineBrook and from June 2019 to February 2020 as Secretary of NREF. Mr. McGraner also served as Chief Investment Officer of NHT from December 2019 until its reorganization and merger with a subsidiary of the Company in April 2025 and has served as a Managing Director at our Sponsor since 2016. NXRT, NREF, VineBrook, NXHT and our Sponsor may be affiliates of the Company. With over 15 years of real estate, private equity and legal experience, his primary responsibilities are to lead the operations of the real estate platform at our Sponsor, as well as source and execute investments, manage risk and develop potential business opportunities, including fundraising, private investments and joint ventures. Mr. McGraner is also a licensed attorney and was formerly an associate at Jones Day from 2011 to 2013, with a practice primarily focused on private equity, real estate and mergers and acquisitions. While at Jones Day, Mr. McGraner led the acquisition and financing of over $200 million of real estate investments and advised on $16.3 billion of M&A and private equity transactions. Since 2013 through March 27, 2026, Mr. McGraner has led the acquisition and financing of over $21.9 billion of real estate investments.

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Dennis Charles “D.C.” Sauter, Jr. has served as our General Counsel since July 2022 and as our Secretary since January 2025. Mr. Sauter has also served as the General Counsel of NXRT and NREF since February 2020, as Secretary of NXRT and NREF since January 2025 and as General Counsel of our Sponsor since April 2021. Previously, Mr. Sauter was a partner in the real estate section of a Dallas-based law firm from January 2014 until joining our Sponsor in February 2020, where he specialized in acquisitions, construction, financing, joint ventures and complex leasing for REITs, private developers and institutional investors. NREF, NXRT and our Sponsor may be affiliates of the Company. Mr. Sauter’s primary responsibility is to manage our legal matters, including corporate governance, real estate transactions and capital markets transactions. He received his Bachelor of Arts degree from the University of Texas at Austin and his Juris Doctor from Southern Methodist University Dedman School of Law. He has been a licensed attorney and member of the State Bar of Texas since 2001.

Dustin Norris has served as our Executive Vice President since April 2019. Mr. Norris previously served as our Assistant Treasurer from 2013 to 2015, and as Secretary from 2015 to 2018. Mr. Norris also serves as Executive Vice President of our Sponsor, President of NexPoint Securities, Inc. (“NexPoint Securities”) and head of Distribution and Chief Product Strategist at NexPoint Securities. Mr. Norris oversees the business development, sales, and marketing efforts focused on REITs, closed-end funds, interval funds, private placements, Delaware statutory trust exchange offerings under Section 1031 of the Internal Revenue Code and open-end mutual funds. Mr. Norris oversees a team including external and internal sales, national accounts, product development and marketing/investor relations. Prior to joining the firm in 2010, he was employed by Deloitte & Touche LLP in the Audit and Enterprise Risk Services Group, working primarily in the financial services and energy industries. Mr. Norris received master’s and bachelor’s degrees in accounting from Brigham Young University. He is a licensed Certified Public Accountant.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our trustees, executive officers and persons who own more than 10% of our Common Shares to file an initial report of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. The SEC rules require us to disclose late filings of initial reports of share ownership and changes in share ownership by our trustees, executive officers and 10% shareholders.

Based solely on a review of copies of Forms 3, 4 and 5 filed with the SEC, we believe that during the fiscal year ended December 31, 2025, all Section 16(a) filing requirements applicable to our trustees, executive officers and 10% shareholders were completed in a timely manner, except for (i) one Form 4 (reporting two transactions) filed on March 24, 2025 for Mr. Mitts, (ii) one Form 4 (reporting two transactions) filed on March 26, 2025 for Mr. McGraner and (iii) one Form 4 (reporting one transaction) filed on April 14, 2025 for Mr. Dondero.

EXECUTIVE COMPENSATION

Overview of Executive Compensation Program

The officers, who are employees of our Adviser, have not received, nor do we expect they will in the future receive, any cash compensation from the Company for their services. Similarly, we do not provide such officers with pension benefits, perquisites or other personal benefits. Instead, we pay our Adviser the fees described below. Our compensation committee does not make determinations with respect to compensation paid by our Adviser or its affiliates to such officers.

As consideration for the Adviser’s services under the Advisory Agreement, we pay our Adviser an annual fee (the “Advisory Fee”) of 1.00% of Managed Assets and an annual fee (the “Administrative Fee” and together with the Advisory Fee, the “Fees”) of 0.20% of Managed Assets (as defined below). In addition, the Company is required to reimburse the Adviser for certain expenses incurred in connection with its provision of services under the Advisory Agreement. Prior to September 19, 2025, the Advisory Agreement provided that the monthly installment of the Administrative Fee must be paid in cash and the monthly installment of the Advisory Fee must be paid one-half in cash and one-half in Common Shares, subject to certain restrictions including that in no event shall the Common Shares issued to the Adviser under the Advisory Agreement exceed five percent of the number of Common Shares or five percent of the voting power of the Company outstanding prior to the first such issuance (the “Share Cap”) and that in no event shall the Common Shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 Common Shares. At the Company’s 2025 annual meeting of shareholders, the Company’s shareholders approved issuances in excess of the Share Cap. On September 19, 2025, we entered into an amendment to the Advisory Agreement whereby the monthly installments of the Fees accruing after September 19, 2025, will be paid entirely in cash unless the Adviser elects, in its sole discretion, to receive all or a portion of the monthly installment of the Fees in Common Shares of the Company, subject to certain restrictions, including that in no event shall the number of Common Shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 Common Shares. For the year ended December 31, 2025, we paid approximately $13.2 million in Fees to our Adviser.

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Additionally, the Advisory Agreement does not require our named executive officers to dedicate a specific amount of time fulfilling the obligations of our Adviser to us under the Advisory Agreement and does not require a specific percentage or amount of the fees paid to the Adviser to be allocated to the compensation of our named executive officers. Our Adviser does not compensate our named executive officers specifically for their services performed for us as they also serve as officers of other investment vehicles that are sponsored, managed or advised by affiliates of our Adviser. For these reasons, our Adviser cannot identify the portion of compensation awarded to our named executive officers for services rendered solely in their capacities as an officer of the Company. Accordingly, we are unable to provide complete compensation information for our named executive officers as the total compensation of our named executive officers reflects the performance of all the investment vehicles for which these individuals provide or provided services. However, for context, the Adviser and/or its affiliates paid our named executive officers aggregate base salary and cash incentive bonuses totaling $4.8 million for the year ended December 31, 2025. This represents approximately 36.1% of the approximately $13.2 million in Fees paid to the Adviser by us for the year ended December 31, 2025. However, if a portion of the aggregate base salary and cash incentive bonuses paid to our named executive officers is allocated to us based on the advisory fees paid to the Adviser by us as a percentage of the total advisory fees earned by the Adviser and its affiliates, the aggregate base salary and cash incentive bonuses allocated to us for our named executive officers is approximately 8.2% of the Fees paid to the Adviser by us for the year ended December 31, 2025. The cash compensation paid to our named executive officers is approximately 17.5% fixed pay and 82.5% variable/incentive pay. Total compensation paid to our named executive officers in the aggregate for the year ended December 31, 2025, including fixed and variable/incentive cash compensation, as well as time-based RSUs, of the Company and other affiliates of the Adviser that vested during the year, totaled approximately $25.43 million. This represents base salary of approximately $0.84 million or 3.3%, incentive cash bonuses of $4.0 million or 15.6%, and time-based RSU compensation of $20.62 million or 81.1%. The compensation paid by our Adviser and its affiliates to each of our named executive officers is based upon a robust review process (which includes self-evaluation and peer-review) that takes into consideration the named executive officer’s projected goals for the given year and the named executive officer’s performance relative to those goals. Our Adviser and its affiliates measure performance based on a number of metrics/measurements, including as applicable, the growth of assets under management of our Sponsor’s investment vehicles, new investment vehicles launched, deals sourced, deals closed, relative performance of the named executive officer’s underlying investments measured against peers and versus applicable investment benchmarks, as well as the accomplishment of additional firm and team goals. However, our Sponsor measures its success by the success of its investors, and thus the performance of investments managed by the applicable named executive officer is a primary consideration in determining variable/incentive compensation payable to our named executive officers.

We have no arrangements to make cash payments to our named executive officers upon their termination from service as our officers. Other than the Post-Vesting Holding Policy (as defined below), we currently do not have any equity ownership requirements or guidelines for our named executive officers. While we do not pay our named executive officers any cash compensation, the compensation committee may grant our named executive officers equity-based awards intended to align their interests with the interests of our shareholders. In establishing award levels, the compensation committee currently does not plan to engage in any benchmarking of award levels/opportunities, believing that there is insufficient information regarding incentive awards in the case of externally-managed REITs.

Post-Vesting Holding Policy

On February 23, 2026, on the recommendation of the compensation committee, the Board adopted a Post-Vesting Holding Policy (the “Post-Vesting Holding Policy”) which requires our President to hold at least 75% (after giving effect to required tax withholding) of any Common Shares acquired pursuant to any equity or equity-based award granted under the Company’s long term incentive plans for a period of at least 12 months following the date on which the President becomes the owner of the Common Shares received in respect of such award.

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Clawback Policies

The Company maintains a clawback policy (the “Mandatory Clawback Policy”) in accordance with applicable securities laws, including the requirements of Section 10D of the Exchange Act, Rule 10D-1 under the Exchange Act, and the listing standards adopted by the NYSE pursuant to Rule 10D-1, which provides for the mandatory recovery of erroneously awarded incentive-based compensation received by current or former executive officers in the event the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws.

On February 23, 2026, on the recommendation of the compensation committee, the Board adopted a Supplemental Clawback Policy (the “Supplemental Clawback Policy”) that applies to all time-based and performance-based equity or equity-based awards (“Covered Awards”) granted to any current or former named executive officer of the Company (the “Covered Individuals”) under the Company’s long term incentive plans, including the 2023 LTIP and, if approved by the Company’s shareholders, the 2026 LTIP. Pursuant to the Supplemental Clawback Policy, in addition to any recovery required by the Mandatory Clawback Policy, the Company may recover any compensation received by a Covered Individual under any Covered Award if the compensation committee determines that such compensation was paid, granted, earned or vested based on or in connection with (i) fraud or intentional misconduct, (ii) a knowing or willful violation of law or the Company’s policies or (iii) conduct that directly results in a material financial misstatement. The Supplemental Clawback Policy does not limit the ability of the Company to pursue other means to recover damages from wrongdoing.

Summary Compensation Table

The following table sets forth the compensation paid to or accrued by those named executive officers for whom we are able to quantify such compensation for services the named executive officer rendered to us during the fiscal years presented.

NAME AND PRINCIPAL POSITION	YEAR	STOCK AWARDS ($)(1)		TOTAL ($)
James Dondero	2025	$	1,492,040	$	1,492,040
President	2024	$	1,784,250	$	1,784,250
Matt McGraner	2025	$	1,492,040	$	1,492,040
Executive VP, Chief Investment Officer and Former Secretary	2024	$	1,784,250	$	1,784,250
Dustin Norris	2025	$	294,604	$	294,604
Executive VP	2024	$	435,717	$	435,717

(1)

The amounts reported in the “Stock Awards” column represent the aggregate grant date fair value of RSUs, calculated in accordance with FASB ASC Topic 718. Pursuant to SEC rules, the amounts shown in this column exclude the impact of estimated forfeitures related to service-based vesting conditions. See Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for information regarding the assumptions made in determining these values.

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Outstanding Equity Awards at Fiscal Year-End

The following table contains information regarding outstanding equity awards held by our named executive officers as of December 31, 2025.

	STOCK AWARDS
NAME	NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)			MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($)(1)
James Dondero		697,421	⁽²⁾	$	2,671,122
Matt McGraner		693,839	⁽³⁾	$	2,657,403
Dustin Norris		154,310	⁽⁴⁾	$	591,007

(1)	Market value is based on the closing price of our Common Shares as of December 31, 2025 ($3.83), the last trading day of the year.

(2)

Consists of RSUs granted on April 4, 2023, March 18, 2024, April 3, 2025 and June 10, 2025. With respect to the RSUs granted on April 4, 2023, as of December 31, 2025, there were 93,832 restricted share units not vested, which vested one-half on April 4, 2026, and which will vest one-half on April 4, 2027. With respect to the RSUs granted on March 18, 2024, as of December 31, 2025, there were 219,375 restricted share units not vested, which vested one-third on March 18, 2026, and which will vest one-third on March 18, 2027 and one-third on March 18, 2028. With respect to the RSUs granted on April 3, 2025, as of December 31, 2025, there were 237,446 RSUs not vested, which vested one-fourth on April 3, 2026, and which will vest one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on April 3, 2029. With respect to the RSUs granted on June 10, 2025, as of December 31, 2025, there were 146,768 RSUs not vested, which will vest one-fourth on June 10, 2026, one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on February 15, 2029.

(3)

Consists of RSUs granted on April 4, 2023, March 18, 2024, April 3, 2025 and June 10, 2025. With respect to the RSUs granted on April 4, 2023, as of December 31, 2025, there were 90,250 restricted share units not vested, which vested one-half on April 4, 2026, and which will vest one-half on April 4, 2027. With respect to the RSUs granted on March 18, 2024, as of December 31, 2025, there were 219,375 restricted share units not vested, which vested one-third on March 18, 2026, and which will vest one-third on March 18, 2027 and one-third on March 18, 2028. With respect to the RSUs granted on April 3, 2025, as of December 31, 2025, there were 237,446 RSUs not vested, which vested one-fourth on April 3, 2026, and which will vest one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on April 3, 2029. With respect to the RSUs granted on June 10, 2025, as of December 31, 2025, there were 146,768 RSUs not vested, which will vest one-fourth on June 10, 2026, one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on February 15, 2029.

(4)

Consists of RSUs granted on April 4, 2023, March 18, 2024, April 3, 2025 and June 10, 2025. With respect to the RSUs granted on April 4, 2023, as of December 31, 2025, there were 24,876 restricted share units not vested, which vested one-half on April 4, 2026, and which will vest one-half on April 4, 2027. With respect to the RSUs granted on March 18, 2024, as of December 31, 2025, there were 53,571 restricted share units not vested, which vested one-third on March 18, 2026, and which will vest one-third on March 18, 2027 and one-third on March 18, 2028. With respect to the RSUs granted on April 3, 2025, as of December 31, 2025, there were 46,883 RSUs not vested, which vested one-fourth on April 3, 2026, and which will vest one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on April 3, 2029. With respect to the RSUs granted on June 10, 2025, as of December 31, 2025, there were 28,980 RSUs not vested, which will vest one-fourth on June 10, 2026, one-fourth on February 15, 2027, one-fourth on February 15, 2028 and one-fourth on February 15, 2029.

Pension Benefits

We do not provide any of our officers with pension benefits.

Nonqualified Deferred Compensation

We do not provide any of our officers with any nonqualified deferred compensation plans.

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Potential Payments Upon Termination of Employment or Change in Control

In the event any officer’s employment is terminated due to such officer’s death or disability, all outstanding RSUs granted that have not previously vested or been forfeited, will vest. For awards granted before 2025, if any officer’s employment is terminated due to such officer’s retirement, all outstanding RSUs that have not previously vested or been forfeited will vest. If any officer’s employment is terminated without cause, subject to the officer’s execution of a general release of claims within a specified time period and subject to non-revocation, the outstanding RSUs which would have become vested and nonforfeitable during the 12-month period immediately following the date of such termination had the officer remained continuously employed, will vest. If a change in control occurs and the award is not assumed or converted into a replacement award in a manner described in the applicable award agreement, all outstanding awards held by our officers that have not previously vested or been forfeited, will vest. If a change of control occurs and the award is converted into a replacement award as described in the applicable award agreement and any officer’s employment is terminated without cause or for good reason within two years following a change in control (or, with respect to awards granted in 2025, if such replacement award is exempt from Section 409A of the Code, at any point following a change in control), all outstanding awards held by our officers that have not previously vested or been forfeited, will vest.

In general, except as may be otherwise prescribed by the compensation committee in any award agreement, the 2023 LTIP provides that a change of control will be deemed to have occurred if: (a) individuals who constitute the Board on the effective date of the 2023 LTIP cease for any reason to constitute at least a majority of the Board, unless their replacements are approved as described in the 2023 LTIP (subject to certain exceptions described in the 2023 LTIP); (b) a person or group becomes the beneficial owner of 35% or more of the then-outstanding Common Shares or the combined voting power of our then-outstanding securities entitled to vote generally in the election of trustees, subject to certain exceptions; (c) the Company closes a reorganization, merger, consolidation, significant sale or purchase of assets or other similar transaction resulting in a substantial change in its ownership or leadership, in each case which causes the persons or groups who are the beneficial owners of 35% or more of the then-outstanding Common Shares or the combined voting power of our then-outstanding securities entitled to vote generally in the election of trustees to cease to be such beneficial owners of the entity resulting from such transaction, in substantially the same proportions of ownership as immediately prior to such transaction, as further described in the 2023 LTIP; (d) the Company’s shareholders approve its complete liquidation or dissolution; or (e) the Adviser is terminated.

Cause is defined in the applicable award agreement and generally includes, among other things, a material breach by the participant of any agreement between the participant and the Company, the participant’s conviction of or plea of guilty or no contest to a felony or gross negligence or gross misconduct by the participant. Good reason is defined in the applicable award agreement and generally includes, among other things, a material diminution of duties or responsibilities, a material reduction in aggregate base salary and bonus opportunity or reassignment to another office location more than 50 miles from the current location.

Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

The Company does not grant options as part of our equity compensation programs.

The compensation committee does not take material nonpublic information into account when determining the timing and terms of equity awards and has not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The compensation committee typically grants equity awards once a year at least two business days after the filing of its Annual Report on Form 10-K and during a period when the Company does not possess material nonpublic information. The compensation committee may also grant equity awards in connection with promotions or other significant events.

During the year ended December 31, 2025, none of our named executive officers were awarded options with an effective grant date during any period beginning four business days before the filing or furnishing of a periodic or current report with the SEC that disclosed material nonpublic information and ending one business day after the filing or furnishing of such reports.

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Pay Versus Performance

As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three completed calendar years. In determining the “compensation actually paid” to our named executive officers (“NEOs”), we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. The table below summarizes compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section. Note that for our NEOs other than our principal executive officer (the “PEO”), compensation and any applicable adjustments are reported as averages.

The compensation committee does not use compensation actually paid as a basis for making compensation decisions. Further, the Company does not use financial performance measures to link compensation actually paid to the NEOs to Company performance.

Year	Summary compensation table total for PEO		Compensation actually paid to PEO (1)		Average summary compensation table total for non-PEO named executive officers		Average compensation actually paid to non-PEO named executive officers (2)		Value of initial fixed $100 investment based on Total Shareholder Return		Net income (in thousands)
2025	$	1,492,040	$	475,363	$	893,322	$	264,237	$	47.13	$	(127,037	)
2024	$	1,784,250	$	1,434,729	$	1,109,984	$	895,565	$	63.75	$	(56,573	)
2023	$	1,961,068	$	1,491,913	$	1,203,051	$	915,240	$	75.04	$	(117,241	)

(1) Mr. Dondero was our PEO for all three reporting years. The following are the adjustments made during each year to arrive at the compensation actually paid to our PEO during each year:

Adjustments	2025			2024			2023
Amounts reported under “Stock Awards” in Summary Compensation Table	$	(1,492,040	)	$	(1,784,250	)	$	(1,961,068	)
Fair Value of Awards Granted in Year that Remain Unvested as of Year-End	$	1,471,540		$	1,784,250		$	1,491,913
Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End	$	(710,980	)	$	(260,380	)		-
Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year	$	(285,197	)	$	(89,140	)		-
Total Adjustments	$	(1,016,677	)	$	(349,521	)	$	(469,155	)

(2) The non-PEO NEOs for the years ended December 31, 2025, 2024 and 2023 are Matt McGraner and Dustin Norris. The following are the adjustments made during each year to arrive at the average compensation actually paid to our non-PEO NEOs during the years ended December 31, 2025, 2024 and 2023:

Adjustments	2025			2024			2023
Amounts reported under “Stock Awards” in Summary Compensation Table	$	(893,322	)	$	(1,109,984	)	$	(1,203,051	)
Fair Value of Awards Granted in Year that Remain Unvested as of Year-End	$	881,047		$	1,109,983		$	915,240
Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End	$	(440,462	)	$	(159,735	)		-
Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year	$	(176,348	)	$	(54,685	)		-
Total Adjustments	$	(629,085	)	$	(214,419	)	$	(287,811	)

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Relationship between Compensation Actually Paid and Performance Measures

The following charts set forth the relationship between the compensation actually paid to the PEO and the average compensation actually paid to the NEOs other than the PEO for fiscal years 2025, 2024 and 2023 to each of (1) net income and (2) total shareholder return.

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides certain information as of the end of our most recently completed fiscal year with respect to compensation plans (including any individual compensation arrangements, of which there are none) under which our equity securities are authorized for issuance, aggregated as follows:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities issuable upon exercise of outstanding options, warrants and rights)
Equity compensation plans approved by securityholders
2023 LTIP	2,463,802 of the Company’s Common Shares (1)	N/A	405,892 of the Company’s Common Shares
Equity compensation plans not approved by securityholders
None	—	N/A	—
Total	2,463,802 of the Company’s Common Shares	N/A	405,892 of the Company’s Common Shares

(1) Represents RSUs issued under our 2023 LTIP.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a summary of transactions that occurred on or were in effect after January 1, 2024 to which we have been a party in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years and in which any of our executive officers, trustees or beneficial holders of more than 5% of our transferable units of beneficial interests had or will have a direct or indirect material interest.

Our Adviser

The Company is externally managed by the Adviser, through the Advisory Agreement for a term that will expire on July 1, 2026 and successive one-year terms thereafter unless earlier terminated. The Adviser manages the day-to-day operations of the Company and provides investment management services. All of the Company’s investment decisions are made by the Adviser, subject to general oversight by the Adviser’s investment committee and the Board. The Adviser is wholly owned by our Sponsor. The members of our Adviser’s investment committee are James Dondero, Matt McGraner and Paul Richards.

Advisory Agreement

We pay our Adviser annual fees. We do not pay any incentive fees to our Adviser. We also generally reimburse our Adviser for operating or offering expenses it incurs on our behalf or in connection with the services it performs for us. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company’s behalf. Once waived, those expenses are considered permanently waived and become non-recoupable.

Under the terms of the Advisory Agreement, our Adviser will, among other things:

●

identify, evaluate and negotiate the structure of our investments (including performing due diligence);

●

find, present and recommend investment opportunities consistent with our investment policies and objectives;

●

structure the terms and conditions of our investments;

●

review and analyze financial information for each investment in our overall portfolio;

●

close, monitor and administer our investments; and

●

identify debt and equity capital needs and procure the necessary capital.

As consideration for the Adviser’s services under the Advisory Agreement, we pay our Adviser an annual Advisory Fee of 1.00% of Managed Assets (as defined below) and an annual Administrative Fee of 0.20% of the Company’s Managed Assets. On July 22, 2024, we entered into an amendment to the Advisory Agreement whereby the monthly installment of the Administrative Fee shall be paid in cash and the monthly installment of the Advisory Fee shall be paid one-half in cash and one-half in Common Shares, subject to certain restrictions, including that in no event shall the Common Shares issued to the Adviser under the Advisory Agreement exceed the Share Cap and that in no event shall the Common Shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 Common Shares; provided, however, that the Share Cap will not apply if the Company’s shareholders have approved issuances in excess of the Share Cap. At the Company’s 2025 annual meeting of shareholders, the Company’s shareholders approved issuances in excess of the Share Cap. During the year ended December 31, 2025 and 2024, we issued 937,026.44 and 867,626.62 Common Shares to the Adviser in payment of Fees in an amount of $4.3 million and $5.54 million, respectively.

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On September 19, 2025, we entered into a further amendment to the Advisory Agreement whereby the monthly installments of the Fees accruing after September 19, 2025 will be paid entirely in cash unless the Adviser elects, in its sole discretion, to receive all or a portion of the monthly installment of the Fees in Common Shares of the Company, subject to certain restrictions, including that in no event shall the number of Common Shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 Common Shares. For the years ended December 31, 2025 and 2024, the Company incurred Fees of $13.2 million and $13.3 million, respectively.

Under the Advisory Agreement, “Managed Assets” means an amount equal to the total assets of the Company, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing to purchase or develop real estate or other investments, borrowing through a credit facility, or the issuance of debt securities), (ii) the issuance of preferred shares or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Company’s investment objectives and policies, and/or (iv) any other means. In the event the Company holds collateralized mortgage-backed securities (“CMBS”) where the Company holds the controlling tranche of the securitization and is required to consolidate under generally accepted accounting principles all assets and liabilities of a specific CMBS trust, the consolidated assets and liabilities of the consolidated trust will be netted to calculate the allowable amount to be included as Managed Assets. In addition, in the event the Company consolidates another person it does not wholly own as a result of owning a controlling interest in such person or otherwise, Managed Assets will be calculated without giving effect to such consolidation and instead such person’s assets, leverage, expenses, liabilities and obligations will, on a pro rata basis consistent with the Company’s percentage ownership, be considered those of the Company for purposes of calculation of Managed Assets. The Adviser computes Managed Assets as of the end of each fiscal quarter and then computes each installment of the Fees as promptly as possible after the end of the month with respect to which such installment is payable.

Incentive compensation may be payable to our executive officers and certain other employees of our Adviser or its affiliates pursuant to a long-term incentive plan adopted by us and approved by our shareholders. Compensation expense is generally not considered when calculating Managed Assets.

We are required to pay directly or reimburse the Adviser for all of the documented “operating expenses” (all out-of-pocket expenses of the Adviser in performing services for us, including but not limited to the expenses incurred by the Adviser in connection with any provision by the Adviser of legal, accounting, financial, due diligence, investor relations or other services performed by the Adviser that outside professionals or outside consultants would otherwise perform and our pro rata share of rent, telephone, utilities, office furniture, equipment, machinery or other office, internal and overhead expenses of the Adviser required for our operations) and any and all expenses (other than underwriters’ discounts) paid or to be paid by us in connection with an offering of our securities, including, without limitation, our legal, accounting, printing, mailing and filing fees and other documented offering expenses paid or incurred by the Adviser or its affiliates in connection with the services it provides to us pursuant to the Advisory Agreement.

We have the right to terminate the Advisory Agreement on 30 days’ written notice upon the occurrence of a cause event (as defined in the Advisory Agreement). The Advisory Agreement can be terminated by us or the Adviser without cause upon the expiration of the then-current term with at least 180 days’ written notice to the other party prior to the expiration of such term. The Adviser may also terminate the agreement with 30 days’ written notice if we have materially breached the agreement and such breach has continued for 30 days before we are given such notice. In addition, the Advisory Agreement will automatically terminate in the event of an Advisers Act Assignment (as defined in the Advisory Agreement) unless we provide written consent. A termination fee will be payable to the Adviser by us upon termination of the Advisory Agreement for any reason, including non-renewal, other than a termination by us upon the occurrence of a cause event or due to an Advisers Act Assignment. The termination fee will be equal to three times the Fees earned by the Adviser during the twelve-month period immediately preceding the most recently completed calendar quarter prior to the effective termination date.

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Under the terms of the Advisory Agreement, the Adviser will indemnify and hold harmless the Company and its subsidiaries, including the OP, from all claims, liabilities, damages, losses, costs and expenses, including amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and expenses of investigating or defending against any claim or alleged claim, of any nature whatsoever, known or unknown, liquidated or unliquidated, that are incurred by reason of the Adviser’s bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of its duties; provided, however, that the Adviser will not be held responsible for any action of our Board in following or declining to follow any written advice or written recommendation given by the Adviser. However, the aggregate maximum amount that the Adviser may be liable to us pursuant to the Advisory Agreement will, to the extent not prohibited by law, never exceed the amount of the Advisory Fees received by the Adviser under the Advisory Agreement prior to the date that the acts or omissions giving rise to a claim for indemnification or liability have occurred. In addition, the Adviser will not be liable for special, exemplary, punitive, indirect or consequential loss, or damage of any kind whatsoever, including without limitation lost profits. The limitations described in the preceding two sentences will not apply, however, to the extent such damages are determined in a final binding non-appealable court or arbitration proceeding to result from the bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of the Adviser’s duties.

The Adviser and its affiliates expect to engage in other business ventures, and as a result, their resources will not be dedicated exclusively to our business. However, pursuant to the Advisory Agreement, the Adviser is required to devote sufficient resources to our administration to discharge its obligations under the Advisory Agreement.

NHT Acquisition and Merger

On April 10, 2024, NexPoint Real Estate Partners, LLC (“NREP”), an entity advised by an affiliate of the Adviser, and Highland, a third party, entered into a Purchase Agreement (“Purchase Agreement”) whereby Highland agreed to sell, among other things, 2,176,257 units of NHT (“NHT Units”) to NREP. The Purchase Agreement was funded in part by cash of $0.8 million provided to NREP by the Company that was allocated for the sale of the NHT Units. Then on April 19, 2024, the Company, NexPoint Real Estate Opportunities, LLC (“NREO”), a wholly owned subsidiary of the Company, and NREP entered into an Assignment of Interests Agreement whereby NREP distributed, assigned, conveyed, transferred, set over, and delivered to NREO its right to purchase the NHT Units under the Purchase Agreement and all of its rights, title and interest in, to and under the NHT Units, including all voting, consent and financial rights, free and clear of all liens and encumbrances (the “NHT Acquisition”). As a result, the Company owned 53.65% of the outstanding NHT Units and was determined to hold the controlling financial interest in NHT and as a result consolidated NHT.

On November 22, 2024, the Company announced that it had entered into an Agreement and Plan of Merger (the “NHT Merger Agreement”) pursuant to which it would acquire the remaining outstanding NHT Units in a merger transaction (the “NHT Merger”) for approximately $5.5 million, to be paid principally in Common Shares, with limited partnership interests of the OP paid for the equity interests of NHT Operating Partnership, LLC (“NHT OP”). On April 17, 2025, the Company consummated the NHT Merger in accordance with the NHT Merger Agreement.

Promissory Notes Due to Affiliates

In connection with the NHT Merger, on April 17, 2025, several promissory notes with affiliates of the Company were issued due to a limitation on Common Shares issued to affiliates of the issuer by the NYSE. The aggregate principal amount of such promissory notes was $0.8 million, each with an interest rate of 7.334% and maturing on April 15, 2027, with two one-year extension options. As of December 31, 2025, the carrying amount of the promissory notes due to affiliates was $0.8 million.

Hospitality Convertible Notes

A subsidiary of the Company also assumed several convertible notes with affiliates of the NHT Adviser at the closing of the NHT Merger. The fixed rate notes have rates ranging from 2.25% to 7.50% (which were market interest rates at the time of their issuance) while outstanding and mature in 20 years from their date of issuance. As of December 31, 2025, the net carrying amount of the convertible notes due to affiliates of the former NHT Adviser was $51.9 million.

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NHT’s Advisory Agreement

Prior to the closing of the NHT Merger on April 17, 2025, NHT was externally managed by NexPoint Real Estate Advisors VI, L.P. (the “NHT Adviser”), an affiliate of the Adviser. In accordance with the agreement entered into with the NHT Adviser (the “NHT Advisory Agreement”), the Company paid the NHT Adviser an advisory fee equal to 1.00% of the REIT Asset Value (as defined below). Under the direct supervision of the REIT, the duties performed by NHT’s Adviser under the terms of the NHT Advisory Agreement include, but are not limited to: providing daily management for NHT, selecting and working with third party service providers, overseeing the third party manager, formulating an investment strategy for NHT and selecting suitable properties and investments, managing NHT’s outstanding debt and its interest rate exposure through derivative instruments, determining when to sell assets, and managing the renovation program or overseeing a third party vendor that implements the renovation program. REIT Asset Value means the value of NHT’s total assets, as determined in accordance with International Financial Reporting Standards (IFRS) except that such value shall only consolidate NHT’s and NHT Holdings, LLC assets plus NHT’s pro rata share of leverage at NHT OP. Pursuant to the terms of the NHT Advisory Agreement, NHT will reimburse the NHT Adviser for all documented Operating Expenses and offering expenses it incurs on behalf of NHT. “Operating Expenses” include legal, accounting, financial and due diligence services performed by the NHT Adviser that outside professionals or outside consultants would otherwise perform and NHT’s pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the NHT Adviser required for NHT’s operations. Operating Expenses do not include expenses for the advisory services described in the NHT Advisory Agreement. Certain Operating Expenses, such as NHT’s ratable share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses incurred by the NHT Adviser or its affiliates that relate to the operations of NHT, may be billed monthly to NHT under a shared services agreement.

As of April 19, 2024, the date of the NHT Acquisition, NHT had a payable balance of advisory fees of $6.5 million. As of December 31, 2025, there is a remaining payable of advisory fees of $11.3 million. The NHT Advisory Agreement was terminated in connection with the closing of the NHT Merger on April 17, 2025, and the Company assumed the remaining outstanding advisory fees under the NHT Advisory Agreement. The termination of the NHT Advisory Agreement incurred a termination fee of $3.5 million.

Management of Operating Properties

The Company’s operating properties in the Diversified segment are managed by NexVest Realty Advisors, LLC (“NexVest”), an affiliate of the Adviser. The property management agreement with NexVest for the retail property in Lubbock, Texas is dated January 1, 2014 and has a fixed fee of $1,200 per month. For the years ended December 31, 2025 and 2024 the Company through its subsidiaries has paid approximately $0.7 million and $0.7 million, respectively, in property management fees to NexVest. The property management agreement with NexVest for the White Rock Center is dated June 1, 2013, and the management fee is calculated on 4% of gross receipts, payable monthly. The property management agreement with NexVest for the undeveloped property in Plano, Texas is dated September 1, 2024, and the management fee is calculated on 3% of gross receipts, with a minimum fee of $750 per month. The property management agreement with NexVest for Cityplace is dated August 15, 2018, and the management fee is calculated on 3% of gross revenues, with a minimum fee of $20,000 per month. The property management agreement with NexVest for Cityplace also allows for the manager, as the agent of CP Tower Owner, LLC (“Owner”), to draw on the operating account when required in connection with the operation or maintenance of the property, the payment of certain expenses defined in the agreement, or as expressly approved in writing by Owner. For the years ended December 31, 2025 and 2024, the special purpose entity holding Cityplace reimbursed $1.5 million and $1.9 million, respectively, to NexVest for these expenses.

Freedom LHV Guarantee

On August 2, 2024, the Company, through Freedom LHV, LLC (“Freedom LHV”), an indirect subsidiary of the Company, borrowed approximately $10.0 million from The Ohio State Life Insurance Company (“OSL”), an entity that may be deemed an affiliate of the Adviser through common beneficial ownership. The note bears interest at an annual fixed rate of 10.0% and matures on August 2, 2029. The debt is secured by certain real property held by Freedom LHV and is guaranteed by the Company.

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NexBank Revolving Credit Facility

On May 22, 2023, the Company entered into a revolving credit facility with NexBank (the “NexBank Revolver”) in the initial principal amount of $20.0 million, with the option for the Company to receive additional disbursements thereunder up to a maximum amount of $50.0 million and bears interest at the one-month secured overnight financing rate (“SOFR”) plus 3.50%. On May 21, 2024, the Company elected to extend the maturity by six months to November 21, 2024. On November 21, 2024, the Company elected to extend the maturity by six months to May 21, 2025. On May 15, 2025, the Company amended the NexBank Revolver agreement to extend the maturity date to November 21, 2025 and to provide for three additional six-month extension options. On November 21, 2025, the Company elected to extend the maturity date by six months to May 21, 2026. As of December 31, 2025 and 2024, the NexBank Revolver had an outstanding balance of $11.0 million and $16.5 million, respectively.

Guaranties of NexPoint Storage Partners, Inc. Debt

On July 2, 2021, the Company, together with Highland Opportunities and Income Fund (“HFRO”) and Highland Global Allocation Fund (“GAF”) (collectively, the “Co-Guarantors”) as limited guarantors, entered into a Guaranty of Recourse Obligations (“SAFStor Recourse Guaranty I”) in favor of ACORE Capital Mortgage, LP (“ACORE”) in its capacity as Administrative Agent for and on behalf of the Lenders under a Loan Agreement (“SAFStor Loan Agreement I”), in an aggregate principal amount of $235.86 million, for the benefit of entities indirectly owned by SAFStor NREA JV – I, LLC (“SAFStor – I”), SAFStor NREA JV – III, LLC (“SAFStor – III”), SAFStor NREA JV – IV, LLC (“SAFStor – IV”), SAFStor NREA JV – V, LLC (“SAFStor – V”), SAFStor NREA JV – VI, LLC (“SAFStor – VI”), SAFStor NREA JV – VII, LLC (“SAFStor – VII”), and SAFStor NREA JV – VIII, LLC (“SAFStor – VIII”) (collectively, “SAFStor”), pursuant to which the Company and the Co-Guarantors guaranteed certain obligations of SAFStor. On July 2, 2021, the Company also entered a substantively identical guaranty in favor of ACORE in its capacity as Administrative Agent for and on behalf of the Lenders under a Mezzanine Loan Agreement (“SAFStor Mezzanine Loan Agreement I”), in the amount of $6.05 million, for the benefit of entities indirectly owned by SAFStor. On December 8, 2022, NSP completed a transaction that resulted in it acquiring 100% of the equity interest in SAFStor. On April 24, 2023, the Company joined certain separate guaranties previously made in favor of ACORE by the Co-Guarantors pursuant to an Omnibus Amendment to and Reaffirmation of Loan Documents (the “SAFStor Recourse Guaranty II”) in favor of ACORE in its capacity as (i) Administrative Agent for and on behalf of the Lenders under a Loan Agreement (“SAFStor Loan Agreement II”), in an aggregate principal amount of $41.99 million, for the benefit of SAFStor, and (ii) Administrative Agent for and on behalf of the Lenders under a Mezzanine Loan Agreement (“SAFStor Mezzanine Loan Agreement II”), in the amount of $1.08 million, for the benefit of entities indirectly owned by SAFStor. Pursuant to the SAFStor Recourse Guaranty I and SAFStor Recourse Guaranty II, the Company guaranteed the loss recourse liability and obligation for any Recourse Liabilities (as defined in the respective SAFStor Loan Agreement) arising out of or in connection with certain bad acts, such as if the borrower took actions that were fraudulent or improper or upon certain violations of the respective SAFStor Loan Agreement. The Company also guaranteed the full payment of the debt upon the occurrence of any Springing Recourse Events (as defined in the respective SAFStor Loan Agreement), such as if the borrower voluntarily filed a bankruptcy or similar liquidation or reorganization action or upon certain other violations of the respective SAFStor Loan Agreement. The guarantees by the Company were limited for loss recourse events, to the loss attributable to properties in which it indirectly owed an interest and for Springing Recourse to the pro-rata share of the aggregate liability of all guarantors within the pool of the guarantor properties. On October 3, 2024, NSP paid the debt in full and the guarantees were terminated.

On September 14, 2022, the Company entered into guaranties (the “BS Guaranties”) for the benefit of JPMorgan Chase Bank, National Association (“JPM”) and any additional or subsequent lenders from time to time (collectively, “BS Lender”) under a loan agreement (the “BS Loan Agreement”), pursuant to which the Company guaranteed certain obligations of the borrowers (“BS Borrower”) under the BS Loan Agreement. The Company, through its ownership in NSP, owns an indirect interest in BS Borrower and entered into the BS Guaranties as a condition of BS Lender lending to BS Borrower under the BS Loan Agreement. Pursuant to the BS Guaranties, the Company guaranteed certain carrying obligations, including interest payments, of BS Borrower and certain recourse obligations of BS Borrower pertaining to exculpation or indemnification of BS Lender. The BS Guaranties also provided that the Company could be required to repay principal amounts upon the occurrence of certain events, including certain action or inaction by BS Borrower, but does not provide for a full guarantee of repayment in all circumstances. The BS Loan Agreement provides for a single initial advance of the loan in the amount of $221.8 million to BS Borrower on the closing date and provided BS Borrower the right to request additional advances in connection with subsequently acquired properties. Amounts outstanding under the BS Loan Agreement were due and payable on March 9, 2024 which date could, at the option of BS Borrower, be extended for an additional six months upon the satisfaction of certain terms and conditions. On March 8, 2024, the BS Lender agreed to extend the maturity date to March 22, 2024. On March 22, 2024, the BS Lender agreed to extend the maturity date on the two loans to September 9, 2024. On September 9, 2024, the BS Lender agreed to extend the maturity date on the two loans to October 9, 2024. On October 4, 2024, NSP paid the debt in full and the guarantees were terminated.

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Separately, on September 14, 2022, the Company entered into a Guaranty Agreement (Recourse Obligations), dated September 14, 2022 (the “CMBS Guaranty”) for the benefit of JPM and any additional or subsequent lenders from time to time (collectively, the “CMBS Lender”) under a loan agreement (the “CMBS Loan Agreement”), by and among the borrowers thereunder (collectively, “CMBS Borrower”) and the CMBS Lender. The CMBS Loan Agreement provided for a loan of $356.5 million to CMBS Borrower. The Company, through its ownership in NSP, owns an indirect interest in CMBS Borrower and entered into the CMBS Guaranty as a condition of the CMBS Loan Agreement. Pursuant to the CMBS Guaranty, the Company guaranteed certain recourse obligations of CMBS Borrower pertaining to exculpation or indemnification of CMBS Lender, but did not provide for a full guarantee of repayment in all circumstances. Amounts outstanding under the CMBS Loan Agreement were due and payable on September 9, 2024. On September 9, 2024, the CMBS Lender and NSP entered into a forbearance agreement, and the CMBS Lender agreed to, until October 9, 2024, forbear from proceeding to exercise its remedies relating to the failure to repay the debt by September 9, 2024. On October 4, 2024, NSP repaid the debt in full and the guarantees were terminated.

On October 4, 2024, the Company entered into a Guaranty Agreement (Recourse Obligations), dated October 4, 2024 (the “Citi Guaranty”) for the benefit of JPM and Citi Real Estate Funding, Inc. (collectively, the “Citi Lender”) under a loan agreement (the “Citi Loan Agreement”), by and among the borrowers thereunder (collectively, “Citi Borrower”) and the Citi Lender. The Company is the owner of an indirect interest in Citi Borrower and entered into the Citi Guaranty as a condition of the Citi Lender lending to Citi Borrower under the Citi Loan Agreement. Pursuant to the Citi Guaranty, the Company guarantees the Guaranteed Obligations (as defined in the Citi Loan Agreement). The Guaranteed Obligations consist of liability for losses suffered by the Citi Lender arising out of certain bad acts, such as if the Citi Borrower takes actions that are fraudulent or improper or upon certain violations of the Citi Loan Agreement. The Guaranteed Obligations also include the full payment of the debt upon the occurrence of certain events including borrower voluntarily filing for bankruptcy or similar liquidation or reorganization action or upon certain other violations of the Citi Loan Agreement. The Citi Loan Agreement provides for a loan of $750.0 million to Citi Borrower. The Citi Loan Agreement is set to mature on November 1, 2029. Borrowings outstanding under the Citi Loan Agreement are secured by mortgages on real property owned by one or more of the borrowers comprising Citi Borrower.

On December 8, 2022 and in connection with a restructuring of NSP, the Company, together with NREF, HFRO and NexPoint Real Estate Strategies Fund (collectively, the “NSP Co-Guarantors”), as guarantors, entered into a Sponsor Guaranty Agreement in favor of Extra Space Storage, LP (“Extra Space”) pursuant to which the Company and the NSP 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 the Company and the NSP Co-Guarantors were capped at $97.6 million, and each of the Company and the NSP 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 Series D Preferred Stock remains outstanding as of December 31, 2025. As of December 31, 2025 and 2024, the outstanding NSP Series D Preferred Stock accrued dividends were $15.0 million and $11.6 million, respectively, and the Company and NREF OP IV REIT Sub, LLC are jointly and severally liable for 85.90% of the guaranteed amount.

NREF OP Promissory Note

On April 19, 2024, the Company, through the OP, loaned $6.5 million to NREF OP IV, L.P. (“NREF OP IV”). In connection with the loan, NREF OP IV issued a promissory note to the OP in the principal amount of $6.5 million bearing interest at 7.535%, which is payable in kind, interest only during the term and matures on April 19, 2029. NREF OP IV is a subsidiary of NREF, which is managed by an affiliate of the Adviser. On September 11, 2024, NREF OP IV extinguished the note and paid down the remaining principal balance and accrued interest.

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NFRO SFR REIT Promissory Notes

On December 14, 2023, the Company, through the OP, loaned approximately $3.6 million to NFRO SFR REIT, LLC (“NFRO SFR REIT”). In connection with the loan, NFRO SFR REIT issued a promissory note to the OP in the principal amount of approximately $3.6 million bearing interest at 7.535% per annum, which is payable in kind, interest only during the term and was to mature on June 14, 2025. On April 9, 2025, NFRO SFR REIT extinguished the note and paid down the remaining principal balance and accrued interest.

On February 15, 2024, the Company, through the OP, loaned approximately $3.2 million to NFRO SFR REIT. In connection with the loan, NFRO SFR REIT issued a promissory note to the OP in the principal amount of approximately $3.2 million bearing interest at 7.535% per annum, which is payable in kind, interest only during the term and was to mature on August 15, 2025. NFRO SFR REIT is a subsidiary of an entity that is advised by an affiliate of the Adviser. On May 16, 2025, NFRO SFR REIT extinguished the note and paid down the remaining principal balance and accrued interest.

Investments in DSTs

On July 26, 2024, the Company, through NREO, acquired $4.6 million worth of beneficial interests in NexPoint Life Sciences II DST (“Life Sciences DST”), a Delaware statutory trust. Life Sciences DST is managed by an affiliate of the Adviser. Life Sciences DST owns a manufacturing and production facility in Philadelphia, PA that is under a triple net lease.

On July 26, 2024, the Company, through NREO, acquired $14.9 million worth of beneficial interests in NexPoint Semiconductor DST (“Semiconductor DST”), a Delaware statutory trust. Semiconductor DST is managed by an affiliate of the Adviser. Semiconductor DST owns a semiconductor manufacturing property in Temecula, CA that is under a triple net lease. On September 11, 2024, the Company acquired an additional $6.1 million worth of beneficial interests in Semiconductor DST. On January 2, 2025, the Company acquired an additional $3.0 million worth of beneficial interests in Semiconductor DST.

SFR WLIF III, LLC

On November 25, 2024, SFR WLIF III, LLC, redeemed all of the interests in SFR WLIF III, LLC. The Company received approximately $7.2 million upon redemption of its units.

Alewife Holdings Loan

On May 10, 2024, the Company, through the OP, NREF OP IV, a subsidiary of NREF, an entity that is managed by an affiliate of the Adviser, and OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership, entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which NREF OP IV assigned the right to fund up to 9% of a mezzanine loan (the “Alewife Loan”) to be made to IQHQ-Alewife Holdings, LLC (“Alewife Holdings”) to the OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, NREF OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which NREF OP IV assigned $7.5 million of 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, 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, the 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 the OP and OSL, respectively. NREF OP IV is required to fund any amounts not funded by OSL and the OP. At any time that the OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, the OP and OSL have the option upon notice to NREF OP IV to pay to NREF OP IV any amount of such unfunded amount. Upon such payment, the OP or OSL would become entitled to all interest and fees accrued on the amount paid to NREF OP IV on and after the date of such payment.

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IQHQ Promissory Note and Warrant

On May 23, 2024, NexPoint Bridge Investor I, LLC (“Bridge Investor I”), an entity owned by an affiliate of the Adviser, entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement (“Bridge Purchase Agreement”) whereby IQHQ, LP (“IQHQ LP”) issued and sold to Bridge Investor I a Secured Convertible Promissory Note (the “IQHQ Promissory Note”) with a purchase commitment of $150 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 preferred stock of IQHQ, Inc. upon a Qualified Equity Financing (as defined in the IQHQ Promissory Note). In accordance with the Bridge Purchase Agreement, IQHQ Holdings, LP (“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 up to 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. The OP and certain entities advised by affiliates of our Adviser (the “IQHQ Participating Purchasers”) own common equity in IQHQ Holdings and/or IQHQ LP and NREF owns Series D-1 preferred stock in IQHQ, Inc., which is the limited partner of IQHQ, LP.

In connection with the Bridge Purchase Agreement, the OP, NREF, through certain subsidiaries, and the IQHQ Participating Purchasers entered into a participation rights agreement with Bridge Investor I pursuant to which the OP and the IQHQ Participating Purchasers had a right to fund up to specified amounts of the IQHQ Promissory Note and IQHQ Bridge Warrant. On December 2, 2024, the IQHQ Promissory Note was fully funded by NREF and the IQHQ Participating Purchasers and the OP did not fund any amounts.

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 preferred stock of IQHQ, Inc. Pursuant to the IQHQ Subscription Agreement, the full $10.1 million of the interest accrued on the IQHQ Promissory Note was substituted and exchanged for a deemed funding of $10.1 million under the IQHQ Subscription Agreement. In connection with the IQHQ Subscription Agreement, on December 31, 2024, Bridge Investor I also entered into a Warrant Purchase Agreement (the “IQHQ Warrant Purchase Agreement”) whereby IQHQ Holdings issued and sold a corresponding warrant to Bridge Investor I to purchase Class A-3 Units of IQHQ Holdings (as amended, the “IQHQ Series E Warrant”). The IQHQ Series E Warrant entitles the holder to purchase, at an exercise price of $0.01, Class A-3 Units of IQHQ Holdings initially intended to represent up to 10.25% of the fully diluted and outstanding common equity of IQHQ Holdings. The IQHQ Series E Warrant is exercisable, in whole or in part, at any time for ten years unless there is an earlier change of control, initial public offering or liquidation.

In connection with the IQHQ Subscription Agreement and IQHQ Warrant Purchase Agreement, the OP, along with NREF, through certain subsidiaries, and the IQHQ Participating Purchasers entered into a participation rights agreement with Bridge Investor I pursuant to which the OP and the IQHQ Participating Purchasers have a right to fund up to specified amounts of the IQHQ Subscription Agreement 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, the 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. NREF would be required to fund any amounts not funded by the IQHQ Participating Purchasers and the 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 NREF or the 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 NREF or the 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.

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As of December 31, 2025, the OP had not funded any amounts.

Ground Lease

The Company has a ground lease situated in Durham County, North Carolina, with a subsidiary of OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership. The lease has a remaining term of 3 years and a discount rate of 4.6% and contains five one-year extension options. As of December 31, 2025, the carrying amount of the right-of-use asset is $0.5 million, and the lease liability is $(0.5) million.

Series B Preferred Offering

On January 30, 2025, the Company announced the launch of the Offering. NexPoint Securities, an affiliate of the Adviser, serves as the Company’s dealer manager (the “Dealer Manager”) in connection with the Offering. The Dealer Manager uses its reasonable best efforts to sell the Series B Preferred Shares 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 Shares in the Offering (“Selling Commissions”) and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Shares in the 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 Series B Preferred Shares 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 Series B Preferred Shares in the Offering or August 1, 2027 (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 Offering at any time. As of December 31, 2025, the Company has sold 911,003 shares of the Series B Preferred Shares for total gross proceeds of $22.4 million.

OSL Loan

On February 12, 2026, certain indirect subsidiaries of the Company (the “NHT Borrowers”) entered into a Loan Agreement with OSL, pursuant to which OSL made a loan to the NHT Borrowers in the principal amount of $39,390,000 (the “OSL Loan”), bearing interest at 8.5% per annum and an initial maturity date of February 12, 2029, with certain extension rights. The OSL Loan is secured by mortgages on two hotel properties owned by the NHT Borrowers: (i) Bradenton Hampton Inn & Suites, with an allocated loan amount of $25,250,000, and (ii) Hyatt Place Park City, with an allocated loan amount of $14,140,000. The proceeds of the OSL Loan were used to fully repay and extinguish the outstanding balance under a borrowing arrangement for a $39.3 million loan with AREEIF Lender, LLC, which was secured by the Bradenton Hampton Inn & Suites and Hyatt Place Park City properties.

In connection with the OSL Loan, the OP entered into a Carveout Guaranty (the “OSL Guaranty”) for the benefit of OSL, pursuant to which the OP guaranteed certain obligations of the NHT Borrowers. The OSL Guaranty is a non-recourse carve-out guaranty. Generally, the OSL Loan is non-recourse to the NHT Borrowers and the Guarantors’ liability is limited to losses, damages, costs and expenses arising from certain “bad acts,” including but not limited to any fraud or willful misconduct of the NHT Borrowers or the OP, intentional damage to or destruction of the properties (including certain physical waste or arson) and misapplication or conversion of tenant security deposits, insurance proceeds, or condemnation awards. The OSL Guaranty becomes a full recourse guaranty covering up to the amount of the outstanding debt, plus accrued interest and other amounts, upon the occurrence of certain events.

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NSP DST Guaranty

On February 13, 2026, but effective as of October 1, 2021, the Company entered into a consent agreement and executed an amended and restated guaranty (the “NSP DST Guaranty”) with NSP and NexPoint Storage Partners Operating Company, LLC (“NSP OC” and together with NSP and the Company, collectively the “NSP DST Guarantors”) in favor of Wilmington Trust, National Association, as trustee for the benefit of registered holders of GS Mortgage Securities Trust 2021-GSA3, Commercial Mortgage Pass-Through Certificates, Series 2021-GSA3 (“NSP DST Lender”) dated October 1, 2021 (the “NSP DST Loan Agreement”), pursuant to which the Company agreed to become an additional guarantor of certain recourse obligations of the borrowers, NSP II Miami DST, NSP II Atlanta DST, NSP II Stamford DST, and NSP II St Pete DST (collectively, the “NSP DST Borrowers”), under a Loan Agreement, dated October 1, 2021, by and among the NSP DST Borrowers and NSP

SEC Form DEF 14A filed by NexPoint Diversified Real Estate Trust