NexPoint Diversified Real Estate Trust Announces Quarterly Distribution

Rhea-AI Summary

NexPoint Diversified Real Estate Trust (NXDT) has declared a quarterly distribution of $0.15 per common share, payable on March 31, 2025, to shareholders of record on February 28, 2025. The distribution will be paid through a combination of cash and NXDT common shares, with the cash component to 20% of the total distribution.

Shareholders can elect to receive the distribution entirely in cash or shares. If cash elections exceed 20% of the aggregate distribution, the cash portion will be prorated. Shareholders who don't make an election will receive the distribution entirely in shares. The share price for the distribution will be calculated based on the volume weighted average trading prices on NYSE during March 17-19, 2025.

This structure helps NXDT maintain REIT qualification requirements while preserving capital and financial flexibility. The distribution is expected to be taxable to shareholders regardless of the form received.

Positive

• Maintains quarterly dividend distribution of $0.15 per share
• Structure helps preserve company capital and enhance financial flexibility
• Ensures compliance with REIT qualification requirements

Negative

• Cash component to 20% of distribution, forcing majority share-based payment
• Potential share dilution due to stock-based distribution
• Cash payments will be prorated if cash elections exceed 20% threshold

News Market Reaction

-0.59%

1 alert

-0.59% News Effect

On the day this news was published, NXDT declined 0.59%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

DALLAS, Feb. 18, 2025 /PRNewswire/ -- NexPoint Diversified Real Estate Trust ("NXDT") (NYSE: NXDT) announced today that its board of trustees has declared a quarterly distribution of $0.15 per common share of NXDT, consisting of a combination of cash and common shares of NXDT.  The distribution will be payable on March 31, 2025, to shareholders of record on February 28, 2025.

The board of trustees has determined that the cash component of the distribution (other than cash paid in lieu of fractional shares) will not exceed 20% in the aggregate, with the balance payable in common shares of NXDT. This will allow NXDT to comply with the real estate investment trust ("REIT") qualification requirements under the Internal Revenue Code, while retaining capital and enhancing NXDT's financial flexibility.

In accordance with the provisions of IRS Revenue Procedure 2017-45, shareholders will be asked to make an election to receive the distribution all in cash or all in shares. To the extent that more than 20% of cash is elected in the aggregate, the cash portion will be prorated. Shareholders who elect to receive the distribution in cash will receive at least 20% of the distribution in cash. Shareholders who do not make an election will receive the distribution entirely in common shares of NXDT. The number of shares issued as a result of the distribution will be calculated based on the volume weighted average trading prices of NXDT's common shares on the New York Stock Exchange on March 17, 18 and 19, 2025.

An election notice and election form will be mailed to shareholders of record after the record date. The properly completed election form to receive cash or common shares must be received by Equiniti Trust Company, NXDT's transfer agent, prior to 5:00 p.m. Eastern Time on March 14, 2025.

Shareholders who hold their shares through a bank or broker should inform the bank or broker of their election. NXDT expects the dividend to be a taxable dividend to shareholders, regardless of whether a particular shareholder receives the dividend in the form of cash or shares. Shareholders are urged to consult with their tax advisers for proper tax treatment of NXDT's distributions. NXDT reserves the right to pay future dividends entirely in cash.

About NexPoint Diversified Real Estate Trust (NYSE: NXDT)

NexPoint Diversified Real Estate Trust is an externally advised, publicly traded, diversified REIT focused on the acquisition, development, and management of opportunistic and value-add investments throughout the United States across multiple sectors where NexPoint and its affiliates have operational expertise. NXDT is externally advised by NexPoint Real Estate Advisors X, L.P. For more information, please visit nxdt.nexpoint.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to the tax status of the distribution, and NXDT's capital retention and financial flexibility contain forward-looking statements. We caution investors that any forward-looking statements presented in this press release are based on management's current beliefs and assumptions made by, and information currently available to, management. When used, the words "will," "retain," "expect" and "enhance," the negative version of these words and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control, including those described in greater detail in our filings with the Securities and Exchange Commission (the "SEC") particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements and encourage you to review our other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement.

CONTACTS

Investor Relations
Kristen Griffith
IR@nexpoint.com

Media Relations
Comms@nexpoint.com

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SOURCE NexPoint Diversified Real Estate Trust

FAQ

What is the amount of NXDT's quarterly distribution for March 2025?

NXDT's quarterly distribution is $0.15 per common share, payable on March 31, 2025.

How will NXDT's Q1 2025 distribution be paid to shareholders?

The distribution will be paid through a combination of cash and NXDT common shares, with the cash component to 20% of the total distribution.

What happens if NXDT shareholders don't make an election for the March 2025 distribution?

Shareholders who do not make an election will receive the distribution entirely in common shares of NXDT.

When is the record date for NXDT's Q1 2025 distribution?

The record date for NXDT's distribution is February 28, 2025.

How will the share price be determined for NXDT's stock distribution?

The share price will be calculated based on the volume weighted average trading prices on NYSE during March 17, 18, and 19, 2025.