NEXPOINT DIVERSIFIED REAL ESTATE TRUST

Rentable · Average Effective MonthlyOccupied Rent Per SquareFoot (1) as of · % Occupied (2) as of

Property Name · Square Footage (in thousands) · Property Type · Date Acquired · December 31, 2025 · December 31, 2024 · December 31, 2025 · December 31, 2024

White Rock Center · 82,793 · Retail · 6/13/2013 · 1.62 · 1.50 · 81.4 · 71.1

5916 W Loop 289 · 30,140 · Retail · 7/23/2013 · — · — · 0.0 · 0.0

Cityplace · 1,365,711 · Office, Multifamily &Hospitality (3) · 8/15/2018 · 2.05 · 2.16 · 41.2 · 46.4

1,478,644

Average effective monthly occupied rent per square foot is equal to the average of the contractual rent for commenced leases as of December 31, 2025, minus any tenant concessions over the term of the lease, divided by the occupied square footage of commenced leases as of December 31, 2025.

Percent occupied is calculated as the rentable square footage occupied as of December 31, 2025, divided by the total rentable square footage, expressed as a percentage.

Cityplace is currently under redevelopment and the Company is converting part of the property into a hotel, which was still under construction as of December 31, 2025.

The Company's ownership of Cityplace is subject to mortgage debt with an outstanding principal balance of approximately $137.6 million as of December 31, 2025. For further information on the Company’s owned real properties, see Notes 4, 5 and 6 to our consolidated financial statements.

Hospitality Segment:

Brand · Location · Name · Chain Scale · Service Scale · YearBuilt/LastRenovation · Rooms

Hilton Garden Inn · Dallas, Texas · HGI Property · Upscale · Select-Service · 1995/2016 · 240

Hyatt · Park City, Utah · Park City · Upscale · Full-Service · 2016 · 122

Hampton Inn & Suites · Bradenton, Florida · Bradenton · Upscale · Select-Service · 1926/2016 · 119

Marriott · St. Petersburg, Florida · St. Pete Property · Upper Upscale · Full-Service · 2001/2021 · 209

Total Rooms: · 690

The HGI Property and St. Pete Property are encumbered by mortgages securing the payment of debts of $26.4 million and $12.7 million, respectively.

The Bradenton and Park City properties are encumbered by mortgages securing the payment of debt of $38.6 million.

For further information on the Company’s owned real properties, see Notes 4, 5 and 6 to our consolidated financial statements.

• Our investments in non-real estate businesses, though limited, may expose us to risks from a number of diverse issuers, industries and investment forms.
• Fluctuations in interest rates and credit spreads could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments.
• Macroeconomic trends including inflation, high interest rates, tariffs or recession may adversely affect our financial condition and results of operations.
• Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.
• Investments in equity securities are subject to variation in their prices.
• We may use leverage in our investment program, resulting in a greater risk of loss.
• We may invest in preferred equity securities which contain provisions that may result in a decline in the value of such preferred security in certain situations.
• We may be subject to risks involved in investment activity through joint ventures.
• Our investments may be concentrated in terms of type of interest, geography, asset types, industry and sponsors and may continue to be so in the future.
• We operate in a competitive market for investment opportunities and competition may limit our ability to acquire desirable properties, loans and investments in commercial real estate and could also affect the yields of these assets.
• Prepayment rates may adversely affect the value of loans in which we invest.
• The lack of liquidity in certain of our investments may adversely affect our business.
• Our success depends on the availability of attractive loans and investments and our Adviser’s ability to identify, structure, consummate, leverage, manage and realize returns on our loans and investments.
• Any distressed loans or investments we make, or loans or investments that later become distressed, may subject us to losses and other risks relating to bankruptcy proceedings.
• We may not have control over certain of our loans and investments.
• Investments that are subordinated or otherwise junior in an issuer’s capital structure and that involve privately negotiated structures expose us to greater risk of loss.
• We may invest in senior loans, a significant portion of which may be below investment grade, which the borrower may fail to repay or which may decline in value due to changes in interest rates.
• We may not realize gains or income from our investments.
• Real estate valuation is inherently subjective and uncertain.
• Some of our portfolio investments may be recorded at fair value not readily available and, as a result, there will be uncertainty as to the value of these investments.
• The Company’s real estate assets may be subject to impairment charges.
• The due diligence process that our Adviser undertakes in regard to investment opportunities may not reveal all facts that may be relevant in connection with an investment and if our Adviser incorrectly evaluates the risks of our loans and investments, we may experience losses.
• Insurance on investments may not cover all losses.
• Risks Related to Our Industry
• Compliance with various laws and regulations, including accessibility, building and health and safety laws and regulations, may be costly, may adversely affect our operations or expose us to liability.
• If we fail to develop, enhance and implement strategies to adapt to changing conditions in the real estate industry and capital markets, our financial condition and results of operations may be materially and adversely affected.
• Any credit ratings assigned to our loans and investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.
• A change in the federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Fannie Mae, Freddie Mac and Ginnie Mae and the U.S. government, may materially adversely affect our business, financial condition and results of operations.
• The securitization process is subject to an evolving regulatory environment that may affect certain aspects of our current business.
• Rapid changes in the values of our real estate investments may make it more difficult for us to maintain our qualification as a REIT or exclusion from regulation under the Investment Company Act.
• We are a “smaller reporting company” under the federal securities laws and will be subject to reduced public company reporting requirements.
• Failure of our internal control over financial reporting could harm our business, financial condition and results of operations.
• The majority of the hotels in the Hospitality segment are operated pursuant to franchise agreements with nationally recognized hotel brands and changes in the market perception of such brands may impact the desirability of our hotels to consumers.
• The Company’s hotel properties may be adversely affected by various risks common to the hospitality and lodging industry.
• The hotel industry is cyclical and changes in economic conditions, consumer behavior and the travel and tourism industries may impact the demand for the Company’s hotel properties.
• Advances in technology and the growing use of online travel agencies may lead to increased costs and competition and lead to changes in consumer behavior.
• The Hospitality segment faces competition from other hotels and alternative lodging providers within the immediate vicinity of and in the broader geographic region where the Hospitality segment's hotels may be located.
• The hotel industry is subject to seasonal changes, which may cause fluctuations in room revenues, occupancy levels, room rates and operating expenses in particular hotels.
• Risks Related to Our Indebtedness and Financing Strategy
• We have a substantial amount of indebtedness which may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.
• Any credit facilities (including term loans and revolving facilities), debt securities, repurchase agreements, warehouse facilities, securitizations or other debt arrangements may impose restrictive covenants, which may restrict our flexibility to determine our operating policies and investment strategy.
• Inability to access funding could have a material adverse effect on our results of operations, financial condition and business.
• We are subject to counterparty risk associated with our debt obligations.
• Any credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities, securitizations or other debt arrangements that we may use to finance our assets may require us to provide additional collateral or pay down debt.
• Risks Related to Our Corporate Structure
• We have limited operating history as a REIT and may not be able to operate our business successfully, find suitable investments, or generate sufficient revenue to make or sustain distributions to our shareholders.
• We depend upon key personnel of our Adviser and its affiliates.
• We are dependent upon our Adviser and its affiliates to conduct our day-to-day operations; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer.
• Our Adviser manages our Portfolio pursuant to very broad investment guidelines and is not required to seek the approval of our Board for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier investments and which could materially and adversely affect us.
• We may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Adviser and members of our Adviser’s management team or by our Sponsor or its affiliates.
• Our Adviser maintains a contractual as opposed to a fiduciary relationship with us. Our Adviser’s liability is limited under the Advisory Agreement, and we have agreed to indemnify our Adviser against certain liabilities.
• We may change our targeted investments and investment guidelines without shareholder consent.
• We will pay substantial fees and expenses to our Adviser and its affiliates, which payments increase the risk that you will not earn a profit on your investment.
• If we internalize our management functions, we may not achieve the perceived benefits of the internalization transaction.
• There are significant potential conflicts of interest that could affect our investment returns.
• The Chapter 11 bankruptcy filing by Highland Capital Management, L.P. (“Highland”) may have materially adverse consequences on our business, financial condition and results of operations.
• Litigation against James Dondero and others may have materially adverse consequences on our business, financial condition and results of operations.
• We may compete with other entities affiliated with our Adviser and our Sponsor for investments.
• Our Adviser, its affiliates and their respective affiliates, officers and employees face competing demands relating to their time, and this may cause our operating results to suffer.
• Our Adviser and its affiliates will face conflicts of interest, including significant conflicts created by our Adviser’s compensation arrangements with us, including compensation which may be required to be paid to our Adviser if the Advisory Agreement is terminated, which could result in actions that are not necessarily in the long-term best interest of our shareholders.
• Our declaration of trust permits our Board to issue shares with terms that may subordinate the rights of our shareholders or discourage a third party from acquiring us in a manner that could otherwise result in a premium price to our shareholders.
• Our declaration of trust contains certain provisions that may delay, defer or prevent an acquisition of our securities or a change in control.
• Risks Related to Our REIT Status and Other Tax Items
• We have elected to be treated as a REIT commencing with our taxable year ended December 31, 2021. Our failure to qualify or maintain our qualification as a REIT for U.S. federal income tax purposes would reduce the amount of funds we have available for distribution and limit our ability to make distributions to our shareholders.
• Even if we qualify as a REIT for U.S. federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you.
• To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, which could adversely affect our financial condition, results of operations, cash flow and value of our securities.
• The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.
• There is a lack of clear authority governing the characterization of our subordinated debt or preferred equity investments for REIT qualification purposes.