NEXPOINT DIVERSIFIED REAL ESTATE TRUST
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
- Consolidated Real Estate Investments
As of September 30, 2024, the major components of the Company’s investments in real estate held by SPEs the Company consolidates, which are included in "Consolidated Real Estate Investments" on the Consolidated Balance Sheet, were as follows (in thousands):
| Operating Properties | Land | Buildings and Improvements | Intangible Lease Assets | Intangible Lease Liabilities | Right of use assets | Construction in Progress | Furniture, Fixtures, and Equipment | Totals |
|---|---|---|---|---|---|---|---|---|
| White Rock Center | $1,315 | $10,562 | $1,921 | $(101) | $— | $— | $5 | $13,702 |
| 5916 W Loop 289 | 1,081 | 2,938 | — | — | — | — | — | 4,019 |
| Cityplace Tower | 18,812 | 194,997 | 9,058 | (6,669) | — | 19,127 | 356 | 235,681 |
| NexPoint Dominion Land, LLC | 26,500 | — | — | — | — | — | — | 26,500 |
| Dallas Hilton Garden Inn | 4,116 | 24,620 | — | — | — | 96 | 1,475 | 30,307 |
| Addison Homewood Suites | 2,576 | 4,977 | — | — | — | 482 | 824 | 8,859 |
| Las Colinas Homewood Suites | 2,335 | 10,337 | — | — | — | 313 | 1,016 | 14,001 |
| St. Petersburg Marriott | 5,829 | 33,650 | — | — | — | 3,417 | 2,303 | 45,199 |
| Hyatt Place Park City | 3,737 | 19,875 | — | — | — | 877 | 3,140 | 27,629 |
| Bradenton Hampton Inn & Suites | 837 | 25,051 | — | — | 1,465 | 708 | 2,825 | 30,886 |
| Accumulated depreciation and amortization | — | (22,098) | (7,801) | 3,363 | (19) | — | (1,081) | (27,636) |
| Total Operating Properties | $67,138 | $304,909 | $3,178 | $(3,407) | $1,446 | $25,020 | $10,863 | $409,147 |
| Held for Sale Properties | ||||||||
| Plano Homewood Suites | $2,106 | $5,394 | $— | $— | $— | $28 | $739 | $8,267 |
| Accumulated depreciation and amortization | — | (77) | — | — | — | — | (56) | (133) |
| Total Held for Sale Properties | $2,106 | $5,317 | $— | $— | $— | $28 | $683 | $8,134 |
As of December 31, 2023, the major components of the Company’s investments in real estate held by SPEs the Company consolidates, which are included in "Consolidated Real Estate Investments" on the Consolidated Balance Sheet, were as follows (in thousands):
| Operating Properties | Land | Buildings and Improvements | Intangible Lease Assets | Intangible Lease Liabilities | Construction in Progress | Furniture, Fixtures, and Equipment | Totals |
|---|---|---|---|---|---|---|---|
| White Rock Center | $1,315 | $10,345 | $1,921 | $(101) | $— | $5 | $13,485 |
| 5916 W Loop 289 | 1,081 | 2,938 | — | — | — | — | 4,019 |
| Cityplace Tower | 18,812 | 192,930 | 9,058 | (6,669) | 19,177 | 357 | 233,665 |
| NexPoint Dominion Land, LLC | 26,500 | — | — | — | — | — | 26,500 |
| 47,708 | 206,213 | 10,979 | (6,770) | 19,177 | 362 | 277,669 | |
| Accumulated depreciation and amortization | — | (13,490) | (6,798) | 2,203 | — | (237) | (18,322) |
| Total Operating Properties | $47,708 | $192,723 | $4,181 | $(4,567) | $19,177 | $125 | $259,347 |
Depreciation expense was $3.9 million and $9.9 million for the three and nine months ended September 30, 2024 and $2.8 million and $7.2 million for the three and nine months ended September 30, 2023. Amortization expense related to the Company’s intangible lease assets was $0.4 million and $1.0 million for the three and nine months ended September 30, 2024 and $0.8 million and $3.3 million for the three and nine months ended September 30, 2023. Amortization expense related to the Company's intangible lease liabilities was $0.6 million and $1.2 million for the three and nine months ended September 30, 2024 and $0.4 million and $1.1 million for the three and nine months ended September 30, 2023. The net amount amortized as an increase to rental revenue for capitalized above and below-market lease intangibles was $0.6 million and $1.1 million for the three and nine months ended September 30, 2024 and $0.3 million and $0.9 million for the three and nine months ended September 30, 2023. Impairment loss consists of $5.1 million relating to Las Colinas Homewood Suites and $1.0 million relating to Plano Homewood Suites, which was classified as held for sale, for the three and nine months ended September 30, 2024. The Company recognizedno impairment loss for the three and nine months ended September 30, 2023.
Acquisitions
During the nine months ended September 30, 2024, as a result of the NHT Acquisition, the Company consolidated the following properties: Dallas Hilton Garden Inn, Addison Homewood Suites, Plano Homewood Suites, Las Colinas Homewood Suites, St. Petersburg Marriott, Hyatt Place Park City, Bradenton Hampton Inn & Suites. There were no acquisitions by the Company for the nine months ended September 30, 2023.
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