NEXPOINT DIVERSIFIED REAL ESTATE TRUST Leases Disclosure
15. Leases
Lessor Accounting
The following table summarizes the future minimum lease payments to the Company as the lessor under the operating lease obligations at December 31, 2025 (in thousands). These amounts do not reflect future rental revenues from renewal or replacement of existing leases. Reimbursements of operating expenses and variable rent increases are excluded from the table below.
Year: |
|
Operating Leases |
|
|
2026 |
|
$ |
5,810 |
|
2027 |
|
|
5,047 |
|
2028 |
|
|
2,832 |
|
2029 |
|
|
2,087 |
|
2030 |
|
|
1,417 |
|
Thereafter |
|
|
1,995 |
|
Total |
|
$ |
19,188 |
|
There are no tenants that make up greater than 10% of net rental income during the year ended December 31, 2025.
The following table lists the tenants where the rental revenue from the tenants represented 10% or more of total rental income in the Company’s Consolidated Statements of Operations and Comprehensive Income (in thousands) for the year ended December 31, 2024:
|
|
For the Year Ended December 31, 2024 |
|
|
Tenant |
|
Rental Income |
|
|
Neiman Marcus Group, LLC |
|
$ |
2,180 |
|
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.
The future minimum lease payments under the operating lease as of December 31, 2025 are as follows:
Years Ending December 31, |
|
Minimum Lease |
|
|
2026 |
|
$ |
208 |
|
2027 |
|
|
212 |
|
2028 |
|
|
217 |
|
Total undiscounted lease payments |
|
|
637 |
|
Less: Present Value discount |
|
|
(91 |
) |
Total lease liability |
|
$ |
546 |
|
For the years ended December 31, 2025 and 2024, the Company recognized lease expense of $0.2 million and $0.2 million, respectively, recorded on a straight-line basis over the lease term.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 31, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.