NEXPOINT DIVERSIFIED REAL ESTATE TRUST Segments Disclosure
16. Segment Reporting
The Company has two reportable segments: Diversified and Hospitality. For a description of the types of products and services from which these reportable segments derive their revenues, see Notes 1, 2 and 3. The accounting policies of both segments are the same as those described in the Summary of Significant Accounting Policies. The chief operating decision maker primarily assesses performance for the segments and decides how to allocate resources based on segment net income (loss). The measures of segment assets are based on each segment’s total assets. The chief operating decision maker uses segment net income (loss) to evaluate profitability in deciding whether to reinvest profits into new or existing investments or into other parts of the entity, such as for dividend amounts. The Company’s two reportable segments serve different strategic purposes. The Diversified segment primarily consists of activities focused on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. The majority of the Diversified segment's revenue is comprised of Rental income, Dividend income, and Interest income. The Hospitality segment is focused on operating and renovating its U.S. located hospitality assets that meet its investment objective and criteria. The majority of the Hospitality segment's revenue is comprised of revenue from renting rooms and selling food and beverages. Therefore, the Company has identified Diversified and Hospitality as the two operating segments and the two reportable segments. The Company’s chief operating decision maker is the president of the Company.
The following table presents measures of the reportable segment measures of profitability, along with significant segment expenses (in thousands):
|
|
For the Year Ended December 31, 2025 |
|
|
For the Year Ended December 31, 2024 |
|
||||||||||||||||||
|
|
Diversified |
|
|
Hospitality |
|
|
Total |
|
|
Diversified |
|
|
Hospitality |
|
|
Total |
|
||||||
Total Revenues |
|
$ |
55,326 |
|
|
$ |
30,639 |
|
|
$ |
85,965 |
|
|
$ |
52,990 |
|
|
$ |
30,232 |
|
|
$ |
83,222 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property operating expense |
|
|
7,081 |
|
|
|
16,711 |
|
|
|
23,792 |
|
|
|
6,517 |
|
|
|
15,738 |
|
|
|
22,255 |
|
Property management fees |
|
|
670 |
|
|
|
880 |
|
|
|
1,550 |
|
|
|
734 |
|
|
|
757 |
|
|
|
1,491 |
|
Real estate taxes and insurance |
|
|
4,343 |
|
|
|
1,915 |
|
|
|
6,258 |
|
|
|
4,836 |
|
|
|
1,708 |
|
|
|
6,544 |
|
Advisory and administrative fees |
|
|
13,175 |
|
|
|
3,898 |
|
|
|
17,073 |
|
|
|
13,286 |
|
|
|
879 |
|
|
|
14,165 |
|
Property general and administrative expenses |
|
|
2,475 |
|
|
|
4,231 |
|
|
|
6,706 |
|
|
|
2,878 |
|
|
|
4,527 |
|
|
|
7,405 |
|
Corporate general and administrative expenses |
|
|
10,574 |
|
|
|
1,327 |
|
|
|
11,901 |
|
|
|
9,947 |
|
|
|
2,856 |
|
|
|
12,803 |
|
Depreciation and amortization |
|
|
13,245 |
|
|
|
4,494 |
|
|
|
17,739 |
|
|
|
11,698 |
|
|
|
3,902 |
|
|
|
15,600 |
|
Impairment loss |
|
|
576 |
|
|
|
1,752 |
|
|
|
2,328 |
|
|
|
— |
|
|
|
7,110 |
|
|
|
7,110 |
|
Interest expense |
|
|
14,682 |
|
|
|
11,922 |
|
|
|
26,604 |
|
|
|
17,443 |
|
|
|
10,909 |
|
|
|
28,352 |
|
Equity in (income) losses of unconsolidated equity method ventures |
|
|
1,289 |
|
|
|
— |
|
|
|
1,289 |
|
|
|
(129 |
) |
|
|
— |
|
|
|
(129 |
) |
Change in unrealized (gains) losses from non-real estate investments |
|
|
103,904 |
|
|
|
— |
|
|
|
103,904 |
|
|
|
1,348 |
|
|
|
— |
|
|
|
1,348 |
|
Realized (gains) losses from non-real estate investments |
|
|
(5,994 |
) |
|
|
— |
|
|
|
(5,994 |
) |
|
|
21,479 |
|
|
|
— |
|
|
|
21,479 |
|
Gain on sales of real estate |
|
|
— |
|
|
|
(37 |
) |
|
|
(37 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Income tax expense (benefit) |
|
|
262 |
|
|
|
(373 |
) |
|
|
(111 |
) |
|
|
1,441 |
|
|
|
(69 |
) |
|
|
1,372 |
|
Net loss |
|
$ |
(110,956 |
) |
|
$ |
(16,081 |
) |
|
$ |
(127,037 |
) |
|
$ |
(38,488 |
) |
|
$ |
(18,085 |
) |
|
$ |
(56,573 |
) |
The following table presents total assets for the reportable segments (in thousands):
|
|
As of December 31, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||||||||||
|
|
Diversified |
|
|
Hospitality |
|
|
Total |
|
|
Diversified |
|
|
Hospitality |
|
|
Total |
|
||||||
Total assets |
|
$ |
928,231 |
|
|
$ |
146,421 |
|
|
$ |
1,074,652 |
|
|
$ |
1,039,392 |
|
|
$ |
185,447 |
|
|
$ |
1,224,839 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.