Material Agreement (Form 8-K)

Item 1.01. Entry into a Material Definitive Agreement.

On April 3, 2026, NexPoint Diversified Real Estate Trust OP, L.P. (the "OP"), the operating partnership of NexPoint Diversified Real Estate Trust (the "Company"), Highland Opportunities & Income Fund ("HFRO"), Highland Global Allocation Fund ("HGLB") and NRES REIT Sub II, LLC ("NRES" and, together with HFRO and HGLB, the "Other NSP Note Purchasers") entered into a participation agreement side letter (the "Side Letter") with NexPoint Real Estate Finance Operating Partnership, L.P. ("NREF"). Pursuant to the Side Letter, effective on March 30, 2026, the OP purchased an undivided participation interest in $962,000 principal amount of that certain Secured Promissory Note, dated as of January 16, 2026, as amended by that certain First Amendment to Secured Promissory Note and Joinder Agreement, dated as of March 25, 2026 (as amended, the "NSP Note"), by and between NexPoint Storage Partners Operating Company, LLC ("NSP OC"), a subsidiary of NexPoint Storage Partners, Inc. ("NSP"), and certain subsidiaries of NSP OC and of NexPoint Advisors, L.P., the parent of our external adviser (our "Sponsor"), as co-borrowers, and NREF, as lender. In addition, under the Side Letter and that certain participation agreement, dated March 25, 2026, as amended, between NREF and The Ohio State Life Insurance Company ("OSL), the OP, OSL and each Other NSP Note Purchaser has the right, but not the obligation, to participate in any future advance under the NSP Note up to its then-current pro rata share, with NREF remaining obligated to fund any amount of future advances under the NSP Note not funded by the OP, OSL or the Other NSP Note Purchasers. Under the NSP Note, the NSP OC may borrow up to an aggregate principal amount of $40 million, with $22.7 million outstanding as of April 3, 2026. The NSP Note bears interest at a rate of 14% per annum, which is payable in kind, is interest only during the term of the NSP Note and matures on January 16, 2031. Borrowings under the NSP Note are secured by a first priority lien on certain income streams and the related deposit accounts of the co-borrowers.

As of April 3, 2026, the Company owned approximately 53.02% of the total outstanding shares of common stock of NSP and has guaranteed certain obligations of NSP. Accounts advised by our Sponsor and its affiliates beneficially own substantially all of the equity securities of NSP. Each Other NSP Note Purchaser and NREF are advised or managed by an affiliate of NexPoint Real Estate Advisors X, L.P., the Company's external adviser (the "Adviser"), and OSL may be deemed an affiliate of the Adviser through common beneficial ownership.