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Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt Debt
The following table contains summary information of the Company’s debt as of June 30, 2025 and December 31, 2024 (dollars in thousands):
Outstanding principal as of
DescriptionTypeJune 30, 2025December 31, 2024Interest RateMaturity Date
Mortgages Payable
Cityplace Note A-1 (1)Floating$98,594 $99,435 6.68 %3/8/2026
Cityplace Note A-2 (1)Floating12,412 12,517 6.68 %3/8/2026
Cityplace Note B-1 (1)Floating21,568 21,751 10.68 %3/8/2026
Cityplace Note B-2 (1)Floating2,715 2,738 10.68 %3/8/2026
Cityplace Mezz Note-1 (1)Floating3,081 3,107 10.68 %3/8/2026
Cityplace Mezz Note-2 (1)Floating388 391 10.68 %3/8/2026
NHT - Note A Loan (2)Floating28,069 50,188 6.32 %9/8/2025
NHT - Note B Loan (2)Floating13,515 24,165 10.78 %9/8/2025
NHT - PC & B Loan (3)Floating38,285 37,875 9.02 %2/5/2026
White Rock Center (4)Fixed10,000 10,000 10.00 %8/2/2029
Notes Payable
Dominion NoteFloating13,250 13,250 7.50 %8/8/2025
Raymond James LoanFloating5,000 11,000 8.57 %10/6/2025
NexBank Revolver (5)Floating13,829 16,485 7.82 %11/21/2025
Convertible Notes Due to AffiliatesFixed57,986 57,986 
2.25% - 7.50%
2/14/2027 - 9/30/2042
Promissory Notes Due to AffiliatesFixed775 — 7.33 %4/17/2027
Prime Brokerage Borrowing
Jefferies Line of CreditFloating4,410 1,222 4.83 %N/A (7)
Total Debt$323,877 $362,110 
Fair market value adjustment, net of accumulated amortization (6)(6,920)(7,740)
Deferred financing costs(500)(315)
$316,457 $354,055 
(1)This debt is secured by the following property: Cityplace Tower.
(2)This debt is secured by the following properties: HGI Property and the St. Pete Property.
(3)This debt is secured by the following properties: Park City and Bradenton.
(4)This debt is secured by the following property: White Rock Center.
(5)This debt is secured by the following property and investments: 5916 W Loop 289 and IQHQ, LP (“IQHQ LP”).
(6)The Company recorded a valuation adjustment of the Convertible Notes Due to Affiliates upon the consolidation of NHT to adjust for the difference between the fair value and the outstanding principal amount of the debt. The difference is amortized into interest expense.
(7)
This debt balance has no stated maturity date.
Cityplace Tower Debt
The Company has debt on the Cityplace Tower pursuant to a Loan Agreement, originally dated August 15, 2018 and subsequently amended (the “Loan Agreement”). The debt is limited recourse to the Company and encumbers the property. On April 15, 2025, the lender agreed to defer the maturity of the Cityplace Tower debt by twelve months to March 8, 2026. The debt restructuring per the terms of the Fourteenth Omnibus Amendment Agreement was considered a debt modification. The purpose of the deferral was to allow for continued discussions around refinancing the debt. Management recognizes that finding an alternative source of funding is necessary to repay the debt by the maturity date. Management is evaluating multiple options to fund the repayment of the $138.8 million principal balance outstanding as of June 30, 2025, including refinancing the debt, securing additional equity or debt financing, selling a portion of the portfolio, or any combination thereof. Management believes that there is sufficient time before the maturity date and that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they become due.
The weighted average interest rate of the Company’s debt related to its Cityplace Tower investment was 7.48% as of June 30, 2025 and 7.65% as of December 31, 2024. The one-month secured overnight financing rate (“SOFR”) was 4.32% as of June 30, 2025 and 4.33% as of December 31, 2024.
The Loan Agreement contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events.
White Rock Center Debt
On August 2, 2024, the Company, through Freedom LHV, LLC (“Freedom LHV”), an indirect subsidiary of the Company, borrowed approximately $10.0 million from The Ohio State Life Insurance Company (“OSL”). The note bears interest at an annual fixed rate of 10.0% and matures on August 2, 2029. The debt is secured by certain real property held by Freedom LHV and is guaranteed by the Company.
Dominion Note
On August 9, 2022, the Company borrowed approximately $13.3 million from the seller, Gabriel Legacy, LLC to finance its acquisition of 21.5 acres of land in Plano, Texas held through NexPoint Dominion Land, LLC, a wholly owned subsidiary of the OP. The note (the “Dominion Note”) bears interest at an annual rate equal to the WSJ Prime Rate and initially matured on August 8, 2025, with two one-year extension options. On August 8, 2025, the Company elected to use one of the one-year extensions under the Dominion Note to extend the maturity date to August 8, 2026.
Mortgages Payable, Hospitality
On February 28, 2019, a subsidiary of the Company, entered into a borrowing arrangement for a $59.4 million Note A loan (the “Note A Loan”) and a $28.6 million Note B loan (the “Note B Loan”) with ACORE Capital Mortgage, LP ("ACORE"). The Note A Loan and Note B Loan are secured by the HGI Property and the St. Pete Property. The Note A Loan bears interest at a variable rate equal to the 30-day SOFR plus 2.00% and matures on September 8, 2025. The Note B Loan bears interest at a variable rate equal to the 30-day SOFR plus 6.46% and matures on September 8, 2025. The Note A Loan and Note B Loan principal amounts reflected their fair values on the date of the NHT Acquisition. As of June 30, 2025, the Note A Loan and the Note B Loan had an outstanding balance of $28.1 million and $13.5 million and effective interest rates of 6.32% and 10.78%, respectively. For the six months ended June 30, 2025, our subsidiary paid $0.5 million and $0.4 million in interest on the Note A Loan and the Note B Loan, respectively.
On February 15, 2022, in connection with the acquisition of the Park City and Bradenton properties, the Company, through its subsidiaries entered into a borrowing arrangement for a $39.3 million loan (the “PC & B Loan”) with AREEIF Lender, LLC. The PC & B Loan principal amount reflected its fair value on the date of the NHT Acquisition. The
outstanding balance on the PC & B Loan as of June 30, 2025 was $38.3 million, with $1.0 million available to draw on for renovation purposes as of June 30, 2025. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the debt.
The loan documents, including the guaranty, for the PC & B Loan and the Note A Loan and Note B Loan contain customary representations, warranties, and events of default, which require a subsidiary of the Company to comply with affirmative and negative covenants. As of June 30, 2025, a subsidiary of the Company, as the guarantor of certain obligations under the PC & B Loan documents, was not in compliance with the PC & B Loan covenants related to the minimum net worth and the minimum liquid assets. AREEIF Lender, LLC, the lender under the PC & B Loan has not granted a waiver for the covenant violations as of June 30, 2025. While the lender under the PC & B Loan has not indicated that it will accelerate the PC & B Loan, the lender has the ability under the loan documents to do so if the conditions remain uncured after the giving of notice and expiration of a cure period. There can be no assurance that the lender under the PC & B Loan will waive such covenant beaches, and discussions regarding such a waiver are ongoing. The PC & B Loan is secured by mortgages on our Park City and Bradenton properties. Should the lender under the PC & B Loan exercise its remedies under the relevant loan documents, up to and including the acceleration of the full amount of the PC & B Loan, it may have a material adverse impact on our financial condition, liquidity and results of operations. If we are unable to pay the amount due upon acceleration, the lender under the PC & B Loan may elect to foreclose on the Park City and Bradenton properties to satisfy the indebtedness. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the debt.
Notes Payable, Hospitality
NHT and certain of its subsidiaries also entered into several convertible notes with affiliates of NexPoint Real Estate Advisors VI, L.P. (the “NHT Adviser”) since January 8, 2019. The fixed rate notes have rates ranging from 2.25% to 7.50% (which were market interest rates at the time of their issuance) while outstanding and mature in 20 years from their date of issuance, with the earliest maturing on February 14, 2027 and the latest maturing on September 30, 2042. For $3.6 million of the notes, the principal and interest is convertible into Class B units of NHT OP (“NHT OP Class B Units”) (at the option of their respective holder) at the market price of the NHT Units at the time of conversion any time during the term of the note. For $38.0 million of the notes, the principal of the notes is convertible into NHT OP Class B Units, at prices ranging from $1.60 to $2.50 for a period of five years from its date of issuance (with the expiration of conversion rights ranging from June 25, 2026 to September 30, 2027). One note issued to Highland Global Allocation Fund in the amount of $8.5 million is not convertible into NHT OP Class B Units. On October 30, 2023, the TSX Venture Exchange (the "TSXV") approved the issuance of up to 21,075,012 NHT Units in connection with the redemption of NHT OP Class B Units issued to a holder of notes on conversion of the $38.0 million of notes. With respect to the $3.6 million of notes convertible on the basis of the market price of the NHT Units at the time of the conversion, any issuance of NHT Units in connection with a redemption of NHT OP Class B Units received by holders on a conversion of such notes is subject to the prior approval of the TSXV. The relative fair value of the convertible notes did not reflect the outstanding principal on the date of the NHT Acquisition. The difference between the fair value and the principal amount of debt is amortized into interest expense over the remaining term. As of June 30, 2025, the net carrying amount of the convertible notes due to affiliates of the NHT Adviser was $51.0 million. On April 17, 2025, the notes were amended and restated in connection with the closing of the NHT Merger. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the notes.
Convertible Notes Payable to Affiliates
In connection with the NHT Merger, on April 17, 2025, several promissory notes were issued to certain affiliates of the Company due to a limitation on common shares issued to affiliates of the issuer by the New York Stock Exchange. The aggregate principal amount of such promissory notes was $0.8 million, each with an interest rate of 7.334% and maturing on April 17, 2027, with two one-year extension options. As of June 30, 2025, the carrying amount of the promissory notes due to affiliates under the notes was $0.8 million.
Credit Facility
On January 8, 2021, the Company entered into a $30.0 million credit facility (the "Credit Facility") with Raymond James Bank, N.A. and drew the full balance. Prior to October 20, 2023, the Company paid down the outstanding amount under the Credit Facility to $1.0 million. Amounts repaid by the Company under the Credit Facility could not be reborrowed. On October 20, 2023, Raymond James Bank, N.A. agreed to amend the terms of the Credit Facility, which, among other things, extended the maturity date to October 6, 2025 and amended the credit limit to $20.0 million. During
the six months ended June 30, 2025, the Company paid down $6.0 million on the Credit Facility. As of June 30, 2025, the Credit Facility had an outstanding balance of $5.0 million and bore interest at the one-month SOFR plus 4.25%.
Revolving Credit Facility
On May 22, 2023, the Company entered into a $20.0 million revolving credit facility (the "NexBank Revolver") with NexBank, in the initial principal balance of $20.0 million, with the option for the Company to receive additional disbursements thereunder up to a maximum of $50.0 million, a maturity date of May 21, 2024 and the option to extend the maturity two times by six months. On May 21, 2024, the Company elected to extend the maturity by six months to November 21, 2024. On November 21, 2024, the Company elected to extend the maturity by six months to May 21, 2025. On May 15, 2025, the Company amended the NexBank Revolver agreement to extend the maturity date to November 21, 2025, and to provide for three additional six-month extension options. As of June 30, 2025, the NexBank Revolver bears interest at one-month SOFR plus 3.50% and matures on November 21, 2025. As of June 30, 2025, the NexBank Revolver had an outstanding balance of $13.8 million.
Deferred Financing Costs
The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company’s Consolidated Balance Sheets. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs.
Prime Brokerage Borrowing
Effective July 2, 2022, the Company entered a prime brokerage account with Jefferies to hold securities owned by the Company (the "Prime Brokerage"). The Company from time to time borrows against the value of these securities. As of June 30, 2025, the Company had a margin balance of approximately $4.4 million outstanding with Jefferies bearing interest at the Overnight Bank Funding Rate plus 0.50%. Securities with a fair value of approximately $13.1 million are pledged as collateral against this margin balance. This arrangement has no stated maturity date. Due to the short-term nature of the debt, the fair value of the debt is approximately the outstanding balance.
Schedule of Debt Maturities
The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to June 30, 2025 are as follows (in thousands):
Mortgages PayableCredit FacilitiesNotes PayablePrime Brokerage BorrowingTotal
2025$41,583 $18,829 $13,250 $— $73,662 
2026177,044 — — — 177,044 
2027— — 21,275 — 21,275 
2028— — — — — 
202910,000 — — — 10,000 
Thereafter— — 37,486 4,410 41,896 
Total$228,627 $18,829 $72,011 $4,410 $323,877