NexPoint Hospitality Trust goes private—Unitholders swapped cash or shares as TSXV delisting nears

NexPoint Hospitality Trust has officially completed its going-private transaction, culminating in the dissolution of the real estate investment trust and the transfer of all underlying assets to NexPoint Diversified Real Estate Trust. The transaction marks the end of NexPoint Hospitality Trust’s public listing on the TSX Venture Exchange, with units scheduled to be delisted by the close of trading on April 22, 2025.

The deal, first proposed in November 2024, involved a structured merger in which all subsidiary entities of NexPoint Hospitality Trust were integrated into entities owned or controlled by NexPoint Diversified Real Estate Trust. As a result of the closing, REIT unitholders had the option to receive either US$0.36 in cash per unit or convert their units into common shares of NHT Hospitality, Inc., which were subsequently exchanged for common shares of NexPoint Diversified Real Estate Trust. The conversion was calculated based on the volume-weighted average price of NexPoint Diversified Real Estate Trust shares over the 10 trading days prior to closing.

Unitholders who did not elect their preference were automatically issued shares in NexPoint Diversified Real Estate Trust. This step completes the transition from a dual-entity structure to full consolidation under NexPoint Diversified Real Estate Trust’s U.S.-based real estate platform.

What does the transaction mean for REIT unitholders?

The key impact of the transaction was the elimination of the Canadian-listed NexPoint Hospitality Trust structure. By choosing to receive either a direct cash payout or shares in the acquiring trust, unitholders were given an exit path or continued participation in the NexPoint real estate ecosystem. The deal price of US$0.36 per unit, while modest in absolute terms, aligned with the thin trading volume and limited liquidity of the REIT prior to its dissolution.

For investors opting for shares, the exchange ratio was linked to the NYSE-listed NexPoint Diversified Real Estate Trust’s market performance, giving them continued exposure to the broader U.S.-focused diversified REIT platform under the NexPoint umbrella.

Why did NexPoint pursue the going-private route?

The going-private move reflects a broader consolidation strategy by NexPoint Diversified Real Estate Trust. By absorbing the hospitality REIT’s assets and operations, NexPoint aims to streamline operations, reduce administrative duplication, and gain greater control over strategic capital allocation. The shift is also designed to simplify the investment structure and enhance operational focus, particularly as the real estate trust intensifies its value-add and opportunistic investments across the U.S.

With the hospitality segment increasingly challenged by macroeconomic volatility and fluctuating demand recovery post-pandemic, integrating these assets into a larger, diversified platform gives NexPoint increased flexibility in asset repositioning and portfolio optimization.

How is NexPoint Diversified Real Estate Trust positioned post-deal?

NexPoint Diversified Real Estate Trust is an externally advised real estate investment trust focused on opportunistic and value-add investments across U.S. sectors including multifamily, single-family rental, self-storage, industrial, and hospitality. The platform benefits from the operational and investment expertise of NexPoint Real Estate Advisors X, L.P., a key part of the broader NexPoint ecosystem led by Highland Capital Management co-founder James Dondero.

The hospitality portfolio acquired from the now-defunct REIT includes properties that may be restructured, rebranded, or redeployed under NexPoint’s strategic growth initiatives. With the integration complete, NexPoint Diversified Real Estate Trust now has greater latitude to rebalance its exposure across high-demand real estate sectors, especially in light of shifting occupancy patterns and inflation-sensitive rent growth.

Market sentiment and forward-looking insights

The delisting of NexPoint Hospitality Trust from the TSX Venture Exchange underscores a broader trend in Canadian capital markets where U.S.-linked REITs and cross-border issuers are consolidating operations for scale and simplicity. The thin trading activity and limited float on the TSXV made the structure less viable in the long term, especially for a U.S.-centric asset portfolio.

NexPoint Diversified Real Estate Trust (NYSE: NXDT) has shown relative stability amid broader real estate sector volatility. As of April 18, 2025, its shares have traded within a tight band year-to-date, with a modest increase in institutional interest following the completion of the transaction. Analysts have noted that while the stock remains undervalued relative to net asset value, the potential for capital recycling and portfolio rebalancing may unlock future upside.

From a sentiment perspective, the completion of this transaction is seen as neutral to slightly positive for shareholders of NexPoint Diversified Real Estate Trust. The impact of additional assets under management, coupled with reduced overhead and streamlined reporting, could support improved earnings visibility over time. Investors may view the deal as part of a broader pattern of operational tightening and strategic repositioning in real estate investment trusts amid rising interest rates and cost pressures.