Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
Title of Securities to be Registered |
Proposed Maximum Aggregate Offering Price (1) |
Amount of Registration Fee (2) | ||
Primary Offering, Class T, Class S, Class D and Class I Common Stock, par value $0.01 per share |
$6,000,000,000 |
$654,600 | ||
Distribution Reinvestment Plan, Class T, Class S, Class D and Class I Common Stock, par value $0.01 per share |
$1,500,000,000 |
$163,650 | ||
Total Class T, Class S, Class D and Class I Common Stock, par value $0.01 per share |
$7,500,000,000 |
$818,250 | ||
(1) |
The registrant reserves the right to reallocate shares of common stock being offered between the primary offering and the distribution reinvestment plan. |
(2) |
As discussed below, pursuant to Rule 415(a)(6) under the Securities Act, for purposes of calculating the registration fees due in connection with the filing of this registration statement, the registrant has assumed that $1,630,000,000 of unsold shares of common stock originally registered for sale pursuant to a prior registration statement will be carried forward to this registration statement. Pursuant to Rule 415(a)(6) of the Securities Act, the registration fees in the amount of $202,935 previously paid with respect to such unsold securities will continue to apply to such unsold securities. Accordingly, after taking into account the previously registered unsold securities and the payment of registration fees of $640,417 in connection with the filing of the Registrant’s registration statement filed on April 28, 2021 and pre-effective amendments thereto filed on July 15, 2021 and September 24, 2021, the registration fee due for this registration statement is $0. Calculated pursuant to Rule 457(o) under the Securities Act. |
• | the resignation of the Sub-Adviser as the registrant’s adviser and the engagement of Brookfield REIT Adviser LLC as the registrant’s adviser; |
• | the engagement of the Sub-Adviser as the registrant’s sub-adviser to (i) manage certain of the registrant’s real estate properties (the “Equity Option Investments”) and real estate-related debt investments (the “Debt Option Investments” and, together with the Equity Option Investments, the “Oaktree Option Investments”) acquired prior to the consummation of the Adviser Transition, and (ii) select and manage the registrant’s liquid investments; |
• | the filing of a Second Articles of Amendment to the registrant’s charter to change the registrant’s name from “Oaktree Real Estate Income Trust, Inc.” to “Brookfield Real Estate Income Trust Inc.”; |
• | the registrant’s entry into an Option Investments Purchase Agreement with Oaktree Capital Management, L.P. (together with its affiliates, “Oaktree”), pursuant to which Oaktree may purchase the entire interest of Brookfield REIT Operating Partnership L.P. (the “Operating Partnership”) in the Equity Option Investments or the Debt Option Investments, or both, subject to certain restrictions; |
• | the expected contribution of certain properties to the registrant by Brookfield in exchange for shares of the registrant’s Class E common stock, Class E units of the Operating Partnership, or a combination thereof; |
• | the disposition of certain of the registrant’s existing real estate properties and real estate-related debt investments; |
• | the engagement of Brookfield Oaktree Wealth Solutions LLC as the dealer manager for this offering; |
• | the resignation of members and the appointment of new members of the registrant’s board of directors; |
• | the resignation of certain of the registrant’s executive officers and the appointment of certain new executive officers; |
• | the filing of Articles Supplementary to the registrant’s charter designating a new class of common stock as Class E shares; and |
• | the termination of the registrant’s line of credit with Oaktree Fund GP I, L.P. and the registrant’s expected entry into a credit agreement with an affiliate of Brookfield Asset Management Inc. providing for a new line of credit. |
• |
We have a limited operating history, our operating history should not be relied upon due to the changes to our business resulting from the Adviser Transition (as defined below), including the engagement of the Adviser and the Dealer Manager and the changes to our board of directors, our executive officers and our investment portfolio, and there is no assurance we will be able to successfully achieve our investment objectives. |
• |
We have only made limited investments to date and you will not have the opportunity to evaluate our future investments before we make them. |
• |
Since there is no public trading market for shares of our common stock, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides stockholders with the opportunity to request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may modify or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid. |
• |
We cannot guarantee that we will make distributions, and if we do we may fund such distributions from sources other than cash flow from operations, and we have no limits on the amounts we may pay from such sources. We believe that the likelihood that we pay |
distributions from sources other than cash flow from operations, will be higher in the early stages of the offering. |
• |
The purchase and repurchase price for shares of our common stock will generally be based on our prior month’s NAV (subject to material changes as described herein) and will not be based on any public trading market. While there will be independent appraisals of our properties, the appraisal of properties is inherently subjective, and our NAV may not accurately reflect the actual price at which our assets could be liquidated on any given day. |
• |
We have no employees and are dependent on the Adviser to conduct our operations. The Adviser will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and Other Brookfield Accounts (as defined herein), the allocation of time of its investment professionals and the substantial fees that we pay to the Adviser. |
• |
This is a “best efforts” offering. If we are not able to raise a substantial amount of capital in the near term, our ability to achieve our investment objectives could be adversely affected. |
• |
Principal and interest payments on any borrowings will reduce the amount of funds available for distribution or investment in additional real estate assets. |
• |
There are limits on the ownership and transferability of our shares. |
• |
If we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease as a result of being subject to corporate income tax. |
Price to the Public (1) |
Upfront Selling Commissions (2) |
Dealer Manager Fees (2) |
Proceeds to Us, Before Expenses (3) |
|||||||||||||
Maximum Offering (4) |
$ |
6,000,000,000 |
$ |
116,370,386 |
$ |
7,246,377 |
$ |
5,891,161,562 |
||||||||
Class T Shares, per Share |
$ |
12.3873 |
$ |
0.3591 |
$ |
0.0598 |
$ |
11.9684 |
||||||||
Class S Shares, per Share |
$ |
12.2929 |
$ |
0.4157 |
— |
$ |
11.8772 |
|||||||||
Class D Shares, per Share |
$ |
12.1479 |
$ |
0.1795 |
— |
$ |
11.9684 |
|||||||||
Class I Shares, per Share |
$ |
11.9684 |
— |
— |
$ |
11.9684 |
||||||||||
Maximum Distribution Reinvestment Plan |
$ |
1,500,000,000 |
— |
— |
$ |
1,500,000,000 |
(1) |
The price per share shown for each of our classes of shares is the November 1, 2021 transaction price, which is equal to such class’s NAV as of September 30, 2021, plus applicable upfront selling commissions and dealer manager fees. Shares of each class will be issued on a monthly basis at a price per share generally equal to the prior month’s NAV per share for such class, plus applicable upfront selling commissions and dealer manager fees. The transaction price is the then-current offering price per share before applicable selling commissions and dealer manager fees and is generally the prior month’s NAV per share for such class. |
(2) |
The table assumes that all shares are sold in the primary offering, with 1/4 of the gross offering proceeds from the sale at Class T shares, 1/4 of the gross offering proceeds from the sale of Class S shares, 1/4 of the gross offering proceeds from the sale of Class D shares and 1/4 of the gross offering proceeds from the sale of Class I shares. The number of shares of each class sold and the relative proportions in which the classes of shares are sold are uncertain and may differ significantly from this assumption. For Class T shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction price; provided, however, that such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. |
For Class S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.5% of the transaction price. For Class D shares sold in the primary offering, investors will pay upfront selling commissions of up to 1.5% of the transaction price. We will also pay the following selling commissions over time as stockholder servicing fees to the dealer manager, subject to Financial Industry Regulatory Authority, Inc. (“FINRA”) limitations on underwriting compensation: (a) for Class T shares only, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV for the Class T shares; provided, however, with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares, (b) for Class S shares only, a stockholder servicing fee equal to 0.85% per annum of the aggregate NAV for the Class S shares and (c) for Class D shares only, a stockholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares, in each case, payable monthly. No stockholder servicing fees will be paid with respect to the Class I shares. The total amount that will be paid over time for other underwriting compensation depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments. We will also pay or reimburse certain organization and offering expenses. See “Plan of Distribution,” “Estimated Use of Proceeds” and “Compensation.” |
(3) | Proceeds are calculated before deducting stockholder servicing fees or organization and offering expenses payable by us, which are paid over time. |
(4) | We reserve the right to reallocate shares of common stock between our distribution reinvestment plan and our primary offering. |
• | a net worth of at least $250,000; or |
• | a gross annual income of at least $70,000 and a net worth of at least $70,000. |
• | meet the minimum income and net worth standards established in your state; |
• | are or will be in a financial position appropriate to enable you to realize the potential benefits described in the prospectus; and |
• | are able to bear the economic risk of the investment based on your overall financial situation. |
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iv | ||||
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15 | ||||
41 | ||||
120 | ||||
123 | ||||
137 | ||||
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157 | ||||
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287 | ||||
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289 | ||||
A-1 |
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B-1 |
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C-1 |
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D-1 |
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F-1 |
Q: |
What is Brookfield Real Estate Income Trust Inc.? |
A: |
We are a Maryland corporation formed on July 27, 2017. We are externally managed by our adviser, Brookfield REIT Adviser LLC (the “Adviser”), a Delaware limited liability company. The Adviser is an affiliate of Brookfield Asset Management Inc. (together with its affiliates, “Brookfield”), our sponsor. We are structured as an “UPREIT,” which means that we own substantially all of our assets through Brookfield REIT Operating Partnership L.P. (the “Operating Partnership”). Brookfield REIT OP GP LLC, our wholly-owned subsidiary, is the sole general partner of the Operating Partnership. Brookfield REIT OP Special Limited Partner L.P., a Delaware limited partnership and an indirect subsidiary of Brookfield (the “Special Limited Partner”), owns a special limited partner interest in the Operating Partnership. We own, and plan to continue to own, all or substantially all of our assets through the Operating Partnership and its subsidiaries. |
Q: |
What is the Adviser Transition? |
A: |
Prior to the date of this prospectus, we were externally managed by Oaktree Fund Advisors, LLC (the “Sub-Adviser”), an affiliate of Oaktree Capital Management, L.P. (together with its affiliates, “Oaktree”). On July 15, 2021, we entered into that certain Adviser Transition Agreement with the Adviser and the Sub-Adviser, pursuant to which the Adviser became our external adviser on the date of this prospectus. Pursuant to the Adviser Transition Agreement, we consummated a series of related transactions and actions that we refer to collectively as the “Adviser Transition,” including, but not limited to, the following: |
• | the resignation of the Sub-Adviser as our adviser and the engagement of the Adviser as our adviser; |
• | the engagement of the Sub-Adviser to (i) manage certain of our real estate properties (the “Equity Option Investments”) and real estate-related debt investments (the “Debt Option Investments” and, together with the Equity Option Investments, the “Oaktree Option Investments”) that we acquired prior to the consummation of the Adviser Transition and (ii) select and manage our liquid assets (cash, cash equivalents, other short-term investments, U.S. government securities, agency securities, corporate debt, liquid real estate-related, equity or debt securities and other investments for which there is reasonable liquidity) (the “Liquidity Sleeve”); |
• | the filing of an amendment to our charter to change our name from “Oaktree Real Estate Income Trust, Inc.” to “Brookfield Real Estate Income Trust Inc.”; |
• | our entry into an Option Investments Purchase Agreement with Oaktree (the “Option Investments Purchase Agreement”), pursuant to which Oaktree may purchase the Operating Partnership’s entire interest in the Equity Option Investments or the Debt Option Investments, or both, subject to certain restrictions; |
• | the expected contribution of certain properties to the Operating Partnership by Brookfield in exchange for shares of the registrant’s Class E common stock, Class E units of the Operating Partnership, or a combination thereof; |
• | the disposition of certain of our existing real estate properties and real estate-related debt investments; |
• | the engagement of Brookfield Oaktree Wealth Solutions LLC (the “Dealer Manager”) as the dealer manager for this offering; |
• | the resignation of members and the appointment of new members of our board of directors; |
• | the resignation of certain of our executive officers and the appointment of certain new executive officers; |
• | the filing of Articles Supplementary to our charter designating a new class of common stock as Class E shares; and |
• | the termination of our line of credit with the Oaktree Fund GP I, L.P. (the “Oaktree Investor”), an affiliate of Oaktree, and our entry into a credit agreement with an affiliate of Brookfield providing for a new line of credit. |
Q: |
Who is Brookfield? |
A: |
Brookfield is a leading global alternative asset manager with over $625 billion of assets under management as of June 30, 2021 across real estate, infrastructure, private equity and credit. Building on a history as an owner and operator that dates back more than 100 years, Brookfield invests in long-life assets and businesses—many of which help support the backbone of today’s global economy—as well as in the debt securities of these assets and businesses. Brookfield uses its global reach, access to large-scale capital and operational expertise to offer a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth. |
Q: |
What are Brookfield’s real estate capabilities? |
A: |
Brookfield’s real estate business is one of the world’s largest investors in real estate, with approximately $219 billion of assets under management as of June 30, 2021 across office, multifamily, logistics, retail, hospitality, mixed-use and alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments). Within the United States, Brookfield manages $136 billion in assets across more than 1,300 properties and significant on-the-ground |
Q: |
Who is Oaktree? |
A: |
Prior to the Adviser Transition, we were externally managed and advised by the Sub-Adviser. The Sub-Adviser is an affiliate of Oaktree, which is a leader among global investment managers specializing in alternative investments, with approximately $156 billion of assets under management as of June 30, 2021. Oaktree’s mission is to deliver superior investment results with risk under control and to conduct its business with the highest integrity. Oaktree emphasizes an opportunistic, value-oriented and risk-controlled approach to investing across real assets (including real estate), credit strategies, private equity and listed equities. Over more than two decades, Oaktree has developed a large and growing client base through its ability to identify and capitalize on opportunities for attractive investment returns in less efficient markets. |
Q: |
What is the relationship between Brookfield and Oaktree? |
A: |
On September 30, 2019, Brookfield acquired 61.2% of Oaktree’s business. Oaktree’s ability to invest across the capital structure has enabled Brookfield to cultivate a diversified mix of global investment strategies in credit, private equity, real assets and listed equities. |
Q: |
What is Brookfield’s and Oaktree’s shared investment philosophy? |
A: |
Together, Brookfield and Oaktree share a long-term, value-driven, contrarian investment style, focusing on sectors in which they believe their in-depth operating experience and market knowledge give the firms a competitive advantage. |
• | Downside Protection: |
• | Consistent Returns: |
• | Client Focus: |
Q: |
What are your primary investment objectives? |
A: |
Our primary investment objectives are to: |
• | Provide sustainable, stable income in the form of regular cash distributions to our stockholders; |
• | Protect and preserve invested capital; |
• | Generate appreciation from asset and market selection and hands-on direct property operations to grow cash flows; and |
• | Provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to high-quality commercial and residential real estate with lower volatility than publicly traded companies. |
Q: |
What is your investment strategy? |
A: |
Our investment strategy is to invest in a diversified portfolio of: |
• | Income-producing real estate |
• | Real estate-related debt |
• | Real estate-related securities |
Q: |
What potential competitive strengths do you offer? |
A: |
We believe that investing in our common stock may offer investors five primary benefits: |
• | Access to a leading global real estate business with experience over multiple market cycles . mixed-use and alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments). Through its deep global sourcing network, Brookfield seeks to acquire high-quality assets in supply-constrained markets and execute operational enhancements to deliver consistent cash flows. Real estate is the largest of Brookfield’s four main business lines, and Brookfield’s real estate business has invested over $88 billion of equity in real estate since 1987. |
• | Brookfield’s operational expertise . in-house expertise and operating capabilities to enhance value and execute business plans with certainty. |
• | An investment team with the ability to access deal flow that is proprietary and less competitive . |
• | Deep market knowledge and sector expertise . |
• | 164 million square feet of Class-A office properties; |
• | 29 million square feet of logistics properties; |
• | approximately 57,000 owned and 23,000 managed multifamily units; |
• | approximately 1,100 owned and 7,300 managed single-family rental properties; |
• | approximately 44,000 hotel rooms; and |
• | 141 million square feet of high-quality retail properties. |
• | Access to Oaktree’s credit investing expertise . sub-advisory relationship with the Sub-Adviser will allow us to opportunistically pivot our debt investments across property types and throughout the capital structure to optimize investments and ensure adequate liquidity for our share repurchase plan and facilitating large acquisitions. |
Q: |
What are Brookfield’s real estate operating capabilities? |
A: |
Brookfield Properties is a fully-integrated affiliate of Brookfield that manages real estate investments, working across sectors to bring high-quality, sustainable real estate to life around the globe every day. Brookfield Properties raises the industry standard for quality and sustainability with its approach to operating and developing real estate across the multifamily, logistics, office, retail and hospitality sectors. |
• | Property management : day-to-day operations of individual properties and managing the ongoing needs and relationships with tenants; |
• | Sales and leasing : |
• | Renovation and capital projects : |
Q: |
Who will direct your investment program? |
A: |
The Adviser will have the authority to implement our investment strategy, as determined by, and subject to the direction of, our board of directors. The Adviser has engaged the Sub-Adviser, an affiliate of Oaktree, to select and manage the Liquidity Sleeve and to manage the Oaktree Option Investments pursuant to sub-advisory agreements. The Sub-Adviser has substantial discretion, within our investment guidelines, to make decisions related to the acquisition, management and disposition of the Liquidity Sleeve and the management of the Oaktree Option Investments. |
Q: |
Do you currently own any investments? |
A: |
Yes, see “Investments in Real Estate and Real Estate Debt” for information about our investments. |
Q: |
What is a real estate investment trust, or REIT? |
A: |
We elected to be taxed as a REIT beginning with our taxable year ended December 31, 2019 and intend to continue to qualify as a REIT. In general, a REIT is a company that: |
• | combines the capital of many investors to acquire or provide financing for real estate assets; |
• | offers the benefits of a real estate portfolio under professional management; |
• | satisfies the various requirements of the Internal Revenue Code of 1986, as amended (the “Code”), including a requirement to distribute to stockholders at least 90% of its REIT taxable income each year (determined without regard to the dividends-paid deduction and excluding net capital gain); and |
• | is generally not subject to U.S. federal corporate income taxes on its net taxable income that it currently distributes to its stockholders, which substantially eliminates the “double taxation” (i.e., taxation at both the corporate and stockholder levels) that generally results from investments in a C corporation. |
Q: |
What is a non-exchange traded, perpetual-life REIT? |
A: |
A non-exchange traded REIT is a REIT whose shares are not listed for trading on a stock exchange or other securities market. We use the term “perpetual-life REIT” to describe an investment vehicle of indefinite duration, whose shares of common stock are intended to be sold by the REIT monthly on a continuous basis at a price generally equal to the REIT’s prior month’s net asset value (“NAV”) per share. In our perpetual-life structure, the investor may request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. While we may consider a liquidity event at any time in the future, we currently do not intend to undertake such consideration until at least 2025, seven years after we launched our investment program, and we are not obligated by our charter or otherwise to effect a liquidity event at any time. |
Q: |
How is an investment in shares of your common stock different from listed REITs? |
A: |
An investment in shares of our common stock generally differs from an investment in listed REITs in a number of ways, including: |
• | Shares of listed REITs are priced by the trading market, which is influenced generally by numerous factors, not all of which are related to the underlying value of the entity’s real estate assets and liabilities. The estimated value of our real estate assets and liabilities will be used to determine our NAV rather than the trading market. The purchase price per share for each class of our common stock varies and generally equals our prior month’s NAV per share plus applicable upfront selling commissions and dealer manager fees, whereas investments in listed REITs often involve nominal to no upfront commissions. |
• | An investment in our shares has limited or no liquidity and our share repurchase plan may be modified or suspended. In contrast, an investment in a listed REIT is a liquid investment, as shares can be sold on an exchange at any time. |
• | Listed REITs are often self-managed, whereas our investment operations are managed by the Adviser, which is an affiliate of Brookfield. |
• | Unlike the offering of a listed REIT, this offering has been registered in every state in which we are offering and selling shares. As a result, we include certain limits in our governing documents that are |
not typically provided for in the charter of a listed REIT. For example, our charter limits the fees we may pay to the Adviser and its affiliates, limits our ability to make certain investments, limits the aggregate amount we may borrow, requires our independent directors to approve certain actions and restricts our ability to indemnify our directors, the Adviser and its affiliates. A listed REIT does not typically provide for these restrictions within its charter. A listed REIT is, however, subject to the governance requirements of the exchange on which its stock is traded, including requirements relating to its board of directors, audit committee, independent director oversight of executive compensation and the director nomination process, code of conduct, stockholder meetings, related party transactions, stockholder approvals, and voting rights. Although we expect to follow many of these same governance guidelines, there is no requirement that we do so. |
Q: |
What type of person might benefit from an investment in your shares? |
A: |
An investment in our shares may be appropriate for you if you: |
• | meet the minimum suitability standards described above in “Suitability Standards;” |
• | seek to allocate a portion of your investment portfolio to a direct investment vehicle with a portfolio of real estate and real estate-related investments primarily located in the United States capable of delivering a regular income stream with the potential for appreciation; |
• | seek to receive current income through regular distribution payments; and |
• | are able to hold your shares as a long-term investment and do not need liquidity from your investment quickly in the near future. |
Q: |
What is the difference between the classes of shares of common stock being offered? |
A: |
We are offering to the public four classes of shares of our common stock, Class T shares, Class S shares, Class D shares and Class I shares. The differences among the share classes relate to upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. No upfront selling commissions, dealer manager fees or stockholder servicing fees are paid with respect to Class I shares. We are also offering Class C shares of our common stock to third-party investors pursuant to a private offering. The Adviser may elect to receive all or a portion of its management fee in Class E shares of our common stock, and we may also issue Class E shares to Brookfield and certain of its affiliates and employees in one or more private placements. Neither the Class C shares, nor the Class E shares are being offered pursuant to this prospectus. See “Description of Capital Stock” and “Plan of Distribution” for a discussion of the differences among the classes of shares of our common stock. |
Q: |
What is the per share purchase price? |
A: |
Each class of shares will be sold at the then-current transaction price, which will generally be the prior month’s NAV per share for such class, plus any applicable upfront selling commissions and dealer manager fees. Although the offering price for shares of our common stock will generally be based on the prior month’s NAV per share, the NAV per share of such stock as of the date on which your purchase is settled |
may be significantly different. We may, but are not obligated to, offer shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month’s NAV per share, including by updating a previously disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month. Each class of shares may have a different NAV per share. See “Net Asset Value Calculation and Valuation Guidelines—Valuation of Investments” for examples of valuation adjustment events that may cause a material change to our NAV per share. |
Q: |
Will I be charged selling commissions? |
A: |
Investors in Class T shares will pay upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5%, of the transaction price of each Class T share sold in the primary offering. Investors in Class S shares will pay upfront selling commissions of up to 3.5%. Investors in Class D shares will pay upfront selling commissions of up to 1.5%. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers. Stockholders will not pay selling commissions on Class I shares, or when purchasing shares under our distribution reinvestment plan. See “Plan of Distribution.” |
A: |
We have registered $6,000,000,000 in shares of our common stock, in any combination of our share classes, to be sold in our primary offering and up to $1,500,000,000 in shares to be sold pursuant to our distribution reinvestment plan. It is our intent, however, to conduct a continuous offering for an indefinite period of time, by filing for additional offerings of our shares, subject to regulatory approval and continued compliance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and applicable state laws. |
Q: |
What are the risks involved with buying your shares? |
A: |
Investing in our common stock involves a high degree of risk. These risks include, among others, that (1) we have a limited operating history, our operating history should not be relied upon due to the changes to our business resulting from the Adviser Transition, including the engagement of the Adviser, the Sub-Adviser and the Dealer Manager and the changes to our board of directors, executive officers and our investment portfolio, and there is no assurance we will be able to successfully achieve our investment objectives; (2) there is no public trading market for shares of our common stock and your ability to dispose of your shares will therefore likely be limited to repurchase by us; (3) the amount and frequency of distributions we make is uncertain, and we may pay distributions from sources other than cash flow from operations, particularly in the earlier part of this offering, which means we would have less cash available for investments and your overall returns may be reduced; (4) you will not have the opportunity to evaluate future investments we will make prior to purchasing shares of our common stock; and (5) we will pay substantial fees and expenses to the Adviser and its affiliates, which were not negotiated at arm’s length and may be higher than fees we could achieve from unaffiliated third parties. See “Risk Factors.” |
Q: |
Is there any minimum investment required? |
A: |
The minimum initial investment in Class T, Class S or Class D shares is $2,500, and the minimum subsequent investment in such shares is $500 per transaction. The minimum initial investment in Class I |
shares is $1,000,000, and the minimum subsequent investment in such shares is $500 per transaction, unless such minimums are waived by the Dealer Manager. The minimum subsequent investment amount does not apply to purchases made under our distribution reinvestment plan. In addition, our board of directors may elect to accept smaller investments in its discretion. |
Q: |
What is a “best efforts” offering? |
A: |
A “best efforts” offering means that the Dealer Manager and the participating brokers are only required to use their best efforts to sell the shares in this offering. When shares are offered to the public on a “best efforts” basis, no underwriter, broker-dealer or other person has a firm commitment or obligation to purchase any of the shares. Therefore, we cannot guarantee that any minimum number of shares will be sold. |
Q: |
How will your NAV per share be calculated? |
A: |
Our NAV is calculated monthly based on the net asset values of our investments (including real-estate related investments), the addition of any other assets (such as cash on hand) and the deduction of any other liabilities. The calculation of our monthly NAV will be determined by the Adviser and our NAV per share is calculated by State Street Bank and Trust Company (“State Street”), a third-party firm that provides us with certain administrative and accounting services, and such calculation will be reviewed and confirmed by the Adviser. The Adviser is ultimately responsible for the determination of our NAV. Altus Group U.S. Inc., a valuation firm, was selected by the Adviser and approved by our board of directors, including a majority of our independent directors, to serve as our independent valuation advisor. Our independent valuation advisor is not responsible for, and does not calculate, our NAV. |
Q: |
When may I make purchases of shares? |
A: |
Subscriptions to purchase our common stock may be made on an ongoing basis, but investors may only purchase our common stock pursuant to accepted subscription orders as of the first calendar day of each month (based on the prior month’s transaction price), and to be accepted, a subscription request must be received in good order at least five business days prior to the first calendar day of the month (unless waived by the Dealer Manager). |
Q: |
When will the transaction price be available? |
A: |
Generally, within 15 days after the last calendar day of each month, we will determine our NAV per share for each share class as of the last calendar day of the prior month, which will generally be the transaction price for the then-current month for such share class. However, in certain circumstances, the transaction price will not be made available until a later time. We will disclose the transaction price for each month when available on our website at www.brookfieldREIT.com |
Q: |
May I withdraw my subscription request once I have made it? |
A: |
Yes. Subscribers are not committed to purchase shares at the time their subscription orders are submitted and any subscription may be canceled at any time before the time it has been accepted. You may withdraw your purchase request by notifying the transfer agent, through your financial intermediary or directly on our toll-free, automated telephone line, (833) 625-7348. |
Q: |
When will my subscription be accepted? |
A: |
Completed subscription requests will not be accepted by us before the later of (i) two business days before the first calendar day of each month and (ii) three business days after we make the transaction price (including any subsequent revised transaction price) publicly available by posting it on our website at www.brookfieldREIT.com |
Q: |
Will I receive distributions and how often? |
A: |
We have declared, and intend to continue to declare, monthly distributions as authorized by our board of directors (or a duly authorized committee of the board of directors) and have paid, and intend to continue to pay, such distributions to stockholders of record on a monthly basis. We commenced paying distributions in December 2019 and have paid distributions each month since such date. Any distributions we make are at the discretion of our board of directors, considering factors such as our earnings, cash flow, capital needs and general financial condition and the requirements of Maryland law. As a result, our distribution rates and payment frequency may vary from time to time. You will not be entitled to receive a distribution if your shares are repurchased prior to the applicable time of the record date. |
Q: |
Will the distributions I receive be taxable as ordinary income? |
A: |
Generally, distributions that you receive, including cash distributions that are reinvested pursuant to our distribution reinvestment plan, will be taxed as ordinary income to the extent they are paid from our current or accumulated earnings and profits. Ordinary dividends received from REITs are generally not eligible to be taxed at the lower U.S. federal income tax rates applicable to individuals for “qualified dividends” from C corporations (i.e., corporations generally subject to U.S. federal corporate income tax). However, under the Tax Cuts and Jobs Act that was enacted at the end of 2017, commencing with taxable years beginning on or after January 1, 2018 and continuing through 2025, individual taxpayers may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us), which temporarily reduces the effective tax rate on such dividends. |
Q: |
May I reinvest my cash distributions in additional shares? |
A: |
Yes. We have adopted a distribution reinvestment plan whereby stockholders (other than Alabama, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, |
Texas, Vermont and Washington investors and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan) will have their cash distributions automatically reinvested in additional shares of our common stock unless they elect to receive their distributions in cash. Alabama, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Texas, Vermont and Washington investors and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan will automatically receive their distributions in cash unless they elect to have their cash distributions reinvested in additional shares of our common stock. See “Prospectus Summary—Distribution Reinvestment Plan” and “Description of Capital Stock—Distribution Reinvestment Plan” for more information regarding the reinvestment of distributions you may receive from us. For the complete terms of the distribution reinvestment plan, see Appendix B to this prospectus. |
Q: |
Can I request that my shares be repurchased? |
A: |
Yes. However, while stockholders may request on a monthly basis that we repurchase all or any portion of their shares pursuant to our share repurchase plan, we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. In addition, our ability to fulfill repurchase requests is subject to a number of limitations. As a result, share repurchases may not be available each month. Under our share repurchase plan, to the extent we choose to repurchase shares in any particular month, we will only repurchase shares as of the opening of the last calendar day of that month (each such date, a “Repurchase Date”). Repurchases will be made at the transaction price in effect on the Repurchase Date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price (an “Early Repurchase Deduction”). The Early Repurchase Deduction may be waived in the case of repurchase requests arising from the death or qualified disability of the holder. To have your shares repurchased, your repurchase request and required documentation must be received in good order by 4:00 p.m. (Eastern time) on the second to last business day of the applicable month. Settlements of share repurchases will be made within three business days of the Repurchase Date. The Early Repurchase Deduction will not apply to shares acquired through our distribution investment plan. An investor may withdraw its repurchase request by notifying the transfer agent before 4:00 p.m. (Eastern time) on the last business day of the applicable month. |
Q: |
Will I be notified of how my investment is doing? |
A: |
Yes. We will provide you with periodic updates on the performance of your investment with us, including: |
• | three quarterly financial reports and investor statements; |
• | an annual report; |
• | in the case of certain U.S. stockholders, an annual Internal Revenue Service (“IRS”) Form 1099-DIV or IRS Form 1099-B, if required, and, in the case of non-U.S. stockholders, an annual IRS Form 1042-S; |
• | confirmation statements (after transactions affecting your balance, except reinvestment of distributions in us and certain transactions through minimum account investment or withdrawal programs); and |
• | a quarterly statement providing material information regarding your participation in the distribution reinvestment plan and an annual statement providing tax information with respect to income earned on shares under the distribution reinvestment plan for the calendar year. |
Q: |
When will I get my detailed tax information? |
A: |
In the case of certain U.S. stockholders, we expect your IRS Form 1099-DIV tax information, if required, to be mailed by January 31 of each year. |
Q: |
Where can I find updated information regarding the Company? |
A: |
You may find updated information on our website, www.brookfieldREIT.com |
Q: |
What is the impact of being an “emerging growth company”? |
A: |
We are an “emerging growth company,” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting and disclosure requirements that are applicable to public companies that are not emerging growth companies and we intend to take advantage of these exemptions. For so long as we remain an emerging growth company, we will not be required to: |
• | have an auditor attestation report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
• | submit certain executive compensation matters to stockholder advisory votes pursuant to the “say on frequency” and “say on pay” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; or |
• | disclose certain executive compensation related items, such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
Q: |
Who can help answer my questions? |
A: |
If you have more questions about this offering or if you would like additional copies of this prospectus, you should contact your financial adviser or our transfer agent: |
Upfront Selling Commissions |
Dealer Manager Fees |
Annual Stockholder Servicing Fees |
Maximum Stockholder Servicing Fees Over Life of Investment (Length of Time) |
Total (Length of Time) |
||||||||||||||||
Class T |
$ | 300 | $ | 50 | $ | 85 | $556 (7 years) | $906 (6.5 years) | ||||||||||||
Class S |
$ | 350 | — | $ | 85 | $556 (7 years) | $906 (6.5 years) | |||||||||||||
Class D |
$ | 150 | — | $ | 25 | $738 (29.5 years) | $888 (29.5 years) | |||||||||||||
Class I |
— | — | — | — | — |
• | Real Estate mixed-use and alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments). Through its deep global sourcing network, Brookfield seeks to acquire high-quality assets in supply-constrained markets and execute operational enhancements to deliver consistent cash flows. |
• | Infrastructure |
• | Private Equity |
• | Credit |
• | Aligning Brookfield’s Interests with Those of its Investors |
• | Cultivating long-term, mutually beneficial relationships with investors; |
• | Using Brookfield’s permanent capital to serve as a significant investor in the funds that Brookfield sponsors; and |
• | Focusing on managing each investment and portfolio to the best possible outcome for both Brookfield and its investors. |
• | Maintaining an Ownership Mentality |
• | Establishing well-resourced operations in strategic locations around the world to leverage real-time local market intelligence and bottom-up investment insights; |
• | Prioritizing the defensive characteristics of high-quality assets in dynamic locations and strong companies that provide essential services; and |
• | Taking a disciplined approach to identifying long-duration assets and businesses that Brookfield believes can generate attractive returns over the long term. |
• | Investing on a Value Basis |
• | Remaining patient in deploying capital but being prepared to invest decisively when the right opportunities emerge; |
• | Pursuing investments with limited competition, where Brookfield believes that it possesses clear advantages, often via “off-market” transactions; |
• | Seeking to execute acquisitions at a discount to replacement cost, thereby helping to reduce the risk of investments and enhancing the potential for strong long-term returns; and |
• | Recognizing that generating attractive returns often requires taking a contrarian approach to evaluating assets, businesses, markets or sectors experiencing periods of distress. |
• | Leveraging Resources and Operational Expertise |
• | Building on a history of successfully operating assets and businesses through multiple market cycles; |
• | Taking advantage of Brookfield’s in-house market knowledge, relationships and execution capabilities across sectors and regions, with the goal of maximizing risk-adjusted returns and optimizing dispositions; and |
• | Focusing on generating consistent cash flows, which are particularly valuable in a volatile environment. |
• | Provide sustainable, stable income in the form of regular cash distributions to our stockholders; |
• | Protect and preserve invested capital; |
• | Generate appreciation from asset and market selection and hands-on direct property operations to grow cash flows; and |
• | Provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to high-quality commercial and residential real estate with lower volatility than publicly traded companies. |
• | Income-producing real estate |
• | Real estate-related debt |
• | Real estate-related securities |
• | We have a limited operating history, and our operating history should not be relied upon due to the changes to our business resulting from the Adviser Transition, including the engagement of the Adviser and the Dealer Manager and the changes to our board of directors, our executive officers and our investment portfolio. There is no assurance that we will be able to successfully achieve our investment objectives. |
• | We have held our current investments for a short period of time and you will not have the opportunity to evaluate our future investments before we make them, which makes an investment in our common stock more speculative. |
• | Since there is no public trading market for shares of our common stock, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan will provide stockholders with the opportunity to request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may modify or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid. |
• | We cannot guarantee that we will make distributions, and if we do we may fund such distributions from sources other than cash flow from operations, and we have no limits on the amounts we may pay from such sources. |
• | The purchase and repurchase price for shares of our common stock will generally be based on our prior month’s NAV (subject to material changes as described herein) and will not be based on any public trading market. While there will be independent annual appraisals of our properties, the appraisal of properties is inherently subjective, and our NAV may not accurately reflect the actual price at which our assets could be liquidated on any given day. |
• | We have no employees and are dependent on the Adviser to conduct our operations. The Adviser will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and Other Brookfield Accounts, the allocation of time of its investment professionals and the substantial fees that we will pay to the Adviser. |
• | This is a “best efforts” offering. If we are not able to raise a substantial amount of capital in the near term, our ability to achieve our investment objectives could be adversely affected. |
• | Principal and interest payments on any borrowings will reduce the amount of funds available for distribution or investment in additional real estate assets. Borrowing also increases our risk of loss and exposure to negative economic effects. |
• | There are limits on the ownership and transferability of our shares. See “Description of Capital Stock—Restrictions on Ownership and Transfer.” |
• | Investing in commercial real estate assets involves certain risks, including but not limited to: tenants’ inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and vacancies; and changes in supply of or demand for similar properties in a given market. |
• | Our operating results will be affected by global and national economic and market conditions generally and by the local economic conditions where our properties are located, including changes with respect to rising vacancy rates or decreasing market rental rates; fluctuations in the average occupancy; |
inability to lease space on favorable terms; bankruptcies, financial difficulties or lease defaults by our tenants; and changes in government rules, regulations and fiscal policies, such as property taxes, zoning laws, limitations on rental rates, and compliance costs with respect to environmental and other laws. |
• | The novel coronavirus (“COVID-19”) may have an adverse impact on our NAV, results of operations, cash flows and fundraising, ability to source new investments, obtain financing, fund distributions to stockholders and satisfy repurchase requests, among other factors. |
• | If we fail to maintain our qualification as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease as a result of being subject to corporate income tax. |
• | fees of the Adviser and the Sub-Adviser; |
• | allocation of investment opportunities; |
• | investments where Other Brookfield Accounts or Other Oaktree Accounts (as defined below) hold related investments; |
• | the engagement of affiliated service providers; |
• | allocation of personnel; and |
• | other conflicts. |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
Organization and Offering Activities |
||||
Upfront Selling Commissions and Dealer Manager Fees— The Dealer Manager |
The Dealer Manager will be entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager | The actual amount will depend on the number of Class T, Class S and Class D shares sold and the transaction price of |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
fees of 0.5%, of the transaction price of each Class T share sold in the primary offering; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager will be entitled to receive upfront selling commissions of up to 3.5% of the transaction price of each Class S share sold in the primary offering and up to 1.5% of the transaction price of each Class D share sold in the primary offering. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers. No upfront or other selling commissions or dealer manager fees will be paid with respect to Class I or Class E shares, or shares of any class sold pursuant to our distribution reinvestment plan. |
each Class T, Class S and Class D share. Aggregate upfront selling commissions and dealer manager fees will equal approximately $123.6 million if we sell the maximum amount, in each case, in our primary offering, assuming payment of the full upfront selling commissions and upfront dealer manager fees, and that 1/4 of our offering proceeds are from the sale of each of Class T, Class S and Class D shares and that the transaction price of each of our Class T, Class S and Class D shares remains constant at $10.00. | |||
Stockholder Servicing Fees— The Dealer Manager |
Subject to FINRA limitations on underwriting compensation, we will pay the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker- dealers servicing investors’ accounts, referred to as servicing broker-dealers: • with respect to our outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of our outstanding Class T shares; provided, however, that with respect to Class T shares sold |
Actual amounts depend upon the per share NAVs of our Class T, Class S and Class D shares, the number of Class T, Class S and Class D shares purchased and when such shares are purchased. For each of Class T and Class S shares, the stockholder servicing fees will equal approximately $12.3 million per annum if we sell the maximum amount. For Class D shares, the stockholder servicing fees will equal approximately $3.7 million per annum if we sell the maximum amount. In each case, we are assuming that, in our primary offering, 1/4 of our offering proceeds are from the sale of Class T, Class S and Class D shares, and that the NAV per share of our Class T shares, Class S shares and Class D shares remains constant at $10.00. |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares; • with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares; and • with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of our outstanding Class D shares. We will not pay a stockholder servicing fee with respect to our outstanding Class I or Class E shares. The stockholder servicing fees will be paid monthly in arrears. The Dealer Manager will reallow (pay) the stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers, and will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services. Because the stockholder servicing fees are calculated based on the NAV for our Class T, Class S and Class D shares, they will reduce the NAV or, alternatively, the distributions payable, with respect to the shares of each such class, including shares issued under our distribution reinvestment plan. We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
transfer agent determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the applicable dealer agreement between the Dealer Manager and a participating broker-dealer at the time such shares were issued) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under our distribution reinvestment plan with respect thereto). At the end of such month, such Class T share, Class S share or Class D share (and any shares issued under our distribution reinvestment plan with respect thereto) held in such stockholder’s account will convert into a number of Class I shares (including any fractional shares) with an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with respect to a Class T share or Class S share over approximately 6.5 years from the date of purchase and with respect to a Class D share held in a stockholder’s account over approximately 29.5 years from the date of purchase, assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions and dealer manager fees (as applicable), opting out of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for these time periods, this fee with respect to a Class T share or Class S share would total approximately $0.56 and |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
with respect to a Class D share would total approximately $0.74. In addition, we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class D shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof, or (iii) the date following the completion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. For a description of the services required from the participating broker-dealer or servicing broker-dealer, see the “Plan of Distribution—Underwriting Compensation—Stockholder Servicing Fees—Class T, Class S and Class D Shares.” |
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Organization and Offering Expense Reimbursement— The Adviser |
The Adviser has agreed to advance all of our organization and offering expenses on our behalf (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 6, 2022. We will reimburse the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2022. We will reimburse the Adviser for any organization and offering expenses that it incurs on our behalf as and when | We estimate our organization and offering expenses to be approximately $20.4 million if we sell the maximum offering amount. |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
incurred after July 6, 2022. Our organization and offering expenses may include the organization and offering expenses of feeder vehicles primarily created to hold our shares, as well as certain expenses associated with the Adviser Transition. As part of the Adviser Transition, the Adviser has acquired the Sub-Adviser’s receivable related to the organization and offering expenses previously incurred by the Sub-Adviser and is to be reimbursed therefor.After the termination of the primary offering and again after termination of the offering under our distribution reinvestment plan, the Adviser has agreed to reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of our gross proceeds from the applicable offering. |
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Investment Activities | ||||
Acquisition Expense Reimbursement— The Adviser |
We do not intend to pay the Adviser any acquisition or other similar fees in connection with making investments, though our charter authorizes us to do so. We will, however, reimburse the Adviser for out-of-pocket |
Actual amounts are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. | ||
Operational Activities | ||||
Management Fee and Expense Reimbursements— The Adviser |
We will pay the Adviser a management fee equal to 1.25% of our NAV for the Class T, Class S, Class D, Class I and Class C shares per annum payable | Actual amounts of the management fee depend upon our aggregate NAV. The management fee will equal approximately $73.4 million per annum |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
monthly. We do not pay the Adviser a management fee with respect to the Class E shares. The management fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I shares obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. In addition to the organization and offering expense and acquisition expense reimbursements described above, we will reimburse the Adviser for costs and expenses it incurs in connection with the services it provides to us, including, but not limited to, (1) the actual cost of goods and services used by us and obtained from third parties, including fees paid to administrators, consultants, attorneys, technology providers and other service providers, and brokerage fees paid in connection with the purchase and sale of investments and securities, (2) expenses of managing and operating our properties, whether payable to an affiliate or a non-affiliated person and (3) administrative service expenses, including, but not limited to, personnel and related employment costs incurred |
if we sell the maximum amount, in each case, in our primary offering, assuming that the NAV per share of each class of our common stock remains constant at $10.00 and before giving effect to any shares issued under our distribution reinvestment plan. Actual amounts of out-of-pocket |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
by the Adviser or its affiliates in performing administrative services on our behalf (including legal, accounting, investor relations, tax, capital markets, financial operations services and other administrative services), provided that no reimbursement shall be made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our board of directors. The expense reimbursements that we will pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf. See “Management—The Advisory Agreement—Management Fee, Performance Participation Interest and Expense Reimbursements.” |
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Performance Participation Interest— The Special Limited Partner |
So long as the Advisory Agreement has not been terminated, the Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive cash distributions (or Class E or Class I Operating Partnership units at its election) from the Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined herein). Such distributions are paid annually.For a detailed explanation of how the performance participation is calculated, see “Summary of The Operating Partnership Agreement—Special Limited Partner Interest.” For a hypothetical calculation of the performance participation calculation, see “Compensation—Performance Participation Interest Example.” |
Actual amounts of the performance participation depend upon the Operating Partnership’s actual annual total return and, therefore, cannot be calculated at this time. |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
Fees from Other Services— Affiliates of the Adviser |
We may retain third parties, including certain of the Adviser’s affiliates, for necessary services relating to our investments or our operations, including lending and loan special servicing; investment banking, advisory, consulting, brokerage and managing foreclosures and workouts; the placement and provision of insurance policies and coverage, including risk retention or insurance captives; entitlement, development, construction and design (including oversight thereof); portfolio company, real estate operations and property management (and oversight thereof) and leasing; legal, financial, compliance, tax, back office, corporate secretarial, accounting, human resources, bank account and cash management; supply or procurement of power and energy; transaction support; accounting and reporting (including coordinating onboarding, due diligence, reporting and other administrative services) and other financial operations services; hedging, derivatives, financing and other treasury services and capital markets services; data generation, analysis, collection and management services; physical and digital security, life and physical safety, and other technical specialties; information technology services and innovation; appraisal and valuation services; market research; cash flow modeling and forecasting; client onboarding; and other services or products. Any fees paid to the Adviser’s affiliates for any such services will not reduce the management fee or performance participation interest. Any such arrangements will subject to approval by a majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transaction. | Actual amounts depend on whether affiliates of the Adviser are actually engaged to perform such services. |
• | “Total Operating Expenses” are all costs and expenses paid or incurred by us, as determined under generally accepted accounting principles, including the management fee, any distributions made to the Special Limited Partner with respect to its performance participation interest and any operating expenses of feeder vehicles primarily created to hold our shares advanced by us, but excluding: (i) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and listing of our capital stock, (ii) property-level expenses incurred at each property, (iii) interest payments, (iv) taxes, (v) non-cash expenditures such as depreciation, amortization and bad debt reserves, (vi) incentive fees paid in compliance with our charter, (vii) acquisition fees and acquisition expenses related to the selection and acquisition of assets, whether or not a property is actually acquired, (viii) real estate commissions on the sale of property and (ix) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). |
• | “Average Invested Assets” means, for any period, the average of the aggregate book value of our assets, invested, directly or indirectly, in equity interests in and loans secured by real estate, including all properties, mortgages and real estate-related securities and consolidated and unconsolidated joint ventures or other partnerships, before deducting depreciation, amortization, impairments, bad debt reserves or other non-cash reserves, computed by taking the average of such values at the end of each month during such period. |
• | “Net Income” means, for any period, total revenues applicable to such period, less the total expenses applicable to such period other than additions to, or allowances for, non-cash charges such as depreciation, amortization, impairments and reserves for bad debt or other similar non-cash reserves. |
• | under Section 3(a)(1)(A), if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
• | under Section 3(a)(1)(C), if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally includes all securities except U.S. government securities and |
securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exemption from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
• | the limited size of our portfolio in the early stages of our development; |
• | our inability to invest the proceeds from sales of our shares on a timely basis in income-producing properties; |
• | our inability to realize attractive risk-adjusted returns on our investments; |
• | high levels of expenses or reduced revenues that reduce our cash flow or non-cash earnings; and |
• | defaults in our investment portfolio or decreases in the value of our investments. |
• | staggering the board of directors into three classes; |
• | requiring a two-thirds vote of stockholders to remove directors; |
• | providing that only the board of directors can fix the size of the board; |
• | providing that all vacancies on the board, regardless of how the vacancy was created, may be filled only by the affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; and |
• | providing for a majority requirement for the calling by stockholders of a special meeting of stockholders. |
• | 80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and |
• | two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other than those shares owned or held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
• | interest rate fluctuations and lack of availability of financing; |
• | changes in global, national, regional or local economic, demographic or capital market conditions; |
• | acts of war or terrorism; |
• | bank liquidity; |
• | increases in borrowing rates; |
• | changes in environmental and zoning laws; |
• | overbuilding and increased competition for properties targeted by our investment strategy; |
• | future adverse national real estate trends, including increasing vacancy rates, declining rental rates and general deterioration of market conditions; |
• | changes in supply and demand fundamentals; |
• | increases in property taxes; |
• | casualty or condemnation losses; |
• | bankruptcy, financial difficulty or lease default of a major tenant; |
• | regulatory limitations on rent; |
• | increased mortgage defaults and the availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; |
• | changes in laws, regulations and fiscal policies, including increases in property taxes and limitations on rental rates; and |
• | wars, natural disasters, epidemics or pandemics, severe weather patterns, terrorist attacks and similar events. |
• | changes in government policies or personnel; |
• | restrictions on currency transfer or convertibility; |
• | changes in labor relations; |
• | less developed or efficient financial markets than in North America; |
• | fluctuations in foreign exchange rates; |
• | the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements; |
• | less government supervision and regulation; |
• | a less developed legal or regulatory environment; |
• | heightened exposure to corruption risk; |
• | political hostility to investments by foreign investors; and |
• | difficulty in enforcing contractual obligations and expropriation or confiscation of assets. |
• | we may be unable to complete an acquisition after making a non-refundable deposit and incurring certain other acquisition-related costs; |
• | we may be unable to obtain financing for acquisitions on commercially reasonable terms or at all; |
• | acquired properties may fail to perform as expected; |
• | acquired properties may be located in new markets in which we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and |
• | we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations. |
• | the joint venture partner could have economic or other interests that are inconsistent with or different from our interests, including interests relating to the financing, management, operation, leasing or sale of the assets purchased by such joint venture; |
• | tax, Investment Company Act and other regulatory requirements applicable to the joint venture partner could cause it to want to take actions contrary to our interests; |
• | the joint venture partner could have joint control or joint governance of the joint venture even in cases where its economic stake in the joint venture is significantly less than ours; |
• | under the joint venture arrangement, it is possible that neither we nor the joint venture partner will be in a position to unilaterally control the joint venture, and deadlocks may occur. Such deadlocks could adversely impact the operations and profitability of the joint venture, including as a result of the inability of the joint venture to act quickly in connection with a potential acquisition or disposition. In addition, depending on the governance structure of such joint venture partner, decisions of such vehicle may be subject to approval by individuals who are independent of Brookfield; |
• | under the joint venture arrangement, we and the joint venture partner may have a buy or sell right and, as a result of an impasse that triggers the exercise of such right, we could be forced to sell our investment in the joint venture, or buy the joint venture partner’s share of the joint venture at a time when it would not otherwise be in our best interest to do so; |
• | our participation in investments in which a joint venture partner participates will be less than what our participation would have been had such other vehicle not participated, and because there may be no limit on the amount of capital that such joint venture partner can raise, the degree of our participation in such investments may decrease over time; |
• | under the joint venture arrangement, we and the joint venture partner could each have preemptive rights in respect of future issuances by the joint venture, which could limit a joint venture’s ability to attract new third-party capital; |
• | under the joint venture arrangement, we and the joint venture partner could be subject to lock-ups, which could prevent us from disposing of our interests in the joint venture at a time it determines it would be advantageous to exit; and |
• | the joint venture partner could have a right of first offer, tag-along rights, drag-along rights, consent rights or other similar rights in respect of any transfers of the ownership interests in the joint venture to third parties, which could have the effect of making such transfers more complicated or limiting or delaying us from selling our interest in the applicable investment. |
• | make it more difficult for us to secure new takeout financing for any multifamily development projects we acquire; |
• | hinder our ability to refinance any completed multifamily assets; |
• | decrease the amount of available liquidity and credit that could be used to broaden our portfolio through the acquisition of multifamily assets; and |
• | require us to obtain other sources of debt capital with potentially different terms. |
• | oversupply or reduced demand for apartments; |
• | rental residents deciding to share rental units and therefore rent fewer units; |
• | potential residents moving back into family homes or delaying leaving family homes; |
• | a reduced demand for higher-rent units; |
• | a decline in household formation; |
• | persons enrolled in college delaying leaving college or choosing to proceed to or return to graduate school in the absence of available employment; |
• | rent control or rent stabilization laws, or other laws regulating housing, that could prevent us from raising rents sufficiently to offset increases in operating costs; |
• | the inability or unwillingness of residents to pay rent increases; and |
• | increased collection losses. |
• | the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights and bankruptcy laws; |
• | so-called lender-liability claims by the issuer of the obligations; |
• | environmental liabilities that may arise with respect to collateral securing the obligations; and |
• | limitations on our ability to enforce directly its rights with respect to participations and CLNs. |
• | many events in a bankruptcy are the product of contested matters and adversary proceedings that are beyond the control of the creditors; |
• | a bankruptcy filing may have adverse and permanent effects on a property, asset or company (for instance, we may lose its market position and key employees and otherwise become incapable of restoring itself as a viable entity, and, if the proceeding is converted to a liquidation, the liquidation value of the property, asset or company may not equal the liquidation value that was believed to exist at the time of the investment); |
• | the duration of a bankruptcy proceeding is difficult to predict and a creditor’s return on investment can be impacted adversely by delays while the plan of reorganization is being negotiated, approved by the creditors and confirmed by the bankruptcy court, and until it ultimately becomes effective; |
• | certain claims, such as claims for taxes, wages, employee and worker pensions and certain trade claims, may have priority by law over the claims of certain creditors; |
• | the administrative costs in connection with a bankruptcy proceeding are frequently high and will be paid out of the debtor’s estate prior to any return to creditors; and |
• | creditors can lose their ranking and priority in a variety of circumstances, including if they exercise “domination and control” over a debtor and other creditors can demonstrate that they have been harmed by such actions. |
• | we would be taxed as a regular domestic corporation, which under current laws, among other things, means being unable to deduct distributions to stockholders in computing taxable income and being subject to federal income tax on our taxable income at regular corporate income tax rates; |
• | any resulting tax liability could be substantial and could have a material adverse effect on our book value; |
• | unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes, and thus, our cash available for distribution to stockholders would be reduced for each of the years during which we did not qualify as a REIT and for which we had taxable income; and |
• | we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years. |
• | the investment is consistent with your fiduciary obligations under applicable law, including common law, ERISA and the Code; |
• | the investment is made in accordance with the documents and instruments governing the trust, plan or IRA, including a plan’s investment policy; |
• | the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code; |
• | the investment will not impair the liquidity of the trust, plan or IRA; |
• | the investment will not produce “unrelated business taxable income” for the plan or IRA; |
• | our stockholders will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and |
• | the investment will not constitute a non-exempt prohibited transaction under Title I of ERISA or Section 4975 of the Code. |
Maximum Offering of $1,500,000,000 in Class T Shares |
||||||||
Gross Proceeds (1) |
$ | 1,500,000,000 | 100.00 | % | ||||
Upfront Selling Commissions and Dealer Manager Fees (2) |
$ | 50,724,638 | 3.38 | % | ||||
Organization and Offering Expenses (3) |
$ | 5,088,271 | 0.34 | % | ||||
|
|
|
|
|||||
Net Proceeds Available for Investment |
$ | 1,444,187,092 | 96.28 | % | ||||
|
|
|
|
Maximum Offering of $1,500,000,000 in Class S Shares |
||||||||
Gross Proceeds (1) |
$ | 1,500,000,000 | 100.00 | % | ||||
Upfront Selling Commissions (2) |
$ | 50,724,638 | 3.38 | % | ||||
Organization and Offering Expenses (3) |
$ | 5,088,271 | 0.34 | % | ||||
|
|
|
|
|||||
Net Proceeds Available for Investment |
$ | 1,444,187,092 | 96.28 | % | ||||
|
|
|
|
Maximum Offering of $1,500,000,000 in Class D Shares |
||||||||
Gross Proceeds (1) |
$ | 1,500,000,000 | 100.00 | % | ||||
Upfront Selling Commissions (2) |
$ | 22,167,488 | 1.50 | % | ||||
Organization and Offering Expenses (3) |
$ | 5,088,271 | 0.34 | % | ||||
|
|
|
|
|||||
Net Proceeds Available for Investment |
$ | 1,472,744,242 | 98.18 | % | ||||
|
|
|
|
Maximum Offering of $1,500,000,000 in Class I Shares |
||||||||
Gross Proceeds (1) |
$ | 1,500,000,000 | 100.00 | % | ||||
Upfront Selling Commissions (2) |
— | — | ||||||
Organization and Offering Expenses (3) |
$ | 5,088,271 | 0.34 | % | ||||
|
|
|
|
|||||
Net Proceeds Available for Investment |
$ | 1,494,911,730 | 99.66 | % | ||||
|
|
|
|
(1) | Gross offering proceeds include upfront selling commissions and dealer manager fees that the Dealer Manager is entitled to receive (including amounts retained by, or reallowed (paid) to, participating broker- dealers). We intend to conduct a continuous offering of an unlimited number of shares of our common stock over an unlimited time period by filing a new registration statement prior to the end of the three-year period described in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”); however, in certain states this offering is subject to annual extensions. |
(2) | For Class T shares, includes upfront selling commissions of 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction price; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price. For Class S shares, includes upfront selling commissions of 3.5% of the transaction price. Amounts presented in the tables are less than 3.5% of gross proceeds because upfront selling commissions and dealer manager fees are calculated as 3.5% of the transaction price (which excludes upfront selling commissions and dealer manager fees), which means that upfront selling commissions expressed as a percentage of the total investment (including upfront selling commissions and dealer manager fees) are less than 3.5%. For Class D shares, includes upfront selling commissions of 1.5% of the transaction price. We will also pay the following selling commissions over time as stockholder servicing fees to the dealer manager, subject to FINRA limitations on underwriting compensation: (a) for Class T shares only, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV for the Class T shares; provided, however, that with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares, (b) for Class S shares only, a stockholder servicing fee equal to 0.85% per annum of the aggregate NAV for the Class S shares and (c) for Class D shares only, a stockholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares, in each case, payable monthly. The total amount that will be paid over time for stockholder servicing fees depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments, and is not expected to be paid from offering proceeds. See “Plan of Distribution—Underwriting Compensation—Selling Commissions and Dealer Manager Fees” and “Compensation—Stockholder Servicing Fees.” |
(3) | The Adviser has agreed to advance all of our organization and offering expenses on our behalf (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 6, 2022. We will reimburse the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2022. We will reimburse the Adviser for any organization and offering expenses that it incurs on our behalf as and when incurred after July 6, 2022. Our organization and offering expenses may include the organization and offering expenses of feeder vehicles primarily created to hold our shares, as well as certain expenses associated with the Adviser Transition. As part of the Adviser Transition, the Adviser has acquired the Sub-Adviser’s receivable related to the organization and offering expenses previously incurred by the Sub-Adviser and is to be reimbursed therefor. See “Compensation—Organization and Offering Expense Reimbursement” for examples of the types of organization and offering expenses we may incur. |
• | Provide sustainable, stable income in the form of regular cash distributions to our stockholders; |
• | Protect and preserve invested capital; |
• | Generate appreciation from asset and market selection and hands-on direct property operations to grow cash flows; and |
• | Provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to high-quality commercial and residential real estate with lower volatility than publicly traded companies. |
• | Income-producing real estate |
• | Real estate-related debt |
• | Real estate-related securities |
• | Agency securities refer to debt obligations generally issued by a government agency or related government-sponsored enterprise. |
• | Real estate-related corporate securities encompass loans to real estate-related companies which may be either secured (by a pledge of specific assets) or unsecured (that is, general claims on the assets of the borrower that are effectively junior to the claims of any secured creditors to the extent of the value of the pledged assets). |
• | Structured credit primarily consists of CMBS, residential mortgage-backed securities (“RMBS”) and other asset-backed securities (“ABS”) that are collateralized by the cash flows of a financial asset, such as a commercial loan, a residential loan, or receivables. |
• | Mezzanine or junior loans are debt obligations secured by a pledge of equity, membership interests or partnership interests in one or more companies owning a direct or indirect interest in real estate. |
• | Commercial first mortgages (which include “A-notes” or “A-participations”) are secured loans collateralized by a first lien on commercial assets, which typically include multifamily, logistics, retail, office and hotel properties. Such investments may be made in individual loans secured by a single property or portfolio as well as in pools of loans. |
• | Residential first mortgages are anticipated to be comprised of pools of first-lien mortgages collateralized by residential properties. |
• | 164 million square feet of Class-A office properties; |
• | 29 million square feet of logistics properties; |
• | approximately 57,000 owned and 23,000 managed multifamily units; |
• | approximately 1,100 owned and 7,300 managed single-family rental properties; |
• | approximately 44,000 hotel rooms; and |
• | 141 million square feet of high-quality retail properties. |
• | We will not make investments in unimproved real property or indebtedness secured by a deed of trust or mortgage loans on unimproved real property in excess of 10% of our total assets. Unimproved real property means a property in which we have an equity interest that was not acquired for the purpose of producing rental or other income, that has no development or construction in process and for which no development or construction is planned, in good faith, to commence within one year; |
• | We will not invest in commodities or commodity futures contracts (which term does not include derivatives related to non-commodity investments, including futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real estate assets, mortgages and real estate-related securities); |
• | We will not invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title; |
• | We will not make or invest in individual mortgage loans (excluding any investments in mortgage pools, CMBS, residential mortgage-backed securities or any other real estate-related asset backed securities) unless an appraisal is obtained concerning the underlying property except for mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of our independent directors determines and in all cases in which a mortgage loan transaction is with the Adviser, the Sub-Adviser, our sponsor, any of our directors or any of their affiliates, the appraisal shall be obtained from an independent appraiser. We will maintain the appraisal in our records for at least five years and it will be available for inspection and duplication by our common stockholders. We will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage; |
• | We will not make or invest in mortgage loans, including construction loans but excluding any investment in mortgage pools, CMBS, residential mortgage-backed securities or any other real estate- related asset backed securities, on any one real property if the aggregate amount of all mortgage loans on such real property would exceed an amount equal to 85% of the appraised value of such real property as determined by appraisal unless substantial justification exists because of the presence of other underwriting criteria; |
• | We will not make or invest in mortgage loans (excluding any investments in mortgage pools, CMBS, residential mortgage-backed securities or any other real estate-related asset backed securities) that are subordinate to any lien or other indebtedness or equity interest of any of our directors, our sponsor, the Adviser, the Sub-Adviser or any of our affiliates; |
• | We will not issue (1) equity securities redeemable solely at the option of the holder (except that stockholders may offer their shares of our common stock to us pursuant to our share repurchase plan), (2) debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt, (3) equity securities on a deferred payment basis or under similar arrangements or (4) options or warrants to the directors, our sponsor, the Adviser, the Sub-Adviser or any of their respective affiliates, except on the same terms as such options or warrants, if any, are sold to the general public. Options or warrants may be issued to persons other than the directors, our sponsor, the Adviser, the Sub-Adviser or any of their respective affiliates, but not at exercise prices less than the fair value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of the independent directors has a fair value less than the value of the option or warrant on the date of grant; |
• | We will not engage in the business of underwriting or the agency distribution of securities issued by other persons; |
• | We will not make any investment that we believe will cause us to be classified as an “investment company” under the Investment Company Act; |
• | We will not make any investment that we believe will be inconsistent with our objectives of qualifying and remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that REIT qualification is not in our best interests; |
• | We will not acquire interests or equity securities in any entity holding investments or engaging in activities prohibited by our charter except for investments in which we hold a non-controlling interest or investments in any entity having securities listed on a national securities exchange or included for quotation on an interdealer quotation system; or |
• | We will not acquire equity securities, other than equity securities that are listed on a national securities exchange or traded in an over-the-counter |
• | under Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
• | under Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” |
having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally includes all securities except U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exemption from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
• | our 90% interest in the joint venture with Holland Partner Group (the “Ezlyn Joint Venture”), which owns a fee simple interest in Ezlyn, a multifamily asset located in Westminster, Colorado (“Ezlyn”); |
• | our commercial mortgage backed securities in Atlantis Paradise Island Resort (BHMS 2018 ATLS D and BHMS 2018 ATLS E); and |
• | the Atlantis Mezzanine Loan, a $25 million second loss mezzanine loan secured by the equity interests of the entity owning Atlantis Paradise Island Resort, a hospitality asset located in the Bahamas. |
Investment |
Location |
Type |
Acquisition Date |
Ownership Percentage |
Fair Value (1) |
Square Feet / Number of Units |
Annualized Base Rent (2) |
Occupancy Rate (4) | ||||||||
Arbors of Las Colinas* | Texas | Multifamily | December 2020 | 90.0% | $66,726,850 | 408 | $5,305,680 | 96% | ||||||||
Lakes at West Covina* | California | Office | February 2020 | 95.0% | $39,700,000 | 177,000 | $4,064,181 | 81% | ||||||||
Two Liberty Center* | Virginia | Office | August 2019 | 96.5% | $90,700,000 | 179,000 | $7,736,435 | 95% | ||||||||
Anzio Apartments* | Georgia | Multifamily | April 2019 | 90.0% | $74,869,509 | 448 | $5,998,269 | 93% | ||||||||
Principal Place | London, UK | Office | — (3) |
20.0% | $229,594,600 | 643,000 | £34,600,000 | 100% | ||||||||
Domain | Florida, | Multifamily | — (3) |
100.0% | $74,100,000 | 324 | $5,231,352 | 98% | ||||||||
The Burnham | Tennessee | Multifamily | — (3) |
100.0% | $129,000,000 | 328 | $6,722,088 | 99% |
(1) | Fair Value of each Equity Option Investment represents the gross asset value of the investment at our ownership percentage as of June 30, 2021. Fair Value of each property included in the Brookfield Portfolio represents the gross asset value of the investment at our ownership percentage as of September 30, 2021, as determined by an independent appraiser. The acquisition of the 20% interest in Principal Place included in the Brookfield Portfolio is expected to be accounted for as an equity method investment. The fair value of our 20% interest in the equity of Principal Place was equal to approximately $102,783,000 as of September 30, 2021. |
(2) | “Annualized Base Rent” is presented on an annualized basis and is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements or deferments)) under commenced leases as of December 31, 2020, by (ii) 12. Annualized base rent does not reflect tenant reimbursements. |
(3) | Denotes an investment in a property included in the Brookfield Portfolio, which Brookfield expects to contribute to us on or within a reasonable period of time following the date of this prospectus. |
(4) | Occupancy is based on in place lease agreements. |
* | Denotes an Equity Option Investment subject to the Option Investments Purchase Agreement, as more fully described below. |
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms |
Trade Date |
Ending Balance 6/30/21 |
||||||||||||||
BX 2020 BXLP G | Industrial Paper |
L+2.50% | 12/15/29 | Principal due at maturity | 01/23/20 | $5,687,269 | ||||||||||||||
CGDB 2019 MOB F | Medical Office Mortgage Loans | L+2.55% | 11/15/36 | Principal due at maturity | 02/04/20 | 3,948,400 | ||||||||||||||
BX 2019 IMC G* | International Markets Center and AmericasMart Atlanta | L+3.60% | 4/15/34 | Principal due at maturity | 03/19/20 | 3,649,310 | ||||||||||||||
BX 2020 VIVA D | MGM Grand and Mandalay Bay Resort and Casino Las Vegas | 3.67% | 3/9/44 | Principal due at maturity | 05/05/20 | — | ||||||||||||||
BX 2020 VIVA E | MGM Grand and Mandalay Bay Resort and Casino Las Vegas | 3.67% | 3/9/44 | Principal due at maturity | 05/05/20 | 1,754,993 | ||||||||||||||
CGCMT 2020-WSS F |
WoodSpring Suites Extended Stay Hotel | L+2.71% | 2/16/27 | Principal due at maturity | 07/08/20 | 2,984,022 | ||||||||||||||
|
|
|||||||||||||||||||
$ | 18,023,994 | |||||||||||||||||||
|
|
(1) | The term “L” refers to the one-month U.S. dollar-denominated London Interbank Offer Rate (“LIBOR”). As of June 30, 2021, one month LIBOR was equal to 0.10%. |
* | Denotes a Debt Option Investment subject to the Option Investments Purchase Agreement, as more fully described below. |
As of June 30, 2021 |
||||||||||||||||||||||||||||||
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms (2) |
Prior Liens |
Face Amount |
Unamortized Discount |
Carrying Amount |
||||||||||||||||||||||
IMC/AMC Bond Investment* |
International Markets Center AmericasMart Atlanta |
L + 6.15% | December 2023 | |
Principal due at maturity |
|
$1.643 billion (4) |
|
25,000,000 | (206,666 | ) | 24,793,334 | ||||||||||||||||||
111 Montgomery* |
The 111 Montgomery Street Condominium Brooklyn, New York |
L+7.00% | February 2024 | |
Principal due at maturity |
none | 2,729,835 | (39,575 | ) | 2,690,260 | ||||||||||||||||||||
The Avery Senior Loan* |
The Avery Condominium San Francisco, California |
L+7.30% | February 2024 | |
Principal due at maturity |
none | 8,981,021 | (95,249 | ) | 8,885,772 | ||||||||||||||||||||
The Avery Mezzanine Loan* |
The Avery Condominium San Francisco, California |
L+12.50% | February 2024 | |
Principal due at maturity |
|
$200.1 million (5) |
|
2,044,580 | (21,366 | ) | 2,023,214 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
$ | 38,755,436 | $ | 362,856 | $ | 38,392,580 | |||||||||||||||||||||||||
|
|
|
|
|
|
(1) | The term “L” refers to the one-month U.S. dollar-denominated London Interbank Offer Rate (“LIBOR”). As of December 31, 2020, one-month LIBOR was equal to 0.14%. |
(2) | The investment is not subject to delinquent principal or interest as of June 30, 2021. |
(3) | The Atlantis Mezzanine Loan is subordinate to a first mortgage loan of $1.20 billion and a $325 million senior mezzanine loan. |
(4) | The IMC / AMC Bond Investment is subordinate to a $1.15 billion first mortgage on properties owned by IMC and a $493 million first mortgage on properties owned by AMC. |
(5) | The Avery Mezzanine Loan is subordinate to an Oaktree Capital Management first mortgage commitment of $200.1 million. |
* | Denotes debt Option Investment, subject to the Option Investments Purchase Agreement, as more fully described below. |
Name |
Age |
Position | ||||
Brian W. Kingston* |
47 | Chairman of the Board | ||||
Zachary B. Vaughan* |
43 | Chief Executive Officer and Director | ||||
Manish H. Desai |
42 | President and Chief Operating Officer | ||||
Dana E. Petitto |
43 | Chief Financial Officer | ||||
Michelle L. Campbell |
50 | Secretary | ||||
Lori-Ann Beausoleil* |
58 | Independent Director | ||||
Richard W. Eaddy* |
59 | Independent Director | ||||
Thomas F. Farley* |
65 | Independent Director | ||||
Lis S. Wigmore* |
58 | Independent Director |
* | Has consented to be named as a director. |
• | our accounting and financial reporting processes; |
• | the integrity and audits of our financial statements; |
• | our compliance with legal and regulatory requirements; and |
• | the qualifications, performance and independence of our independent accountants. |
• | serving as an advisor to us with respect to the establishment and periodic review of our investment guidelines and our investment and financing activities and operations; |
• | purchasing, selling, exchanging, converting, trading, financing, refinancing, mortgaging, encumbering, conveying, assigning, pledging, constructing, lending or otherwise effecting transactions for our portfolio with respect to investment opportunities and our investments, in accordance with our investment guidelines, policies and objectives and limitations, subject to oversight by our board of directors; |
• | investigating, analyzing, evaluating, structuring and negotiating, on our behalf, potential acquisitions, purchases, sales, exchanges or other dispositions of investments with sellers, purchasers and other counterparties and, if applicable, their respective agents, advisors and representatives; |
• | providing us with portfolio management and other related services, including managing, operating, improving, developing, redeveloping, renovating and monitoring our investments; |
• | negotiating, arranging and executing any borrowings or financings in accordance with our investment guidelines; |
• | engaging and supervising, on our behalf and at our expense, various service providers; |
• | coordinating and managing operations of any joint venture or co-investment interests held by us and conducting matters with our joint venture or co-investment partners; |
• | advising us as to our capital structure and capital raising activities; and |
• | overseeing, or arranging for, the performance of the administrative services necessary for our operation. |
• | immediately by us (1) for “cause,” (2) upon the bankruptcy of the Adviser or (3) upon a material breach of the Advisory Agreement by the Adviser; |
• | upon 60 days’ written notice by us without cause or penalty upon the vote of a majority of our independent directors; or |
• | upon 60 days’ written notice by the Adviser. |
• | “Total Operating Expenses” are all costs and expenses paid or incurred by us, as determined under generally accepted accounting principles, including the management fee, any distributions made to the Special Limited Partner with respect to its performance participation interest and any operating expenses of feeder vehicles primarily created to hold our shares advanced by us, but excluding: (i) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and listing of our capital stock, (ii) property-level expenses incurred at each property, (iii) interest payments, (iv) taxes, (v) non-cash expenditures such as depreciation, amortization and bad debt reserves, (vi) incentive fees paid in compliance with our charter, (vii) acquisition fees and acquisition expenses related to the selection and acquisition of assets, whether or not a property is actually acquired, (viii) real estate commissions on the sale of property and (ix) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). |
• | “Average Invested Assets” means, for any period, the average of the aggregate book value of our assets, invested, directly or indirectly, in equity interests in and loans secured by real estate, including all properties, mortgages and real estate-related securities and consolidated and unconsolidated joint ventures or other partnerships, before deducting depreciation, amortization, impairments, bad debt reserves or other non-cash reserves, computed by taking the average of such values at the end of each month during such period. |
• | “Net Income” means, for any period, total revenues applicable to such period, less the total expenses applicable to such period other than additions to, or allowances for, non-cash charges such as depreciation, amortization, impairments and reserves for bad debt or other similar non-cash reserves. |
• | the amount of fees paid to the Adviser in relation to the size, composition and performance of our investments; |
• | the success of the Adviser in generating investments that meet our investment objectives; |
• | rates charged to other externally-advised REITs and other similar investment entities by advisors performing similar services; |
• | additional revenues realized by the Adviser and its affiliates through their advisory relationship with us (including distributions paid to the Special Limited Partner with respect to its performance participation interest); |
• | the quality and extent of the services and advice furnished by the Adviser; |
• | the performance of the assets, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and |
• | the quality of our portfolio in relationship to the investments generated by the Adviser for its own account. |
• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or |
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful. |
• | the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; |
• | the indemnitee was acting on our behalf or performing services for us; |
• | in the case of affiliated directors, the Adviser or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; and |
• | in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification. |
• | there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the party seeking indemnification; |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to such party; or |
• | a court of competent jurisdiction approves a settlement of the claims against such party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws. |
• | the proceeding relates to acts or omissions with respect to the performance of duties or services on our behalf; |
• | the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification; |
• | the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and |
• | the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with the requisite standard of conduct and is not entitled to indemnification. |
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Organization and Offering Activities |
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Upfront Selling Commissions and Dealer Manager Fees (1)(2) —The Dealer Manager |
The Dealer Manager will be entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5%, of the transaction price of each Class T share sold in the primary offering; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager will be entitled to receive upfront selling commissions of up to 3.5% of the transaction price of each Class S share sold in the primary offering and up to 1.5% of the transaction price of each Class D share sold in the primary offering. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers. No upfront or other selling commissions or dealer manager fees will be paid with respect to Class I or Class E shares, or shares of any class sold pursuant to our distribution reinvestment plan. |
The actual amount will depend on the number of Class T, Class S and Class D shares sold and the transaction price of each Class T, Class S and Class D share. Aggregate upfront selling commissions and dealer manager fees will equal approximately $123.6 million if we sell the maximum amount, in each case, in our primary offering, assuming payment of the full upfront selling commissions and upfront dealer manager fees, and that 1/4 of our offering proceeds are from the sale of each of Class T, Class S and Class D shares and that the transaction price of each of our Class T, Class S and Class D shares remains constant at $10.00. | ||
Stockholder Servicing Fees (2)(3) —The Dealer Manager |
Subject to FINRA limitations on underwriting compensation, we will pay the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing investors’ accounts, referred to as servicing broker-dealers: • with respect to our outstanding Class T shares equal to 0.85% per |
Actual amounts depend upon the per share NAVs of our Class T, Class S and Class D shares, the number of Class T, Class S and Class D shares purchased and when such shares are purchased. For each of Class T and Class S shares, the stockholder servicing fees will equal approximately $12.3 million per annum if we sell the maximum amount. For Class D shares, the |
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annum of the aggregate NAV of our outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of our outstanding Class T shares; provided, however, that with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares; • with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares; and • with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of our outstanding Class D shares. We will not pay a stockholder servicing fee with respect to our outstanding Class I shares. The stockholder servicing fees will be paid monthly in arrears. The Dealer Manager will reallow (pay) the stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers and will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services. Because the stockholder servicing fees are calculated based on the NAV for our Class T, Class S and Class D shares, they will reduce the NAV or, alternatively, the distributions payable, with respect to the shares of |
stockholder servicing fees will equal approximately $3.7 million per annum if we sell the maximum amount. In each case, we are assuming that, in our primary offering, 1/4 of our offering proceeds are from the sale of Class T shares, Class S and Class D shares, and that the NAV per share of our Class T shares, Class S shares and Class D shares remains constant at $10.00. |
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each such class, including shares issued under our distribution reinvestment plan. We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the applicable dealer agreement between the Dealer Manager and a participating broker-dealer at the time such shares were issued) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under our distribution reinvestment plan with respect thereto). At the end of such month, such Class T share, Class S share or Class D share (and any shares issued under our distribution reinvestment plan with respect thereto) held in such stockholder’s account will convert into a number of Class I shares (including any fractional shares) with an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with respect to a Class T share or Class S share over approximately 6.5 years from the date of purchase and with respect to a Class D share held in a stockholder’s account over approximately 29.5 years from the date of purchase, assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions and dealer |
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manager fees (as applicable), opting out of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for these time periods, this fee with respect to a Class T share or Class S share would total approximately $0.56 and with respect to a Class D share would total approximately $0.74. In addition, we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class D shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof, or (iii) the date following the completion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. For a description of the services required from the participating broker-dealer or servicing broker-dealer, see the “Plan of Distribution—Underwriting Compensation—Stockholder Servicing Fees—Class T, Class S and Class D Shares.” |
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Organization and Offering Expense Reimbursement (2)(4) —The Adviser |
The Adviser has agreed to advance all of our organization and offering expenses on our behalf (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 6, 2022. | We estimate our organization and offering expenses to be approximately $20.4 million if we sell the maximum offering amount. |
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We will reimburse the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2022. We will reimburse the Adviser for any organization and offering expenses that it incurs on our behalf as and when incurred after July 6, 2022. Our organization and offering expenses may include the organization and offering expenses of feeder vehicles primarily created to hold our shares, as well as certain expenses associated with the Adviser Transition. As part of the Adviser Transition, the Adviser has acquired the Sub-Adviser’s receivable related to the organization and offering expenses previously incurred by the Sub-Adviser and is to be reimbursed therefor.After the termination of the primary offering and again after termination of the offering under our distribution reinvestment plan, the Adviser has agreed to reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of our gross proceeds from the applicable offering. |
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Investment Activities |
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Acquisition Expense Reimbursement (5) —The Adviser |
We do not intend to pay the Adviser any acquisition or other similar fees in connection with making investments, though our charter authorizes us to do so. We will, however, reimburse the Adviser for out-of-pocket |
Actual amounts are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. |
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Operational Activities |
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Management Fee and Expense Reimbursements (6) —The Adviser |
We will pay the Adviser a management fee equal to 1.25% of our NAV for the Class T, Class S, Class D, Class I and Class C shares per annum payable monthly. We do not pay the Adviser a management fee with respect to the Class E shares. The management fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E shares or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I common stock obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. In addition to the organization and offering expense and acquisition expense reimbursements described above, we will reimburse the Adviser for costs and expenses it incurs in connection with the services it provides to us, including, but not limited to, (1) the actual cost of goods and services used by us and obtained from third parties, including fees paid to administrators, consultants, attorneys, technology providers and other service providers, and brokerage fees paid in connection with the purchase and sale of investments and securities, (2) expenses of managing and operating our properties, whether payable to an affiliate or a non-affiliated person and (3) administrative service expenses, including, but not limited to, personnel and related employment costs incurred by the Adviser or its affiliates in |
Actual amounts of the management fee depend upon our aggregate NAV. The management fee will equal approximately $73.4 million per annum if we sell the maximum amount, in each case, in our primary offering, assuming that the NAV per share of each class of our common stock remains constant at $10.00 and before giving effect to any shares issued under our distribution reinvestment plan. Actual amounts of out-of-pocket |
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performing administrative services on our behalf (including legal, accounting, investor relations, tax, capital markets, financial operations services and other administrative services), provided that no reimbursement shall be made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our board of directors. The expense reimbursements that we will pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf. See “Management—The Advisory Agreement—Management Fee, Performance Participation Interest and Expense Reimbursements.” |
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Performance Participation Interest— The Special Limited Partner |
So long as the Advisory Agreement has not been terminated, the Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive cash distributions (or Class E or Class I Operating Partnership units at its election) from the Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined herein). Such distributions are paid annually.The performance participation payable to the Special Limited Partner serves to provide a performance-based incentive distribution to the Adviser and is subject to the review and approval of a majority of our board of directors, including a majority of our independent directors. |
Actual amounts of the performance participation depend upon the Operating Partnership’s actual annual total return and, therefore, cannot be calculated at this time. | ||
For a detailed explanation of how the performance participation is calculated, see “Summary of the Operating Partnership Agreement—Special Limited Partner Interest.” For a hypothetical calculation of the |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
performance participation calculation, see “Compensation—Performance Participation Interest Example.” Specifically, the Special Limited Partner is paid a performance participation distribution in an amount equal to: • First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such Excess Profits until the total amount paid to the Special Limited Partner equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount paid to the Special Limited Partner pursuant to this clause (this is commonly referred to as a “Catch-Up”); and• Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits. “Total Return” for any period since the end of the prior calendar year shall equal the sum of: (i) all distributions accrued or paid (without duplication) on the Class C units, Class D units, Class I units, Class S units and Class T units (collectively, the “Performance Participation Units”) outstanding at the end of such period since the beginning of the then-current calendar year plus (ii) the change in aggregate NAV of such units since the beginning of the year, before giving effect to (x) changes resulting solely from the proceeds of issuances of Performance Participation Units, (y) any performance participation accrual and (z) applicable stockholder servicing fee expenses (including any payments made to us for payment of such expenses). |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in the NAV of Performance Participation Units issued during the then-current calendar year but (ii) exclude the proceeds from the initial issuance of such units. “Hurdle Amount” for any period during a calendar year means that amount that results in a 5% annualized internal rate of return on the NAV of the Performance Participation Units outstanding at the beginning of the then-current calendar year and all Performance Participation Units issued since the beginning of the then-current calendar year, taking into account the timing and amount of all distributions accrued or paid (without duplication) on all such units and all issuances of Performance Participation Units over the period and calculated in accordance with recognized industry practices. The ending NAV of the Performance Participation Units used in calculating the internal rate of return is calculated before giving effect to any accrual of performance participation interest and applicable stockholder servicing fee expenses, provided that the calculation of the Hurdle Amount for any period will exclude any Performance Participation Units repurchased during such period, which such units are subject to the performance participation distribution upon repurchase as described below. |
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Except as described in Loss Carryforward below, any amount by which Total Return falls below the Hurdle Amount is not carried forward to subsequent periods. “Loss Carryforward Amount” shall initially equal zero and shall cumulatively increase by the absolute value of any negative annual Total |
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Determination of Amount |
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Return and decrease by any positive annual Total Return, provided that the Loss Carryforward Amount shall at no time be less than zero and provided further that the calculation of the Loss Carryforward Amount will exclude the Total Return related to any Performance Participation Units repurchased during such year, which units are subject to the performance participation distribution upon repurchase as described below. The effect of the Loss Carryforward Amount is that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of the calculation of the Special Limited Partner’s performance participation. This is referred to as a “High Water Mark.” The Special Limited Partner will also receive a performance participation with respect to all Performance Participation Units that are repurchased at the end of any month (in connection with repurchases of our shares in our share repurchase plan) in an amount calculated as described above with the relevant period being the portion of the year for which such unit was outstanding, and proceeds for any such unit repurchase will be reduced by the amount of any such performance participation. Distributions on the performance participation interest may be payable in cash or Class E or Class I units at the election of the Special Limited Partner. If the Special Limited Partner elects to receive such distributions in Class E or Class I units, the Special Limited Partner may request the Operating Partnership to repurchase such Class E or Class I units from the Special Limited Partner at a later date. Any such repurchase requests are not subject to the Early Repurchase Deduction or minimum holding period. |
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The Operating Partnership will repurchase any such Operating Partnership units for cash unless our board of directors determines that any such repurchase for cash would be prohibited by applicable law or the partnership agreement, in which case such Operating Partnership units will be repurchased for Class E or Class I shares of our common stock with an equivalent aggregate NAV. See “Summary of the Operating Partnership Agreement—Special Limited Partner Interest.” |
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Fees from Other Services— Affiliates of the Adviser |
We may retain third parties, including certain of the Adviser’s affiliates, for necessary services relating to our investments or our operations, including lending and loan special servicing; investment banking, advisory, consulting, brokerage and managing foreclosures and workouts; the placement and provision of insurance policies and coverage, including risk retention or insurance captives; entitlement, development, construction and design (including oversight thereof); portfolio company, real estate operations and property management (and oversight thereof) and leasing; legal, financial, compliance, tax, back office, corporate secretarial, accounting, human resources, bank account and cash management; supply or procurement of power and energy; transaction support; accounting and reporting (including coordinating onboarding, due diligence, reporting and other administrative services) and other financial operations services; hedging, derivatives, financing and other treasury services and capital markets services; data generation, analysis, collection and management services; physical and digital security, life and physical safety, and other technical specialties; information technology | Actual amounts depend on whether affiliates of the Adviser are actually engaged to perform such services. |
Type of Compensation and Recipient |
Determination of Amount |
Estimated Amount | ||
services and innovation; appraisal and valuation services; market research; cash flow modeling and forecasting; client onboarding; and other services or products. Any fees paid to the Adviser’s affiliates for any such services will not reduce the management fee or performance participation interest. Any such arrangements will subject to approval by a majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transaction. |
(1) | Upfront selling commissions and dealer manager fees for sales of Class T and Class S shares may be reduced or waived in connection with volume or other discounts, other fee arrangements or for sales to certain categories of purchasers. See “Plan of Distribution—Underwriting Compensation—Selling Commissions and Dealer Manager Fees.” If all shares sold in this offering are Class S shares, our total upfront selling commissions would be approximately $202,898,551 if we raise the maximum offering, assuming that the maximum upfront selling commission is paid for each share sold in our primary offering, the NAV per Class S share is $10.00 and we do not reallocate any shares between our primary offering and our distribution reinvestment plan. |
(2) | We will cease paying stockholder servicing fees at the date following the completion of this offering at which total underwriting compensation from any source in connection with this offering equals 10% of the gross proceeds from our primary offering (i.e., excluding proceeds from sales pursuant to our distribution reinvestment plan). This limitation is intended to ensure that we satisfy the FINRA requirement that total underwriting compensation paid in connection with this offering does not exceed 10% of the gross proceeds of our primary offering. |
(3) | In calculating our stockholder servicing fee, we will use our NAV before giving effect to accruals for the stockholder servicing fee or distributions payable on our shares. If all shares sold in this offering are Class S shares, our total annual stockholder servicing fees would be approximately $49,275,362 if we raise the maximum offering, assuming that our NAV per share for Class S shares is $10.00 and no shares are issued pursuant to our distribution reinvestment plan. |
(4) | These amounts represent estimated expenses incurred in connection with our organization and this offering, including legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of our transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals. Under no circumstances may our total organization and offering expenses (including upfront selling commissions, stockholder servicing fees and due diligence expenses) exceed 15% of the gross proceeds from this offering. |
(5) | We will pay all expenses incurred in connection with the acquisition of our investments, including legal and accounting fees and expenses, brokerage commissions payable to unaffiliated third parties, travel expenses, costs of appraisals (including independent appraisals), nonrefundable option payments on property not acquired, engineering, due diligence, title insurance and other expenses related to the selection and acquisition of investments, whether or not acquired. While most of the acquisition expenses are expected to be paid to third parties, a portion of the out-of-pocket |
expenses we pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf that the Adviser is required to reimburse to the Sub-Adviser under the Sub-Advisory Agreements. |
(6) | In calculating our management fee, we will use our NAV before giving effect to accruals for the management fee, performance participation interest, stockholder servicing fees or distributions payable on our shares. |
• | “Total Operating Expenses” are all costs and expenses paid or incurred by us, as determined under generally accepted accounting principles, including the management fee, any distributions made to the Special Limited Partner with respect to its performance participation interest and any operating expenses of feeder vehicles primarily created to hold our shares advanced by us, but excluding: (i) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and listing of our capital stock, (ii) property-level expenses incurred at each property, (iii) interest payments, (iv) taxes, (v) non-cash expenditures such as depreciation, amortization and bad debt reserves, (vi) incentive fees paid in compliance with our charter, (vii) acquisition fees and acquisition expenses related to the selection and acquisition of assets, whether or not a property is actually acquired, (viii) real estate commissions on the sale of property and (ix) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). |
• | “Average Invested Assets” means, for any period, the average of the aggregate book value of our assets, invested, directly or indirectly, in equity interests in and loans secured by real estate, including all properties, mortgages and real estate-related securities and consolidated and unconsolidated joint ventures or other partnerships, before deducting depreciation, amortization, impairments, bad debt reserves or other non-cash reserves, computed by taking the average of such values at the end of each month during such period. |
• | “Net Income” means, for any period, total revenues applicable to such period, less the total expenses applicable to such period other than additions to, or allowances for, non-cash charges such as depreciation, amortization, impairments and reserves for bad debt or other similar non-cash reserves. |
A. | Beginning NAV | $ | 500,000,000 | |||
B. | Loss Carryforward Amount | $ | — | |||
C. | Net proceeds from new issuances | $ | — | |||
D. | Distributions paid (in 12 equal monthly installments) | $ | 20,000,000 | |||
E. | Change in NAV required to meet 5% annualized internal rate of return (1) |
$ | 4,600,000 | |||
F. | Hurdle Amount (1) (D plus E) |
$ | 24,600,000 | |||
G. | Actual change in NAV | $ | 25,000,000 | |||
H. | Annual Total Return prior to performance participation interest (D plus G) | $ | 45,000,000 | |||
I. | Excess Proceeds (H minus the sum of B and F) | $ | 20,400,000 | |||
J. | Performance participation interest is equal to 12.5% of annual Total Return (H) because the annual Total Return exceeds the Hurdle Rate (F) plus loss carryforward account balance (B) with enough Excess Proceeds (I) to achieve the full Catch-Up |
$ | 5,625,000 |
(1) | Amounts rounded to the nearest $100,000. The Hurdle Amount for any period is the amount that results in a 5% annualized internal rate of return on the NAV of the shares outstanding at the end of the period. An internal rate of return reflects the timing and amount of all distributions accrued or paid (without duplication) and any issuances of such shares during the period. Internal rate of return is a metric used in business and asset management to measure the profitability of an investment and is calculated according to a standard formula that determines the total return provided by gains on an investment over time. |
• | the continuation, renewal or enforcement of our agreements with the Adviser and its affiliates, including the Advisory Agreement and the Dealer Manager Agreement; |
• | the decision to adjust the value of any of our investments or the calculation of our NAV; and |
• | public offerings of equity by us, which may result in increased advisory fees to the Adviser and increased fees to the dealer manager. |
• | the continuation, renewal or enforcement of our agreements with the Adviser and its affiliates, including the Advisory Agreement; |
• | the continuation, renewal or enforcement of our agreements with the Sub-Adviser and its affiliates, including the Sub-Advisory Agreement; |
• | the continuation, renewal or enforcement of our agreements with the Dealer Manager and its affiliates, including the Dealer Manager Agreement; |
• | the allocation of investment opportunities to us by the Adviser and its affiliates; and |
• | transactions with affiliates of the Adviser, Brookfield, the Sub-Adviser and Oaktree. |
• | the amount of the fees paid to the Adviser and its affiliates in relation to the size, composition and performance of our investments; |
• | the success of the Adviser in generating appropriate investment opportunities; |
• | the rates charged to other REITs and others by advisors performing similar services; |
• | additional revenues realized by the Adviser and its affiliates through their relationship with us, including whether we pay them or they are paid by others with whom we do business; |
• | the quality and extent of service and advice furnished by the Adviser and its affiliates; |
• | the performance of our investment portfolio; and |
• | the quality of our portfolio relative to the investments generated by the Adviser for its own account and for its other clients. |
• | a stockholder would be able to realize the NAV per share for the class of shares a stockholder owns if the stockholder attempts to sell its shares; |
• | a stockholder would ultimately realize distributions per share equal to the NAV per share for the class of shares it owns upon liquidation of our assets and settlement of our liabilities or a sale of our company; |
• | shares of our common stock would trade at their NAV per share on a national securities exchange; |
• | a third party would offer the NAV per share for each class of shares in an arm’s-length transaction to purchase all or substantially all of our shares; or |
• | the NAV per share would equate to a market price of an open-ended real estate fund. |
Components of NAV |
September 30, 2021 |
|||
Investments in real properties |
$ | 475,499,258 | ||
Investments in real estate-related securities |
95,202,806 | |||
Cash and cash equivalents |
18,275,717 | |||
Restricted cash |
5,535,629 | |||
Other assets |
5,708,955 | |||
Debt obligations |
(282,976,143 | ) | ||
Accrued performance fee (1) |
(4,922,143 | ) | ||
Accrued stockholder servicing fees (2) |
(146,992 | ) | ||
Management fee payable |
(447,941 | ) | ||
Dividend payable |
(903,005 | ) | ||
Subscriptions received in advance |
||||
Other liabilities |
(7,043,027 | ) | ||
Non-controlling interests in joint ventures |
(21,943,260 | ) | ||
|
|
|||
Net asset value |
$ | 281,839,854 | ||
|
|
|||
Number of shares outstanding |
23,720,559 | |||
|
|
(1) | Represents the performance fee for the period ended September 30, 2021. |
(2) | Stockholder servicing fees only apply to Class S, Class T and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. The Dealer Manager does not retain any of these fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers. |
NAV Per Share |
Class S Shares |
Class I Shares |
Class C Shares |
Class T Shares |
Class D Shares |
Total |
||||||||||||||||||
Net asset value |
$ | 232,259,266 | $ | 33,417,032 | $ | 16,343,798 | $ | — | $ | — | $ | 282,020,096 | ||||||||||||
Number of shares outstanding |
19,555,095 | 2,792,111 | 1,373,353 | — | — | 23,720,559 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NAV per share as of September 30, 2021 |
$ | 11.8772 | $ | 11.9684 | $ | 11.9007 | $ | — | $ | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Property Type |
Discount Rate |
Exit Capitalization Rate |
||||||
Multifamily |
5.70 | % | 4.50 | % | ||||
Office |
7.73 | % | 6.48 | % |
Input |
Hypothetical Change |
Multifamily Investment Values |
Office Investment Values |
|||||||
Discount Rate |
0.25% decrease | 1.96 | % | 1.92 | % | |||||
(weighted average) |
0.25% increase | (1.92 | )% | (1.76 | )% | |||||
Exit Capitalization Rate |
0.25% decrease | 3.88 | % | 2.61 | % | |||||
(weighted average) |
0.25% increase | (3.62 | )% | (2.30 | )% |
Date |
Class S |
Class I |
Class C |
Class T |
Class D |
Class E |
||||||||||||||||||
December 6, 2019 |
$ | 10.0458 | $ | 10.0458 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
December 31, 2019 |
10.0686 | 10.0687 | — | — | — | — | ||||||||||||||||||
January 31, 2020 |
10.2171 | 10.2204 | — | — | — | — | ||||||||||||||||||
February 29, 2020 |
10.2187 | 10.2347 | — | — | — | — | ||||||||||||||||||
March 31, 2020 |
10.3008 | 10.3170 | — | — | — | — | ||||||||||||||||||
April 30, 2020 |
10.1559 | 10.1873 | — | — | — | — | ||||||||||||||||||
May 31, 2020 |
10.2782 | 10.3009 | — | — | — | — | ||||||||||||||||||
June 30, 2020 |
10.2789 | 10.3121 | — | — | — | — | ||||||||||||||||||
July 31, 2020 |
10.3257 | 10.3643 | — | — | — | — | ||||||||||||||||||
August 31, 2020 |
10.2991 | 10.3503 | — | — | — | — | ||||||||||||||||||
September 30, 2020 |
10.3603 | 10.4261 | — | — | — | — | ||||||||||||||||||
October 31, 2020 |
10.3658 | 10.4444 | — | — | — | — | ||||||||||||||||||
November 30, 2020 |
10.4433 | 10.5409 | — | — | — | — | ||||||||||||||||||
December 31, 2020 |
10.4993 | 10.6190 | — | — | — | — | ||||||||||||||||||
January 31, 2021 |
10.5020 | 10.6220 | — | — | — | — | ||||||||||||||||||
February 28, 2021 |
10.5287 | 10.6480 | — | — | — | — | ||||||||||||||||||
March 31, 2021 |
10.6138 | 10.7307 | 10.7093 | — | — | — | ||||||||||||||||||
April 30, 2021 |
10.6751 | 10.7861 | 10.7230 | — | — | — | ||||||||||||||||||
May 31, 2021 |
10.7562 | 10.8583 | 10.8046 | — | — | — | ||||||||||||||||||
June 30, 2021 |
10.8558 | 10.9475 | 10.8933 | — | — | — | ||||||||||||||||||
July 31, 2021 |
10.9087 | 10.9868 | 10.9288 | — | — | — | ||||||||||||||||||
August 31, 2021 |
11.1222 | 11.2011 | 11.1424 | — | — | — | ||||||||||||||||||
September 30, 2021 |
11.8772 | 11.9684 | 11.9007 | — | — | — |
Investments |
||||||||
Location |
Number |
Cost (in thousands) |
||||||
North America |
276 | $ | 25,268,319 | |||||
Asia-Pacific |
20 | 4,940,666 | ||||||
Europe |
17 | 5,314,697 | ||||||
South America |
3 | 579,994 | ||||||
Middle East |
1 | 257,300 | ||||||
|
|
|
|
|||||
Total |
317 | $ | 36,360,976 |
Type of Property |
Total |
|||
Office |
30 | % | ||
Multifamily |
15 | % | ||
Retail |
14 | % | ||
Alternative Real Estate Investments |
13 | % | ||
Mixed Use |
12 | % | ||
Logistics |
8 | % | ||
Hospitality |
8 | % | ||
|
|
|||
Total |
100 | % |
• | Brookfield Real Estate Opportunity Fund I |
• | Brookfield Real Estate Opportunity Fund II |
• | Brookfield Real Estate Turnaround Fund |
• | Brookfield Strategic Real Estate Partners |
• | Brookfield Strategic Real Estate Partners II |
• | Brookfield Strategic Real Estate Partners III |
• | U.S. Multifamily Value Add Fund I |
• | U.S. Multifamily Value Add Fund II |
• | U.S. Multifamily Value Add Fund III |
• | U.S. Office Fund |
• | Downtown Los Angeles Fund |
• | Brookfield Premier Real Estate Partners |
• | Brookfield Premier Real Estate Partners Australia |
• | Brookfield European Real Estate Partnership |
• | Brookfield Opportunity Zone Partners |
• | Thayer Hotel Investors VI |
• | Brookfield Single Family Rental |
• | Brookfield Senior Mezzanine Real Estate Finance Fund |
• | Brookfield Real Estate Finance Fund I |
• | Brookfield Real Estate Finance Fund II |
• | Brookfield Real Estate Finance Fund III |
• | Brookfield Real Estate Finance Fund IV |
• | Brookfield Real Estate Finance Fund V |
Share Class |
Name of Beneficial Owner |
Number of Shares Beneficially Owned |
Percent of All Shares (1) |
|||||||
Directors and Officers |
||||||||||
Brian W. Kingston | 0 | 0 | % | |||||||
Zachary B. Vaughan | 0 | 0 | % | |||||||
Manish H. Desai | 0 | 0 | % | |||||||
Dana E. Petitto | 0 | 0 | % | |||||||
Michelle L. Campbell | 0 | 0 | % | |||||||
Lori-Ann Beausoleil |
0 | 0 | % | |||||||
Richard W. Eaddy | 0 | 0 | % | |||||||
Thomas F. Farley | 0 | 0 | % | |||||||
Lis S. Wigmore | 0 | 0 | % | |||||||
|
|
|
|
|||||||
All directors and executive officers as a group (9 persons) (1) |
0 | 0 | % | |||||||
|
|
|
|
|||||||
5% Stockholder |
||||||||||
E |
Brookfield Investor (2) |
14,639,384 | 38.16 | % |
(1) | Percentages calculated using outstanding shares of our common stock as of September 30, 2021, adjusted to reflect the issuance of shares to the Brookfield Investor in consideration for Brookfield’s contribution of the Brookfield Portfolio as discussed in footnote 2 below. |
(2) | Includes 16,711 shares of Class I common stock that the Adviser or its affiliate will purchase prior to the commencement of this offering. Assumes the issuance of 14,622,673 shares of our common stock to Brookfield in consideration for Brookfield’s contribution of the Brookfield Portfolio, which is based on the fair value of the Brookfield Portfolio and our NAV, each as of September 30, 2021. The actual number of shares, or Operating Partnership Units, or a combination thereof, at Brookfield’s election to be issued in consideration for the contribution of the Brookfield Portfolio will be calculated by using the fair value of the Brookfield Portfolio as of a current date prior to the completion of the contributions, as determined by an independent appraiser, and our most recently determined NAV immediately prior to the completion of the contributions. Brookfield’s contribution of the Brookfield Portfolio is subject to certain conditions, and there can be no assurance that such contribution will take place as contemplated herein or at all. |
• | a transaction involving our securities that have been for at least 12 months listed on a national securities exchange; or |
• | a transaction involving our conversion to a corporate, trust, or association form if, as a consequence of the transaction, there will be no significant adverse change in any of the following: stockholder voting rights; the term of our existence; compensation to the Adviser; or our investment objectives. |
• | accepting the securities of a Roll-up Entity offered in the proposed Roll-up Transaction; or |
• | one of the following: |
• | remaining as holders of our stock and preserving their interests therein on the same terms and conditions as existed previously; or |
• | receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of our net assets. |
• | that would result in the common stockholders having democracy rights in a Roll-up Entity that are less than those provided in our charter and bylaws and described elsewhere in this prospectus, including rights with respect to the election and removal of directors, annual reports, annual and special meetings, amendment of our charter, and our dissolution; |
• | that includes provisions that would operate to materially impede or frustrate the accumulation of shares of stock by any purchaser of the securities of the Roll-up Entity, except to the minimum extent necessary to preserve the tax status of the Roll-up Entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-up Entity on the basis of the number of shares of stock held by that investor; |
• | in which investor’s rights to access of records of the Roll-up Entity will be less than those provided in the “—Meetings and Special Voting Requirements” section above; or |
• | in which any of the costs of the Roll-up Transaction would be borne by us if the Roll-up Transaction is rejected by our common stockholders. |
• | any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding stock of the corporation. |
• | 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
• | two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of stock held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
• | one-tenth or more but less than one-third; |
• | one-third or more but less than a majority; or |
• | a majority or more of all voting power. |
• | a classified board of directors; |
• | a two-thirds vote requirement for removing a director; |
• | a requirement that the number of directors be fixed only by vote of the directors; |
• | a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and |
• | a majority requirement for the calling of a stockholder-requested special meeting of stockholders. |
• | First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such Excess Profits until the total amount paid to the Special Limited Partner equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount paid to the Special Limited Partner pursuant to this clause (this is commonly referred to as a “Catch-Up”); and |
• | Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits. |
(i) | all distributions accrued or paid (without duplication) on the Class C units, Class D units, Class I units, Class S units and Class T units (collectively, the “Performance Participation Units”) outstanding at the end of such period since the beginning of the then-current calendar year plus |
(ii) | the change in aggregate NAV of such units since the beginning of the year, before giving effect to (x) changes resulting solely from the proceeds of issuances of Performance Participation Units, (y) any performance participation accrual and (z) applicable stockholder servicing fee expenses (including any payments made to us for payment of such expenses). |
• | We will pay U.S. federal income tax on our taxable income, including net capital gain, that we do not distribute to stockholders during, or within a specified time after, the calendar year in which the income is earned. |
• | If we have net income from “prohibited transactions,” which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax unless we qualify for a safe harbor exception. |
• | If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or from certain leasehold terminations as “foreclosure property,” (a) we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction) and |
(b) any income from such property will be treated as qualifying for purposes of the REIT gross income tests discussed below, but the income from the sale or operation of the property that would not otherwise be qualifying income for purposes of the gross income test may be subject to U.S. corporate income tax at the highest applicable rate. |
• | If, due to reasonable cause and not willful neglect, we fail to satisfy either the 75% gross income test or the 95% gross income test discussed below, but nonetheless maintain our qualification as a REIT because other requirements are met, we will be subject to a 100% tax on the greater of the amount by which we fail the 75% gross income test or the 95% gross income test, multiplied in either case by a fraction intended to reflect our profitability. |
• | If (i) we fail to satisfy the asset tests (other than a de minimis failure of the 5% asset test or the 10% vote or value test, as described below under “—Asset Tests”) due to reasonable cause and not to willful neglect, (ii) we dispose of the assets or otherwise comply with such asset tests within six months after the last day of the quarter in which we identify such failure and (iii) we file a schedule with the IRS describing the assets that caused such failure, we will pay a tax equal to the greater of $50,000 or the net income from the nonqualifying assets during the period in which we failed to satisfy such asset tests multiplied by the highest corporate tax rate. |
• | If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, and the failure was due to reasonable cause and not to willful neglect, we will be required to pay a penalty of $50,000 (or more, in certain cases) for each such failure. |
• | We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet recordkeeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s stockholders, as described below in “—Requirements for Qualification as a REIT.” |
• | If we fail to distribute during each calendar year at least the sum of: |
• | 85% of our ordinary income for such calendar year; |
• | 95% of our capital gain net income for such calendar year; and |
• | any undistributed taxable income from prior taxable years, |
• | We may elect to retain and pay income tax on our net long-term capital gain. In that case, a U.S. holder would include its proportionate share of our undistributed long-term capital gain (to the extent we make a timely designation of such gain to the stockholder) in its income, and would receive a credit or a refund for its proportionate share of the tax we paid. |
• | We will be subject to a 100% excise tax on amounts received by us from a taxable REIT subsidiary (or on certain expenses deducted by a taxable REIT subsidiary) if certain arrangements between us and a taxable REIT subsidiary of ours, as further described below, are not comparable to similar arrangements among unrelated parties. |
• | If we acquire any assets in a carry-over basis transaction from a non-REIT C corporation that does not elect to recognize its “built-in gain” in such assets, i.e., the excess of the fair market value of such assets over the adjusted tax basis at the time we acquire such assets, we would be subject to tax at the highest regular corporate tax rate on the built-in gain during the five-year period following acquisition. |
1. | that is managed by one or more trustees or directors; |
2. | the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; |
3. | that would be taxable as a domestic corporation, but for its election to be subject to tax as a REIT; |
4. | that is neither a financial institution nor an insurance company subject to certain provisions of the Code; |
5. | the beneficial ownership of which is held by 100 or more persons; |
6. | of which not more than 50% in value of the outstanding shares are owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) after applying certain attribution rules; |
7. | that makes an election to be a REIT for the current taxable year or has made such an election for a previous taxable year, which has not been terminated or revoked; and |
8. | that meets other tests described below regarding the nature of its income and assets. |
• | rents from real property; |
• | interest on debt secured by mortgages on real property or on interests in real property; |
• | dividends or other distributions on, and gain from the sale of, stock in other REITs; |
• | gain from the sale of real property or mortgage loans; |
• | abatements and refunds of taxes on real property; |
• | income and gain derived from foreclosure property (as described below); |
• | amounts (other than amounts the determination of which depends in whole or in part on the income or profits of any person) received or accrued as consideration for entering into agreements (i) to make loans secured by mortgages on real property or on interests in real property or (ii) to purchase or lease real property (including interests in real property and interests in mortgages on real property); and |
• | interest or dividend income from investments in stock or debt instruments attributable to the temporary investment of new capital during the one-year period following our receipt of new capital that we raise through equity offerings (but not our distribution reinvestment plan) or public offerings of debt obligations with at least a five-year term. |
• | that is acquired by a REIT as the result of the REIT having bid in such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such property or on indebtedness that such property secured; |
• | for which the related loan was acquired by the REIT at a time when the default was not imminent or anticipated; and |
• | for which the REIT makes a proper election to treat the property as foreclosure property. |
• | on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test; |
• | on which any construction takes place on the property, other than completion of a building or any other improvement, if more than 10% of the construction was completed before default became imminent; or |
• | which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business that is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income. |
• | At least 75% of the value of our total assets must be represented by the following: |
• | interests in real property, including leaseholds and options to acquire real property and leaseholds; |
• | interests in mortgages on real property; |
• | interests in personal property that generates rents from real property; |
• | stock in other REITs and debt instruments issued by publicly offered REITs; |
• | cash and cash items (including certain receivables); |
• | government securities; |
• | investments in stock or debt instruments attributable to the temporary investment of new capital during the one-year period following our receipt of new capital that we raise through equity offerings (but not our distribution reinvestment plan) or public offerings of debt obligations with at least a five-year term; and |
• | regular or residual interests in a REMIC. However, if less than 95% of the assets of a REMIC consists of assets that are qualifying real estate-related assets under U.S. federal income tax laws, determined as if we held such assets directly, we will be treated as holding directly our proportionate share of the assets of such REMIC. |
• | Not more than 25% of our total assets may be represented by securities, other than those in the 75% asset class described above. |
• | Except for securities in taxable REIT subsidiaries and the securities in the 75% asset class described in the first bullet point above, the value of any one issuer’s securities owned by us may not exceed 5% of the value of our total assets. |
• | Except for securities in taxable REIT subsidiaries and the securities in the 75% asset class described in the first bullet point above, we may not own more than 10% of any one issuer’s outstanding voting securities. |
• | Except for securities of taxable REIT subsidiaries and the securities in the 75% asset class described in the first bullet point above, we may not own more than 10% of the total value of the outstanding securities of any one issuer, other than securities that qualify for the “straight debt” exception or other exceptions discussed below. |
• | Not more than 20% of the value of our total assets may be represented by the securities of one or more taxable REIT subsidiaries. |
• | Not more than 25% of the value of our total assets may be represented by “nonqualified publicly offered REIT debt instruments.” |
• | the sum of (i) 90% of our REIT taxable income, computed without regard to the dividends-paid deduction and our net capital gain and (ii) 90% of our net income after tax, if any, from foreclosure property; minus |
• | the excess of the sum of specified items of non-cash income (including original issue discount on our mortgage loans) over 5% of our REIT taxable income, computed without regard to the dividends-paid deduction and our net capital gain. |
• | a citizen or resident of the United States; |
• | a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if it (i) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. |
• | a 20% gain distribution, which would be taxable to non-corporate U.S. holders of our stock at a federal rate of up to 20%; or |
• | an unrecaptured Section 1250 gain distribution, which would be taxable to non-corporate U.S. holders of our stock at a maximum rate of 25%. |
• | the amount of cash and the fair market value of any property received on such disposition; and |
• | the U.S. holder’s adjusted basis in such common stock for tax purposes. |
• | The investment in the common stock is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder), in which case the non-U.S. holder will generally be subject to the same treatment as U.S. holders with respect to any gain, except that a holder that is a foreign corporation also may be subject to the 30% branch profits tax, as discussed above; or |
• | The non-U.S. holder is an individual who is present in the United States for 183 days or more during the taxable year of the distribution and has a “tax home” in the United States, in which case the individual will be subject to a 30% tax on the individual’s capital gains. |
• | the investment in our common stock is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder), in which case the non-U.S. holder will be subject to the same treatment as domestic holders with respect to any gain; |
• | the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and has a tax home in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual’s net capital gains for the taxable year; or |
• | the non-U.S. holder is not a “qualified shareholder” or a “qualified foreign pension fund” (each as defined below) and our common stock constitutes a USRPI within the meaning of FIRPTA, as described below. |
• | our common stock were “regularly traded” on an established securities market within the meaning of applicable Treasury regulations; and |
• | the non-U.S. holder did not actually, or constructively under specified attribution rules under the Code, own more than 10% of our common stock at any time during the shorter of the five-year period preceding the disposition or the holder’s holding period. |
• | it would not have qualified as a REIT but for Section 856(h)(3) of the Code, which provides that stock owned by pension trusts will be treated, for purposes of determining whether the REIT is closely held, as owned by the beneficiaries of the trust rather than by the trust itself; and |
• | either (i) at least one pension trust holds more than 25% of the value of the interests in the REIT, or (ii) a group of pension trusts each individually holding more than 10% of the value of the REIT’s stock, collectively owns more than 50% of the value of the REIT’s stock. |
1) | Neither we, the Adviser, the Dealer Manager, Brookfield Real Estate, Brookfield, or any of our or their respective affiliates (collectively, the “Brookfield Entities”) has been relied upon for any advice with respect |
to the Plan’s decision to purchase or hold any shares of our common stock and none of the Brookfield Entities shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to purchase, continue to hold, transfer, vote or provide any consent with respect to any such shares; |
2) | The Plan is aware of and acknowledges that (a) none of the Brookfield Entities is undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the Plan’s investment in the shares of common stock, (b) the Brookfield Entities have a financial interest in the Plan’s investment in the shares of common stock on account of the fees and other compensation they expect to receive from us and their other relationships with us, as disclosed in this prospectus and (c) any such fees received by the Brookfield Entities do not constitute fees rendered for the provision of investment advice to the Plan; and |
3) | The Plan’s decision to invest in our shares of common stock has been made at the recommendation or direction of a fiduciary (an “Independent Fiduciary”) who: |
a. | is independent of the Brookfield Entities; |
b. | is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies contemplated in this prospectus; and |
c. | is a fiduciary in connection with the Plan’s investment in us and any related transactions and is responsible for exercising independent judgment in evaluating the Plan’s investment in us and any related transactions. |
Maximum Upfront Selling Commissions as a % of Transaction Price |
Maximum Upfront Dealer Manager Fees as a % of Transaction Price |
|||||||
Class T shares |
up to 3.0% | 0.5% | ||||||
Class S shares |
up to 3.5% | None | ||||||
Class D shares |
up to 1.5% | None | ||||||
Class I shares |
None | None |
Stockholder Servicing Fee as a % of NAV |
||||
Class T shares |
0.85% | (1) | ||
Class S shares |
0.85% | |||
Class D shares |
0.25% | |||
Class I shares |
None |
(1) | Consists of an advisor stockholder servicing fee of 0.65% per annum and a dealer stockholder servicing fee of 0.20% per annum. |
Your Investment |
Upfront Selling Commissions as a % of Transaction Price of Class T Share |
Upfront Selling Commissions as a % of Transaction Price of Class S Share |
||||||
Up to $149,999.99 |
3.00 | % | 3.50 | % | ||||
$150,000 to $499,999.99 |
2.50 | % | 3.00 | % | ||||
$500,000 to $999,999.99 |
2.00 | % | 2.50 | % | ||||
$1,000,000 and up |
1.50 | % | 2.00 | % |
Upfront selling commissions and dealer manager fees |
$ | 202,898,551 | 3.38% | |||||
Stockholder servicing fees (1) |
$ | 322,101,449 | 5.37% | |||||
Wholesaling reimbursements (2) |
$ | 16,300,000 | 0.27% | |||||
Legal expenses of the Dealer Manager |
$ | 200,000 | 0.00% | |||||
|
|
|
|
|||||
Total |
$ | 541,500,000 | 9.03% | |||||
|
|
|
|
(1) | We will pay the Dealer Manager a stockholder servicing fee with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares. The numbers presented reflect that stockholder servicing fees are paid over a number of years, and as a result, will cumulatively increase above 0.85% over time. The Dealer Manager will reallow (pay) the stockholder servicing fee to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers, and will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services. |
(2) | Wholesale reimbursements consist primarily of (a) actual costs incurred for fees to attend retail seminars sponsored by participating broker-dealers and due diligence expenses not accompanied by a detailed and itemized invoice, (b) amounts used to reimburse participating broker-dealers for the actual costs incurred by registered representatives for travel, meals and lodging in connection with attending bona fide training and education meetings, (c) non-transaction based compensation paid to registered persons associated with the Dealer Manager in connection with the wholesaling of our offering and (d) certain expense reimbursements for actual costs incurred by registered representatives of the Dealer Manager in the performance of wholesaling activities. Except for the expenses in (c) above, which will be paid by the Adviser or its affiliates without reimbursement by us, we will reimburse the Dealer Manager or its affiliates for the expenses set forth above, in each case, to the extent permissible under applicable FINRA rules. |
• | Read this entire prospectus and any appendices and supplements accompanying this prospectus. |
• | Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it, is included in this prospectus as Appendix C. Subscription agreements may be executed manually or by electronic signature except where the use of such electronic signature has not been approved. Should you execute the subscription agreement electronically, your electronic signature, whether digital or encrypted, included in the subscription agreement is intended to authenticate the subscription agreement and to have the same force and effect as a manual signature. |
• | Deliver a check, submit a wire transfer, instruct your broker to make payment from your brokerage account or otherwise deliver funds for the full purchase price of the shares of our common stock being subscribed for along with the completed subscription agreement to the participating broker-dealer. Checks should be made payable, or wire transfers directed, to “Brookfield Real Estate Income Trust Inc.” For Class T, Class S and Class D shares, after you have satisfied the applicable minimum purchase requirement of $2,500, additional purchases must be in increments of $500. For Class I shares, after you have satisfied the applicable minimum purchase requirement of $1,000,000, additional purchases must be in increments of $500, unless such minimums are waived by the Dealer Manager. The minimum subsequent investment does not apply to purchases made under our distribution reinvestment plan. |
• | By executing the subscription agreement and paying the total purchase price for the shares of our common stock subscribed for, each investor attests that he or she meets the suitability standards as stated in the subscription agreement and agrees to be bound by all of its terms. Certain participating broker-dealers may require additional documentation. |
• | On each business day, our transfer agent will collect purchase orders. Notwithstanding the submission of an initial purchase order, we can reject purchase orders for any reason, even if a prospective investor meets the minimum suitability requirements outlined in our prospectus. Investors may only purchase our common stock pursuant to accepted subscription orders as of the first calendar day of each month (based on the prior month’s transaction price), and to be accepted, a subscription request must be made with a completed and executed subscription agreement in good order and payment of the full purchase price of our common stock being subscribed at least five business days prior to the first calendar day of the month. If a purchase order is received less than five business days prior to the first calendar day of the month, unless waived by the Dealer Manager, the purchase order will be executed in the next month’s closing at the transaction price applicable to that month, plus any applicable upfront selling commissions and dealer manager fees. As a result of this process, the price per share at which your order is executed may be different than the price per share for the month in which you submitted your purchase order. |
• | Generally, within 15 days after the last calendar day of each month, we will determine our NAV per share for each share class as of the last calendar day of the prior month, which will generally be the transaction price for the then-current month for such share class. |
• | Completed subscription requests will not be accepted by us before the later of (i) two business days before the first calendar day of each month and (ii) three business days after we make the transaction price (including any subsequent revised transaction price in the circumstances described below) publicly available by posting it on our website and filing a prospectus supplement with the SEC. |
• | Subscribers are not committed to purchase shares at the time their subscription orders are submitted and any subscription may be canceled at any time before the time it has been accepted as described in the previous sentence. You may withdraw your purchase request by notifying the transfer agent, through your financial intermediary or directly on our toll-free, automated telephone line, (833) 625-7348. |
• | You will receive a confirmation statement of each new transaction in your account as soon as practicable but generally not later than seven business days after the stockholder transactions are settled. The confirmation statement will include information on how to obtain information we have filed with the SEC and made publicly available on our website, www.brookfieldREIT.com |
• | Under our share repurchase plan, to the extent we choose to repurchase shares in any particular month we will only repurchase shares as of the opening of the last calendar day of that month (a “Repurchase Date”). To have your shares repurchased, your repurchase request and required documentation must be received in good order by 4:00 p.m. (Eastern time) on the second to last business day of the applicable month. Settlements of share repurchases will be made within three business days of the Repurchase Date. Repurchase requests received and processed by our transfer agent will be effected at a repurchase price equal to the transaction price on the applicable Repurchase Date (which will generally be equal to our prior month’s NAV per share), subject to any Early Repurchase Deduction. |
• | A stockholder may withdraw his or her repurchase request by notifying the transfer agent, directly or through the stockholder’s financial intermediary, on our toll-free, automated telephone line, (833) 625-7348. The line is open on each business day between the hours of 9:00 a.m. and 6:00 p.m. (Eastern time). Repurchase requests must be cancelled before 4:00 p.m. (Eastern time) on the last business day of the applicable month. |
• | If a repurchase request is received after 4:00 p.m. (Eastern time) on the second to last business day of the applicable month, the purchase order will be executed, if at all, on the next month’s Repurchase Date at the transaction price applicable to that month (subject to any Early Repurchase Deduction), unless such request is withdrawn prior to the repurchase. Repurchase requests received and processed by our transfer agent on a business day, but after the close of business on that day or on a day that is not a business day, will be deemed received on the next business day. |
• | Repurchase requests may be made by mail or by contacting your financial intermediary, both subject to certain conditions described in this prospectus and our share repurchase plan filed as an exhibit to the registration statement of which this prospectus forms a part. If making a repurchase request by contacting your financial intermediary, your financial intermediary may require you to provide certain documentation or information. If making a repurchase request by mail to the transfer agent, you must complete and sign a repurchase authorization form, which can be found in our share repurchase plan. Written requests should be sent to the transfer agent at the following address: |
• | For processed repurchases, stockholders may request that repurchase proceeds are to be paid by mailed check provided that the amount is less than $100,000 and the check is mailed to an address on file with the transfer agent for at least 30 days. |
• | Processed repurchases of more than $100,000 will be paid only via wire transfer. For this reason, stockholders who own more than $100,000 of our common stock must provide wiring instructions for their brokerage account or designated U.S. bank account. Stockholders who own less than $100,000 of our common stock may also receive repurchase proceeds via wire transfer, provided the payment amount is at least $2,500. For all repurchases paid via wire transfer, the funds will be wired to the account on file with the transfer agent or, upon instruction, to another financial institution provided that the stockholder has made the necessary funds transfer arrangements. The customer service representative can provide detailed instructions on establishing funding arrangements and designating your bank or brokerage account on file. Funds will be wired only to U.S. financial institutions (ACH network members). |
• | A medallion signature guarantee will be required in certain circumstances. The medallion signature process protects stockholders by verifying the authenticity of a signature and limiting unauthorized fraudulent transactions. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker-dealer, clearing agency, savings association or other financial institution which participates in a medallion program recognized by the Securities Transfer Association. The three recognized medallion programs are the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program and the New York Stock Exchange, Inc. Medallion Signature Program. Signature guarantees from financial institutions which are not participating in any of these medallion programs will not be accepted. A notary public cannot provide signature guarantees. We reserve the right to amend, waive or discontinue this policy at any time and establish other criteria for verifying the authenticity of any repurchase or transaction request. We may require a medallion signature guarantee if, among other reasons: (1) the amount of the repurchase request is over $500,000; (2) you wish to have repurchase proceeds transferred by wire to an account other than the designated bank or brokerage account on file for at least 30 days or sent to an address other than your address of record for the past 30 days; or (3) our transfer agent cannot confirm your identity or suspects fraudulent activity. |
• | If a stockholder has made multiple purchases of shares of our common stock, any repurchase request will be processed on a first in/first out basis unless otherwise requested in the repurchase request. |
• | repurchases resulting from death or qualifying disability; or |
• | in the event that a stockholder’s shares are repurchased because the stockholder has failed to maintain the $500 minimum account balance. |
• | if you are requesting that some but not all of your shares be repurchased, keep your balance above $500 to avoid minimum account repurchase, if applicable; |
• | you will not receive interest on amounts represented by uncashed repurchase checks; |
• | under applicable anti-money laundering regulations and other federal regulations, repurchase requests may be suspended, restricted or canceled and the proceeds may be withheld; and |
• | all shares of our common stock requested to be repurchased must be beneficially owned by the stockholder of record making the request or his or her estate, heir or beneficiary, or the party requesting the repurchase must be authorized to do so by the stockholder of record of the shares or his or her estate, |
heir or beneficiary, and such shares of common stock must be fully transferable and not subject to any liens or encumbrances. In certain cases, we may ask the requesting party to provide evidence satisfactory to us that the shares requested for repurchase are not subject to any liens or encumbrances. If we determine that a lien exists against the shares, we will not be obligated to repurchase any shares subject to the lien. |
• | any stockholder who requests that we repurchase its shares of our common stock within 30 calendar days of the purchase of such shares; |
• | transactions deemed harmful or excessive by us (including, but not limited to, patterns of purchases and repurchases), in our sole discretion; and |
• | transactions initiated by financial advisors, among multiple stockholder accounts, that in the aggregate are deemed harmful or excessive. |
• | purchases and requests for repurchase of our shares in the amount of $2,500 or less; |
• | purchases or repurchases initiated by us; and |
• | transactions subject to the trading policy of an intermediary that we deem materially similar to our policy. |
• | financial statements that are prepared in accordance with GAAP and are audited by our independent registered public accounting firm; |
• | the ratio of the costs of raising capital during the year to the capital raised; |
• | the aggregate amount of the management fee and any other fees paid to the Adviser and any affiliate of the Adviser by us or third parties doing business with us during the year; |
• | our Total Operating Expenses for the year, stated as a percentage of our Average Invested Assets and as a percentage of our Net Income; |
• | a report from the independent directors that our policies are in the best interest of our stockholders and the basis for such determination; and |
• | a separate report containing full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and the Adviser, a director or any affiliate thereof during the year, which report the independent directors are specifically charged with a duty to examine and to comment on regarding the fairness of the transactions. |
• | our Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 31, 2021; |
• | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 filed on May 17, 2021 and June 30, 2021 filed on August 16, 2021; |
• |
• | our definitive Proxy Statement on Schedule 14A filed on April 21, 2021. |
Table I |
Experience in Raising and Investing Funds | |
Table II |
(Omitted) Compensation to Sponsor has been omitted since compensation data is in Table IV—Results of Completed Programs. | |
Table III |
Operating Results of Prior Programs | |
Table IV |
Results of Completed Programs | |
Table V |
Sales or Disposals of Properties |
As of December 31, 2020 |
||||||||||||
($ in millions) |
BPREP |
BPREPA |
BEREP |
|||||||||
Dollar Amount Offered (1) |
N/A | N/A | N/A | |||||||||
Dollar Amount Raised (2) |
$ | 3,350 | $ | 703 | $ | 753 | ||||||
Length of Offering (1) |
N/A | N/A | N/A | |||||||||
Months to invest 90% of amount available for investment (3) |
N/A | N/A | N/A |
(1) | BPREP, BPREPA and BEREP are open end funds with no set dollar amount or length of time offered. |
(2) | Represents inception to date capital contributions net of capital redemptions. |
(3) | Disclosure is not meaningful for open end funds. |
BPREP |
||||||||||||||||||||
Year Ended (Unaudited) |
||||||||||||||||||||
($ in thousands except per share value) | 2020 |
2019 |
2018 |
2017 |
2016 |
|||||||||||||||
Summary Operating Results |
||||||||||||||||||||
Total investment income |
$ | 118,435 | $ | 67,032 | $ | 50,014 | $ | 19,968 | $ | — | ||||||||||
Operating expenses |
(8,796 | ) | (9,283 | ) | (3,899 | ) | (2,892 | ) | (2,717 | ) | ||||||||||
Net operating income (loss) |
109,639 | 57,749 | 46,115 | 17,076 | (2,717 | ) | ||||||||||||||
Interest expense |
(6,269 | ) | (2,359 | ) | (2,191 | ) | (977 | ) | — | |||||||||||
Income tax expense |
846 | — | — | — | — | |||||||||||||||
Net investment income (loss)-GAAP basis |
104,216 | 55,390 | 43,924 | 16,099 | (2,717 | ) | ||||||||||||||
Realized gain (loss) on investments |
57,991 | (237 | ) | 19,209 | — | — | ||||||||||||||
Unrealized gain (loss) on investments |
(108,813 | ) | 158,463 | 139,499 | 88,968 | 53,370 | ||||||||||||||
Net income (loss) |
53,394 | 213,616 | 202,632 | 105,067 | 50,653 | |||||||||||||||
Summary Statements of Cash Flows |
||||||||||||||||||||
Net cash flows provided by (used in) operating activities |
(809,315 | ) | (421,829 | ) | (466,445 | ) | (506,042 | ) | (454,510 | ) | ||||||||||
Net cash flows provided by (used in) investing activities |
— | — | — | — | — | |||||||||||||||
Net cash flows provided by (used in) financing activities |
822,228 | 384,969 | 502,127 | 506,860 | 463,729 | |||||||||||||||
Amount and Source of Cash Distributions |
||||||||||||||||||||
Cash distributions paid to limited partners: |
52,980 | 29,883 | 18,527 | 6,796 | — | |||||||||||||||
Amount of reinvested distributions paid to limited partners: |
56,520 | 49,917 | 36,743 | 16,804 | — | |||||||||||||||
Total distributions paid to limited partners (per $1,000 invested): |
40.81 | 37.18 | 36.09 | 23.28 | — | |||||||||||||||
Source of cash distributions to limited partners: |
||||||||||||||||||||
From operations |
52,980 | 29,883 | 18,527 | 6,796 | — | |||||||||||||||
From sales of properties |
— | — | — | — | — | |||||||||||||||
From refinancings |
— | — | — | — | — | |||||||||||||||
From return of capital |
— | — | — | — | — | |||||||||||||||
Summary Balance Sheet |
||||||||||||||||||||
Total assets |
3,410,466 | 2,532,613 | 1,932,422 | 1,221,894 | 610,918 | |||||||||||||||
Total liabilities |
676,121 | 66,583 | 31,474 | 28,661 | 3,497 | |||||||||||||||
Estimated per share value |
N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Carry accrued during the year |
$ | (10,888 | ) | $ | 19,269 | $ | 17,150 | $ | 11,404 | $ | 5,197 |
BPREPA |
||||||||||||
Year Ended (Unaudited) |
||||||||||||
($ in thousands except per share value) | 2020 |
2019 |
2018 |
|||||||||
Summary Operating Results |
||||||||||||
Total investment income |
$ | 32,545 | $ | 35,412 | $ | — | ||||||
Operating expenses |
(5,299 | ) | (3,909 | ) | (1,997 | ) | ||||||
Net operating income (loss) |
27,246 | 31,503 | (1,997 | ) | ||||||||
Interest expense |
(8,596 | ) | (12,293 | ) | (1,505 | ) | ||||||
Income tax expense |
— | — | — | |||||||||
Net investment income (loss)-GAAP basis |
18,650 | 19,210 | (3,502 | ) | ||||||||
Realized gain (loss) on investments |
— | 10,335 | — | |||||||||
Unrealized gain (loss) on investments |
(6,769 | ) | 19,176 | 50,344 | ||||||||
Net income (loss) |
11,881 | 48,721 | 46,842 | |||||||||
Summary Statements of Cash Flows |
||||||||||||
Net cash flows provided by (used in) operating activities |
20,027 | 25,146 | — | |||||||||
Net cash flows provided by (used in) investing activities |
(3,915 | ) | (70,945 | ) | — | |||||||
Net cash flows provided by (used in) financing activities |
(18,789 | ) | 54,337 | — | ||||||||
Amount and Source of Cash Distributions |
||||||||||||
Cash distributions paid to limited partners: |
24,754 | 36,978 | — | |||||||||
Total distributions paid to limited partners (per $1,000 invested): |
36.60 | 52.56 | — | |||||||||
Source of cash distributions to limited partners: |
||||||||||||
From operations |
20,336 | 20,397 | — | |||||||||
From sales of properties |
— | 10,966 | — | |||||||||
From refinancings |
— | — | — | |||||||||
From return of capital |
4,418 | 5,614 | — | |||||||||
Summary Balance Sheet |
||||||||||||
Total assets |
826,693 | 758,948 | 669,430 | |||||||||
Total liabilities |
260,072 | 230,369 | 248,938 | |||||||||
Estimated per share value |
0.869 | 0.811 | 0.793 | |||||||||
Carry accrued during the year |
$ | 836 | $ | 4,621 | $ | 1,997 |
BEREP |
||||
Year Ended (Unaudited) |
||||
($ in thousands except per share value) | 2020* |
|||
Summary Operating Results |
||||
Total investment income |
$ | — | ||
Operating expenses |
(5,206 | ) | ||
Net operating income (loss) |
(5,206 | ) | ||
Interest expense |
(777 | ) | ||
Income tax expense |
— | |||
Net investment income (loss)-GAAP basis |
(5,983 | ) | ||
Realized gain (loss) on investments |
— | |||
Unrealized gain (loss) on investments |
(1,685 | ) | ||
Net income (loss) |
(7,667 | ) | ||
Summary Statements of Cash Flows |
||||
Net cash flows provided by (used in) operating activities |
(4,098 | ) | ||
Net cash flows provided by (used in) investing activities |
(64,872 | ) | ||
Net cash flows provided by (used in) financing activities |
69,026 | |||
Amount and Source of Cash Distributions |
||||
Cash distributions paid to limited partners: |
611 | |||
Total distributions paid to limited partners (per $1,000 invested): |
11 | |||
Source of cash distributions to limited partners: |
— | |||
From operations |
611 | |||
From sales of properties |
— | |||
From refinancings |
— | |||
From return of captial |
— | |||
Summary Balance Sheet |
||||
Total assets |
63,262 | |||
Total liabilities |
1,903 | |||
Estimated per share value |
0.908 | |||
Carry accrued during the year |
$ | — |
* | For the period from January 21, 2020 (inception) to December 31, 2020. |
BOZP |
||||||||
Year Ended (Unaudited) |
||||||||
($ in thousands except per share value) | 2020 |
2019* |
||||||
Summary Operating Results |
||||||||
Total investment income |
$ | 2,482 | $ | 8,084 | ||||
Operating expenses |
16,737 | 6,242 | ||||||
Net operating income (loss) |
(14,255 | ) | 1,842 | |||||
Interest expense |
— | — | ||||||
Income tax expense |
— | — | ||||||
Net investment income (loss)-GAAP basis |
(14,255 | ) | 1,842 | |||||
Realized gain (loss) on investments |
— | — | ||||||
Unrealized gain (loss) on investments |
(30,683 | ) | (949 | ) | ||||
Net income (loss) |
(44,938 | ) | 893 | |||||
Summary Statements of Cash Flows |
||||||||
Net cash flows provided by (used in) operating activities |
(110,058 | ) | (898,727 | ) | ||||
Net cash flows provided by (used in) investing activities |
— | — | ||||||
Net cash flows provided by (used in) financing activities |
— | 1,010,603 | ||||||
Amount and Source of Cash Distributions |
||||||||
Cash distributions paid to limited partners: |
— | — | ||||||
Total distributions paid to limited partners (per $1,000 invested): |
— | — | ||||||
Source of cash distributions to limited partners: |
||||||||
From operations |
— | — | ||||||
From sales of properties |
— | — | ||||||
From refinancings |
— | — | ||||||
From return of capital |
— | — | ||||||
Summary Balance Sheet |
||||||||
Total assets |
969,262 | 1,017,738 | ||||||
Total liabilities |
2,704 | 6,242 | ||||||
Estimated per share value |
956.42 | 1,000.88 | ||||||
Carry accrued during the year |
$ | — | $ | — |
* | For the period from June 22, 2019 (inception) to December 31, 2019. |
BSFR |
||||
Year Ended (Unaudited) |
||||
($ in thousands except per share value) | 2020* |
|||
Summary Operating Results |
||||
Total investment income |
$ | — | ||
Operating expenses |
995 | |||
Net operating income (loss) |
(995 | ) | ||
Interest expense |
— | |||
Income tax expense |
— | |||
Net investment income (loss)-GAAP basis |
(995 | ) | ||
Realized gain (loss) on investments |
— | |||
Unrealized gain (loss) on investments |
(3,396 | ) | ||
Net income (loss) |
(4,391 | ) | ||
Summary Statements of Cash Flows |
||||
Net cash flows provided by (used in) operating activities |
(28,718 | ) | ||
Net cash flows provided by (used in) investing activities |
— | |||
Net cash flows provided by (used in) financing activities |
35,000 | |||
Amount and Source of Cash Distributions |
||||
Cash distributions paid to limited partners: |
— | |||
Total distributions paid to limited partners (per $1,000 invested): |
— | |||
Source of cash distributions to limited partners: |
||||
From operations |
— | |||
From sales of properties |
— | |||
From refinancings |
— | |||
From return of captial |
— | |||
Summary Balance Sheet |
||||
Total assets |
30,803 | |||
Total liabilities |
194 | |||
Estimated per share value |
— | |||
Carry accrued during the year |
$ | — |
* | For the period from July 2, 2020 (inception) to December 31, 2020. |
($ in millions) | BREOF |
BREOF II |
RETIP |
VAMF I |
BREF III |
|||||||||||||||
Date of first close |
04/2006 | 12/2007 | 03/2010 | 07/2012 | 03/2011 | |||||||||||||||
Date of liquidation (1) |
12/2019 | 01/2020 | 06/2020 | 12/2019 | 12/2018 | |||||||||||||||
Dollar amount raised |
$ | 242 | $ | 262 | $ | 5,565 | $ | 323 | $ | 727 | ||||||||||
Equity invested |
331 | 325 | 3,787 | 315 | 696 | |||||||||||||||
Realized proceeds |
571 | 607 | 8,575 | 654 | 868 |
(1) | RETIP realized its last investment in June 2020. The fund is expected to be liquidated by the end of 2021. |
Selling Price, Net of Closing Costs and GAAP Adjustments ($ in thousands) |
Cost of Properties Including Closing and Soft Costs ($ in thousands) |
|||||||||||||||||||||||||||||||||||||||||||||
Program |
Property (1)(2) |
Date Acquired |
Date of Sale |
Cash Received Net of Closing Costs (3) |
Mortgage Balance at Time of Sale |
Purchase Money Mortgage Taken Back By Program |
Adjustments Resulting From Application of GAAP |
Total |
Original Mortgage Financing |
Total Acquisition Cost, Capital Improvement, Closing and Soft Costs (3) |
Total |
Excess (Deficiency) of Property Operating Cash Receipts Over Cash Expenditures (4) |
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BPREP |
75 State Street | 11/28/2016 | 9/19/2019 | $ | 80,752 | $ | 70,000 | $ | — | $ | — | $ | 150,752 | $ | 70,000 | $ | 83,033 | $ | 153,033 | $ | 4,674 | |||||||||||||||||||||||||
BPREPA |
Jessie Street Centre | 12/28/2018 | 11/1/2019 | 78,251 | 62,130 | — | — | 140,380 | 63,370 | 67,605 | 130,975 | 6,019 | ||||||||||||||||||||||||||||||||||
BPREP |
Executive Distribution Center | 3/31/2017 | 12/2/2019 | 13,855 | 7,000 | — | — | 20,855 | 7,000 | 7,675 | 14,675 | 604 | ||||||||||||||||||||||||||||||||||
BPREP |
51 Sleeper Street | 12/19/2018 | 1/23/2020 | 67,697 | 46,160 | — | — | 113,857 | 46,160 | 46,900 | 93,060 | — | ||||||||||||||||||||||||||||||||||
BPREP |
Hughes Airport Center | 3/31/2017 | 3/31/2020 | 44,887 | 26,000 | — | — | 70,887 | 26,000 | 24,136 | 50,136 | 3,538 | ||||||||||||||||||||||||||||||||||
BPREP |
The Alexander | 3/31/2017 | 9/2/2020 | 49,306 | 39,000 | — | — | 88,306 | 39,000 | 32,546 | 71,546 | 6,669 |
(1) | Excludes sales of partial interests less than 25%. |
(2) | All figures are presented at the program’s pro-rata ownership percentage of the property. |
(3) | Excludes capital improvements and softs costs during the hold period as the information is not available. |
(4) | Represents net operating distributions received by the program from the property during the hold period. |
|
Subscription Agreement for Shares of Brookfield Real Estate Income Trust Inc. |
1. |
Your Investment |
Investment Amount $ |
☐ Initial Purchase | |||||||
☐ Subsequent Purchase | ||||||||
Investment Method |
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☐ By mail | Attach a check to this agreement. Make all checks payable to: BROOKFIELD REAL ESTATE INCOME TRUST INC. | |||||||
☐ By wire | Name: DST as Agent for Brookfield Real Estate Income Trust Inc. | |||||||
Bank Name: [●] | ||||||||
ABA: [●] | ||||||||
DDA: [●] | ||||||||
☐ Broker-dealer/Financial advisor | ||||||||
* Cash, cashier’s checks/official bank checks, temporary checks, foreign checks, money orders, third-party checks, or travelers checks are not accepted. | ||||||||
S HARE CLASS SELECTION (required) |
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☐ Share Class T (minimum investment $2,500; minimum subsequent investment $500) | ||||||||
☐ Share Class S (minimum investment $2,500; minimum subsequent investment $500) | ||||||||
☐ Share Class D (minimum investment $2,500); minimum subsequent investment $500; available for eligible investors as disclosed in the prospectus) | ||||||||
☐ Share Class I (minimum investment $1,000,000 (unless waived); minimum subsequent investment $500; available for eligible investors as disclosed in the prospectus) |
☐ Brookfield Employee | ☐ Brookfield Officer or Director | ☐ Brookfield Affiliate | ☐ Not Applicable |
2. |
Ownership Type (Select only one) |
Non-Custodial Account Type |
Third-Party Custodial Account Type | |||||||
B ROKERAGE ACCOUNT NUMBER |
C USTODIAN ACCOUNT NUMBER | |||||||
☐ I NDIVIDUAL OR JOINT TENANT WITH RIGHTS OF SURVIVORSHIP |
☐ IRA | |||||||
☐ T RANSFER ON DEATH (Optional Designation. Not Available for Louisiana Residents. See Section 3C.) ☐ T ENANTS IN COMMON |
☐ ROTH IRA ☐ SEP IRA ☐ S IMPLE IRA | |||||||
☐ C OMMUNITY PROPERTY |
☐ O THER | |||||||
C USTODIAN INFORMATION (To BE COMPLETED BY CUSTODIAN) | ||||||||
☐ U NIFORM GIFT /TRANSFER TO MINORS S TATE OF |
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C USTODIAN NAME | ||||||||
☐ P ENSION PLAN (Include Certification of Investment Powers Form) |
C USTODIAN TAX ID # | |||||||
☐ T RUST (Include Certification of Investment Powers Form) |
C USTODIAN PHONE # | |||||||
☐ C ORPORATION / PARTNERSHIP / OTHER |
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(Corporate Resolution or Partnership Agreement Required) |
Entity Name Tax ID Number |
Date of Trust: | Exemptions (See Form W-9 instructions at www.irs.gov) |
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Entity Type (Select one. Required ) |
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☐ Retirement Plan ☐ Trust ☐ S-Corp |
☐ C-Corp ☐ LLC ☐ Partnership |
Exempt payee code (if any) |
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☐ Other |
Jurisdiction (if Non-U.S.) |
Exemption from FATCA reporting | ||||||
( Attach a completed applicable Form W-8 |
code (if any) |
3 |
Investor Information |
A. Investor Name (Investor/Trustee/Executor/Authorized Signatory Information) |
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(Residential street address MUST be provided. See Section 4 if mailing address is different than residential street address.) |
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First Name |
(MI) |
Last Name |
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Gender |
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Social Security Number/Tax ID |
Date of Birth (MM/DD/YYYY) |
Daytime Phone Number |
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Residential Street Address |
City |
State |
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Zip Code |
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Email Address |
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If Non-U.S. Citizen, Specify Country of Citizenship and Select One below (required) |
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☐ Resident Alien |
☐ Non-Resident Alien (Attach a completed Form W-8BEN, Rev. July 2017) |
Country of Citizenship |
If you are an Brookfield Employee, Officer, Director or Affiliate, Select One below ( required) |
☐ Brookfield Employee |
☐ Brookfield Officer or Director | ☐ Brookfield Affiliate |
B. Co-Investor Name (Co-Investor/Co-Trustee/Co-Authorized |
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First Name |
(MI) |
Last Name |
Gender |
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Social Security Number/Tax ID |
Date of Birth (MM/DD/YYYY) |
Daytime Phone Number |
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Residential Street Address |
City |
State |
Zip Code |
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Email Address |
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If Non-U.S. Citizen, Specify Country of Citizenship and Select One below (required) |
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☐ Resident Alien |
☐ Non-Resident Alien (Attach a completed Form W-8BEN, Rev. July 2017) |
Country of Citizenship |
If you are an Brookfield Employee, Officer, Director or Affiliate, Select One below (required |
☐ Brookfield Employee |
☐ Brookfield Officer or Director | ☐ Brookfield Affiliate |
First Name |
(MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) | ☐ Primary | |||||||
☐ Secondary | ||||||||||||
First Name |
(MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) | ☐ Primary | |||||||
☐ Secondary | ||||||||||||
First Name |
(MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) | ☐ Primary | |||||||
☐ Secondary | ||||||||||||
First Name |
(MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) | ☐ Primary | |||||||
☐ Secondary |
4. |
Contact Information (If different than provided in Section 3A) |
Email Address |
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Mailing Address |
City | State | ZipCode |
5. |
Select How You Want to Receive Your Distributions (Select only one) |
IF YOU ARE NOT AN ALABAMA, IDAHO, KANSAS, KENTUCKY, MAINE, MARYLAND, MASSACHUSETTS, NEBRASKA, NEW JERSEY, NORTH CAROLINA, OHIO, OREGON, TEXAS, VERMONT OR WASHINGTON INVESTOR, YOU ARE AUTOMATICALLY ENROLLED IN OUR DISTRIBUTION REINVESTMENT PLAN.If you do not wish to be enrolled in the Distribution Reinvestment Plan, initial this box and complete the information below: |
☐ | |||
Initials |
If you wish to enroll in the Distribution Reinvestment Plan, initial this box*: ☐ Initials |
A. Cash/Check Mailed to the address set forth above (Available for Non-Custodial Investors only.) | ||||||
B. Cash/Check Mailed to Third Party/Custodian | ||||||
Name/Entity Name/Financial Institution |
Mailing Address |
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City |
State |
Zip Code |
Account Number (Required) | |||
C. Cash/Direct Deposit - Attach a pre-printed voided check. (Non-Custodian Investors Only) |
Financial Institution Name |
Mailing Address |
City |
State | |||
Your Bank’s ABA Routing Number | Your Bank Account Number |
* | A participant may terminate participation in the Distribution Reinvestment Plan at any time, without penalty, by delivering 10 days’ prior written notice to Brookfield Real Estate Income Trust Inc. This notice must be received by Brookfield Real Estate Income Trust Inc. prior to the last day of a month in order for a participant’s termination to be effective for such month. Upon termination, future distributions will be distributed in cash. |
6. |
Broker-Dealer/Financial Advisor Information (Required Information. All fields must be completed.) |
Broker-Dealer |
Financial Advisor Name |
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Advisor Mailing Address |
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City |
State |
Zip Code | ||||
Financial Advisor Number |
Branch Number |
Telephone Number | ||||
E-mail Address |
Fax Number |
X |
X |
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Financial Advisor Signature |
Date |
Branch Manager Signature (If required by Broker-Dealer) |
Date |
7. |
Electronic Delivery Form (Optional) |
I consent to electronic delivery |
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Initials |
8. |
Subscriber Representations |
Note: All Items Must Be Read and Initialed In order to induce Brookfield Real Estate Income Trust Inc. to accept this subscription, I hereby represent and warrant to you as follows: |
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(a) |
I have received a copy of the final Prospectus. |
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Initials |
Initials |
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(b) |
I/We have (i) a minimum net worth (not including home, home furnishings and personal automobiles) of at least $250,000, or (ii) a minimum net worth (as previously described) of at least $70,000 and a minimum annual gross income of at least $70,000. |
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Initials |
Initials |
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(c) |
In addition to the general suitability requirements described above in 8(b), I/we meet the higher suitability requirements, if any, imposed by my state of primary residence as set forth in the Prospectus under “SUITABILITY STANDARDS.” |
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Initials |
Initials |
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(d) |
I acknowledge that there is no public market for the Shares and, thus, my investment in Shares is not liquid. |
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Initials |
Initials |
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(e) |
I am purchasing the Shares for my own account. |
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Initials |
Initials |
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(f) |
I understand that the transaction price per share at which my investment will be executed will be made available at www.brookfieldREIT.com www.sec.gov. |
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Initials |
Initials |
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(g) |
I understand that my subscription request will not be accepted before the later of (i) two business days before the first calendar day of the month and (ii) three business days after the transaction price is made available. I understand that I am not committed to purchase shares at the time my subscription order is submitted and I may cancel my subscription at any time before the time it has been accepted as described in the previous sentence. I understand that I may withdraw my purchase request by notifying the transfer agent, through my financial intermediary or directly on Brookfield Real Estate Income Trust Inc.’s toll-free, automated telephone line, (833) 625-7348. |
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Initials |
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Initials |
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(h) |
If I am not an Alabama, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Texas, Vermont or Washington |
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Initials |
Initials |
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(i) |
I am an Alabama |
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Initials |
Initials |
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(j) |
If I am a California |
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Initials |
Initials |
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(k) |
If I am an Idaho |
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Initials |
Initials |
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(l) |
If I am an Iowa non-publicly traded real estate investment trusts (REITs) does not exceed 10% of my net worth. |
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Initials |
Initials |
(m) |
If I am a Kansas non-traded real estate investment trusts to not more than 10% of such investor’s liquid net worth. For this purpose, “liquid net worth” is that portion of net worth (total assets minus total liabilities) which consists of cash, cash equivalents and readily marketable securities. |
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Initials |
Initials | |||||||
(n) |
If I am a Kentucky non-publicly traded real estate investment trusts may not exceed 10% of my liquid net worth. |
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Initials |
Initials | |||||||
(o) |
If I am a Maine |
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Initials |
Initials | |||||||
(p) |
If I am a Massachusetts |
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Initials |
Initials | |||||||
(q) |
If I am a Missouri |
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Initials |
Initials | |||||||
(r) |
If I am a Nebraska non-publicly traded REITs may not exceed 10% of my net worth. |
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Initials |
Initials | |||||||
(s) |
If I am a New Jersey |
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cash equivalents and readily marketable securities. In addition, my investment in Brookfield Real Estate Income Trust Inc., and its affiliates, and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed 10% of my liquid net worth. |
Initials |
Initials | ||||||
New Jersey investors are advised that the Class T and Class S shares will, with limited exceptions, be subject to upfront selling commissions and/or dealer manager fees of up to 3.5% and Class D shares will, with limited exceptions, be subject to upfront selling commissions of up to 1.5%, which, in each case, will reduce the amount of the purchase price that is available for investment. |
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New Jersey investors are also advised that Brookfield Real Estate Income Trust Inc. will pay stockholder servicing fees, subject to certain limits, with respect to outstanding Class T, Class S and Class D shares in an annual amount equal to 0.85%, 0.85% and 0.25%, respectively, of the aggregate NAV of the outstanding Class T, Class S or Class D shares. The stockholder servicing fees will reduce the NAV or, alternatively, the amount of distributions that are paid with respect to Class T, Class S and Class D shares. Stockholder servicing fees allocable to a specific class of shares will only be included in the NAV calculation for that class, which may cause the NAV per share for our share classes to be different. No upfront selling commissions, dealer manager fees or ongoing stockholder servicing fees are paid with respect to Class I shares. Your financial advisor may charge a separate wrap account or similar fee with respect to Class I shares or Class D shares. |
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(t) |
If I am a New Mexico non-traded real estate investment trusts to 10% of my net worth. |
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Initials |
Initials | |||||||
(u) |
If I am a North Dakota |
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Initials |
Initials | |||||||
(v) |
If I am an Ohio non-traded real estate investment programs may not exceed 10% of my liquid net worth. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles minus total liabilities) that is comprises cash, cash equivalents, and readily marketable securities. |
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Initials |
Initials | |||||||
(w) |
If I am an Oregon |
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Initials |
Initials | |||||||
(x) |
If I am a Pennsylvania |
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Initials |
Initials |
(y) |
If I am a Puerto Rico non-traded real estate investment programs may not exceed 10% of my liquid net worth. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles minus total liabilities) consisting of cash, cash equivalents, and readily marketable securities. |
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Initials |
Initials | |||||||
(z) |
If I am a Tennessee |
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Initials |
Initials | |||||||
(aa) |
If I am a Texas |
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Initials |
Initials | |||||||
(bb) |
If I am a Vermont |
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Initials |
Initials |
9. |
Tax Information and Subscriber Signature |
• | A pension trust under Code Section 501(c)(17) (a trust that provides for payment of supplemental unemployment compensation); |
• | A private foundation under Code Section 509(a); and |
• | A trust permanently set aside or used for charitable purposes as described in Code Section 642(c) (charitable trusts for estate planning purposes). |
(a) | ☐ | The Subscriber is a natural person and either: | ||||||
(i) | ☐ | none of the Subscriber’s spouse, brothers or sisters (whether by whole or half-blood), ancestors or lineal descendants Beneficially Owns an interest in Brookfield Real Estate Income Trust Inc.; or | ||||||
(ii) | ☐ | the name of each related person described in clause (i) are disclosed in Section 9(C) below. | ||||||
(b) | ☐ | The Subscriber is a trust described in Code Section 401(a) and exempt from tax under Code Section 501(a) and either: | ||||||
(i) | ☐ | no beneficiary holds an actuarial interest in the Subscriber in excess of 1%; or | ||||||
(ii) | ☐ | a beneficiary holds an actuarial interest in the Subscriber of more than 1% but not in excess of 10%. | ||||||
(c) | ☐ | The Subscriber is a private foundation within the meaning of Code Section 509(a). | ||||||
(d) | ☐ | The Subscriber is a trust described in Code Section 501(c)(17) (a trust providing for payment of supplemental unemployment compensation benefits). | ||||||
(e) | ☐ | The Subscriber is a trust permanently set aside for a charitable or other purpose as described in Code Section 642(c). | ||||||
(f) | ☐ | The Subscriber is a public charity exempt from tax under Code Section 501(c)(3). | ||||||
(g) | ☐ | The Subscriber is a governmental plan within the meaning of Code Section 414(d) and either: | ||||||
(i) | ☐ | no beneficiary holds an actuarial interest in the Subscriber in excess of 1%; or | ||||||
(ii) | ☐ | a beneficiary holds an actuarial interest in the Subscriber of more than 1% but not in excess of 10%. | ||||||
(h) | ☐ | The Subscriber is a voluntary employees’ beneficiary association described in Code Section 501(c)(9) and either: | ||||||
(i) | ☐ | no beneficiary holds an interest in the Subscriber in excess of 1%; or | ||||||
(ii) | ☐ | a beneficiary holds an interest in the Subscriber of more than 1% but not in excess of 10%. | ||||||
(i) | ☐ | The Subscriber is a corporation, limited liability company or partnership not otherwise described in paragraphs (a) through (h) and either: | ||||||
(i) | ☐ | no Individual Beneficially Owns more than 1% of the interests in the Subscriber; | ||||||
(ii) | ☐ | an Individual Beneficially Owns more than 1% of the interests in the Subscriber, but no Individual Beneficially Owns more than 10% of the interests in the Subscriber; or | ||||||
(iii) | ☐ | neither (i) nor (ii) applies, in which case the Subscriber must complete Section 9(B) below. | ||||||
(j) | ☐ | The Subscriber is a trust or estate not otherwise described in paragraphs (a) through (h) and the statements in clause (i), (ii), (iii) or (iv) checked below apply: | ||||||
(i) | ☐ | each beneficiary of the Subscriber (a “ Beneficiary Grantor either | ||||||
(A) | ☐ | no Beneficiary or Grantor described in clause (i) is a related person within the meaning of paragraph (a)(i) of this Section 9(A) with respect to another Subscriber, Beneficiary of another Subscriber or Grantor of another Subscriber; or | ||||||
(B) | ☐ | the names of all related persons described in clause (A), their status as Beneficiary or Grantor and such persons’ relationship to the Subscriber, the Beneficiary and/or the Grantor (as applicable) are disclosed in Section C below; | ||||||
(ii) | ☐ | no Individual will Beneficially Own, directly or indirectly, more than 1% of the interests in the Subscriber; | ||||||
(iii) | ☐ | if an Individual will Beneficially Own, directly or indirectly, more than 1% of the interests in the Subscriber, no Individual will Beneficially Own, directly or indirectly, more than 10% of the interests in the Subscriber; or | ||||||
(iv) | ☐ | neither (i), (ii) nor (iii) applies, in which case the Subscriber must complete Section 9(B) below. |
(a) | Please describe the Subscriber’s tax status under the Code ( e.g., |
(b) | Please attach a statement describing the number of Beneficial Owners of the Subscriber, such Beneficial Owners’ relative interests in the Subscriber, and the relationships, if any, among the Subscriber’s beneficial owners. |
(c) | To the best of the Subscriber’s knowledge, as of the date hereof, are the Beneficial Owners of the Subscriber (disregarding the current investment) currently investors in Brookfield Real Estate Income Trust Inc. either directly or indirectly? |
☐ Yes ☐ No |
(a) | To the best of the Subscriber’s knowledge, is the Subscriber affiliated with or related to any other investor in Brookfield Real Estate Income Trust Inc.? |
☐ Yes ☐ No |
Name Affiliation |
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Name Affiliation |
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Name Affiliation |
(b) | In the case of a Subscriber that is a trust described in Code Section 401(a) and exempt from tax under Code Section 501(a), the Subscriber certifies that no “disqualified person” (as defined in Code Section 4975(e)(2), without regard to subparagraphs (B) and (I) thereof) with respect to such Subscriber holds, directly or indirectly, any interest in Brookfield Real Estate Income Trust Inc. |
(a) | ☐ | The Subscriber is a Foreign Person. | ||
(b) | ☐ | The Subscriber is U.S. Person. If the Subscriber is a U.S. Person and not a U.S. Individual, the Subscriber represents that: | ||
(i) | the Subscriber’s Foreign Ownership Percentage does not (and will not) exceed ______% (please provide your Foreign Ownership Percentage) | |||
(ii) | the Subscriber will promptly notify Brookfield Real Estate Income Trust Inc. in writing upon any change in its Foreign Ownership Percentage |
(1) | The number shown on this Subscription Agreement is my correct taxpayer identification number (or I am waiting for a number to be issued to me); |
(2) | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; |
(3) | I am a U.S. citizen or other U.S. person (including a resident alien) (defined in IRS Form W-9); and |
(4) | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
X |
X |
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Signature of Investor |
Date |
Signature of Co-Investor or Custodian (If applicable) |
Date |
10. |
Miscellaneous |
FACTS |
WHAT DOES BROOKFIELD DO WITH YOUR PERSONAL INFORMATION? | |||||||
Why? |
Financial companies choose how they share your personal information. U.S. federal law gives consumers the right to limit some but not all sharing. U.S. federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | |||||||
What? |
The types of personal information we collect and share depend on the product or service you have with us. This information can include: | |||||||
• | Social Security number and Income | |||||||
• | Account balances and wire transfer instructions | |||||||
• | Account transactions and assets | |||||||
• | When you are no longer our customer, we continue to share your information as described in this notice. | |||||||
How? |
All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Brookfield chooses to share; and whether you can limit this sharing. | |||||||
Reasons we can share your personal information |
Does Brookfield share? |
Can you limit this sharing? | ||||||
For our everyday business purposes - |
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such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus 3 |
Yes | No | ||||||
For our marketing purposes - to offer our products and services to you |
Yes | No | ||||||
For joint marketing with other financial companies |
No | We don’t share | ||||||
For our affiliates’ everyday business purposes - information about your transactions and experiences |
No | We don’t share | ||||||
For our affiliates’ everyday business purposes - information about your creditworthiness |
No | We don’t share | ||||||
For our affiliates to market to you |
No | We don’t share | ||||||
For nonaffiliates to market to you |
No | We don’t share | ||||||
Questions? |
Contact Ronald Fisher-Dayn by phone at (212) 978-1763 or via email at Ronald.Fisher-Dayn@Brookfield.com |
3 |
Certain registered representatives (“Registered Representatives”) of Brookfield Private Advisors LLC, a FINRA member, are also registered with FINRA on behalf, and under the supervision, of Quasar Distributors (“Quasar”), also a FINRA member, for purposes of marketing and distribution of certain Brookfield-sponsored mutual funds, and SDDco Brokerage Advisors, LLC (“SDDco”), also a FINRA member, for purposes of marketing and distribution of a non-traded real estate investment trust (REIT). In order to facilitate Quasar’s and SDDco’s supervision of the Registered Representatives’ activities that are conducted through Quasar and SDDco, Brookfield makes available to Quasar and SDDco such representatives’ e-mail communications for the limited purpose of conducting supervisory reviews, subject to appropriate confidentiality arrangements. |
Who we are | ||||
Who is providing this notice? |
The Brookfield affiliated entities set forth below. | |||
What we do | ||||
How does Brookfield protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. | |||
How does Brookfield collect my personal information? |
We collect your personal information, for example, when you | |||
• | open an account or provide account information | |||
• | give us your contact information or enter into an investment advisory contract | |||
• |
make a wire transfer | |||
Why can’t I limit all sharing? |
U.S. federal law gives you the right to limit only | |||
• | sharing for affiliates’ everyday business purposes-information about your creditworthiness | |||
• | affiliates from using your information to market to you | |||
• | sharing for nonaffiliates to market to you | |||
State laws and individual companies may give you additional rights to limit sharing. | ||||
Definitions | ||||
Affiliates |
Companies related by common ownership or control. They can be financial and nonfinancial companies. | |||
Our affiliates include the Brookfield companies. | ||||
Nonaffiliates |
Companies not related by common ownership or control. They can be financial and nonfinancial companies. | |||
Nonaffiliates we share with can include fund administrators, custodians, brokers, dealers, counterparties, auditors, and legal advisors. | ||||
Joint marketing |
A formal agreement between nonaffiliated financial companies that together market financial products or services to you. Brookfield does not jointly market. | |||
Other important information | ||||
N/A | ||||
Who we are cont’d… | ||||
Who is providing this notice? |
Brookfield Real Estate Income Trust Inc. Brookfield REIT Adviser LLC Brookfield Oaktree Wealth Solutions LLC. |
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Brookfield Real Estate Income Trust Inc. and Subsidiaries Pro Forma Consolidated Balance Sheet June 30, 2021 (Unaudited) (in thousands, except per share amounts) |
Brookfield Real Estate Income Trust Inc. (A) |
Dispositions (B) |
Acquisition of Brookfield Portfolio |
Proforma |
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Assets |
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Investments in real estate, net |
$ | 310,694 | $ | (77,562 | ) | $ | 203,100 | (F) | $ | 436,232 | ||||||
Investments in real estate-related loans and securities, net |
83,964 | (27,737 | ) | — | 56,227 | |||||||||||
Intangible assets, net |
8,426 | — | — | 8,426 | ||||||||||||
Cash and cash equivalents |
35,892 | 35,821 | (C) | 3,423 | (G) | 75,136 | ||||||||||
Restricted cash |
4,022 | (277 | ) | 352 | (G) | 4,097 | ||||||||||
Accounts and other receivables, net |
3,435 | (63 | ) | 318 | (G) | 3,690 | ||||||||||
Equity accounted investments and other assets |
1,166 | 33,810 | (D) | 102,783 | (H) | 137,759 | ||||||||||
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Total Assets |
$ | 447,599 | $ | (36,008 | ) | $ | 309,976 | $ | 721,567 | |||||||
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Liabilities and Equity |
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Mortgage loans, net |
$ | 229,454 | $ | (52,792 | ) | $ | 132,550 | (I) | $ | 309,212 | ||||||
Due to affiliates |
17,492 | (22 | ) | — | 17,470 | |||||||||||
Intangible liabilities, net |
57 | — | — | 57 | ||||||||||||
Accounts payable, accrued expenses and other liabilities |
6,178 | (636 | ) | 5,916 | (J) | 11,458 | ||||||||||
Commitments and contingencies |
— | — | — | — | ||||||||||||
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Total Liabilities |
$ | 253,181 | $ | (53,450 | ) | $ | 138,466 | $ | 338,197 | |||||||
Stockholders’ Equity |
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Preferred stock, $0.01 par value per share, 50,000,000 shares authorized; no shares issued nor outstanding at June 30, 2021, actual and pro forma |
$ | — | $ | — | $ | — | $ | — | ||||||||
Common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 21,237,215 and 20,510,001 shares issued and outstanding at June 30, 2021, actual; 1,000,000,000 shares authorized, 38,424,528 and 37,691,314 shares issued and outstanding at June 30, 2021, pro forma |
212 | — | 146 | (K) | 358 | |||||||||||
Additional paid-in capital |
209,544 | 19,887 | (E) | 174,864 | (K) | 404,295 | ||||||||||
Accumulated deficit |
(22,558 | ) | — | (3,500 | )(J) | (26,058 | ) | |||||||||
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Total Stockholders’ Equity |
$ | 187,198 | $ | 19,887 | $ | 171,510 | $ | 378,595 | ||||||||
Non-controlling interests attributable to third party joint ventures |
7,220 | (2,445 | ) | — | 4,775 | |||||||||||
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Total Equity |
194,418 | 17,442 | 171,510 | 383,370 | ||||||||||||
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Total Liabilities and Stockholders’ Equity |
$ | 447,599 | $ | (36,008 | ) | $ | 309,976 | $ | 721,567 | |||||||
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(A) | Reflects the historical Consolidated Balance Sheet of the Company at June 30, 2021, as presented in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (the “Form 10-Q”). |
(B) | Dispositions reflect the financial information as reported in the Form 10-Q for the following investments, which are anticipated to be sold: |
• | Ezlyn, a 332-unit multifamily asset in Colorado; and |
• | Two real estate-related securities and a mezzanine loan associated with the Atlantis Paradise Island Resort. |
(C) | Cash and cash equivalents of $35,821 represent the estimated net proceeds received from the sale of the aforementioned investments assuming the transaction price is calculated as the fair value as of September 30, 2021 for those investments, offset by the removal of cash balances of approximately $516 held at one of the investments. |
(D) | Other assets includes a preferred membership interest, with a liquidation preference equal to approximately $33,831, in the entity that purchased the Ezlyn Joint Venture. The Company received the preferred membership interest as partial consideration for the sale of the Ezlyn Joint Venture. An affiliate of Oaktree will own 100% common membership interest in the entity that purchased the Ezlyn Joint Venture. The Company has granted such affiliate an option to purchase the Company’s preferred membership interest beginning on January 3, 2022, at price equal to the liquidation preference plus any accrued distributions on the preferred membership interest as of the date of purchase. |
(E) | Additional paid-in capital of $19,887 represents the net gain on the sale of the Dispositions assuming the transaction price is calculated as the fair value as of September 30, 2021 for those investments. The gain is net of amounts allocated to the other partner in the Ezlyn Joint Venture. |
(F) | The acquisition of the multifamily assets in the Brookfield Portfolio will be accounted for as an asset acquisition. The Company allocates the purchase price of these investments based on the relative fair value of the assets acquired less accumulated depreciation and liabilities assumed. The components of the $203,100, which assumes the transaction price is calculated as the fair value as of September 30, 2021 for those investments, are as follows: |
Component (USD thousands) |
Balance as of September 30, 2021 |
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Land |
$ | 23,800 | ||
Building |
175,238 | |||
Furniture, Fixtures & Equipment |
4,062 | |||
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Total |
$ |
203,100 |
(G) | The balances in Cash and cash equivalents, Restricted cash and Accounts and other receivables, net, represent the property-specific amounts that will be acquired as part of the Brookfield Portfolio acquisition. |
(H) | Equity accounted investments and other assets includes the acquisition of a 20% interest in Principal Place, an office asset in London, United Kingdom, at the fair value of the total equity in the asset as of March 31, 2021, which represents $99,284 of the balance. On a pro forma basis, Principal Place will be accounted for as an equity method investment at fair value. |
(I) | Represents refinancing of the multifamily assets anticipated to be completed on or within a reasonable time following the date of the contribution, of which we expect the terms to be $48,700 at SOFR plus 1.50% for Domain and $83,850 at LIBOR plus 1.95% for The Burnham. |
(J) | Includes transaction costs of $3.5 million. |
(K) | The presentation above assumes the issuance of 14,622,673 shares of common stock of the Company to be issued to Brookfield in consideration for the contribution of the Brookfield Portfolio, which is based on the fair value of the Brookfield Portfolio and NAV of the Company, each as of September 30, 2021. The actual number of shares or OP Units, or a combination thereof, at Brookfield’s election to be issued in |
consideration for the contribution of the Brookfield Portfolio will be calculated by using the fair value of the Brookfield Portfolio as of a current date prior to the completion of the contributions, as determined by an independent appraiser, and the most recently determined NAV of the Company or the Operating Partnership, as applicable, immediately prior to the completion of the contributions. |
Brookfield Real Estate Income Trust Inc. and Subsidiaries Pro Forma Consolidated Statements of Income For the Six Months Ended June 30, 2021 (in thousands, except per share amounts) |
Brookfield Real Estate Income Trust Inc. (A) |
Dispositions (B) |
Acquisition of Brookfield Portfolio (C) |
Proforma Adjustments |
Proforma |
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Revenues |
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Rental revenues |
$ | 14,667 | $ | (2,696 | ) | $ | 25,748 | $ | (18,602 | ) | $ | 19,117 | ||||||||
Other revenues |
865 | (182 | ) | 1,166 | (354 | ) | 1,495 | |||||||||||||
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Total revenues |
15,532 | (2,878 | ) | 26,914 | (18,956 | )(D) | 20,612 | |||||||||||||
Expenses |
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Rental property operating |
6,744 | (865 | ) | 5,159 | (1,337 | )(E) | 9,701 | |||||||||||||
General and administrative expenses |
2,068 | (15 | ) | — | 5 | 2,058 | ||||||||||||||
Management fee |
1,123 | |
— |
|
— | — | 1,123 | |||||||||||||
Performance fee |
1,261 | — | — | — | 1,261 | |||||||||||||||
Depreciation and amortization |
8,113 | (1,238 | ) | — | 3,326 | (G) | 10,201 | |||||||||||||
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Total expenses |
19,309 | (2,118 | ) | 5,159 | 1,994 | 24,344 | ||||||||||||||
Fees waived |
— | — | — | — | — | |||||||||||||||
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Net expenses |
19,309 | (2,118 | ) | 5,159 | 1,994 | 24,344 | ||||||||||||||
Other income (expense) |
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Income from real estate-related loans and securities |
2,555 | (895 | ) | — | — | 1,660 | ||||||||||||||
Interest expense |
(2,775 | ) | 924 | — | (1,560 | )(H) | (3,411 | ) | ||||||||||||
Realized gain on investments |
981 | (290 | ) | — | — | 691 | ||||||||||||||
Unrealized gain on investments |
320 | (844 | ) | — | 7,760 | (I) | 7,236 | |||||||||||||
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Total other income (expense) |
1,081 | (1,105 | ) | — | 6,200 | 6,176 | ||||||||||||||
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Net income (loss) |
(2,696 | ) | (1,865 | ) | 21,755 | (14,750 | ) | (2,444 | ) | |||||||||||
Net income (loss) attributable to non-controlling interests |
189 | 16 | — | — | 205 | |||||||||||||||
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Net income (loss) attributable to stockholders |
$ | (2,507 | ) | $ | (1,849 | ) | $ | 21,755 | $ | (14,750 | ) | $ | 2,649 | |||||||
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Per common share data: |
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Net income (loss) per share of common stock |
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Basic |
$ | (0.12 | ) | $ | 0.07 | |||||||||||||||
Diluted |
$ | (0.12 | ) | $ | 0.07 | |||||||||||||||
Weighted average number of shares outstanding |
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Basic |
21,742,068 | 14,622,673 | (K) | 36,364,741 | ||||||||||||||||
Diluted |
21,742,068 | 14,622,673 | (K) | 36,364,741 |
Brookfield Real Estate Income Trust Inc. and Subsidiaries Pro Forma Consolidated Statements of Income For the Year Ended December 31, 2020 (in thousands, except per share amounts) |
Brookfield Real Estate Income Trust Inc. (A) |
Dispositions (B) |
Acquisition of Brookfield Portfolio (C) |
Proforma Adjustments |
Proforma |
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Revenues |
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Rental revenues |
$ | 24,145 | $ | (5,378 | ) | $ | 46,537 | $ | (34,363 | ) | $ | 30,941 | ||||||||
Other revenues |
1,141 | (277 | ) | 2,110 | (619 | ) | 2,355 | |||||||||||||
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Total revenues |
25,286 | (5,655 | ) | 48,647 | (34,982 | )(D) | 33,296 | |||||||||||||
Expenses |
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Rental property operating |
10,211 | (1,789 | ) | 10,477 | (2,814 | )(E) | 16,085 | |||||||||||||
General and administrative expenses |
3,474 | (88 | ) | — | 3,591 | (F) | 6,977 | |||||||||||||
Management fee |
1,920 | — | — | — | 1,920 | |||||||||||||||
Performance fee |
2,215 | — | — | — | 2,215 | |||||||||||||||
Depreciation and amortization |
13,481 | (3,735 | ) | — | 6,653 | (G) | 16,399 | |||||||||||||
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Total expenses |
31,301 | (5,612 | ) | 10,477 | 7,430 | 43,596 | ||||||||||||||
Fees waived |
(749 | ) | — | — | — | (749 | ) | |||||||||||||
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Net expenses |
30,552 | (5,612 | ) | 10,477 | 7,430 | 42,847 | ||||||||||||||
Other income (expense) |
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Income from real estate-related loans and securities |
4,908 | (1,928 | ) | — | — | 2,980 | ||||||||||||||
Interest expense |
(4,948 | ) | 1,868 | — | (3,119 | )(H) | (6,199 | ) | ||||||||||||
Realized gain on investments |
144 | 25,219 | (J) | — | — | 25,363 | ||||||||||||||
Unrealized gain on investments |
2,417 | (1,064 | ) | — | 13,845 | (I) | 15,198 | |||||||||||||
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Total other income (expense) |
2,521 | 24,095 | — | 10,726 | 37,342 | |||||||||||||||
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Net income (loss) |
(2,745 | ) | 24,052 | 38,170 | (31,686 | ) | 27,791 | |||||||||||||
Net income (loss) attributable to non-controlling interests |
307 | (5,332 | )(K) | — | — | (5,025 | ) | |||||||||||||
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Net income (loss) attributable to stockholders |
$ | (2,438 | ) | $ |
18,720 |
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$ | 38,170 | $ | (31,686 | ) | $ | 22,766 | |||||||
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Per common share data: |
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Net income (loss) per share of common stock |
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Basic |
$ | (0.13 | ) | $ | 0.68 | |||||||||||||||
Diluted |
$ | (0.13 | ) | $ | 0.68 | |||||||||||||||
Weighted average number of shares outstanding |
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Basic |
18,895,893 | 14,622,673 | (L) | 33,518,566 | ||||||||||||||||
Diluted |
18,895,893 | 14,622,673 | (L) | 33,518,566 |
(A) | Reflects the historical Consolidated Statements of Income for the six months ended June 30, 2021, as presented in the Form 10-Q and the year ended December 31, 2020, as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”). |
(B) | Reflects the historical Consolidated Statements of Income for the six months ended June 30, 2021 as presented in the Form 10-Q and the year ended December 31, 2020, as presented in the Form 10-K for the Dispositions. |
(C) | Reflects the combined statements of revenue and certain operating expenses of the Brookfield Portfolio for the six months ended June 30, 2021 and the year ended December 31, 2020. |
(D) | Revenue pro forma adjustments of $18,956 and $34,982 for the six months ended June 30, 2021, and the year ended December 31, 2020, respectively, relate entirely to the removal of the revenue associated with Principal Place, which on a pro forma basis will be accounted for as an equity method investment at fair value. |
(E) | Property operating expense pro forma adjustments include $1,337 and $2,814 for the six months ended June 30, 2021, and the year ended December 31, 2020, respectively, relate to the removal of the expense associated with Principal Place, which on a pro forma basis will be accounted for as an equity method investment at fair value. Additionally, the multifamily assets that are being contributed are subject to a property management agreement with Brookfield Properties Multifamily LLC (“BPM”). Under the terms of the property management agreement, BPM is entitled to a fee equal to 3% of gross rentals collected each month for each rental property for property management services. The pro forma adjustment reflects the property management fee that would be contractually payable to BPM, assuming the acquisition of the multifamily assets included in the Brookfield Portfolio occurred on January 1, 2020 and that the Company will become a party to such property management agreement, which amounted to $207 and $458 for the six months ended June 30, 2021, and the year ended December 31, 2020, respectively. |
(F) | Includes $3,500 of transaction costs that represent one-time costs and are not anticipated to recur. |
(G) | Reflects depreciation expense associated with the acquisition of the multifamily assets included in the Brookfield Portfolio assuming that the acquisition of the multifamily assets included in the Brookfield Portfolio had been acquired as of January 1, 2020. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets including 30 years for buildings and five years for furniture, fixtures and equipment. |
(H) | The pro forma adjustment reflects interest expense associated with expected refinancing of the multifamily assets included in the Brookfield Portfolio, of which the terms are expected to be $48,700 at SOFR plus 1.50% for Domain and $83,850M at LIBOR plus 1.95% for The Burnham. |
(I) | Reflects the change in fair value of Principal Place of $7,760 and $13,845 for the six months ended June 30, 2021, and the year ended December 31, 2020, respectively, based on the movement in value of the asset and the respective debt during such periods. |
(J) | Realized gain on investments relates to the sale of Ezlyn, a 332-unit multifamily asset in Colorado along with the sale of two real estate-related securities and a mezzanine loan associated with the Atlantis Paradise Island Resort; the gain amounts represented in the periods presented are one-time gains associated with these sales and will not recur and are calculated assuming the transaction price is calculated as the fair value as of September 30, 2021 for those investments. |
(K) | Represents the other partner’s share in the Ezlyn Joint Venture of the net gain upon the disposition of the Company’s investment in the Ezlyn Joint Venture. |
(L) | The presentation above assumes the issuance of 14,622,673 shares of common stock of the Company to be issued to Brookfield in consideration for the contribution of the Brookfield Portfolio, which is based on the fair value of the Brookfield Portfolio and NAV of the Company, each as of September 30, 2021. The actual number of shares, or OP Units, or a combination thereof, at Brookfield’s election to be issued in consideration for the contribution of the Brookfield Portfolio will be calculated by using the fair value of the Brookfield Portfolio as of a current date prior to the completion of the contributions, as determined by an independent appraiser, and the most recently determined NAV of the Company or Operating Partnership, as applicable, immediately prior to the completion of the contributions. |
December 31 |
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2020 |
2019 |
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Assets |
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Investments in real estate, net |
$ | $ | ||||||
Investments in real estate-related loans and securities, net |
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Intangible assets, net |
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Cash and cash equivalents |
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Restricted cash |
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Accounts and other receivables, net |
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Other assets |
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Total Assets |
$ | $ | ||||||
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Liabilities and Equity |
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Mortgage loans, net |
$ | $ | ||||||
Due to affiliates |
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Intangible liabilities, net |
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Accounts payable, accrued expenses and other liabilities |
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Commitments and contingencies (Note 12) |
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Total Liabilities |
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Stockholders’ Equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
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Total Stockholders’ Equity |
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Non-controlling interests attributable to third party joint ventures |
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Total Equity |
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Total Liabilities and Stockholders’ Equity |
$ | $ | ||||||
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December 31 |
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2020 |
2019 |
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Assets |
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Investments in real estate, net |
$ | $ | ||||||
Intangible assets, net |
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Cash and cash equivalents |
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Restricted cash |
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Accounts and other receivables, net |
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Other assets |
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Total Assets |
$ |
$ |
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Liabilities |
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Mortgage loans, net |
$ | $ | ||||||
Intangible liabilities, net |
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Accounts payable, accrued expenses and other liabilities |
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Total Liabilities |
$ |
$ |
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For the year ended December 31, 2020 |
For the year ended December 31, 2019 |
For the period from January 10, 2018 through December 31, 2018 |
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Revenues |
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Rental revenues |
$ | |
$ | $ | ||||||||
Other revenues |
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Total revenues |
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Expenses |
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Rental property operating |
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General and administrative expenses |
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Organizational expenses |
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Management fee |
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Performance fee |
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Depreciation and amortization |
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Total expenses |
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Fees waived |
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Net expenses |
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Other income (expense) |
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Income from real estate-related loans and securities |
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Interest expense |
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Realized gain on investments |
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Unrealized gain on investments |
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Total other income (expense) |
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Net loss |
( |
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Net loss attributable to non-controlling interests |
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Net loss attributable to stockholders |
$ | ( |
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Per common share data: |
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Net loss per share of common stock |
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Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
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Weighted average number of shares outstanding |
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Basic |
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Diluted |
Shares |
Par Value |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity |
Non- controlling Interests |
Total Equity |
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Common Stock Class I |
Common Stock Class S |
Common Stock Class T |
Common Stock Class D |
|||||||||||||||||||||||||||||||||||||
Balance at January 10, 2018 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2018 |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2019 |
( |
) |
||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Distribution reinvestments |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Repurchases |
( |
) | ( |
) | ( |
) | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
( |
$ |
$ |
$ |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2020 |
For the Year Ended December 31, 2019 |
For the period from January 10, 2018 through December 31, 2018 |
||||||||||
Cash flows from operating activities: |
| |||||||||||
Net loss |
$ | ( |
$ | ( |
) | $ | ( |
) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: |
| |||||||||||
Depreciation and amortization |
||||||||||||
Management fees |
||||||||||||
Performance fees |
||||||||||||
Amortization of above and below market leases |
( |
) | ||||||||||
Amortization of restricted stock grants |
||||||||||||
Amortization of deferred financing costs |
||||||||||||
Amortization of discount |
( |
) | ( |
) | ||||||||
Realized gain on investments |
( |
) | ||||||||||
Unrealized gain on investments |
( |
) | ||||||||||
Changes in assets and liabilities: |
||||||||||||
Increase in lease inducements and origination costs |
( |
) | ||||||||||
Increase in other assets |
( |
) | ( |
) | ||||||||
Increase in accounts and other receivables |
( |
) | ( |
) | ||||||||
Increase in accounts payable, accrued expenses and other liabilities |
( |
) | ||||||||||
Increase in due to affiliates |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
( |
) | ( |
) | ||||||||
Cash flows from investing activities |
| |||||||||||
Acquisition of real estate |
( |
) | ( |
) | ||||||||
Purchase of real estate-related loans and securities |
( |
) | ( |
) | ||||||||
Proceeds from sale of real estate-related loans and securities |
||||||||||||
Building improvements |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||||||
Cash flows from financing activities: |
| |||||||||||
Borrowings from mortgage loans |
||||||||||||
Proceeds from affiliate lin e of credit |
||||||||||||
Repayments of affiliate line of credit |
( |
) | ||||||||||
Payment of deferred financing costs |
( |
) | ( |
) | ||||||||
Proceeds from issuance of common stock |
||||||||||||
Repurchase of common stock |
( |
) | ||||||||||
Payment of offering costs |
( |
) | ( |
) | ||||||||
Distributions to non-controlling interests |
( |
) | ( |
) | ||||||||
Contributions from non-controlling interests |
||||||||||||
Distributions |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
Net change in cash and cash-equivalents and restricted cash |
( |
) | ||||||||||
Cash and cash-equivalents and restricted cash, beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and cash-equivalents and restricted cash, end of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets: |
For the Year Ended December 31, 2020 |
For the Year Ended December 31, 2019 |
For the period from January 10, 2018 through December 31, 2018 |
|||||||||
Cash and cash equivalents |
$ | $ | $ | |||||||||
Restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Total cash and cash equivalents and restricted cash |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosures: |
| |||||||||||
Interest paid |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Non-cash investing and financing activities: |
| |||||||||||
Line of credit repayment through issuance of Class I shares |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
|||||||
Accrued distributions |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Accrued stockholder servicing fee |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Distributions reinvested |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Accrued management fee in due to affiliates |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Management fees paid in shares |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Accrued building improvements and lease inducements |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Accrued repurchases in due to affiliates |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Accrued offering costs |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Additions of furniture, fixtures and equipment in lieu of rent |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Classification |
No. of Authorized Shares |
Par Value Per Share |
||||||
Preferred stock |
$ | |||||||
Class T common stock |
$ | |||||||
Class S common stock |
$ | |||||||
Class D common stock |
$ | |||||||
Class I common stock |
$ | |||||||
|
|
|||||||
|
|
Description |
Depreciable Life | |
Building |
||
Building and site improvements |
||
Furniture, fixtures and equipment |
||
Tenant improvements |
Shorter of estimated useful life or lease term | |
In-place lease intangibles |
Over lease term | |
Above and below market leases |
Over lease term | |
Lease origination costs |
Over lease term |
December 31, 2020 |
December 31, 2019 |
|||||||
Building and building improvements |
$ | $ | ||||||
Land |
||||||||
Tenant improvements |
||||||||
Furniture, fixtures and equipment |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Investments in real estate, net |
$ | $ | ||||||
|
|
|
|
Initial Cost |
Costs Capitalized Subsequent to Acquisition |
Gross Carrying Amount (1) |
||||||||||||||||||||||||||||||||||
Description |
Land |
Building and Building Improvements |
Building and Building Improvements |
Land |
Building and Building Improvements |
Total |
Accumulated Depreciation (2) |
Encumbrance |
Construction Date |
|||||||||||||||||||||||||||
Anzio Apartments |
$ |
$ | $ | $ | $ | $ | $ | ( |
) | $ | 1986 | |||||||||||||||||||||||||
Two liberty Center |
( |
) | 2007 | |||||||||||||||||||||||||||||||||
Ezlyn |
( |
) | 1986 | |||||||||||||||||||||||||||||||||
lakes |
( |
) | 1990 | |||||||||||||||||||||||||||||||||
Arbors |
( |
) | 1984 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | As of December 31, 2020 and 2019, the aggregated cost basis for tax purposes was $ |
(2) | Refer to Note 3 for details of depreciable lives. |
Real estate |
For the year ended December 31, 2020 |
For the year ended December 31, 2019 |
||||||
Balance at the beginning of year |
$ | $ | — | |||||
Additions during the year: |
||||||||
Building and building improvements |
||||||||
Land |
||||||||
Tenant improvements |
||||||||
Furniture, fixtures and equipment |
||||||||
|
|
|
|
|||||
Balance at the end of year |
$ | $ | ||||||
|
|
|
|
|||||
Accumulated depreciation |
||||||||
Balance at the beginning of year |
$ | ( |
) | $ | — | |||
Depreciation expense |
( |
) | ( |
) | ||||
Balance at the end of year |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Investments in real estate, net |
$ | $ | ||||||
|
|
|
|
2019 Acquisitions |
2020 Acquisitions |
|||||||||||||||||||
Anzio Apartments |
Two Liberty |
Ezlyn |
Lakes |
Arbors |
||||||||||||||||
Building and building improvements |
$ | $ | $ | $ | $ | |||||||||||||||
Land |
||||||||||||||||||||
Tenant improvements |
||||||||||||||||||||
Furniture, fixtures and equipment |
||||||||||||||||||||
In-place lease intangibles |
||||||||||||||||||||
Lease origination costs |
||||||||||||||||||||
Above-market lease intangibles |
||||||||||||||||||||
Below-market lease intangibles |
( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total purchase price (1) |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Purchase price is inclusive of closing costs. |
Intangible assets: |
December 31, 2020 |
December 31, 2019 |
||||||
In-place lease intangibles |
$ | $ | ||||||
Lease origination costs |
||||||||
Lease inducements |
||||||||
Above-market lease intangibles |
||||||||
|
|
|
|
|||||
Total intangible assets |
||||||||
Accumulated amortization: |
||||||||
In-place lease intangibles |
( |
) | ( |
) | ||||
Lease origination costs |
( |
) | ( |
) | ||||
Lease inducements |
( |
) | ( |
) | ||||
Above-market lease intangibles |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total accumulated amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Intangible assets, net |
$ |
$ |
||||||
|
|
|
|
|||||
Intangible liabilities: |
||||||||
Below-market lease intangibles |
$ | ( |
) | $ | ( |
) | ||
Accumulated amortization |
||||||||
|
|
|
|
|||||
Intangible liabilities, net |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
For the year ended: |
Amortization |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ |
|||
|
|
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms |
Trade Date |
Face Amount |
Beginning Balance 12/31/19 |
Purchases |
Sales |
Unrealized Gain / (Loss) (2) |
Ending Balance 12/31/20 |
Realized Gain / (Loss) (3) |
||||||||||||||||||||||||||||||
BX 2020 BXLP G | Industrial Paper | L+ |
12/15/29 | Principal due at maturity | 01/23/20 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||
CGDB 2019 MOB F | Medical Office Mortgage Loans | L+ |
11/15/36 | Principal due at maturity | 02/04/20 | ( |
) | |||||||||||||||||||||||||||||||||||
BXMT 2020 FL 2 | Commercial Real Estate Collateralized Loan Obligation | L+ |
2/16/37 | Principal due at maturity | 01/31/20 | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
BX 2019 IMC G | International Markets Center and AmericasMart Atlanta | L+ |
4/15/34 | Principal due at maturity | 03/19/20 | |||||||||||||||||||||||||||||||||||||
BHMS 2018 ATLS D | Atlantis Paradise Island Resort | L+ |
7/15/35 | Principal due at maturity | 03/20/20 | |||||||||||||||||||||||||||||||||||||
BHMS 2018 ATLS E | Atlantis Paradise Island Resort |
L+ |
7/15/35 | Principal due at maturity | 03/30/20 | |||||||||||||||||||||||||||||||||||||
BX 2020 VIVA D | MGM Grand and Mandalay Bay Resort and Casino Las Vegas | 3/9/44 | Principal due at maturity | 05/05/20 | ( |
) | ||||||||||||||||||||||||||||||||||||
BX 2020 VIVA E | MGM Grand and Mandalay Bay Resort and Casino Las Vegas |
3/9/44 | Principal due at maturity | 05/05/20 | ||||||||||||||||||||||||||||||||||||||
CGCMT 2020-WSS E |
WoodSpring Suites Extended Stay Hotel |
L+ |
2/16/27 | Principal due at maturity | 07/08/20 | ( |
) | |||||||||||||||||||||||||||||||||||
CGCMT 2020-WSS F |
WoodSpring Suites Extended Stay Hotel | L+ |
2/16/27 | Principal due at maturity | 07/08/20 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
$ | $ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated London Interbank Offer Rate (“LIBOR”). As of December 31, 2020 and 2019, one-month LIBOR was equal to |
(2) | Unrealized gains/(losses) on investments are determined using price quotations provided by independent third party valuation firms and are included in other income (expense) on the consolidated statement of operations. |
(3) | Realized gains on investments are included in other income (expense) on the consolidated statement of operations. |
As of December 31, 2020 |
||||||||||||||||||||||||||
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms (2) |
Prior Liens |
Face Amount |
Unamortized Discount |
Carrying Amount |
||||||||||||||||||
Atlantis Mezzanine Loan | Atlantis Paradise Island Resort | L+ |
July 2021 | Principal due at maturity |
|
$ (3) |
$ | $ | $ | |||||||||||||||||
IMC/AMC Bond Investment | International Markets Center AmericasMart Atlanta | L+ |
December 2023 | Principal due at maturity |
|
$ (4) |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
$ | $ | ( |
) | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
As of December 31, 2019 |
||||||||||||||||||||||||||
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms (2) |
Prior Liens |
Face Amount |
Unamortized Discount |
Carrying Amount |
||||||||||||||||||
Atlantis Mezzanine Loan |
Atlantis Paradise Island Resort | L+ |
July 2021 | Principal due at maturity |
|
$ (3) |
$ | $ | ( |
) | $ | |||||||||||||||
IMC/AMC Bond Investment |
International Markets Center AmericasMart Atlanta | L+ |
December 2023 | Principal due at maturity |
|
$ (4) |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
$ | $ | ( |
) | $ | ||||||||||||||||||||||
|
|
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated London Interbank Offer Rate (“LIBOR”). As of December 31, 2020 and 2019, one-month LIBOR was equal to |
(2) | Neither investment is subject to delinquent principal or interest as of December 31, 2020 or December 31, 2019. |
(3) | The Atlantis Mezzanine Loan is subordinate to a first mortgage loan of $ |
(4) | The IMC / AMC Bond Investment is subordinate to a $ |
Receivables |
December 31, 2020 |
December 31, 2019 |
||||||
Accounts receivable |
$ | $ | ||||||
Straight-line rent receivable |
||||||||
Interest receivable |
||||||||
Allowance for doubtful accounts |
( |
) | — | |||||
|
|
|
|
|||||
Total accounts and other receivables, net |
$ |
$ |
||||||
|
|
|
|
Other assets |
December 31, 2020 |
December 31, 2019 |
||||||
Deposits |
$ | $ | ||||||
Prepaid expenses |
||||||||
Interest rate cap |
||||||||
|
|
|
|
|||||
Total other assets |
$ |
$ |
||||||
|
|
|
|
December 31, 2020 |
December 31, 2019 |
|||||||
Subscriptions received in advance |
$ | $ | ||||||
Real estate taxes payable |
||||||||
Accounts payable and accrued expenses |
||||||||
Prepaid rent |
||||||||
Accrued interest expense |
||||||||
Tenant security deposits |
||||||||
Derivative (1) |
||||||||
Distribution payable |
||||||||
|
|
|
|
|||||
Total accounts payable, accrued expenses and other liabilities |
$ |
$ |
||||||
|
|
|
|
(1) | This derivative relates to an interest rate swap on the Two Liberty mortgage loan. The notional amount of the swap is $ one-month USD LIBOR and pays a fixed rate of |
Principal Balance Outstanding |
||||||||||||||
Indebtedness |
Interest Rate (1) |
Maturity Date |
December 31, 2020 |
December 31, 2019 |
||||||||||
Anzio Apartments mortgage loan |
L + |
April 2029 | $ | $ | ||||||||||
Two Liberty Center mortgage loan (2) |
L + |
August 2024 | ||||||||||||
Ezlyn mortgage loan |
December 2026 | |||||||||||||
Lakes mortgage loan (2) |
L + |
February 2025 | ||||||||||||
Arbors mortgage loan (3) |
SOFR + |
January 2031 | ||||||||||||
|
|
|
|
|
|
|
||||||||
Total mortgage loans |
||||||||||||||
Less: deferred financing costs, net |
( |
) | ( |
) | ||||||||||
|
|
|
|
|||||||||||
Mortgage loans, net |
$ | $ | ||||||||||||
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated LIBOR. As of December 31, 2020 and 2019, one-month LIBOR was equal to |
(2) | The mortgage loans are subject to customary terms and conditions, and the respective joint venture was in compliance with all financial covenants it is subject to under the mortgage loan as of December 31, 2020. |
(3) | The term “SOFR” refers to the Secured Overnight Financing Rate. As of December 31, 2020, the SOFR was |
Year |
Amount |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Classification |
No. of Authorized Shares |
Par Value Per Share |
||||||
Preferred stock |
$ | |||||||
Class T common stock |
$ | |||||||
Class S common stock |
$ | |||||||
Class D common stock |
$ | |||||||
Class I common stock |
$ | |||||||
Class S |
Class I |
Class T |
Class D |
Total |
||||||||||||||||
December 31, 2019 |
||||||||||||||||||||
Common stock issued |
||||||||||||||||||||
Distribution reinvestments |
||||||||||||||||||||
Independent directors’ restricted stock vested (1) |
||||||||||||||||||||
Management fees |
||||||||||||||||||||
Stock redemptions |
( |
) | ( |
) | ( |
) | ||||||||||||||
December 31, 2020 |
||||||||||||||||||||
(1) | The directors’ vested restricted stock represents $ service period of such stock grants. ar |
Declaration Date |
Class S Shares |
Class I Shares |
Class T Shares |
Class D Shares |
||||||||||||
December 31, 2019 |
$ | $ | $ | $ | ||||||||||||
January 30, 2020 |
$ | $ | $ | $ | ||||||||||||
February 27, 2020 |
$ | $ | $ | $ | ||||||||||||
March 30, 2020 |
$ | $ | $ | $ | ||||||||||||
April 30, 2020 |
$ | $ | $ | $ | ||||||||||||
May 29, 2020 |
$ | $ | $ | $ | ||||||||||||
June 30, 2020 |
$ | $ | $ | $ | ||||||||||||
July 30, 2020 |
$ | $ | $ | $ | ||||||||||||
August 28, 2020 |
$ | $ | $ | $ | ||||||||||||
September 29, 2020 |
$ | $ | $ | $ | ||||||||||||
October 29, 2020 |
$ | $ | $ | $ | ||||||||||||
November 25, 2020 |
$ | $ | $ | $ | ||||||||||||
December 30, 2020 |
$ | $ | $ | $ | ||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Year |
Future Minimum Rents |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total |
$ |
|||
December 31, 2020 |
December 31, 2019 |
|||||||
Multifamily |
$ | $ | ||||||
Office |
||||||||
Real estate-related loans and securities |
||||||||
Other (Corporate) |
||||||||
Total assets |
$ | $ | ||||||
Multifamily |
Office |
Real estate-related loans and securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
Total expenses |
||||||||||||||||
Income from real-estate related loans and securities |
||||||||||||||||
Realized gain on investments |
||||||||||||||||
Unrealized gain on investments |
( |
) | ||||||||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Interest expense |
||||||||||||||||
Net loss |
( |
) | ||||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
Net loss attributable to stockholders |
$ |
( |
) | |||||||||||||
Multifamily |
Office |
Real estate-related loans and securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
Total expenses |
||||||||||||||||
Income from real estate-related loans |
||||||||||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Organizational expenses |
||||||||||||||||
Interest expense |
||||||||||||||||
Net loss |
$ |
( |
) | |||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
Net loss attributable to stockholders |
$ |
( |
) | |||||||||||||
Record Date |
Class S |
Class I |
Class T |
Class D |
||||||||||||
January 28, 2021 |
$ | $ | N/A | N/A | ||||||||||||
February 25, 2021 |
$ | $ | N/A | N/A | ||||||||||||
March 30, 2021 |
$ | $ | N/A | N/A |
ITEM 1. |
FINANCIAL STATEMENTS |
June 30, 2021 (Unaudited) |
December 31, 2020 |
|||||||
Assets |
||||||||
Investments in real estate, net |
$ | $ | ||||||
Investments in real estate-related loans and securities, net |
||||||||
Intangible assets, net |
||||||||
Cash and cash equivalents |
||||||||
Restricted cash |
||||||||
Accounts and other receivables, net |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Equity |
||||||||
Mortgage loans, net |
$ | $ | ||||||
Due to affiliates |
||||||||
Intangible liabilities, net |
||||||||
Accounts payable, accrued expenses and other liabilities |
||||||||
Commitments and contingencies (Note 12) |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
Stockholders’ Equity |
||||||||
Preferred stock, $ |
— | — | ||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Stockholders’ Equity |
||||||||
Non-controlling interests attributable to third party joint ventures |
||||||||
|
|
|
|
|||||
Total Equity |
||||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity |
$ | $ | ||||||
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Investments in real estate, net |
$ | $ | ||||||
Intangible assets, net |
||||||||
Cash and cash equivalents |
||||||||
Restricted cash |
||||||||
Accounts and other receivables, net |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ |
$ |
||||||
|
|
|
|
|||||
Liabilities |
||||||||
Mortgage loans, net |
$ | $ | ||||||
Intangible liabilities, net |
||||||||
Accounts payable, accrued expenses and other liabilities |
||||||||
|
|
|
|
|||||
Total Liabilities |
$ |
$ |
||||||
|
|
|
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 30, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
|||||||||||||
Revenues |
| |||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||
Expenses |
||||||||||||||||
Rental property operating |
||||||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
||||||||||||||||
Other income (expense) |
||||||||||||||||
Income from real estate-related loans and securities |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Realized gains on investments |
||||||||||||||||
Unrealized gain (loss) on investments |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (loss) income |
( |
) | ( |
) | ( |
) | ||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (loss) income attributable to stockholders |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Per common share data: |
||||||||||||||||
Net (loss) income per share of common stock |
||||||||||||||||
Basic |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
Diluted |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||
Weighted average number of shares outstanding |
||||||||||||||||
Basic |
||||||||||||||||
Diluted |
For the Three Months Ended June 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Shares |
Common Stock Class I |
Common Stock Class S |
Common Stock Class C |
Common Stock Class T |
Common Stock Class D |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity |
Non-controlling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
$ | $ | $ | $ | — | $ | — | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distribution reinvestments |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class C common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Repurchases |
( |
) | ( |
) | ( |
) | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Offering Costs |
— | — | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
For the Three Months Ended June 30, 2020 |
||||||||||||||||||||||||||||||||||||||||||||
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Shares |
Common Stock Class I |
Common Stock Class S |
Common Stock Class C |
Common Stock Class T |
Common Stock Class D |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity |
Non-controlling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 |
$ | $ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distribution reinvestments |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Repurchases |
( |
) | ( |
) | ( |
) | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Offering Costs |
— | — | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at June 30, 2020 |
$ | $ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Shares |
Common Stock Class I |
Common Stock Class S |
Common Stock Class C |
Common Stock Class T |
Common Stock Class D |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity |
Non-controlling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Distribution reinvestments |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class C common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Repurchases |
( |
) | ( |
) | ( |
) | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Offering Costs |
— | — | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at June 30, 2021 |
$ | $ | $ | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
For the Six Months Ended June 30, 2020 |
||||||||||||||||||||||||||||||||||||||||||||
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Shares |
Common Stock Class I |
Common Stock Class S |
Common Stock Class C |
Common Stock Class T |
Common Stock Class D |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity |
Non-controlling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Distribution reinvestments |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Class I common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Class S common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Repurchases |
( |
) | ( |
) | ( |
) | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Offering Costs |
— | — | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at June 30, 2020 |
$ | $ | $ | — | $ | — | $ | — | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended |
||||||||
June 30, 2021 |
June 30, 2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Management fees |
||||||||
Amortization of above and below market leases and lease inducements |
||||||||
Amortization of restricted stock grants |
||||||||
Amortization of deferred financing costs |
||||||||
Amortization of origination fees and discount |
( |
) | ( |
) | ||||
Capitalized interest from the real-estate loans |
( |
) | ||||||
Realized (gain) loss on investments in real estate-related loans and securities |
( |
) | ||||||
Unrealized (gain) loss on investments in real estate-related loans and securities |
( |
) | ||||||
Changes in assets and liabilities: |
||||||||
(Increase) decrease in lease inducements and origination costs |
( |
) | ||||||
Decrease (increase) in other assets |
( |
) | ( |
) | ||||
(Increase) decrease in accounts and other receivables |
( |
) | ( |
) | ||||
(Decrease) increase in accounts payable, accrued expenses and other liabilities |
||||||||
(Decrease) increase in due to affiliates |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities |
||||||||
Acquisition of real estate |
( |
) | ||||||
Purchase and funding of real estate-related loans and securities |
( |
) | ( |
) | ||||
Proceeds from sale of real estate-related loans and securities |
||||||||
Principal repayments from real estate-related loans |
||||||||
Building improvements |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from mortgage loans |
||||||||
Payment of deferred financing costs |
( |
) | ||||||
Proceeds from issuance of common stock |
||||||||
Repurchases of common stock |
( |
) | ( |
) | ||||
Payment of offering costs |
( |
) | ( |
) | ||||
Distributions to non-controlling interests |
( |
) | ( |
) | ||||
Contributions from non-controlling interests |
||||||||
Distributions |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
Net change in cash and cash-equivalents and restricted cash |
( |
) | ||||||
Cash and cash-equivalents and restricted cash, beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash-equivalents and restricted cash, end of period |
$ | $ | ||||||
|
|
|
|
For the Six Months Ended |
||||||||
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets: |
June 30, 2021 |
June 30, 2020 |
||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents and restricted cash |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosures: |
||||||||
Interest paid |
$ | $ | ||||||
|
|
|
|
|||||
Non-cash investing and financing activities: |
||||||||
Accrued distributions |
$ | $ | ||||||
|
|
|
|
|||||
Accrued stockholder servicing fee |
$ | $ | ||||||
|
|
|
|
|||||
Accrued offering costs |
$ | $ | — | |||||
|
|
|
|
|||||
Distributions reinvested |
$ | $ | ||||||
|
|
|
|
|||||
Management fees paid in shares |
$ | $ | — | |||||
|
|
|
|
|||||
Accrued building improvements |
$ | $ | — | |||||
|
|
|
|
|||||
Real estate related loan repayment in accounts receivable |
$ | $ | — | |||||
|
|
|
|
|||||
Accrued repurchases in accounts payable |
$ | — | $ | |||||
|
|
|
|
|||||
Accrued repurchases in due to affiliates |
$ | $ | — | |||||
|
|
|
|
Classification |
No. of Authorized Shares |
Par Value Per Share |
||||||
Preferred stock |
$ | |||||||
Class T common stock |
$ | |||||||
Class S common stock |
$ | |||||||
Class D common stock |
$ | |||||||
Class C common stock |
$ | |||||||
Class I common stock |
$ | |||||||
|
|
|||||||
|
|
Description |
Depreciable Life | |
Building |
||
Building and site improvements |
||
Furniture, fixtures and equipment |
||
Tenant improvements |
Shorter of estimated useful life or lease term | |
In-place lease intangibles |
Over lease term | |
Above and below market leases |
Over lease term | |
Lease origination costs |
Over lease term |
June 30, 2021 |
December 31, 2020 |
|||||||
Building and building improvements |
$ | $ | ||||||
Land |
||||||||
Tenant improvements |
||||||||
Furniture, fixtures and equipment |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Investments in real estate, net |
$ | $ | ||||||
|
|
|
|
Intangible assets: |
June 30, 2021 |
December 31, 2020 |
||||||
In-place lease intangibles |
$ | $ | ||||||
Lease origination costs |
||||||||
Lease inducements |
||||||||
Above-market lease intangibles |
||||||||
|
|
|
|
|||||
Total intangible assets |
||||||||
Accumulated amortization: |
||||||||
In-place lease intangibles |
( |
) | ( |
) | ||||
Lease origination costs |
( |
) | ( |
) | ||||
Lease inducements |
( |
) | ( |
) | ||||
Above-market lease intangibles |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total accumulated amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Intangible assets, net |
$ |
$ |
||||||
|
|
|
|
|||||
Intangible liabilities: |
||||||||
Below-market lease intangibles |
$ | ( |
) | $ | ( |
) | ||
Accumulated amortization |
||||||||
|
|
|
|
|||||
Intangible liabilities, net |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
Amortization |
||||
For the remainder of 2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms |
Trade Date |
Face Amount |
Beginning Balance 12/31/20 |
Purchases |
Sales / Principal Payments |
Unrealized Gain / (Loss) (2) |
Ending Balance 6/30/21 |
Realized Gain / (Loss) (3) |
||||||||||||||||||||||||||||
BX 2020 BXLP G | Industrial Paper | L+ |
12/15/29 | Principal due at maturity |
01/23/20 | $ | $ | $ | — | $ | ( |
) | $ | $ | — | |||||||||||||||||||||||||
CGDB 2019 MOB F | Medical Office Mortgage Loans |
L+ |
11/15/36 | Principal due at maturity |
02/04/20 | — | — | — | ||||||||||||||||||||||||||||||||
BX 2019 IMC G | International Markets Center and AmericasMart Atlanta |
L+ |
4/15/34 | Principal due at maturity |
03/19/20 | — | — | — | ||||||||||||||||||||||||||||||||
BHMS 2018 ATLS D | Atlantis Paradise Island Resort |
L+ |
7/15/35 | Principal due at maturity |
03/20/20 | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
BHMS 2018 ATLS E | Atlantis Paradise Island Resort |
L+ |
7/15/35 | Principal due at maturity |
03/30/20 | — | — | — | ||||||||||||||||||||||||||||||||
BX 2020 VIVA D | MGM Grand and Mandalay Bay Resort and Casino Las Vegas |
3/9/44 | Principal due at maturity |
05/05/20 | — | ( |
) | ( |
) | — | ||||||||||||||||||||||||||||||
BX 2020 VIVA E | MGM Grand and Mandalay Bay Resort and Casino Las Vegas |
3/9/44 | Principal due at maturity |
05/05/20 | — | ( |
) | |||||||||||||||||||||||||||||||||
CGCMT 2020-WSS F |
WoodSpring Suites Extended Stay Hotel |
L+ |
2/16/27 | Principal due at maturity |
07/08/20 | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | $ | $ | — | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated London Interbank Offer Rate (“LIBOR”). As of June 30, 2021 and December 31, 2020, one-month LIBOR was equal to |
(2) | Unrealized gain/loss on debt security investments are determined using price quotations provided by independent third party valuation firms and are included in other income (expense) on the consolidated statement of operations. |
(3) | Realized gain/loss is included in other income (expense) on the consolidated statement of operations. |
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms |
Trade Date |
Face Amount |
Beginning Balance 12/31/19 |
Purchases |
Sales / Principal Payments |
Unrealized Gain / (Loss) (2) |
Ending Balance 6/30/20 |
Realized Gain / (Loss) (3) |
||||||||||||||||||||||||||||
BX 2020 BXLP G | Industrial Paper | L+ |
12/15/29 | Principal due at maturity |
01/23/20 | $ | $ | — | $ | $ | — | $ | ( |
) | $ | — | ||||||||||||||||||||||||
CGDB 2019 MOB F | Medical Office Mortgage Loans |
L+ |
11/15/36 | Principal due at maturity |
02/04/20 | — | — | ( |
) | — | ||||||||||||||||||||||||||||||
BXMT 2020 FL 2 | Commercial Real Estate Collateralized Loan Obligation |
L+ |
2/16/37 | Principal due at maturity |
01/31/20 | — | — | ( |
) | — | ||||||||||||||||||||||||||||||
BX 2019 IMC G | International Markets Center and AmericasMart Atlanta |
L+ |
4/15/34 | Principal due at maturity |
03/19/20 | — | — | — | ||||||||||||||||||||||||||||||||
BHMS 2018 ATLS D | Atlantis Paradise Island Resort |
L+ |
7/15/35 | Principal due at maturity |
03/20/20 | — | — | — | ||||||||||||||||||||||||||||||||
BHMS 2018 ATLS E | Atlantis Paradise Island Resort |
L+ |
7/15/35 | Principal due at maturity |
03/30/20 | — | — | — | ||||||||||||||||||||||||||||||||
BX 2020 VIVA D | MGM Grand and Mandalay Bay Resort and Casino Las Vegas |
3/9/44 | Principal due at maturity |
05/05/20 | — | — | — | |||||||||||||||||||||||||||||||||
BX 2020 VIVA E | MGM Grand and Mandalay Bay Resort and Casino Las Vegas |
3/9/44 | Principal due at maturity |
05/05/20 | — | — | — | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | $ | — | $ | $ | — | $ | $ | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated London Interbank Offer Rate (“LIBOR”). As of June 30, 2020 and December 31, 2019, one-month LIBOR was equal to |
(2) | Unrealized gain/loss on debt security investments are determined using price quotations provided by independent third party valuation firms and are included in other income (expense) on the consolidated statement of operations. |
(3) | Realized gain/loss is included in other income (expense) on the consolidated statement of operations. |
As of June 30, 2021 |
||||||||||||||||||||||||||
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms (2) |
Prior Liens |
Face Amount |
Unamortized Discount/ Origination Fees |
Carrying Amount |
||||||||||||||||||
Atlantis Mezzanine Loan | Atlantis Paradise Island Resort | L+ |
July 2022 | Principal due at maturity |
|
$ (3) |
$ | $ | — | $ | ||||||||||||||||
IMC/AMC Bond Investment | International Markets Center AmericasMart Atlanta | L+ |
December 2023 | Principal due at maturity |
|
$ (4) |
( |
) | ||||||||||||||||||
111 Montgomery | The 111 Montgomery Street Condominium Brooklyn, New York | L+ |
February 2024 | Principal due at maturity |
|
none | ( |
) | ||||||||||||||||||
The Avery Senior Loan | The Avery Condominium San Francisco, California |
L+ |
February 2024 | Principal due at maturity |
|
none | ( |
) | ||||||||||||||||||
The Avery Mezzanine Loan | The Avery Condominium San Francisco, California |
L+ |
February 2024 | Principal due at maturity |
|
$ (5) |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
$ | $ | ( |
) | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||||||||
Investment |
Collateral |
Interest Rate (1) |
Maturity Date |
Payment Terms (2) |
Prior Liens |
Face Amount |
Unamortized Discount |
Carrying Amount |
||||||||||||||||||
Atlantis Mezzanine Loan | Atlantis Paradise Island Resort | L+ |
July 2021 | Principal due at maturity |
|
$ (3) |
$ | $ | — | $ | ||||||||||||||||
IMC/AMC Bond Investment | International Markets Center AmericasMart Atlanta | L+ |
December 2023 | Principal due at maturity |
|
$ (4) |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
$ | $ | ( |
) | $ | ||||||||||||||||||||||
|
|
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated London Interbank Offer Rate (“LIBOR”). As of June 30, 2021 and December 31, 2020, one-month LIBOR was equal to |
(2) | Neither investment is subject to delinquent principal or interest as of June 30, 2021 or December 31, 2020. |
(3) | The Atlantis Mezzanine Loan is subordinate to a first mortgage loan of $ |
(4) | The IMC / AMC Bond Investment is subordinate to a $ |
(5) | The Avery Mezzanine Loan is subordinate to an Oaktree Capital Management first mortgage commitment of $200.1 million. |
Receivables |
June 30, 2021 |
December 31, 2020 |
||||||
Accounts receivable |
$ | $ | ||||||
Straight-line rent receivable |
||||||||
Interest receivable |
||||||||
Allowance for doubtful accounts |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total accounts and other receivables, net |
$ |
$ |
||||||
|
|
|
|
Other assets |
June 30, 2021 |
December 31, 2020 |
||||||
Deposits |
$ | $ | ||||||
Prepaid expenses |
||||||||
Capitalized fees, net |
||||||||
|
|
|
|
|||||
Total other assets |
$ |
$ |
||||||
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Real estate taxes payable |
$ | $ | ||||||
Accounts payable and accrued expenses |
||||||||
Prepaid rent |
||||||||
Accrued interest expense |
||||||||
Tenant security deposits |
||||||||
Derivative (1) |
||||||||
Distribution payable |
||||||||
|
|
|
|
|||||
Total accounts payable, accrued expenses and other liabilities |
$ |
$ |
||||||
|
|
|
|
(1) | This derivative relates to an interest rate swap on the Two Liberty mortgage loan. The notional amount of the swap is $ one-month USD LIBOR and pays a fixed rate of |
Principal Balance Outstanding |
||||||||||||||||
Indebtedness |
Interest Rate (1) |
Maturity Date |
June 30, 2021 |
December 31, 2020 |
||||||||||||
Anzio Apartments mortgage loan |
L + |
April 2029 | $ | $ | ||||||||||||
Two Liberty Center mortgage loan (2) |
L + |
August 2024 | ||||||||||||||
Ezlyn mortgage loan |
December 2026 | |||||||||||||||
Lakes mortgage loan (2) |
L + |
February 2025 | ||||||||||||||
Arbors mortgage loan (3) |
SOFR + |
January 2031 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total mortgage loans |
||||||||||||||||
Less: deferred financing costs, net |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|||||||||||||
Mortgage loans, net |
$ | $ | ||||||||||||||
|
|
|
|
(1) | The term “L” refers to the one-month US dollar-denominated LIBOR. As of June 30, 2021 and December 31, 2020, one-month LIBOR was equal to |
(2) | The mortgage loans are subject to customary terms and conditions, and the respective joint venture was in compliance with all financial covenants it is subject to under the mortgage loan as of June 30, 2021. |
(3) | The term “SOFR” refers to the Secured Overnight Financing Rate. As of June 30, 2021 and December 31, 2020, the SOFR was |
Year |
Amount |
|||
For the remainder of 2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
Total |
$ | |||
|
|
Classification |
No. of Authorized Shares |
Par Value Per Share |
||||||
Preferred stock |
$ | |||||||
Class T common stock |
$ | |||||||
Class S common stock |
$ | |||||||
Class D common stock |
$ | |||||||
Class C common stock |
$ | |||||||
Class I common stock |
$ | |||||||
Declaration Date |
Class S Shares |
Class I Shares |
Class C Shares |
Class T Shares |
Class D Shares |
|||||||||||||||
December 31, 2019 |
$ | $ | $ | $ | $ | |||||||||||||||
January 30, 2020 |
||||||||||||||||||||
February 27, 2020 |
||||||||||||||||||||
March 30, 2020 |
||||||||||||||||||||
April 30, 2020 |
||||||||||||||||||||
May 29, 2020 |
||||||||||||||||||||
June 30, 2020 |
||||||||||||||||||||
July 30, 2020 |
||||||||||||||||||||
August 28, 2020 |
||||||||||||||||||||
September 29, 2020 |
||||||||||||||||||||
October 29, 2020 |
||||||||||||||||||||
November 25, 2020 |
||||||||||||||||||||
December 30, 2020 |
||||||||||||||||||||
January 28, 2021 |
||||||||||||||||||||
February 25, 2021 |
||||||||||||||||||||
March 30, 2021 |
||||||||||||||||||||
April 29, 2021 |
||||||||||||||||||||
May 27, 2021 |
||||||||||||||||||||
June 29, 2021 |
||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | |||||||||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
Multifamily |
$ | $ | ||||||
Office |
||||||||
Real estate-related loans and securities |
||||||||
Other (Corporate) |
||||||||
Total assets |
$ | $ | ||||||
Multifamily |
Office |
Real Estate- Related Loans and Securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total rental operating expenses |
||||||||||||||||
Income from real estate-related loans and securities |
||||||||||||||||
Realized gain on investments |
||||||||||||||||
Unrealized gain on investments |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Interest expense |
||||||||||||||||
|
|
|||||||||||||||
Net loss |
( |
) | ||||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
|
|
|||||||||||||||
Net loss attributable to stockholders |
$ | ( |
) | |||||||||||||
|
|
Multifamily |
Office |
Real Estate- Related Loans and Securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total rental operating expenses |
||||||||||||||||
Income from real estate-related loans and securities |
||||||||||||||||
Realized gain on investments |
||||||||||||||||
Unrealized gain (loss) on investments |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Interest expense |
||||||||||||||||
|
|
|||||||||||||||
Net loss |
( |
) | ||||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
|
|
|||||||||||||||
Net loss attributable to stockholders |
$ | ( |
) | |||||||||||||
|
|
Multifamily |
Office |
Real Estate- Related Loans and Securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total rental operating expenses |
||||||||||||||||
Income from real estate-related loans and securities |
||||||||||||||||
Unrealized (loss) gain on investments |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Interest expense |
||||||||||||||||
|
|
|||||||||||||||
Net income |
||||||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
|
|
|||||||||||||||
Net income attributable to stockholders |
$ | |||||||||||||||
|
|
Multifamily |
Office |
Real Estate- Related Loans and Securities |
Total |
|||||||||||||
Revenues: |
||||||||||||||||
Rental revenues |
$ | $ | $ | $ | ||||||||||||
Other revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
||||||||||||||||
Expenses: |
||||||||||||||||
Rental property operating |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total rental operating expenses |
||||||||||||||||
Income from real estate-related loans and securities |
||||||||||||||||
Unrealized (loss) gain on investments |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment net operating income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses |
||||||||||||||||
Management fee |
||||||||||||||||
Performance fee |
||||||||||||||||
Interest expense |
||||||||||||||||
|
|
|||||||||||||||
Net loss |
( |
) | ||||||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
|
|
|||||||||||||||
Net loss attributable to stockholders |
$ | ( |
) | |||||||||||||
|
|
Record Date |
Class S |
Class I |
Class C |
Class T |
Class D |
|||||||||||||||
July 29, 2021 |
$ | $ | $ | $ |
$ |
Deloitte & Touche LLP 30 Rockefeller Plaza New York, NY 10112-0015 USA Tel: +1 212 492 4000 Fax: +1 212 489 1687 www.deloitte.com |
Six Months Ended June 30, 2021 (Unaudited) |
Year Ended December 31, 2020 |
|||||||
Revenues |
||||||||
Rental revenue |
$ | 25,748 | $ | 46,537 | ||||
Other revenue |
1,166 | 2,110 | ||||||
|
|
|
|
|||||
Total revenues |
26,914 | 48,647 | ||||||
Certain Operating Expenses |
||||||||
Rental property operating |
(5,159 | ) | (10,477 | ) | ||||
|
|
|
|
|||||
Total certain operating expenses |
(5,159 | ) | (10,477 | ) | ||||
|
|
|
|
|||||
Revenues in Excess of Certain Operating Expenses |
$ | 21,755 | $ | 38,170 | ||||
|
|
|
|
Years ending December 31: |
| |||
2021 |
$ | 49,133 | ||
2022 |
48,283 | |||
2023 |
48,387 | |||
2024 |
48,855 | |||
2025 |
49,329 | |||
Thereafter |
348,294 | |||
|
|
|||
Total |
$ | 592,281 | ||
|
|
Years ending December 31: |
| |||
2021 |
$ | 2,649 | ||
2022 |
2,967 | |||
2023 |
2,967 | |||
2024 |
2,967 | |||
2025 |
2,967 | |||
Thereafter |
55,642 | |||
|
|
|||
Total |
$ | 70,159 | ||
|
|
SEC registration fee |
$ | 640,417 | ||
FINRA filing fee |
$ | 225,500 | ||
Legal fees and expenses |
$ | 5,000,000 | ||
Printing and mailing |
$ | 4,000,000 | ||
Accounting and tax fees and expenses |
$ | 1,000,000 | ||
Blue sky fees and expenses |
$ | 1,000,000 | ||
Advertising and sales expenses |
$ | 2,000,000 | ||
Due diligence |
$ | 2,000,000 | ||
Transfer agent fees and expenses |
$ | 2,000,000 | ||
Promotional items expenses |
$ | 500,000 | ||
Technology expenses |
$ | 1,000,000 | ||
Issuer costs related to training and education meetings and retail conferences |
$ | 1,000,000 | ||
Total |
$ | 20,365,917 | ||
• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or |
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful. |
• | the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was in our best interest; |
• | the indemnitee was acting on our behalf or performing services for us; |
• | in the case of affiliated directors, the Adviser or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; and |
• | in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification. |
• | there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the party seeking indemnification; |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to such party; or |
• | a court of competent jurisdiction approves a settlement of the claims against such party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws. |
• | the proceeding relates to acts or omissions with respect to the performance of duties or services on our behalf; |
• | the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification; |
• | the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and |
• | the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with the requisite standard of conduct and is not entitled to indemnification. |
1. | Financial Statements F-1 for an index to the financial statements included in the registration statement. |
2. | Exhibits S-11, which Exhibit Index is incorporated herein by reference. |
(i) | The undersigned registrant hereby undertakes: |
(A) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(1) | To include any prospectus required by section 10(a)(3) of the Securities Act. |
(2) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
(3) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(B) | That, for the purpose of determining any liability under the Securities Act, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(C) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(D) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of the registration statement relating to the offering, other than a registration statement relying on Rule 430B or other than a prospectus filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(E) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, in a primary offering of securities pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(1) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(2) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(3) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(4) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(F) | To send to each stockholder, at least on an annual basis, a detailed statement of any transactions with the Adviser or its affiliates, and of fees, commissions, compensation and other benefits paid or accrued to the Adviser or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed. |
(ii) | The registrant undertakes to provide to the stockholders the financial statements required by Form 10-K for the first full fiscal year of operations of the registrant. |
(iii) | The registrant undertakes to file a sticker supplement pursuant to Rule 424(c) under the Securities Act during the distribution period describing each significant property not identified in the prospectus at such time as there arises a reasonable probability that such property will be acquired and to consolidate all such stickers into a post-effective amendment filed at least once every three months, with the information contained in such amendment provided simultaneously to the existing stockholders. Each sticker supplement should disclose all compensation and fees received by the Adviser and its affiliates in connection with any such acquisition. The post-effective amendment shall include or incorporate by reference audited financial statements meeting the requirements of Rule 3-14 of Regulation S-X that have been filed or should have been filed on Form 8-K for all significant properties acquired during the distribution period. |
(iv) | The registrant undertakes to file, after the end of the distribution period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of Regulation S-X, for each significant property acquired and to provide the information contained in such report to the stockholders at least once each quarter after the distribution period of the offering has ended. |
(v) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions and otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
Exhibit Number |
Description | |
21.1 | Subsidiaries of Registrant (filed as Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K on March 31, 2021 and incorporated herein by reference) | |
23.1* | Consent of Ernst & Young LLP | |
23.2* | Consent of Deloitte & Touche LLP | |
23.3* | Consent of Altus Group U.S. Inc. | |
23.4 | Consent of Venable LLP (included in Exhibit 5.1) | |
23.5 | Consent of Alston & Bird LLP (included in Exhibit 8.1) | |
24.1 | Power of Attorney (included in signature page to the Registration Statement filed on April 28, 2021 and incorporated by reference herein) | |
99.1# | Consent of Brian W. Kingston | |
99.2# | Consent of Zachary B. Vaughan | |
99.3# | Consent of Lori-Ann Beausoleil | |
99.4# | Consent of Richard W. Eaddy | |
99.5# | Consent of Thomas F. Farley | |
99.6# | Consent of Lis S. Wigmore | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Filed herewith. |
# | Previously filed. |
Oaktree Real Estate Income Trust, Inc. | ||
By: | /s/ John Brady | |
John Brady | ||
Chairman of the Board and Chief Executive Officer |
Signature |
Title | |
/s/ John Brady John Brady |
John Brady Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | |
/s/ Brian Grefsrud Brian Grefsrud |
Brian Grefsrud Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | |
/s/ Derek Smith Derek Smith |
Derek Smith Director | |
/s/ Manish Desai Manish Desai |
Manish Desai Director | |
* Howard Heitner |
Howard Heitner Independent Director | |
* James Martin |
James Martin Independent Director | |
* Robert Cavanaugh |
Robert Cavanaugh Independent Director | |
* Catherine Long |
Catherine Long Independent Director |
By: | /s/ John Brady | |
John Brady | ||
Attorney-in-fact |