UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___

Commission file number: 814-01736

FRANKLIN BSP REAL ESTATE DEBT BDC

(Exact name of registrant as specified in its charter) 

Delaware	One Madison Avenue,	99-1918767
(State or Other Jurisdiction of Incorporation or Organization)	New York, New York 10010	(I.R.S. Employer Identification No.)
	(Address of Principal Executive Office) (Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large-accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☐
	Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2025, the issuer had: 20,167,473.60 common shares of beneficial interest (“Common Shares”), $0.001 par value per share, outstanding.

FRANKLIN BSP REAL ESTATE DEBT BDC

FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2025

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)	2
Consolidated Statements of Assets and Liabilities as of March 31, 2025 (Unaudited) and December 31, 2024	2
Consolidated Statements of Operations for the three months ended March 31, 2025 and for the period from March 11, 2024 (inception) through March 31, 2024 (Unaudited)	3
Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2025 and for the period from March 11, 2024 (inception) through March 31, 2024 (Unaudited)	4
Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and for the period from March 11, 2024 (inception) through March 31, 2024 (Unaudited)	5
Consolidated Schedules of Investments as of March 31, 2025 (Unaudited) and December 31, 2024	6
Notes to Consolidated Financial Statements (Unaudited)	13
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	48
Item 4. Controls and Procedures	49
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	51
Signatures	52

1

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(Amounts in thousands, except share and per share)

	March 31, 2025		December 31, 2024
Assets	(Unaudited)
Investments at fair value:
Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,108,079 and $834,884, respectively)	$	1,117,329	$	842,856
Cash	13,689		28,489
Interest and fees receivable	4,553		3,303
Deferred financing costs	2,269		1,509
Due from advisor	278		—
Total assets	$	1,138,118	$	876,157
Liabilities
Repurchase agreements	$	673,508	$	501,200
Interest Payable	1,734		1,356
Accrued administration fees	1,052		562
Distribution payable	—		13,220
Other payable	694		978
Total liabilities	$	676,988	$	517,316
Commitments & Contingencies (Note 7)
Redeemable Series A Cumulative Preferred Shares, $0.001 par value, 125 shares authorized; 125 issued and outstanding as of March 31, 2025, and none issued and outstanding as of December 31, 2024, net of offering costs	$	111	$	—
Total net assets applicable to common shareholders	$	461,019	$	358,841
Net assets applicable to common shareholders
Common Shares, $0.001 par value, unlimited shares authorized, 17,353,215 and 13,583,897 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	$	17	$	14
Paid-in-capital in excess of par value	449,986		349,987
Distributable earnings (loss)	11,016		8,840
Total net assets applicable to common shareholders	$	461,019	$	358,841
Total liabilities, redeemable preferred shares and net assets applicable to common shareholders	$	1,138,118	$	876,157
Net asset value per share applicable to common shares	$	26.57	$	26.42

The accompanying notes are an integral part of these consolidated financial statements.

2

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except share and per share data)

(Unaudited)

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024
Investment Income
From non-controlled, non-affiliated investments:
Interest income	$	22,045	$	—
Fees and other income	698		—
Total investment income (loss)	$	22,743	$	—
Operating Expenses
Interest and debt fees	$	9,728	$	—
Administration fees	490		—
Management fees	1,259		15
Incentive fees	1,772		—
Directors’ fees	27		—
Organizational costs	—		396
Legal expenses	312		—
Other expenses	562		—
Total expenses	$	14,150	$	411
Less: waivers (Note 3)	(4,307)		(15)
Net expenses	$	9,843	$	396
Net investment income (loss)	$	12,900	$	(396)
Realized and unrealized gain (loss) on investments:
Change in unrealized appreciation (depreciation) from:
Non-controlled, non-affiliated investments	$	1,278	$	—
Total net realized and unrealized appreciation (depreciation) on investments	$	1,278	$	—
Net increase (decrease) in net assets resulting from operations	$	14,178	$	(396)
Weighted average shares outstanding	16,766,876		—
Net Investment Income per share (basic and diluted)	0.77		—
Net increase (decrease) in net assets resulting from operations per share (basic and diluted)	0.85		—

The accompanying notes are an integral part of these consolidated financial statements.

3

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollars in thousands, except share and per share data)

(Unaudited)

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	12,900	$	(396)
Net change in unrealized appreciation (depreciation)	1,278		—
Net increase (decrease) in net assets resulting from operations	$	14,178	$	(396)
Shareholder Distributions
Distributions declared from earnings ($0.69 per share)	$	(12,000)	$	—
Net increase (decrease) in net assets resulting from shareholder distributions	$	(12,000)	$	—
Capital share transactions
Issuance of Common Shares, net of offering costs and advisor reimbursement	$	100,000	$	—
Net increase (decrease) in net assets resulting from capital share transactions	$	100,000	$	—
Total increase (decrease) in net assets	$	102,178	$	(396)
Net assets at beginning of period	358,841		—
Net assets at end of period	$	461,019	$	(396)
Capital share activity
Shares issued	3,769,318		—
Net increase (decrease) in shares outstanding	3,769,318		—

The accompanying notes are an integral part of these consolidated financial statements.

4

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands, except share and per share data)

(Unaudited)

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024
Operating activities:
Net increase (decrease) in net assets from operations	$	14,178	$	(396)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Origination of loans	(279,517)		—
Loan origination fees collected	2,970		—
Net (accretion) on investments	(1,621)		—
Proceeds from sales of real estate securities and loans	4,973		—
Amortization of deferred financing fees	235		—
Net change in unrealized (appreciation) depreciation on investments	(1,278)		—
(Increase) decrease in operating assets:
Interest and fees receivable	(1,249)		—
Due from advisor	(278)		—
Increase (decrease) in operating liabilities:
Accrued administration fee	490		—
Accrued organizational costs	—		396
Interest payable	377		—
Other payable	(283)		—
Net cash provided by (used in) operating activities	$	(261,003)	$	—
Financing activities:
Payments of financing costs	$	(995)	$	—
Proceeds from borrowings on repurchase agreements	175,295		—
Paydowns on repurchase agreements	(2,988)		—
Proceeds from issuance of common shares	100,000		—
Proceeds from issuance of Series A preferred shares	125		—
Series A preferred shares offering costs	(14)		—
Common shareholder distributions	(25,220)		—
Net cash provided by (used in) financing activities	$	246,203	$	—
Net increase (decrease) in cash	$	(14,800)	$	—
Cash, beginning of period	28,489		—
Cash, end of period	$	13,689	$	—

The accompanying notes are an integral part of these consolidated financial statements.

5

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

March 31, 2025

(Unaudited)

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Senior Mortgage - 230.7%
Hospitality - 35.9%
68 East Avenue Austin, LLC (5)(7)(9)	SOFR+ 4.00%	8.32	%	8/9/2026	$	22,320	$	22,165	$	22,320	4.8	%
AVR Eugene Hotel LLC (5)(7)(14)	SOFR+ 4.50%	8.82	%	7/9/2026	12,235		12,153		12,235		2.7	%
AWH Dallas PC Hotel, LP (5)(7)(9)	SOFR+ 3.25%	7.57	%	1/9/2027	10,641		10,550		10,641		2.3	%
Blue Suede Hospitality Group (5)(7)(9)(14)	SOFR+ 4.40%	8.72	%	8/9/2026	18,336		18,201		18,336		4.0	%
DK LDOI IV Aggregate Holdco LP (5)(7)(9)	SOFR+ 4.03%	8.35	%	7/9/2027	36,927		36,589		36,927		8.0	%
Insite Orlando Two, LLC (5)(7)(10)(14)	SOFR+ 4.75%	9.07	%	11/9/2027	15,270		15,074		15,270		3.3	%
West 63 Empire Associates LLC (Senior) (5)(7)(9)	SOFR+ 3.41%	7.73	%	1/9/2026	50,000		49,630		50,000		10.8	%
Subtotal Hospitality							$	164,362	$	165,729	35.9	%
Industrial - 19.9%
6304 Sheriff Road LLC (5)(7)(9)(14)	SOFR+ 3.65%	7.97	%	2/9/2028	$	35,196	$	34,833	$	35,196	7.6	%
Creekside Logistics Center Owner, LLC (5)(7)(9)(14)	SOFR+ 3.65%	7.97	%	3/9/2027	9,919		9,775		9,919		2.2	%
GVP TC Wilmer Property Owner, LLC (5)(7)(9)(14)	SOFR+ 3.75%	8.07	%	10/9/2027	38,059		37,684		38,059		8.3	%
Olymbec Viscount LLC (5)(7)(10)(14)	SOFR+ 3.50%	7.82	%	12/9/2026	8,359		8,285		8,359		1.8	%
Subtotal Industrial							$	90,577	$	91,533	19.9	%
Mixed Use - 9.4%
GDC White Plains Fee LLC (5)(7)(9)	SOFR+ 5.35%	9.67	%	12/9/2025	$	43,315	$	43,023	$	43,315	9.4	%
Subtotal Mixed Use							$	43,023	$	43,315	9.4	%
Multifamily - 162.1%
1915 WBP Owner, LLC (5)(7)(14)	SOFR+ 2.75%	7.07	%	4/9/2028	$	10,099	$	9,989	$	10,099	2.2	%
26 W 9th Street LLC (5)(7)(14)	SOFR+ 5.25%	9.57	%	8/9/2025	17,715		17,626		17,715		3.8	%
50 West BSP Owner LLC (5)(7)(9)(14)	SOFR+ 2.95%	7.27	%	12/9/2026	42,693		42,332		42,693		9.3	%
Admiral's Cove Holdings LLC (5)(7)(10)	SOFR+ 2.75%	7.07	%	8/9/2026	46,837		46,522		46,837		10.1	%
ALP Delaware, LLC (5)(7)(11)	SOFR+ 3.05%	7.37	%	7/9/2026	21,219		21,081		21,219		4.6	%
Augusta Flats 2024 LP (5)(7)(9)	SOFR+ 2.95%	7.27	%	11/9/2027	15,077		14,947		15,077		3.3	%
Bristol LLC (5)(7)	SOFR+ 3.00%	7.32	%	4/9/2027	30,412		30,111		30,412		6.6	%
Caledon Owner, LLC (5)(7)(9)	SOFR+ 3.25%	7.57	%	12/9/2027	13,641		13,519		13,641		3.0	%
Canal Properties LLC (5)(7)(9)	SOFR+ 3.75%	8.07	%	12/9/2026	12,205		12,106		12,205		2.6	%
CRP/RPM LYV Broadway GP, LLC (5)(7)(10)	SOFR+ 2.80%	7.12	%	7/9/2027	44,250		43,992		44,250		9.6	%
CS Harvey, LTD. (5)(7)(10)	SOFR+ 2.90%	7.22	%	10/9/2026	35,200		34,935		35,200		7.6	%
EPH 51, LLC (5)(7)(9)	SOFR+ 3.15%	7.47	%	2/9/2027	30,000		29,738		30,000		6.5	%
Gainsville Properties III, LLC (5)(7)(9)	SOFR+ 3.50%	7.82	%	12/9/2026	20,192		20,023		20,192		4.4	%

6

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

March 31, 2025

(Unaudited)

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Grand Cypress Apartments, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.07	%	9/9/2027	$	49,228	$	48,926	$	49,228	10.6	%
Hallandale Oasis 2019 LLC (5)(7)(14)	SOFR+ 8.30%	12.62	%	8/9/2026	8,637		8,482		8,637		1.9	%
Haven at the Gulch, LLC (5)(7)(9)	SOFR+ 2.90%	7.22	%	2/9/2027	22,548		22,336		22,548		4.9	%
INTEGRA MYST LIMITED PARTNERSHIP (5)(7)(10)	SOFR+ 3.21%	7.53	%	3/9/2027	23,429		23,199		23,429		5.1	%
Paraiso 256, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.07	%	9/9/2027	28,645		28,461		28,645		6.2	%
Pines at Woodcreek Leasehold LLC (5)(7)(10)	SOFR+ 3.50%	7.82	%	4/9/2028	13,845		13,709		13,845		3.0	%
PRE Mirage Propco, LLC (5)(7)(10)	SOFR+ 3.25%	7.57	%	2/9/2027	13,820		13,701		13,820		3.0	%
PREF Montabella PropCo, LLC & PREF Dominion PropCo, LLC (5)(7)(10)	SOFR+ 4.00%	8.32	%	2/9/2027	10,411		10,322		10,411		2.3	%
Racetrack Properties I, LLC (5)(7)(9)	SOFR+ 2.95%	7.27	%	10/9/2026	44,300		43,967		44,300		9.6	%
Rise Bridgeview, LLC (5)(7)(10)(14)	SOFR+ 3.25%	7.57	%	1/9/2028	10,737		10,622		10,737		2.3	%
Rise Stone Gate, LLC & Artic Investments, LLC (5)(7)(10)(14)	SOFR+ 3.25%	7.57	%	3/9/2028	7,585		7,496		7,585		1.6	%
S2 Pleasantdale LLC (5)(7)(9)(14)	SOFR+ 2.75%	7.07	%	11/9/2027	18,786		18,589		18,786		4.1	%
SL 418, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.07	%	9/9/2027	47,981		47,690		47,981		10.4	%
Smart Living Texas City MM, LLC (5)(7)(10)	SOFR+ 3.80%	8.12	%	7/9/2025	14,200		14,160		14,200		3.1	%
VCP Kennesaw, LLC (5)(7)(9)	SOFR+ 2.95%	7.27	%	11/9/2026	47,227		46,856		47,227		10.2	%
VCP Manager LLC (5)(7)(9)	SOFR+ 3.10%	7.42	%	10/9/2026	29,380		29,162		29,380		6.4	%
WHK Waterfront Urban Renewal LLC (5)(7)(14)	SOFR+ 5.50%	9.82	%	7/9/2027	3,504		3,127		3,504		0.8	%
Woodbine MF TIC 1 LLC (5)(7)(9)	SOFR+ 2.75%	7.07	%	9/9/2027	13,680		13,570		13,680		3.0	%
Subtotal Multifamily							$	741,296	$	747,483	162.1	%
Self Storage - 3.4%
Silver Star Delray, LLC (5)(7)(10)	SOFR+ 3.50%	7.82	%	8/9/2026	$	15,530	$	15,427	$	15,530	3.4	%
Subtotal Self Storage							$	15,427	$	15,530	3.4	%
Subtotal Senior Mortgage							$	1,054,685	$	1,063,590	230.7	%
Mezzanine - 5.4%
Hospitality - 1.6%
AWH Dallas PC Hotel, LP (5)(7)	SOFR+ 10.51%	14.83	%	1/9/2027	$	1,046	$	1,037	$	1,046	0.2	%
West 63 Empire Associates LLC (Mezz) (5)(7)(9)	SOFR+ 11.00%	15.32	%	1/9/2026	6,250		6,206		6,250		1.4	%
Subtotal Hospitality							$	7,243	$	7,296	1.6	%
Mixed Use - 1.2%
GDC White Plains SPE LLC (5)(7)(9)		16.00	%	12/9/2025	$	5,556	$	5,518	$	5,555	1.2	%
Subtotal Mixed Use							$	5,518	$	5,555	1.2	%

7

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

March 31, 2025

(Unaudited)

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Multifamily - 2.6%
26 W 9th Street LLC (5)(7)(14)	SOFR+ 12.75%	17.07	%	8/9/2025	$	2,056	$	2,046	$	2,056	0.4	%
50 West BSP Owner LLC (5)(7)(9)(14)	SOFR+ 8.23%	12.55	%	12/9/2026	2,571		2,550		2,571		0.6	%
Admiral's Cove Holdings Mezz LLC (5)(7)(10)	SOFR+ 6.75%	11.07	%	8/9/2026	3,163		3,141		3,163		0.7	%
INTEGRA MYST FLORIDA CAPITAL LP (5)(7)(10)	SOFR+ 7.18%	11.50	%	3/9/2027	1,838		1,819		1,838		0.4	%
WHK Waterfront Urban Renewal LLC (5)(7)(14)	SOFR+ 11.90%	16.22	%	7/9/2027	2,340		2,152		2,340		0.5	%
Subtotal Multifamily							$	11,708	$	11,968	2.6	%
Subtotal Mezzanine							$	24,469	$	24,819	5.4	%
Real Estate Securities - 6.3%
Hospitality - 3.3%
BX 2024-SLCT D (7)(13)	SOFR+ 2.94%	7.26	%	1/15/2030	$	15,111	$	15,079	$	15,027	3.3	%
Subtotal Hospitality							$	15,079	$	15,027	3.3	%
Industrial - 1.1%
DBGS 2024-SBL D (7)(12)	SOFR+ 3.54%	7.86	%	8/15/2039	$	5,000	$	4,989	$	5,004	1.1	%
Subtotal Industrial							$	4,989	$	5,004	1.1	%
Multifamily - 1.9%
NYC 2024-3ELV C (7)(12)	SOFR+ 2.84%	7.16	%	8/15/2029	$	8,875	$	8,857	$	8,889	1.9	%
Subtotal Multifamily							$	8,857	$	8,889	1.9	%
Subtotal Real Estate Securities							$	28,925	$	28,920	6.3	%
Total Investments - 242.4%							$	1,108,079	$	1,117,329	242.4	%

(1) All investments are U.S. domiciled.

(2) All debt investments are income-producing, unless otherwise noted.

(3) The investments herein bear interest at rates that may be determined by reference to Secured Overnight Financing Rate (“SOFR”), which typically resets monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at March 31, 2025. As of March 31, 2025, rates for 1M SOFR, 3M SOFR, 6M SOFR, 12M SOFR are 4.32%, 4.29%, 4.19%, and 4.01%, respectively. Certain investments are subject to a SOFR floor.

(4) Interest rates on investments are annualized.

(5) The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board (as defined below) as required by the Investment Company Act of 1940, as amended (the “1940 Act”). Such investments are valued using significant unobservable inputs. Refer to Note 5 - Fair Value Measurement.

8

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

March 31, 2025

(Unaudited)

(6) All of the Company’s investments are Non-Control/Non-Affiliate investments. Non-Control/Non-Affiliate investments as defined by the 1940 Act, are those that are neither Control nor Affiliate investments and in which we own less than 25.0%/5.0% of the issued and outstanding voting securities.

(7) Represents co-investments made with the Company’s affiliates. Refer to Note 3 - Related Party Transactions.

(8) All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of March 31, 2025, qualifying assets represent 100.0% of the Company's total assets.

(9) The Company’s investment or a portion thereof is pledged as collateral under the JPM Credit Facility (as defined in Note 6).

(10) The Company’s investment or a portion thereof is pledged as collateral under the Barclay’s Warehouse Facility (as defined in Note 6).

(11) The Company’s investment or a portion thereof is pledged as collateral under the Webster Warehouse Facility (as defined in Note 6.)

(12) The Company’s investment or a portion thereof is pledged as collateral under the JPM Repo Facility (as defined in Note 6).

(13) The Company’s investment or a portion thereof is pledged as collateral under the Barclay’s Repo Facility (as defined in Note 6).

(14) The Company’s investment or a portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. Refer to Note 7 - Commitments and Contingencies.

The accompanying notes are an integral part of these consolidated financial statements.

9

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

December 31, 2024

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Senior Mortgage - 222.7%
Hospitality - 32.7%
68 East Avenue Austin, LLC (5)(7)(9)	SOFR+ 4.00%	8.33	%	8/9/2026	$	22,320	$	22,129	$	22,320	6.2	%
AVR Eugene Hotel LLC (5)(7)(14)	SOFR+ 4.50%	8.83	%	7/9/2026	8,969		8,868		8,969		2.5	%
AWH Dallas PC Hotel, LP (5)(7)	SOFR+ 3.25%	7.58	%	1/9/2027	10,641		10,534		10,641		3.0	%
Blue Suede Hospitality Group (5)(7)(9)(14)	SOFR+ 4.40%	8.73	%	8/9/2026	18,336		18,169		18,336		5.1	%
DK LDOI IV Aggregate Holdco LP (5)(7)(9)	SOFR+ 4.03%	8.36	%	7/9/2027	41,900		41,521		41,900		11.7	%
Insite Orlando Two, LLC (5)(7)(10)	SOFR+ 4.75%	9.08	%	11/9/2027	15,069		14,849		15,069		4.2	%
Subtotal Hospitality							$	116,070	$	117,235	32.7	%
Industrial - 12.6%
GVP TC Wilmer Property Owner, LLC (5)(7)(9)(14)	SOFR+ 3.75%	8.08	%	10/9/2027	$	37,077	$	36,640	$	37,077	10.3	%
Olymbec Viscount LLC (5)(7)(14)	SOFR+ 3.50%	7.83	%	12/9/2026	8,359		8,272		8,359		2.3	%
Subtotal Industrial							$	44,912	$	45,436	12.6	%
Mixed Use - 12.1%
GDC White Plains Fee LLC (5)(7)	SOFR+ 5.35%	9.68	%	12/9/2025	$	43,315	$	42,899	$	43,315	12.1	%
Subtotal Mixed Use							$	42,899	$	43,315	12.1	%
Multifamily - 161.0%
26 W 9th Street LLC (5)(7)(14)	SOFR+ 5.25%	9.58	%	8/9/2025	$	16,613	$	16,453	$	16,613	4.6	%
50 West BSP Owner LLC (5)(7)(9)(14)	SOFR+ 2.95%	7.28	%	12/9/2026	42,281		41,855		42,281		11.8	%
Admiral's Cove Holdings LLC (5)(7)(10)	SOFR+ 2.75%	7.08	%	8/9/2026	46,837		46,449		46,837		13.1	%
ALP Delaware, LLC (5)(7)(11)	SOFR+ 3.05%	7.38	%	7/9/2026	21,219		21,047		21,219		5.9	%
Augusta Flats 2024 LP (5)(7)(9)	SOFR+ 2.95%	7.28	%	11/9/2027	15,077		14,930		15,077		4.2	%
Caledon Owner, LLC (5)(7)	SOFR+ 3.25%	7.58	%	12/9/2027	13,641		13,505		13,641		3.8	%
Canal Properties LLC (5)(7)(9)	SOFR+ 3.75%	8.08	%	12/1/2026	12,205		12,088		12,205		3.4	%
CRP/RPM LYV Broadway GP, LLC (5)(7)(10)	SOFR+ 2.80%	7.13	%	7/9/2027	44,250		43,950		44,250		12.3	%
CS Harvey, LTD. (5)(7)(10)	SOFR+ 2.90%	7.23	%	10/9/2026	35,200		34,881		35,200		9.8	%
Gainsville Properties III, LLC (5)(7)	SOFR+ 3.50%	7.83	%	12/9/2026	20,192		19,992		20,192		5.6	%
Grand Cypress Apartments, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.08	%	9/9/2027	48,484		48,139		48,484		13.5	%
Hallandale Oasis 2019 LLC (5)(7)(14)	SOFR+ 8.30%	12.63	%	8/9/2026	6,388		6,200		6,388		1.8	%
Paraiso 256, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.08	%	9/9/2027	27,011		26,801		27,011		7.5	%
Racetrack Properties I, LLC (5)(9)	SOFR+ 2.95%	7.28	%	10/9/2026	44,300		43,898		44,300		12.3	%
Rise Bridgeview, LLC (5)(7)(14)	SOFR+ 3.25%	7.58	%	1/9/2028	10,737		10,609		10,737		3.0	%
S2 Pleasantdale LLC (5)(7)(9)(14)	SOFR+ 2.75%	7.08	%	11/9/2027	18,078		17,858		18,078		5.0	%
SL 418, LLC (5)(7)(10)(14)	SOFR+ 2.75%	7.08	%	9/9/2027	47,797		47,461		47,797		13.3	%

10

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

December 31, 2024

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Smart Living Texas City MM, LLC (5)(7)(10)	SOFR+ 3.80%	8.13	%	7/9/2025	$	14,200	$	14,120	$	14,200	4.0	%
VCP Kennesaw, LLC (5)(7)(9)	SOFR+ 2.95%	7.28	%	11/9/2026	47,227		46,784		47,227		13.2	%
VCP Manager LLC (5)(7)(9)	SOFR+ 3.10%	7.43	%	10/9/2026	29,380		29,117		29,380		8.2	%
WHK Waterfront Urban Renewal LLC (5)(7)(14)	SOFR+ 5.50%	9.83	%	7/9/2027	3,347		2,928		3,347		0.9	%
Woodbine MF TIC 1 LLC (5)(7)(9)	SOFR+ 2.75%	7.08	%	9/9/2027	13,680		13,555		13,680		3.8	%
Subtotal Multifamily							$	572,620	$	578,144	161.0	%
Self Storage - 4.3%
Silver Star Delray, LLC (5)(7)(10)	SOFR+ 3.50%	7.83	%	8/9/2026	$	15,530	$	15,402	$	15,530	4.3	%
Subtotal Self Storage							$	15,402	$	15,530	4.3	%
Subtotal Senior Mortgage							$	791,903	$	799,660	222.7	%
Mezzanine - 3.9%
Hospitality - 0.3%
AWH Dallas PC Hotel, LP (5)(7)(14)	SOFR+ 10.51%	14.84	%	1/9/2027	$	1,046	$	1,036	$	1,046	0.3	%
Subtotal Hospitality							$	1,036	$	1,046	0.3	%
Mixed Use - 1.5%
GDC White Plains SPE LLC (5)(7)		16.00	%	12/9/2025	$	5,556	$	5,501	$	5,556	1.5	%
Subtotal Mixed Use							$	5,501	$	5,556	1.5	%
Multifamily - 2.1%
26 W 9th Street LLC (5)(7)(14)	SOFR+ 12.75%	17.08	%	8/9/2025	$	1,893	$	1,875	$	1,893	0.5	%
50 West BSP Owner LLC (5)(7)(9)(14)	SOFR+ 8.23%	12.56	%	12/9/2026	2,546		2,520		2,546		0.7	%
Admiral's Cove Holdings Mezz LLC (5)(7)(10)	SOFR+ 6.75%	11.08	%	8/9/2026	3,163		3,135		3,163		0.9	%
Subtotal Multifamily							$	7,530	$	7,602	2.1	%
Subtotal Mezzanine							$	14,067	$	14,204	3.9	%
Real Estate Securities - 8.1%
Hospitality - 4.2%
BX 2024-SLCT D (7)(13)	SOFR+ 2.94%	7.27	%	1/15/2030	$	15,111	$	15,073	$	15,086	4.2	%
Subtotal Hospitality							$	15,073	$	15,086	4.2	%
Industrial - 1.4%
DBGS 2024-SBL D (7)(12)	SOFR+ 3.54%	7.87	%	8/15/2039	$	5,000	$	4,988	$	5,016	1.4	%
Subtotal Industrial							$	4,988	$	5,016	1.4	%

11

FRANKLIN BSP REAL ESTATE DEBT BDC

CONSOLIDATED SCHEDULE OF INVESTMENTS

(dollars in thousands, except share and per share data)

December 31, 2024

Portfolio Company (1)(2)(6)(8)	Spread Above Reference Rate (3)	Interest Rate (4)		Maturity Date	Par Amount		Amortized Cost		Fair Value		% of Net Assets
Multifamily - 2.5%
NYC 2024-3ELV C (7)(12)	SOFR+ 2.84%	7.17	%	8/15/2029	$	8,875	$	8,853	$	8,890	2.5	%
Subtotal Multifamily							$	8,853	$	8,890	2.5	%
Subtotal Real Estate Securities							$	28,914	$	28,992	8.1	%
Total Investments - 234.7%							$	834,884	$	842,856	234.7	%

(1) All investments are U.S. domiciled.

(2) All debt investments are income-producing, unless otherwise noted.

(3) The investments herein bear interest at rates that may be determined by reference to Secured Overnight Financing Rate (“SOFR”), which typically resets monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at December 31, 2024. As of December 31, 2024, rates for 1M SOFR, 3M SOFR, 6M SOFR, 12M SOFR are 4.33%, 4.31%, 4.25%, and 4.18%, respectively. Certain investments are subject to a SOFR floor.

(4) Interest rates on investments are annualized.

(5) The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board (as defined below) as required by the Investment Company Act of 1940, as amended (the “1940 Act”). Such investments are valued using significant unobservable inputs. Refer to Note 5 - Fair Value Measurement.

(6) All of the Company’s investments are Non-Control/Non-Affiliate investments. Non-Control/Non-Affiliate investments as defined by the 1940 Act, are those that are neither Control nor Affiliate investments and in which we own less than 25.0%/5.0% of the issued and outstanding voting securities.

(7) Represents co-investments made with the Company’s affiliates. Refer to Note 3 - Related Party Transactions.

(8) All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of December 31, 2024, qualifying assets represent 100.0% of the Company's total assets.

(9) The Company’s investment or a portion thereof is pledged as collateral under the JPM Credit Facility (as defined in Note 6).

(10) The Company’s investment or a portion thereof is pledged as collateral under the Barclay’s Warehouse Facility (as defined in Note 6).

(11) The Company’s investment or a portion thereof is pledged as collateral under the Webster Warehouse Facility (as defined in Note 6.)

(12) The Company’s investment or a portion thereof is pledged as collateral under the JPM Repo Facility (as defined in Note 6).

(13) The Company’s investment or a portion thereof is pledged as collateral under the Barclay’s Repo Facility (as defined in Note 6).

(14) The Company’s investment or a portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion. Refer to Note 7 - Commitments and Contingencies.

The accompanying notes are an integral part of these consolidated financial statements.

12

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Note 1 - Organization

Franklin BSP Real Estate Debt BDC (the “Company”) is an externally managed, non-diversified, closed-end management investment company that elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”) on June 6, 2024 and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually thereafter, as a real estate investment trust (“REIT”). The Company was formed as a Delaware statutory trust on March 11, 2024 (date of inception). As a BDC, the Company must comply with certain regulatory requirements.

The Company is externally managed by Benefit Street Partners, L.L.C. (the “Advisor”). The Company’s Advisor is a limited liability company that is registered as an investment advisor with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Advisor oversees the management of the Company’s activities and is responsible for making investment decisions with respect to the Company’s portfolio.

The Company’s investment objectives are to seek to provide high current income while maintaining downside protection. The Company seeks to invest in assets that will enable it to:

•provide current income in the form of regular, stable cash distributions to achieve an attractive distribution yield;

•preserve and protect invested capital, by primarily focusing on high-quality credit investments supported by current cash-flow and/or limited business plan risk in the underlying assets;

•reduce downside risk through loans with relatively low loan-to-value ratios, meaning we generally invest in less risky loans with low interest rates which are backed by high-quality real assets, with a focus on residential lending and with meaningful borrower equity; and

•provide an investment alternative for shareholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate (“CRE”) debt with expected lower volatility than publicly traded securities and compelling risk-adjusted returns compared to fixed income alternatives.

The Company’s investment strategy is to originate, acquire, finance and manage a portfolio of primarily CRE investments, focused on senior secured, CRE loans across a wide range of geography. The Company focuses its investments in the middle market, with loans in the range of $25 - $100 million, across a mix of asset classes, but maintains a focus on multi-family lending. To a lesser extent, the Company may invest in, or originate, other real-estate related debt and equity investments, which may include subordinated debt, commercial mortgage-backed securities (“CMBS”) and collateralized loan obligations (“CLOs”).

The Company seeks to focus on a flexible mix of credit and other real estate investments associated with high-quality assets to generate current cash flow. The Company seeks to identify attractive risk-reward investment opportunities with a focus on financing middle market investments.

The Company is a fixed-term BDC, meaning it is an investment vehicle of defined duration. Following the initial closing, the Company has an investment period (the “Investment Period”) of 18 months during which it may invest capital commitments and reinvest proceeds in line with the Company’s investment strategy. The term of the Company shall not extend beyond the 4 year anniversary of the end of the Investment Period.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The Company's unaudited consolidated financial statements and related footnotes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the period ended December 31, 2024, which are included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 27, 2025, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this report.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these consolidated financial statements. Actual results could differ from those estimates.

13

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Principles of Consolidation

The Company will generally consolidate any wholly or substantially owned subsidiary when the design and purpose of the subsidiary is to act as an extension of the Company’s investment operations and to facilitate the execution of the Company’s investment strategy. Accordingly, the Company consolidated the results of its wholly or substantially wholly owned subsidiaries in its consolidated financial statements.

Note 3 - Related Party Transactions

Investment Advisory Agreement

The Company entered into an Investment Advisory Agreement with the Advisor in which the Advisor, subject to the overall supervision of the Company’s Board of Trustees, manages the day-to-day operations of, and provides investment advisory services to the Company. Pursuant to the Investment Advisory Agreement with the Advisor, the Company pays the Advisor a fee for investment advisory and management services consisting of two components—a base management fee (the “Management Fee”) and an incentive fee (the “Incentive Fee”).

Management Fee

The Management Fee is payable quarterly in arrears and is calculated at an annual rate of 0.50% based on the average value of the Company’s gross assets at the end of the two most recently completed quarters.

Incentive Fee

The Incentive Fee consists of two parts. The first part, referred to as the “Incentive Fee on Income,” is calculated and payable quarterly in arrears based on the Company’s “pre-incentive fee net investment income” (as defined below) for the immediately preceding quarter. The term “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Management Fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred share, but excluding the Incentive Fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of computing the Company’s pre-incentive fee net investment income, the calculation methodology will look through total return swaps (to the extent the Company invests in any, which it does not currently intend to) as if the Company owned the referenced assets directly.

The payment of the Incentive Fee on Income shall be subject to payment of a preferred return to investors each quarter, expressed as a quarterly rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, subject to a “catch up” feature (as described below). The calculation of the Incentive Fee on Income is as follows:

•No Incentive Fee on Income shall be payable to the Advisor in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the preferred return rate of 1.25% per quarter (or 5.00% annualized) (the “Preferred Return”) on net assets;

•100% of the dollar amount of the Company’s pre-incentive fee net investment income, if any, that exceeds the Preferred Return but is less than or equal to 1.429% in any calendar quarter (or 5.71% annualized) shall be payable to the Advisor. This portion of the Incentive Fee on Income is referred to as the “catch up” and is intended to provide the Advisor with an incentive fee of 12.5% on all of the Company’s pre-incentive fee net investment income when the Company’s pre-incentive fee net investment income reaches 1.429% (or 5.71% annualized) in any calendar quarter; and

•For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.429% in any calendar quarter (or 5.71% annualized), the Incentive Fee on Income shall equal 12.5% of the dollar amount of the Company’s pre-incentive fee net investment income as the Preferred Return and catch up will have been achieved.

The second part of the incentive fee, referred to as the “Incentive Fee on Capital Gains During Operations,” shall be calculated based on the Company’s “Capital Gains During Operations” (as defined below) and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, if earlier).

14

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

“Capital Gains During Operations” means the Company’s cumulative realized capital gains from the date of the Company’s election to be regulated as a BDC through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis. For the purpose of computing the Company’s Capital Gains During Operations, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly. Therefore, realized gains and realized losses on the disposition of any reference assets, as well as unrealized depreciation on reference assets retained in the derivative financial instrument or swap, will be included on a cumulative basis in the calculation of the Company’s Capital Gains During Operations.

The Incentive Fee on Capital Gains During Operations equals 12.5% of the Company’s Capital Gains During Operations, less the aggregate amount of any previously paid Incentive Fee on Capital Gains During Operations.

GAAP requires that the incentive fee accrual be calculated assuming a hypothetical liquidation of the Company based upon investments held at the end of each period. In such a calculation, in order to calculate the accrual for the Incentive Fee on Capital Gains During Operations in accordance with GAAP for a given period, the Company includes unrealized appreciation in calculating the accrual for the Incentive Fee on Capital Gains During Operations even though such unrealized appreciation is not included in calculating the capital gains incentive fee payable under the Investment Advisory Agreement. There can be no assurance that such unrealized appreciation will be realized in the future. Accordingly, the accrual for the Incentive Fee on Capital Gains During Operations, as calculated and accrued in accordance with GAAP, does not necessarily represent amounts that will be payable under the Investment Advisory Agreement.

For the three months ended March 31, 2025, the Company accrued $0.2 million in Incentive Fee on Capital Gains During Operations on unrealized appreciation in accordance with GAAP, none of which was payable to the Advisor under the Investment Advisory Agreement.

On June 7, 2024 a Fee Waiver Agreement (“fee waiver”) was entered into between the Advisor and the Company. Under the terms of the fee waiver, (a) the Advisor shall waive its Management Fee indefinitely and (b) the Advisor shall waive its Incentive Fee for a period of 12 months after the initial closing of the Company’s private placement of Common Shares of beneficial interests.

Administration Agreement

The Company entered into an administration agreement with Benefit Street Partners (the “Administration Agreement”), pursuant to which Benefit Street Partners (in such capacity, the “Administrator”) provides the Company with office facilities and certain administrative services necessary for the Company to conduct its business. At the request of the Administrator, the Company may reimburse certain costs and expenses incurred in connection with this agreement.

Expense Limitation Agreement

The Company has entered into an Expense Limitation Agreement (the ‘Expense Limitation Agreement”) with the Advisor. Under the Expense Limitation Agreement, the Advisor agrees on a quarterly basis to reimburse the Company’s Specified Expenses (as defined below) to the extent that such annualized Specified Expenses in respect of the relevant quarter exceed 0.10% of the Company’s quarter-end net asset value (the “Expense Limitation”). Any reimbursement is not subject to recoupment. Specified Expenses shall mean the Company’s initial organizational and offering costs as well as its total operating expenses, inclusive of any fees the Company has agreed to bear pursuant to 4(b) of the Administration Agreement, but excluding (1) expenses directly related to the interest costs and structuring costs for borrowing and line(s) of credit, taxes, litigation or extraordinary expenses; (2) any tax, litigation and extraordinary expenses related to any structuring, litigation or other actions taken by the Advisor to preserve or enhance the value of investments for the Company’s shareholders; and (3) the incentive fees. The Expense Limitation Agreement shall be in effect during the term of the Company, unless and until the Board of Trustees approves its modification or termination.

Co-Investments

The Company may originate loans alongside its affiliated entities in co-investment transactions. Prior to engaging in co-investment transactions, the Company obtained approval from the Board pursuant to the October 3, 2024 exemptive order issued by the SEC, which superseded a prior order issued May 1, 2018.

Note 4 - Investments

15

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, “non-affiliated investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the consolidated financial statements, including the Consolidated Schedule of Investments.

The information in the tables below is presented on an aggregate portfolio basis, without regard to whether they are non-controlled, non-affiliated; non-controlled, affiliated; or controlled affiliated investments.

The following table represents the Company's investment portfolio as of March 31, 2025:

	Investments at Cost		Investments at Fair Value		Fair Value Percentage of Total Portfolio
Senior Mortgage	$	1,054,685	$	1,063,590	95.2	%
Mezzanine	24,469		24,819		2.2	%
Real Estate Securities	28,925		28,920		2.6	%
Total	$	1,108,079	$	1,117,329	100.0	%

The following table represents the Company's investment portfolio as of December 31, 2024:

	Investments at Cost		Investments at Fair Value		Fair Value Percentage of Total Portfolio
Senior Mortgage	$	791,903	$	799,660	94.9	%
Mezzanine	14,067		14,204		1.7	%
Real Estate Securities	28,914		28,992		3.4	%
Total	$	834,884	$	842,856	100.0	%

The following tables show the investment portfolio composition by industry grouping based on fair value at March 31, 2025 and December 31, 2024, respectively (dollars in thousands):

	At March 31, 2025
	Investments at Fair Value		Percentage of Total Portfolio
Multifamily	$	768,340	68.8	%
Hospitality	188,052		16.8	%
Industrial	96,537		8.6	%
Mixed Use	48,870		4.4	%
Self Storage	15,530		1.4	%
Total	$	1,117,329	100.0	%

As of March 31, 2025, 100% of investments held were based in the United States.

16

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

	At December 31, 2024
	Investments at Fair Value		Percentage of Total Portfolio
Multifamily	$	594,636	70.6	%
Hospitality	133,367		15.8	%
Industrial	50,452		6.0	%
Mixed Use	48,871		5.8	%
Self Storage	15,530		1.8	%
Total	$	842,856	100.0	%

As of December 31, 2024, 100% of investments held were based in the United States.

Note 5 - Fair Value Measurement

In accordance with ASC Topic 820, fair value is defined as the price that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability as of the reporting date.

Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.The three-tier hierarchy of inputs is summarized below:

•Level 1 – Quoted prices in active markets for identical investments.

•Level 2 – Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

•Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments at the reporting date).

The level in the fair value hierarchy within which the fair value measurement is categorized in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. If a fair value measurement uses price data vendors or observable market price quotations, that measurement may be a Level 1 or Level 2 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability.

The determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Valuation of Investments

Investments are valued at fair value as determined in good faith by the Advisor, subject to the oversight of the Board, based on input from management and independent valuation firms that have been engaged to assist in the valuation of portfolio investments without readily available market quotations. This valuation process is conducted at the end of each fiscal quarter.

17

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Investments for which market quotations are not readily available are valued at fair value as determined in good faith pursuant to Rule 2a-5 under the 1940 Act and ASC Topic 820. As a general principle, the fair value of a security or other asset is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Pursuant to Rule 2a-5, the Board has designated the Advisor as the valuation designee (“Valuation Designee”) for the Company to perform the fair value determination relating to all Company investments. The Advisor may carry out its designated responsibilities as Valuation Designee through various teams and committees. The Valuation Designee’s policies and procedures govern the Valuation Designee’s selection and application of methodologies for determining and calculating the fair value of Company investments. The Valuation Designee may value Company portfolio securities for which market quotations are not readily available and other Company assets utilizing inputs from pricing sources, quotation reporting systems, valuation agents and other third-party sources (together, “Pricing Sources”).

The fair market value of the Company’s commercial real estate (“CRE”) loans and other real asset loan investments shall be determined by the Advisor, who has been appointed the Valuation Designee on a quarterly basis. Newly originated or acquired loan investments’ fair value in the month they are closed are valued by the Company’s independent valuation firm and will usually approximate the par value of the loan investment. For each quarter after the initial month in which a loan investment is closed, an independent third-party appointed by the Valuation Designee shall review and confirm the reasonableness of the Advisor’s valuation of each of the Company’s CRE loan and other real asset loan investments. Updated valuations of CRE loan and other real asset loan investments will reflect changes in interest rates, spreads, collateral value, loan tests (including loan impairment testing) and metrics, risk ratings, and anticipated liquidation timing and proceeds, among other items. The fair values shall generally be determined by discounting the future contractual cash flows to the present value using a current market interest rate or spread. The market rate shall generally be determined through consideration of the interest rates for debt of comparable quality and maturity, and, where applicable, the value of the underlying real estate investment.

The fair values of loan investments based upon pricing data vendors or observable market price quotations are generally categorized as Level 1 or Level 2. Loan investments priced using internal models with significant unobservable inputs are categorized as Level 3.

The fair value of our real estate securities are determined using market-based inputs provided by external pricing vendors. The vendors utilize observable market data, including recent trades, benchmark indices, and market yield curves, to estimate valuations. The Company performs periodic reviews to ensure that the pricing sources and methodologies used are consistent. The real estate securities are generally categorized as Level 2.

The following table presents fair value measurements of investments, by investment type, as of March 31, 2025, according to the fair value hierarchy:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Senior Mortgage	$	—	$	—	$	1,063,590	$	1,063,590
Mezzanine	—		—		24,819		24,819
Real Estate Securities	—		28,920		—		28,920
Total	$	—	$	28,920	$	1,088,409	$	1,117,329

The following table presents fair value measurements of investments, by investment type, as of December 31, 2024, according to the fair value hierarchy:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Senior Mortgage	$	—	$	—	$	799,660	$	799,660
Mezzanine	—		—		14,204		14,204
Real Estate Securities	—		28,992		—		28,992
Total	$	—	$	28,992	$	813,864	$	842,856

18

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

The following tables present a summary of changes in fair value of Level 3 assets by investment type for the three months ended March 31, 2025 and for the period from March 11, 2024 (date of inception) to December 31, 2024 (amounts in thousands):

	For the three months ended March 31, 2025
	Senior Mortgage (1)		Mezzanine (1)		Total
Balance as of January 1, 2025	$	799,660	$	14,204	$	813,864
Origination of loans	268,901		10,616		279,517
Paydowns of loans	(4,973)		—		(4,973)
Loan origination fees collected	(2,698)		(272)		(2,970)
Net accretion on investments	1,554		58		1,612
Net change in unrealized appreciation (depreciation) on investments (2)	1,146		213		1,359
Balance as of March 31, 2025	$	1,063,590	$	24,819	$	1,088,409

(1) There were no transfers into or out of Level 3 for the three months ended March 31, 2025.

(2) The total amount of unrealized gains relating to the Company’s Level 3 assets held was $1.4 million as of March 31, 2025.

	For the period from March 11, 2024 (date of inception) to December 31, 2024
	Senior Mortgage (1)		Mezzanine (1)		Total
Balance as of March 11, 2024	$	—	$	—	$	—
Origination of loans	799,659		21,682		821,341
Loan origination fees collected	(8,642)		(241)		(8,883)
Net accretion on investments	885		21		906
Net change in unrealized appreciation (depreciation) on investments (2)	7,758		137		7,895
Sales of investments	—		(7,390)		(7,390)
Net realized gains (losses)	—		(5)		(5)
Balance as of December 31, 2024	$	799,660	$	14,204	$	813,864

(1) There were no transfers into or out of Level 3 for the period from March 11, 2024 (date of inception) to December 31, 2024.

(2) The total amount of unrealized gains relating to the Company’s Level 3 assets held was $7.9 million as of December 31, 2024.

The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments as of March 31, 2025. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value (amounts in thousands).

					Range
Asset Category	Fair Value		Primary Valuation Technique	Unobservable Inputs	Minimum	Maximum	Weighted Average
Senior Mortgage	$	87,704	Recent Transaction	n/a	n/a	n/a	n/a
Senior Mortgage	975,886		DCF Method	Discount Rate	2.65%	8.30%	3.46%
Mezzanine	1,838		Recent Transaction	n/a	n/a	n/a	n/a
Mezzanine	22,981		DCF Method	Discount Rate	6.75%	15.89%	11.53%
Total	$	1,088,409

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

19

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments as of December 31, 2024. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value (amounts in thousands).

					Range
Asset Category	Fair Value		Primary Valuation Technique	Unobservable Inputs	Minimum	Maximum	Weighted Average
Senior Mortgage	$	106,885	Recent Transaction	n/a	n/a	n/a	n/a
Senior Mortgage	692,775		DCF Method	Discount Rate	2.65%	8.30%	3.46%
Mezzanine	6,602		Recent Transaction	n/a	n/a	n/a	n/a
Mezzanine	7,602		DCF Method	Discount Rate	6.75%	12.75%	8.78%
Total	$	813,864

Note 6 - Repurchase Agreements

On June 24, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC BB FLOAT, LLC (“Barclays SPV”), entered into a master repurchase agreement (the “Barclays Agreement”), with the Barclays SPV as the seller, and Barclays Bank PLC as the purchaser. On February 20, 2025, the Company increased the aggregate commitment to purchase loans under the Barclays Agreement from $250 million to $400 million. Obligations under the Barclays SPV are secured by a first priority security interest in all of the loans pledged under Barclays SPV. The obligations of Barclays SPV under the Barclays Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays Agreement will mature, and will be due and payable, on the maturity date, which is June 24, 2027. The Barclays Agreement bore interest at one-month SOFR plus an average spread of 1.67%.

On July 3, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC High Yield Securities, LLC (“JPM Repo SPV”), entered into a master repurchase agreement (the “JPM Repo Agreement”), with the JPM Repo SPV as the seller, and J.P. Morgan Securities LLC as the purchaser. There is no maximum aggregate commitments to purchase real estate securities under the JPM Repo Agreement. Obligations under the JPM Repo SPV are secured by a first priority security interest in all of the real estate securities pledged under JPM Repo SPV. The obligations of JPM Repo SPV under the JPM Repo Agreement are nonrecourse to the Company. Any amounts borrowed under the JPM Repo Agreement will mature, and will be due and payable when the pledged real estate securities mature or are sold by the Company. The JPM Repo Agreement bore interest at one-month SOFR plus an average spread of 0.97%.

On August 14, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC JPM Seller, LLC (“JPM SPV”), entered into a master repurchase agreement (the “JPM Agreement”), with the JPM SPV as the seller, and JPMorgan Chase Bank, National Association as the purchaser. The aggregate commitment to purchase the loans under the JPM Agreement is $500 million. Obligations under the JPM SPV are secured by a first priority security interest in all of the loans pledged under JPM SPV. The obligations of JPM SPV under the JPM Agreement are nonrecourse to the Company. Any amounts borrowed under the JPM Agreement will mature, and will be due and payable, on the maturity date, which is August 14, 2026. The JPM Agreement bore interest at one-month SOFR plus an average spread of 1.89%.

On September 3, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC Landings Finance, LLC (“Webster SPV”), entered into a master repurchase agreement (the “Webster Agreement”), with the Webster SPV as the seller, and Webster Bank, National Associate as the purchaser. The aggregate commitment to purchase a loan under the agreement is $15.9 million. Obligations under the Webster SPV are secured by a first priority security interest in the loan pledged under Webster SPV. The obligations of Webster SPV under the Webster Agreement are nonrecourse to the Company. Any amounts borrowed under the Webster Agreement will mature, and will be due and payable, on the maturity date, which is July 9, 2026. The Webster Agreement bore interest at one-month SOFR plus a spread of 1.95%.

On August 28, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC High Yield Securities, LLC (“Barclays Repo SPV”), entered into a master repurchase agreement (the “Barclays Repo Agreement”), with the Barclays Repo SPV as the seller, and Barclays Bank PLC as the purchaser. There is no maximum aggregate commitments to purchase real estate securities under the Barclays Repo Agreement. Obligations under the Barclays Repo SPV are secured by a first priority security interest in all of the real estate securities pledged under Barclays Repo SPV. The obligations of Barclays Repo SPV under the Barclays Repo Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays Repo Agreement will mature, and will be due and payable when the pledged real estate securities mature or are sold by the Company. The Barclays Repo Agreement bore interest at one-month SOFR plus an average spread of 1.00%.

20

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

On March 13, 2025, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC WWH Seller, LLC ("Wells Fargo SPV"), entered into a Master Repurchase and Securities Contract agreement (the "Wells Fargo Agreement"), with the Wells Fargo SPV as the seller, and Wells Fargo Bank, National Association, as the purchaser. The aggregate commitments to purchase the loans under the Wells Fargo Agreement is $150 million. Obligations under the Wells Fargo SPV are secured by a first priority security interest in all of the loans pledged under Wells Fargo SPV. The obligations of Wells Fargo SPV under the Wells Fargo Agreement are nonrecourse to the Company. Any amounts borrowed under the Wells Fargo Agreement will mature, and will be due and payable, on the maturity date, which is March 13, 2027. As of March 31, 2025, the Company has not entered into any borrowings under the agreement.

The following table represents the Company's repurchase agreements as of March 31, 2025:

	Maturity Date	Interest Expense Incurred		Ending Weighted Average Interest Rate		Amount Pledged		Amount per Consolidated Statements of Assets and Liabilities
FBRED BDC BB FLOAT, LLC (“Barclays SPV”)	6/24/2027	$	8,188	5.91	%	$	390,327	$	243,199
FBRED BDC High Yield Securities, LLC ("JPM Repo SPV")	N/A	436		5.28	%	13,875		11,592
FBRED BDC JPM Seller, LLC ("JPM SPV")	8/14/2026	8,259		6.10	%	588,818		390,744
FBRED BDC Landings Finance, LLC (“Webster SPV”)	7/9/2026	613		6.27	%	21,219		15,914
FBRED BDC High Yield Securities, LLC ("Barclays Repo SPV")	N/A	169		5.32	%	15,111		12,059
Total		$	17,665	6.01	%	$	1,029,350	$	673,508

The combined weighted average borrowings outstanding was $610.5 million for the period ended March 31, 2025.

The following table represents the Company's repurchase agreements as of December 31, 2024:

	Maturity Date	Interest Expense Incurred		Ending Weighted Average Interest Rate		Amount Pledged		Amount per Consolidated Statements of Assets and Liabilities
FBRED BDC BB FLOAT, LLC (“Barclays SPV”)	6/24/2027	$	4,673	6.27	%	$	297,541	$	215,594
FBRED BDC High Yield Securities, LLC ("JPM Repo SPV")	N/A	283		5.61	%	13,875		11,576
FBRED BDC JPM Seller, LLC ("JPM SPV")	8/14/2026	3,025		4.70	%	344,407		246,058
FBRED BDC Landings Finance, LLC (“Webster SPV”)	7/9/2026	363		6.50	%	21,219		15,914
FBRED BDC High Yield Securities, LLC ("Barclays Repo SPV")	N/A	9		1.00	%	15,111		12,058
Total		$	8,353	5.36	%	$	692,153	$	501,200

The combined weighted average borrowings outstanding was $156.2 million for the period ended December 31, 2024.

21

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. On April 8, 2024, the Company’s sole initial shareholder approved the adoption of this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act. As of March 31, 2025 and December 31, 2024, the Company’s asset coverage ratio based on the aggregate amount outstanding of senior securities was 168.5% and 171.6%, respectively.

At March 31, 2025, the carrying amount of the Company's repurchase agreements approximated their fair value. The fair values of the Company's debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company's repurchase agreements is estimated based upon market interest rates for the Company's own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of March 31, 2025, the Company's borrowings would be deemed to be Level 3, as defined in Note 5 - Fair Value Measurement.

Note 7- Commitments & Contingencies

Commitments

In the ordinary course of business, the Company may enter into future funding commitments. As of March 31, 2025, the Company had unfunded commitments on delayed draw term loans of $140.0 million. As of March 31, 2025, the Company’s unfunded commitments consisted of the following:

22

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Portfolio Company Name	Investment Type	Commitment Type	Total Commitment		Remaining Commitment
1915 WBP Owner, LLC	Senior Mortgage	Delayed Draw	$	11,255	$	1,156
26 W 9th Street LLC	Mezzanine	Delayed Draw	2,801		745
26 W 9th Street LLC	Senior Mortgage	Delayed Draw	25,210		7,494
300 Pressler Street Owner, LLC	Mezzanine	Delayed Draw	2,218		2,218
300 Pressler Street Owner, LLC	Senior Mortgage	Delayed Draw	11,489		11,489
50 West BSP Owner LLC	Mezzanine	Delayed Draw	2,656		85
50 West BSP Owner LLC	Senior Mortgage	Delayed Draw	44,107		1,415
6304 Sheriff Road LLC	Senior Mortgage	Delayed Draw	40,350		5,154
AVR Eugene Hotel LLC	Senior Mortgage	Delayed Draw	12,598		363
Blue Suede Hospitality Group	Senior Mortgage	Delayed Draw	19,510		1,174
Creekside Logistics Center Owner, LLC	Senior Mortgage	Delayed Draw	14,701		4,782
Grand Cypress Apartments, LLC	Senior Mortgage	Delayed Draw	50,000		772
GVP TC Wilmer Property Owner, LLC	Senior Mortgage	Delayed Draw	46,027		7,967
Hallandale Oasis 2019 LLC	Senior Mortgage	Delayed Draw	23,098		14,461
Insite Orlando Two, LLC	Senior Mortgage	Delayed Draw	22,795		7,525
Olymbec Viscount LLC	Senior Mortgage	Delayed Draw	8,819		460
Paraiso 256, LLC	Senior Mortgage	Delayed Draw	29,896		1,251
Rise Bridgeview, LLC	Senior Mortgage	Delayed Draw	12,724		1,987
Rise Stone Gate, LLC & Artic Investments, LLC	Senior Mortgage	Delayed Draw	9,050		1,465
S2 Pleasantdale LLC	Senior Mortgage	Delayed Draw	22,809		4,022
SL 418, LLC	Senior Mortgage	Delayed Draw	48,701		719
WHK Waterfront Urban Renewal LLC	Senior Mortgage	Delayed Draw	50,000		46,496
WHK Waterfront Urban Renewal LLC	Mezzanine	Delayed Draw	19,091		16,751
Total			$	529,905	$	139,951

In the ordinary course of business, the Company may enter into future funding commitments. As of December 31, 2024, the Company had unfunded commitments on delayed draw term loans of $127.9 million. As of December 31, 2024, the Company’s unfunded commitments consisted of the following:

23

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Portfolio Company Name	Investment Type	Commitment Type	Total Commitment		Remaining Commitment
26 W 9th Street LLC	Mezzanine	Delayed Draw	$	2,801	$	908
26 W 9th Street LLC	Senior Mortgage	Delayed Draw	25,210		8,596
50 West BSP Owner LLC	Mezzanine	Delayed Draw	2,656		110
50 West BSP Owner LLC	Senior Mortgage	Delayed Draw	44,107		1,827
AVR Eugene Hotel LLC	Senior Mortgage	Delayed Draw	12,598		3,629
Blue Suede Hospitality Group	Senior Mortgage	Delayed Draw	19,510		1,174
Grand Cypress Apartments, LLC	Senior Mortgage	Delayed Draw	50,000		1,516
GVP TC Wilmer Property Owner, LLC	Senior Mortgage	Delayed Draw	46,027		8,949
Hallandale Oasis 2019 LLC	Senior Mortgage	Delayed Draw	23,098		16,711
Insite Orlando Two, LLC	Senior Mortgage	Delayed Draw	22,795		7,726
Olymbec Viscount LLC	Senior Mortgage	Delayed Draw	8,819		460
Paraiso 256, LLC	Senior Mortgage	Delayed Draw	29,896		2,885
Rise Bridgeview, LLC	Senior Mortgage	Delayed Draw	12,724		1,987
S2 Pleasantdale LLC	Senior Mortgage	Delayed Draw	22,809		4,731
SL 418, LLC	Senior Mortgage	Delayed Draw	48,701		904
WHK Waterfront Urban Renewal LLC	Senior Mortgage	Delayed Draw	50,000		46,653
WHK Waterfront Mezz LLC	Mezzanine	Delayed Draw	19,091		19,091
Total			$	440,842	$	127,857

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Indemnifications

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company.

Note 8 - Series A Cumulative Preferred Shares

On January 17, 2025, the Company issued 125 shares of Series A Cumulative Preferred Shares (the “Preferred Shares”) with a liquidation preference of $1,000 per share plus an amount equal to accrued but unpaid dividends. The Preferred Shares pay dividends at a cumulative rate of 12.0% per annum and are redeemable under certain conditions by the Company.

Note 9 - Net Assets

Equity Issuance

The Company has the authority to issue an unlimited number of Common Shares at $0.001 per share par value.

As of March 31, 2025, The Company had capital commitments totaling $634.0 million with unfunded commitments totaling $184.0 million and a percent called ratio of 71.0%. As of December 31, 2024, The Company had capital commitments totaling $526.5 million with unfunded commitments totaling $176.5 million and a percent called ratio of 66.5%. The following table summarizes the total shares issued and amount received related to capital drawdowns delivered pursuant to the Subscription Agreements:

24

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Share Issue Date	Shares Issued	Net Proceeds Received
January 15, 2025	3,769,318	$	100,000
November 14, 2024	2,786,033	75,000
August 7, 2024	4,250,388	110,000
July 10, 2024	2,347,417	60,000
June 20, 2024	4,199,999	104,999
April 8, 2024	60	2
Total Capital Drawdowns	17,353,215	$	450,001

Distributions

The following table reflects the distributions paid on shares of the Company’s Common Stock during the three months ended March 31, 2025:

Date Declared	Record Date	Payment Date	Amount Per Share
March 27, 2025	March 28, 2025	March 31, 2025	$0.69
December 26, 2024	December 31, 2024	January 22, 2025	$0.97

Note 10 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per Common Share for the three months ended March 31, 2025:

	For the three months ended March 31, 2025
Basic and diluted
Net increase in net assets resulting from operations	$	14,178
Weighted average shares outstanding	16,766,876
Net increase in net assets resulting from operations per share (basic and diluted) (1)	$	0.85

(1) The Company does not have any outstanding anti-dilutive instruments as of March 31, 2025.

25

FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Note 11 - Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2025:

	For the three months ended March 31, 2025
Per share data:
Net asset value, beginning of period	$	26.42
Net investment income (4)	0.77
Net change in unrealized gain on investments (4)	0.08
Net increase in net assets resulting from operations (4)	0.85
Common Shareholder distributions from net investment income	(0.69)
Net increase in net assets	0.16
Other (1)	(0.01)
Net asset value, end of period	$	26.57
Shares outstanding at end of period	17,353,215
Total return (2)	3.19		%
Ratio/Supplemental data attributable to Common Shares:
Total net assets attributable to Common Shares, end of period	461,019
Ratio of net investment income to average net assets attributable to common stock (3)(8)	11.68		%
Ratio of total expenses to average net assets attributable to common stock (3)(8)	12.81		%
Ratio of net expenses to average net assets attributable to common stock (3)(8)	8.91		%
Ratio of gross operating expenses to average net assets attributable to Common Shares (3)(5)(8)	4.00		%
Ratio of net operating expenses to average net assets attributable to Common Shares (3)(6)(8)	0.10		%
Ratio of total investment income less interest and debt fees to average net assets attributable to Common Shares (3)(7)(8)	11.78		%
Portfolio turnover rate (9)	0.51		%

(1) Represents the impact of calculating certain per share amounts based on weighted average Common Shares outstanding during the period and certain per share amounts based on Common Shares outstanding as of period end.

(2) Total return is calculated as the change in NAV per share during the period, plus distributions per share, if any, divided by the NAV per share at the beginning of the period. Total return is for the period indicated and has not been annualized.

(3) Average net assets are computed by taking the daily weighted average of our net assets for the period being reported.

(4) The per share data was derived by using the weighted average shares outstanding during the period.

(5) Gross operating expenses are defined as total expenses less interest and debt fees for the period.

(6) Net operating expenses are defined as net expenses less interest and debt fees for the period.

(7) Also referred to as net interest margin.

(8) Ratios are annualized for the period.

(9) Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over average investments at fair value.

Note 12 - Segment Reporting

The Company operates through a single operating and reporting segment with an investment objective to provide high current income while maintaining downside protection on its investments. The Chief Operating Decision Maker (“CODM”) is comprised of the Company’s President of Commercial Real Estate and the Chief Financial Officer/Chief Operating Officer, and assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company’s net increase in net assets resulting from operations (“net income”). The CODM uses net income as a key metric in determining the amount of dividends to be distributed to the Company’s shareholders. As the Company’s operations comprise of a single reporting segment, the segment assets are reflected in total assets on the accompanying Consolidated Statement of Assets and Liabilities and the significant segment expenses are listed on the accompanying Consolidated Statement of Operations.

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FRANKLIN BSP REAL ESTATE DEBT BDC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2025

(Unaudited)

Note 13 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q. The following activity took place subsequent to the three months ended March 31, 2025.

Common Shares

On April 14, 2025, the Company issued Common Shares to certain investors pursuant to capital drawdown notices issued by the Company and sent to each of such investors. The offer and sale of the Common Shares were exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof and Regulation D promulgated thereunder. The following table details the amount of Common Shares sold and consideration therefor:

Date of Unregistered Sale	Aggregate Amount of Common Shares	Consideration
April 14, 2025	2,814,259	$	75,000,000

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

References herein to “Franklin BSP Real Estate Debt BDC” “Company,” “we,” “us,” or “our” refer to Franklin BSP Real Estate Debt BDC and its subsidiaries unless the context specifically requires otherwise.

Forward Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Quarterly Report on Form 10-Q may include statements as to:

•our future operating results;

•our business prospects and the prospects of the assets in which we may invest;

•changes in political, economic or industry conditions, the inflation and interest rate environment or conditions affecting the financial and capital markets;

•the impact of the investments that we expect to make;

•our ability to raise sufficient capital to execute our investment and lending strategies;

•the ability of our portfolio companies to achieve their objectives;

•our contractual arrangements and relationships with third parties;

•our expected financings and investments;

•the adequacy of our cash resources, financing sources and working capital;

•the timing and amount of cash flows, distributions and dividends, if any, from the operations of our portfolio companies;

•actual and potential conflicts of interest with our Advisor and its affiliates, and its senior investment team;

•the dependence of our future success on the general economy and its effect on the industries in which we invest;

•the ability to qualify and maintain our qualification as a REIT for U.S. federal income tax purposes under the Code and maintain our qualification as a BDC;

•the timing, form and amount of any distributions;

•the impact of fluctuations in interest rates on our business;

•the valuation of any investments in portfolio companies, particularly those having no liquid trading market;

•the impact of changes to generally accepted accounting principles, and the impact to the Company;

•the impact of changes to tax legislation and, generally, our tax position;

•the ability of our Advisor to locate suitable investments for us and to monitor and administer our investments; and

•the ability of our Advisor and its affiliates to attract and retain highly talented professionals.

In addition, words such as “anticipate,” “believe,” expect,” “intend,” “plan,” “will,” “may,” “continue,” “seek,” “estimate,” “would,” “could,” “should,” “target,” “project,” and variations of these words and similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this Registration Statement involve risks and uncertainties. Our actual results could differ materially from those implied or express in the forward-looking statements for any reason. Examples of factors that could cause actual results to differ materially include:

•changes in the economy, particularly those affecting the real estate industry;

•risks associated with possible disruption in our operations or the economy generally due to terrorism, war and military conflicts, natural disasters, epidemics or other events having a broad impact on the economy;

•adverse conditions in the areas where our investments or the properties underlying such investments are located and local real estate conditions;

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•future changes in laws or regulations and conditions in our operating areas;

•distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds, the sale of our assets, and repayments of our real estate debt investments, and we have no limits on the amounts we may fund from such sources;

•the purchase prices for our Common Shares are generally based on our net asset value (“NAV”) determined within 48 hours of the issuance of Common Shares and are not based on any public trading market; and

•future changes in laws or regulations and conditions in our operating areas.

Although we believe the assumptions underlying the forward-looking statements, are reasonable, any of the assumptions could be inaccurate, and, as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of the these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this Quarterly Report on Form 10-Q. Moreover, we assume no duty and do not undertake to update the forward-looking statements.

Overview

The Company is a non-diversified, externally managed closed-end management investment company focused on providing investors with access to a diversified portfolio comprised primarily of loans with equity upside investments in U.S. middle-market companies. We have elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated, and intend to comply with the requirements to qualify annually, as a REIT under Subchapter M of the Code. We were formed as a Delaware statutory trust on March 11, 2024. As a BDC and a REIT, we must comply with certain regulatory requirements.

We are externally managed by the Advisor. Our Advisor is a limited liability company that is registered as an investment advisor under the Advisers Act. Our Advisor oversees the management of our activities and is responsible for making investment decisions with respect to our portfolio.

The Company’s investment objectives are to seek to provide high current income while maintaining downside protection.

The Company seeks to invest in assets that will enable it to:

•provide current income in the form of regular, stable cash distributions to achieve an attractive distribution yield;

•preserve and protect invested capital, by primarily focusing on high-quality credit investments supported by current cash-flow and/or limited business plan risk in the underlying assets;

•reduce downside risk through loans with relatively low loan-to-value ratios, meaning we generally invest in less risky loans with low interest rates which are backed by high-quality real assets, with a focus on residential lending and with meaningful borrower equity; and

•provide an investment alternative for shareholders seeking to allocate a portion of their long-term investment portfolios to CRE debt with expected lower volatility than publicly traded securities and compelling risk-adjusted returns compared to fixed income alternatives.

The Company’s investment strategy is to originate, acquire, finance and manage a portfolio of primarily CRE investments, focused on senior secured, CRE loans across a wide range of geography. The Company focuses its investments in the middle market, with loans in the range of $25 - $100 million, across a mix of asset classes, but maintains a focus on multi-family lending. To a lesser extent, the Company may invest in, or originate, other real-estate related debt and equity investments, which may include subordinated debt, CMBS and CLOs

The Company is a fixed-term BDC, meaning it is an investment vehicle of defined duration. Following the initial closing, the Company has an Investment Period of 18 months during which it may invest capital commitments and reinvest proceeds in line with the Company’s investment strategy. The term of the Company shall not extend beyond the 4 year anniversary of the end of the Investment Period.

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We are conducting a private offering of our Common Shares in reliance on an exemption from the registration requirements of the Securities Act to investors that are (i) accredited investors (as defined in Regulation D under the Securities Act) and (ii) in the case of Common Shares sold outside the United States, to persons that are not “U.S. persons” (as defined in Regulation S under the Securities Act). At the closing of any private placement, each investor will make a Capital Commitment to purchase Common Shares pursuant to a Subscription Agreement entered into with us. Investors will be required to fund drawdowns to purchase shares of Common Shares up to the amount of their respective Capital Commitments each time we deliver the Drawdown Notice to the investors.

We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our real estate debt investments or real estate-related securities, other than those referred to in this Quarterly Report on Form 10-Q.

Key Components of our Results of Operations

Investments

The Company’s investment strategy is to originate, acquire, finance and manage a portfolio of primarily CRE debt investments, focused on senior secured, CRE loans diversified across geography. The Company focuses its investments in the middle market across a diversified mix of asset classes, but maintains a focus on multifamily lending. It is expected that most of the borrowers will be eligible portfolio companies, as such term is defined in the 1940 Act. To a lesser extent, the Company may invest in, or originate, other real-estate related debt and equity investments, which may include subordinated debt, CMBS and CLOs. The Company believes its real estate-related debt and equity investments will help manage cash before investing subscription proceeds into investments while also seeking attractive current income.

The Company seeks to focus on a flexible mix of real estate investments, secured by high-quality assets to generate current cash flow. The Company seeks to identify attractive risk-reward investment opportunities by financing middle market investment companies. The Company expects to create synergies with Benefit Street Partner’s commercial real estate team’s existing debt sourcing capabilities by leveraging its significant scale and existing relationships to source high quality lending opportunities.

During periods in which the Advisor determines that economic or market conditions are unfavorable to shareholders and a defensive strategy would benefit the Company, the Company may temporarily depart from its investment strategy. During these periods, subject to compliance with the 1940 Act, the Company may expand or change its investment strategy and target assets, including by investing all or any portion of its assets in U.S. government securities, including bills, notes and bonds differing as to maturity and rates of interest that are either issued or guaranteed by the U.S. Treasury or by U.S. government agencies; non-U.S. government securities that have received the highest investment grade credit rating; certificates of deposit issued against funds deposited in a bank or a savings and loan association; commercial paper; bankers’ acceptances; fixed time deposits; shares of money market funds; credit-linked notes; repurchase agreements with respect to any of the foregoing; or any other fixed income securities that the Advisor considers consistent with this temporary strategy.

Senior secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in priority of payments and are generally secured by liens on the operating assets of a borrower which may include inventory, receivables, plant, property and equipment. Mezzanine debt is subordinated to senior loans and is generally unsecured.

Revenue

The Company generates revenue primarily in the form of interest income on debt investments it holds. In addition, the Company generates income from dividends or distributions on income on direct equity investments, capital gains on the sales of loans and equity securities and various loan origination and other fees. The Company’s debt investments generally have a stated term of two to five years and typically bear interest at a floating rate usually determined on the basis of a benchmark such as Secured Overnight Financing Rate (“SOFR”). Interest on these debt investments is paid quarterly. In some instances, the Company receives payments on its debt investments based on scheduled amortization of the outstanding balances. In addition, the Company may receive repayments of some of its debt investments prior to their scheduled maturity date. The frequency or volume of these repayments is expected to fluctuate significantly from period to period. The Company’s portfolio activity also reflects the proceeds of sales of securities. The Company may also generate revenue in the form of commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.

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Expenses

We bear all out-of-pocket costs and expenses of our operations and transactions, including, but not limited to:

•all investment personnel of the Advisor, when and to the extent engaged in providing investment advisory services hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by the Advisor and not by the Company;

•organization expenses and offering expenses, including third-party due diligence fees related to an offering;

•costs and expenses incurred in contracting with third parties on behalf of the Company;

•the actual cost of goods and services used by the Company and obtained from non-affiliated persons;

•administrative services expenses, including all costs and expenses incurred by the Advisor or its affiliates in fulfilling its duties hereunder, including reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services; provided, however, that no reimbursement shall be made for costs of such employees of the Advisor or its affiliates to the extent that such employees perform services related to the acquisition of investments;

•expenses of organizing, amending, revising, converting, modifying or terminating the Company or the Declaration of Trust or the bylaws, or any of its subsidiaries;

•expenses incurred by the Advisor and payable to third parties, including agents, consultants and other advisors, in monitoring the financial and legal affairs of the Company, news and quotation subscriptions, and market or industry research expenses;

•the cost of calculating the Company’s NAV;

•the cost of effecting sales of the Company’s Common Shares and other securities;

•the Management Fees and Incentive Fees payable pursuant to the Investment Advisory Agreement;

•expenses of managing and operating investments owned by the Company, whether payable to an affiliate of the Company or a non-affiliated person;

•fees payable to third parties, including agents, consultants and other advisors, relating to, or associated with, making investments, and, if necessary, enforcing its rights, and valuing investments (including third-party valuation firms);

•expenses related to consummated or unconsummated investments, including dead deal or broken deal expenses;

•rating agency expenses;

•interest and other costs for financings, including discounts, points and other similar fees, taxes and assessment on income of the Company or its investments, and accounting fees, legal fees, closing and other similar costs;

•distributions on the Company’s shares;

•administration fees payable under the Administration Agreement;

•the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it;

•transfer agent and custodial fees;

•fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events);

•accounting, audit and tax preparation expenses;

•federal and state registration fees;

•any exchange listing fees;

•federal, state, local, and other taxes;

•costs and expenses incurred in relation to compliance with applicable laws and regulations and the operation and administration of the Company generally;

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•Independent Trustees’ (persons who are not “interested persons” as defined in the 1940 Act) fees and expenses, including any legal counsel or other advisors retained by, or at the discretion or for the benefit of, the Independent Trustees;

•brokerage commissions;

•costs of preparing government filings, including periodic and current reports with the SEC;

•the Company’s fidelity bond, trustees and officers/errors and omissions liability insurance, and any other insurance premiums;

•indemnification payments;

•expenses relating to the development and maintenance of the Company’s website, if any, and other operations and technology costs;

•direct costs and expenses of administration, including printing, mailing, copying, telephone, fees of independent accountants and outside legal costs; and

•all other expenses incurred by the Company or the Administrator in connection with administering the Company’s business, including, but not limited to, payments under the Administration Agreement based upon the Company’s allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent, travel and the allocable portion of the cost of the Company’s chief compliance officer and chief financial officer and their respective staffs, including operations and tax professionals, and administrative staff providing support services in respect of the Company.

For avoidance of doubt, it is agreed and understood that, from time to time, the Advisor or its affiliates may pay amounts or bear costs properly constituting Company expenses as set forth herein or otherwise and that the Company shall reimburse the Advisor or its affiliates for all such costs and expenses that have been paid by the Advisor or its affiliates on behalf of the Company.

In certain circumstances the Advisor, any sub-advisor, or any of their respective affiliates, may receive compensation from a portfolio company, in connection with the Company’s investment in such portfolio company. Any compensation received by the Advisor, sub-advisor, or any of their respective affiliates, attributable to the Company’s investment in any portfolio company, in excess of any of the limitations in or exemptions granted from the 1940 Act, any interpretation thereof by the staff of the SEC, or the conditions set forth in any exemptive relief granted to the Advisor, any sub-advisor or the Company by the SEC, shall be delivered promptly to the Company and the Company will retain such excess compensation for the benefit of its shareholders. All of the expenses described above may be ultimately borne by the Company’s shareholders.

The Company bears, among other expenses and costs, the cost of its organization as well as initial and ongoing offering expenses subject to the Expense Cap. The Company’s initial private offering costs will be recorded as a reduction to paid-in-capital when the offering is completed.

Expense Limitation Agreement

The Advisor and the Company entered into the Expense Limitation Agreement. Under the Expense Limitation Agreement, the Advisor has agreed on a quarterly basis to reimburse the Company’s Specified Expenses to the extent such annualized Specified Expenses exceed the Expense Cap, and any of such reimbursement is not subject to recapture.

“Specified Expenses” include the Company’s initial organization and offering costs, as well as the Company’s annualized operating expenses, inclusive of any fees the Company has agreed to bear pursuant to 4(b) of the Administration Agreement, but excluding (i) expenses directly related to the interest costs and structuring costs for borrowing and line(s) of credit, (ii) any taxes, litigation and extraordinary expenses related to any structuring, litigation or other actions taken by the Advisor to preserve or enhance the value of the Investments for the Shareholders and (iii) the Incentive Fees.

The Expense Limitation Agreement shall be in effect during the term of the Company, unless and until the Board of Trustees approves its modification or termination.

Fee Waiver Agreement

Pursuant to the Fee Waiver Agreement, the Advisor irrevocably waived the Management Fee during the Term of the Company. The Advisor also waived any Incentive Fee for a period of 12 months after the initial closing of the Company’s private offering of Common Shares. Any waived fees are not subject to recoupment.

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Portfolio, Investment Activity And Results Of Operations

As of March 31, 2025 and December 31, 2024, the Company had investments in fifty-two loans and three real estate securities across six industries and investments in thirty-seven loans and three real estate securities across six industries, respectively. Based on fair value as of March 31, 2025 and December 31, 2024, 99.5% and 99.3%, respectively, of the Company’s loan portfolio was invested in debt bearing a floating interest rate, which are primarily subject to interest rate floors. Approximately 99.5% and 99.3% of the Company’s loan portfolio at fair value had an interest rate floor denoted in SOFR as of March 31, 2025 and December 31, 2024, respectively. The weighted average index floor across the Company’s floating-rate loan portfolio was approximately 3.53% and 3.47%, respectively, as of March 31, 2025 and December 31, 2024. These floors allow the Company to mitigate (to a degree) any impact of spread widening on the valuation of the Company’s investments. As of March 31, 2025 and December 31, 2024, the Company’s estimated weighted average total yield of investments in loans was 7.87% and 7.85%, respectively. Weighted average yields are based on interest rates as of March 31, 2025 and December 31, 2024.

As part of the monitoring process, the Advisor has developed risk policies pursuant to which it regularly assesses the risk profile of each of our loan investments. The Advisor has developed a classification system to group investments into five categories. The investments are evaluated regularly and assigned a category based on certain credit metrics. The Advisor’s ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments. Please see below for a description of the four categories of the Advisor’s Internal Risk Rating system:

Category 1 – In the opinion of the Advisor, investments in Category 1 involve the least amount of risk relative to the Company’s initial cost basis at the time of origination or acquisition. Category 1 investments exceed fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.

Category 2 – In the opinion of the Advisor, investments in Category 2 involve a level of risk relative to the Company’s initial cost basis at the time of origination or acquisition. Category 2 investments are Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. All new originated or acquired investments are initially included in Category 2.

Category 3 – In the opinion of the Advisor, investments in Category 3 indicate that Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.

Category 4 – In the opinion of the Advisor, investments in Category 4 are underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.

Category 5 – In the opinion of the Advisor, investments in Category 5 are underperforming investment with expected loss of interest and some principal.

The distribution of the Company’s CRE loan portfolio on the Advisor’s Internal Risk Rating System as of March 31, 2025 and December 31, 2024 is as follows (dollars in thousands):

	As of March 31, 2025
Internal Performance Rating	Fair Value		Percentage of Total Investments		Number of Portfolio Companies
1	—		—	%	—
2	1,088,409		100.0	%	52
3	—		—	%	—
4	—		—	%	—
5	—		—	%	—
Total	$	1,088,409	100.0	%	52

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	As of December 31, 2024
Internal Performance Rating	Fair Value		Percentage of Total Investments		Number of Portfolio Companies
1	—		—	%	—
2	813,864		100.0	%	37
3	—		—	%	—
4	—		—	%	—
5	—		—	%	—
Total	$	813,864	100.0	%	37

The following tables show the investment portfolio composition by industry grouping based on fair value at March 31, 2025 and December 31, 2024, respectively (dollars in thousands):

	At March 31, 2025
	Investments at Fair Value(1)		Percentage of Total Portfolio
Multifamily	$	768,340	68.8	%
Hospitality	188,052		16.8	%
Industrial	96,537		8.6	%
Mixed Use	48,870		4.4	%
Self Storage	15,530		1.4	%
Total	$	1,117,329	100.0	%

(1) Investments include real estate securities.

	At December 31, 2024
	Investments at Fair Value (1)		Percentage of Total Portfolio
Multifamily	$	594,636	70.6	%
Hospitality	133,367		15.8	%
Industrial	50,452		6.0	%
Mixed Use	48,871		5.8	%
Self Storage	15,530		1.8	%
Total	$	842,856	100.0	%

(1) Investments include real estate securities.

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The following tables present a summary of changes in fair value of Level 3 assets by investment type for the three months ended March 31, 2025 and for the period from March 11, 2024 (date of inception) to December 31, 2024 (amounts in thousands):

	For the three months ended March 31, 2025
	Senior Mortgage (1)		Mezzanine (1)		Total
Balance as of January 1, 2025	$	799,660	$	14,204	$	813,864
Origination of loans	268,901		10,616		279,517
Paydowns of loans	(4,973)		—		(4,973)
Loan origination fees collected	(2,698)		(272)		(2,970)
Net accretion on investments	1,554		58		1,612
Net unrealized gains (losses) (2)	1,146		213		1,359
Balance as of March 31, 2025	$	1,063,590	$	24,819	$	1,088,409

(1) There were no transfers into or out of Level 3 for the three months ended March 31, 2025.

(2) Represents the total amount of unrealized gains relating to the Company’s Level 3 assets held as of March 31, 2025.

	For the period from March 11, 2024 (date of inception) to December 31, 2024
	Senior Mortgage (1)		Mezzanine (1)		Total
Balance as of March 11, 2024	$	—	$	—	$	—
Origination of loans	799,659		21,682		821,341
Loan origination fees collected	(8,642)		(241)		(8,883)
Net accretion on investments	885		21		906
Net change in unrealized appreciation (depreciation) on investments (2)	7,758		137		7,895
Sales of investments	—		(7,390)		(7,390)
Net realized gains (losses)	—		(5)		(5)
Balance as of December 31, 2024	$	799,660	$	14,204	$	813,864

(1) There were no transfers into or out of Level 3 for the period from March 11, 2024 (date of inception) to December 31, 2024.

(2) Represents the total amount of unrealized gains relating to the Company’s Level 3 assets held as of December 31, 2024.

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Consolidated Results Of Operations

The following table represents our operating results for the three months ended March 31, 2025 and for the period from March 11, 2024 (date of inception) to March 31, 2024 (amounts in thousands):

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024 (1)
Total investment income (loss)	$	22,743	$	—
Total expenses	14,150		411
Less: waivers	(4,307)		(15)
Net investment income (loss)	12,900		(396)
Change in unrealized appreciation from investments	1,278		—
Net increase (decrease) in net assets resulting from operations	$	14,178	$	(396)
Weighted average shares outstanding	16,766,876		—
Net Investment Income per share (basic and diluted)	0.77		—
Net increase in net assets resulting from operations per share (basic and diluted) (2)	0.85		—

(1) The Company commenced investment operations after its initial capital call on June 20, 2024, and therefore had no investment activity for the period from March 11, 2024 (date of inception) to March 31, 2024.

(2) The Company did not have any outstanding anti-dilutive instruments as of March 31, 2025.

Revenues

Revenues were as follows (amounts in thousands):

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024
Investment Income
From non-controlled, non-affiliated investments:
Interest income	$	22,045	$	—
Fees and other income	698		—
Total investment income (loss)	$	22,743	$	—

Total investment income was driven by the Company’s deployment of capital and invested balance of investments. The size of the Company’s investment portfolio at fair value was $1.1 billion as of March 31, 2025 and, as of such date, all of the Company’s debt investments were income-producing.

Interest income on the loans the Company originates and the Company’s real estate securities is dependent on the composition and credit quality of the portfolio. Generally, the Company expects the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2025, all of the Company’s investments were performing and current on their interest payments.

Change in Unrealized Appreciation from Investments

The change in unrealized appreciation from investments was driven by the mark-to-market of our investments to fair value from amortized cost.

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Expenses

Expenses were as follows (amounts in thousands):

	For the three months ended March 31, 2025		For the period from March 11, 2024 (date of inception) to March 31, 2024
Expenses:
Interest and debt fees	$	9,728	$	—
Administration fees	490		—
Management fees	1,259		15
Incentive fees	1,772		—
Directors’ fees	27		—
Organizational costs	—		396
Legal expenses	312		—
Other expenses	562		—
Total expenses	$	14,150	$	411
Less: waivers	(4,307)		(15)
Net expenses	$	9,843	$	396

Interest and debt fees was driven by the Company’s repurchase agreements and amortization of deferred financing costs. Administration fees are derived from an agreed upon reimbursable amount based on employee time charged and allocated to the Company.

Organizational costs include expenses incurred in the Company’s initial formation and the Company’s offering of Common Shares. Other expenses include valuation, custody, sub-administration and other costs. Waivers include organizational costs and management and incentive fee waivers.

Returns

	For the three months ended March 31, 2025
Per share data:
Net asset value, beginning of period	$	26.42
Increase in net assets from operations	0.85
Distributions	(0.69)
Other (7)	(0.01)
Net increase in net assets	0.15
Net asset value, end of period	$	26.57
Shares outstanding at end of period	17,353,215
Total return (1)	3.19		%
Total economic return (since commencement of investment operations)(2)	16.50		%
Net interest margin (3)	11.78		%
Operating expense ratio (4)	4.00		%
Waivers	(3.90)		%
Net expense ratio (5)	0.10		%
Net return (6)	11.68		%

(1) Total return is calculated as the change in NAV per share during the period, plus distributions per share, if any, divided by the NAV per share at the beginning of the period. Total return is for the period indicated and has not been annualized.

(2) The Company commenced investment operations after its capital call on June 20, 2024. From June 20, 2024 through the period ended March 31, 2025, the Company’s economic return was 16.50%.

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(3) Net interest margin is calculated as the ratio of total investment income less interest and debt fees to average net assets attributable to Common Shares.

(4) Operating expense ratio is calculated as gross operating expenses to average net assets attributable to Common Shares.

(5) Net expense ratio is calculated as net operating expenses to average net assets attributable to Common Shares.

(6) Net return is calculated as the ratio of net investment income to average net assets attributable to Common Shares.

(7) Represents the impact of calculating certain per share amounts based on weighted average Common Shares outstanding during the period and certain per share amounts based on Common Shares outstanding as of period end.

Income Taxes

The Company has elected to be treated as a REIT under Subchapter M of the Code, and the Company intends to operate in a manner so as to continue to qualify for the tax treatment applicable to REITs. To qualify for tax treatment as a REIT, the Company must, among other things, distribute to the Company’s shareholders in each taxable year generally at least 90% of the sum of our Investment Company Taxable Income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain the Company’s tax treatment as a REIT, the Company, among other things, intends to make the requisite distributions to its shareholders, which generally relieve the Company from corporate-level U.S. federal income taxes. The Company did not record any tax provision in the current period.

Non-GAAP Financial Measures

Adjusted Distributable Earnings is a non-GAAP measure, which the Company defines as GAAP distributable earnings per the Consolidated Statement of Assets and Liabilities or the net increase in net assets resulting from operations per the Consolidated Statements of Operations (loss) adjusted for (i) net changes in unrealized (appreciation) depreciation and (ii) other one time or non-recurring charges that not related to the Company’s core activities. The Company believes that Adjusted Distributable Earnings provides meaningful information to consider in addition to the disclosed GAAP results. The Company believes Adjusted Distributable Earnings is a useful financial metric for existing and potential future holders of its Common Shares, as it represents the basis for calculating taxable income and determining dividends. The Company considers dividends to be one of the principal reasons shareholders invest in its Common Shares. Adjusted Distributable Earnings does not represent net income (loss) and should not be considered an alternative to GAAP net income (loss). The methodology for calculating Adjusted Distributable Earnings may differ from that used by other companies and, as a result, may not be comparable to the Adjusted Distributable Earnings reported by similar companies.

The following table provides a reconciliation of GAAP metrics to Adjusted Distributable Earnings for the three months ended March 31, 2025:

	For the three months ended March 31, 2025
Net increase in net assets resulting from operations	$	14,178
Net change in unrealized (appreciation) depreciation	(1,278)
Adjusted distributable earnings as of March 31, 2025	$	12,900

Financial Condition, Liquidity And Capital Resources

Liquidity is a measure of our ability to meet our cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make new investments where appropriate, pay distributions to our shareholders and other general business needs. We closely monitor our liquidity position and believe that we have sufficient current liquidity and access to additional liquidity to meet our financial obligations for at least the next 12 months and for the foreseeable future.

The Company generates cash from the net proceeds of offerings of its Common Shares, and from cash flows from interest and fees earned from its investments and principal repayments and proceeds from sales of its investments. The Company may also fund a portion of its investments through borrowings from banks and issuances of senior securities, including before the Company has fully invested the proceeds of any closing of the Company’s continuous private offering of its Common Shares. The Company’s primary use of cash will be investments in portfolio companies, payments of Company expenses and payment of cash distributions to shareholders.

The Company may seek to enter into bank debt, credit facility and/or other financing arrangements on at least customary and market terms; however, such incurrence would be subject to prevailing market conditions, the Company’s liquidity requirements, contractual and regulatory restrictions and other factors. As of March 31, 2025 and December 31, 2024 the Company had $673.5 million and $501.2 million, respectively, of borrowings outstanding.

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Cash Equivalents

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near their maturity such that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents. As of March 31, 2025 and December 31, 2024, the Company had no cash equivalents.

Repurchase Agreements

On June 24, 2024, the Company’s wholly, consolidated subsidiary, FBRED BDC BB FLOAT, LLC (“Barclays SPV”), entered into a master repurchase agreement (“Barclays Agreement”), with the Barclays SPV as the seller, and Barclays Bank PLC as the purchaser. On February 20, 2025, the Company increased the aggregate commitment to purchase loans under the Barclays Agreement from $250 million to $400 million. Obligations under the Barclays SPV are secured by a first priority security interest in all of the loans pledged under Barclays SPV. The obligations of Barclays SPV under the Barclays Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays agreement will mature, and will be due and payable, on the maturity date, which is June 24, 2027. The Barclays agreement bore interest at one-month SOFR plus an average spread of 1.67%.

On July 3, 2024, the Company’s wholly, consolidated subsidiary, FBRED BDC High Yield Securities, LLC (“JPM Repo SPV”), entered into a master repurchase agreement (“JPM Repo Agreement”), with the JPM Repo SPV as the seller, and J.P. Morgan Securities LLC as the purchaser. There is no maximum aggregate commitments to purchase real estate securities under the JPM Repo Agreement. Obligations under the JPM Repo SPV are secured by a first priority security interest in all of the real estate securities pledged under JPM Repo SPV. The obligations of JPM Repo SPV under the JPM Repo Agreement are nonrecourse to the Company. Any amounts borrowed under the JPM Repo agreement will mature, and will be due and payable when the pledged real estate securities mature or are sold by the Company. The JPM Repo agreement bore interest at one-month SOFR plus an average spread of 0.97%.

On August 14, 2024, the Company’s wholly, consolidated subsidiary, FBRED BDC JPM Seller, LLC (“JPM SPV”), entered into a master repurchase agreement (“JPM Agreement”), with the JPM SPV as the seller, and JPMorgan Chase Bank, National Association as the purchaser. The aggregate commitments to purchase the loans under the JPM Agreement are $500 million. Obligations under the JPM SPV are secured by a first priority security interest in all of the loans pledged under JPM SPV. The obligations of JPM SPV under the JPM Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays agreement will mature, and will be due and payable, on the maturity date, which is August 14, 2026. The JPM agreement bore interest at one-month SOFR plus an average spread of 1.89%.

On August 28, 2024, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC High Yield Securities, LLC (“Barclays Repo SPV”), entered into a master repurchase agreement (the “Barclays Repo Agreement”), with the Barclays Repo SPV as the seller, and Barclays Bank PLC as the purchaser. There is no maximum aggregate commitments to purchase real estate securities under the Barclays Repo Agreement. Obligations under the Barclays Repo SPV are secured by a first priority security interest in all of the real estate securities pledged under Barclays Repo SPV. The obligations of Barclays Repo SPV under the Barclays Repo Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays Repo Agreement will mature, and will be due and payable when the pledged real estate securities mature or are sold by the Company. The Barclays Repo Agreement bore interest at one-month SOFR plus an average spread of 1.00%.

On September 3, 2024, the Company’s wholly, consolidated subsidiary, FBRED BDC Landings Finance, LLC (“Webster SPV”), entered into a master repurchase agreement (“Webster Agreement”), with the Webster SPV as the seller, and Webster Bank, National Associate as the purchaser. The aggregate commitment to purchase a loan under the agreement is $15.9 million. Obligations under the Webster SPV are secured by a first priority security interest in the loan pledged under Webster SPV. The obligations of Webster SPV under the Webster Agreement are nonrecourse to the Company. Any amounts borrowed under the Barclays agreement will mature, and will be due and payable, on the maturity date, which is July 9, 2026. The Webster agreement bore interest at one-month SOFR plus a spread of 1.95%.

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On March 13, 2025, the Company’s wholly-owned, consolidated subsidiary, FBRED BDC WWH Seller, LLC ("Wells Fargo SPV"), entered into a Master Repurchase and Securities Contract agreement (the "Wells Fargo Agreement"), with the Wells Fargo SPV as the seller, and Wells Fargo Bank, National Association, as the purchaser. The aggregate commitments to purchase the loans under the Wells Fargo Agreement is $150 million. Obligations under the Wells Fargo SPV are secured by a first priority security interest in all of the loans pledged under Wells Fargo SPV. The obligations of Wells Fargo SPV under the Wells Fargo Agreement are nonrecourse to the Company. Any amounts borrowed under the Wells Fargo Agreement will mature, and will be due and payable, on the maturity date, which is March 13, 2027. As of March 31, 2025, the Company has not entered into any borrowings under the agreement

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The following table represents the Company's repurchase agreements as of March 31, 2025:

	Maturity Date	Interest Expense Incurred		Ending Weighted Average Interest Rate		Amount Pledged		Amount per Consolidated Statements of Assets and Liabilities
FBRED BDC BB FLOAT, LLC (“Barclays SPV”)	6/24/2027	$	8,188	5.91	%	$	390,327	$	243,199
FBRED BDC High Yield Securities, LLC ("JPM Repo SPV")	N/A	436		5.28	%	13,875		11,592
FBRED BDC JPM Seller, LLC ("JPM SPV")	8/14/2026	8,259		6.10	%	588,818		390,744
FBRED BDC Landings Finance, LLC (“Webster SPV”)	7/9/2026	613		6.27	%	21,219		15,914
FBRED BDC High Yield Securities, LLC ("Barclays Repo SPV")	N/A	169		5.32	%	15,111		$	12,059
Total		$	17,665	6.01	%	$	1,029,350	$	673,508

The combined weighted average borrowings outstanding was $610.5 million as of March 31, 2025.

The following table represents the Company's repurchase agreements as of December 31, 2024:

	Maturity Date	Interest Expense Incurred		Ending Weighted Average Interest Rate		Amount Pledged		Amount per Consolidated Statements of Assets and Liabilities
FBRED BDC BB FLOAT, LLC (“Barclays SPV”)	6/24/2027	$	4,673	6.27	%	$	297,541	$	215,594
FBRED BDC High Yield Securities, LLC ("JPM Repo SPV")	N/A	$	283	5.61	%	13,875		11,576
FBRED BDC JPM Seller, LLC ("JPM SPV")	8/14/2026	$	3,025	4.70	%	344,407		246,058
FBRED BDC Landings Finance, LLC (“Webster SPV”)	7/9/2026	$	363	6.50	%	21,219		15,914
FBRED BDC High Yield Securities, LLC ("Barclays Repo SPV")	N/A	$	9	1.00	%	15,111		12,058
Total		$	8,353	5.36	%	692,153		501,200

The combined weighted average borrowings outstanding was $156.2 million as of December 31, 2024.

In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. On April 8, 2024, the Company’s sole initial shareholder approved the adoption of this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act. As of March 31, 2025 and December 31, 2024, the Company’s asset coverage ratio based on the aggregate amount outstanding of senior securities was 168.5% and 171.6%, respectively.

At March 31, 2025, the carrying amount of the Company's repurchase agreements approximated their fair value. The fair values of the Company's debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company's repurchase agreements is estimated based upon market interest rates for the Company's own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of March 31, 2025, the Company's borrowings would be deemed to be Level 3, as defined in Note 5 - Fair Value Measurement to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

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Contractual Obligations

The following table shows our payment obligations for repayment of debt and other contractual obligations as of March 31, 2025 (dollars in thousands):

			Payment Due by Period
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
FBRED BDC BB FLOAT, LLC (“Barclays SPV”) (1)	$	243,199	$	—	$	243,199	$	—	$	—
FBRED BDC High Yield Securities, LLC ("JPM Repo SPV") (2)	11,592		11,592		—		—		—
FBRED BDC JPM Seller, LLC ("JPM SPV") (3)	390,744		—		390,744		—		—
FBRED BDC Landings Finance, LLC (“Webster SPV”) (4)	15,914		—		15,914		—		—
FBRED BDC High Yield Securities, LLC ("Barclays Repo SPV") (5)	12,059		12,059		—		—		—
Total	$	673,508	$	23,651	$	649,857	$	—	$	—

(1) As of March 31, 2025, we had $156.8 million in unused borrowing capacity under the Barclays SPV, subject to borrowing base limits.

(2) As of March 31, 2025, we had $2.3 million in unused borrowing capacity under the JPM Repo SPV, subject to borrowing base limits.

(3) As of March 31, 2025, we had $109.3 million in unused borrowing capacity under the JPM SPV, subject to borrowing base limits.

(4) As of March 31, 2025, we had $5.3 million in unused borrowing capacity under the Webster SPV, subject to borrowing base limits.

(5) As of March 31, 2025, we had $3.1 million in unused borrowing capacity under the Barclays Repo SPV, subject to borrowing base limits.

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In the ordinary course of business, the Company may enter into future funding commitments. As of March 31, 2025, the Company had unfunded commitments on delayed draw term loans of $140.0 million. As of March 31, 2025, the Company’s unfunded commitments consisted of the following (amounts in thousands):

Portfolio Company Name	Investment Type	Commitment Type	Total Commitment		Remaining Commitment
1915 WBP Owner, LLC	Senior Mortgage	Delayed Draw	$	11,255	$	1,156
26 W 9th Street LLC	Mezzanine	Delayed Draw	2,801		745
26 W 9th Street LLC	Senior Mortgage	Delayed Draw	25,210		7,494
300 Pressler Street Owner, LLC	Mezzanine	Delayed Draw	2,218		2,218
300 Pressler Street Owner, LLC	Senior Mortgage	Delayed Draw	11,489		11,489
50 West BSP Owner LLC	Mezzanine	Delayed Draw	2,656		85
50 West BSP Owner LLC	Senior Mortgage	Delayed Draw	44,107		1,415
6304 Sheriff Road LLC	Senior Mortgage	Delayed Draw	40,350		5,154
AVR Eugene Hotel LLC	Senior Mortgage	Delayed Draw	12,598		363
Blue Suede Hospitality Group	Senior Mortgage	Delayed Draw	19,510		1,174
Creekside Logistics Center Owner, LLC	Senior Mortgage	Delayed Draw	14,701		4,782
Grand Cypress Apartments, LLC	Senior Mortgage	Delayed Draw	50,000		772
GVP TC Wilmer Property Owner, LLC	Senior Mortgage	Delayed Draw	46,027		7,967
Hallandale Oasis 2019 LLC	Senior Mortgage	Delayed Draw	23,098		14,461
Insite Orlando Two, LLC	Senior Mortgage	Delayed Draw	22,795		7,525
Olymbec Viscount LLC	Senior Mortgage	Delayed Draw	8,819		460
Paraiso 256, LLC	Senior Mortgage	Delayed Draw	29,896		1,251
Rise Bridgeview, LLC	Senior Mortgage	Delayed Draw	12,724		1,987
Rise Stone Gate, LLC & Artic Investments, LLC	Senior Mortgage	Delayed Draw	9,050		1,465
S2 Pleasantdale LLC	Senior Mortgage	Delayed Draw	22,809		4,022
SL 418, LLC	Senior Mortgage	Delayed Draw	48,701		719
WHK Waterfront Urban Renewal LLC	Senior Mortgage	Delayed Draw	50,000		46,496
WHK Waterfront Urban Renewal LLC	Mezzanine	Delayed Draw	19,091		16,751
Total			$	529,905	139,951

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As of December 31, 2024, the Company did not have any significant contractual payment obligations.

However, in the ordinary course of business, the Company may enter into future funding commitments. As of December 31, 2024, the Company had unfunded commitments on delayed draw term loans of $127.9 million. As of December 31, 2024, the Company’s unfunded commitments consisted of the following (amounts in thousands):

Portfolio Company Name	Investment Type	Commitment Type	Total Commitment		Remaining Commitment
26 W 9th Street LLC	Mezzanine	Delayed Draw	$	2,801	$	908
26 W 9th Street LLC	Senior Mortgage	Delayed Draw	25,210		8,596
50 West BSP Owner LLC	Mezzanine	Delayed Draw	2,656		110
50 West BSP Owner LLC	Senior Mortgage	Delayed Draw	44,107		1,827
AVR Eugene Hotel LLC	Senior Mortgage	Delayed Draw	12,598		3,629
Blue Suede Hospitality Group	Senior Mortgage	Delayed Draw	19,510		1,174
Grand Cypress Apartments, LLC	Senior Mortgage	Delayed Draw	50,000		1,516
GVP TC Wilmer Property Owner, LLC	Senior Mortgage	Delayed Draw	46,027		8,949
Hallandale Oasis 2019 LLC	Senior Mortgage	Delayed Draw	23,098		16,711
Insite Orlando Two, LLC	Senior Mortgage	Delayed Draw	22,795		7,726
Olymbec Viscount LLC	Senior Mortgage	Delayed Draw	8,819		460
Paraiso 256, LLC	Senior Mortgage	Delayed Draw	29,896		2,885
Rise Bridgeview, LLC	Senior Mortgage	Delayed Draw	12,724		1,987
S2 Pleasantdale LLC	Senior Mortgage	Delayed Draw	22,809		4,731
SL 418, LLC	Senior Mortgage	Delayed Draw	48,701		904
WHK Waterfront Urban Renewal LLC	Senior Mortgage	Delayed Draw	50,000		46,653
WHK Waterfront Mezz LLC	Mezzanine	Delayed Draw	19,091		19,091
Total			$	440,842	127,857

Capital Commitments

The following table shows the funded capital commitments and total capital commitments from investors as of March 31, 2025 and December 31, 2024 (dollar amounts in thousands):

March 31, 2025
	Capital Commitments		Funded Capital Commitments		% of Capital Commitments
Common Shares	$	634,002	$	450,001	71.0	%

December 31, 2024
	Capital Commitments	Funded Capital Commitments	% of Capital Commitments
Common Shares	526,500	350,001	66.5	%

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Unregistered Sales of Equity Securities

As of March 31, 2025, The Company had capital commitments totaling $634.0 million with unfunded commitments totaling $184.0 million and a percent called ratio of 71.0%. As of December 31, 2024, The Company had capital commitments totaling $526.5 million with unfunded commitments totaling $176.5 million and a percent called ratio of 66.5%. The following table summarizes the total shares issued and amount received related to capital drawdowns delivered pursuant to the Subscription Agreements:

Share Issue Date	Shares Issued	Net Proceeds Received
January 15, 2025	3,769,318	$	100,000
November 14, 2024	2,786,033	75,000
August 7, 2024	4,250,388	110,000
July 10, 2024	2,347,417	60,000
June 20, 2024	4,199,999	104,999
April 8, 2024	60	2
Total Capital Drawdowns	17,353,215	$	450,001

Distributions

The amount of each distribution is subject to the discretion of our Board of Directors and applicable legal restrictions related to the payment of distributions. We calculate each shareholder’s specific distribution amount for the quarter using record and declaration dates.

The table shows the components of the distributions we declared and paid to common shareholders for the three months ended March 31, 2025 (dollars in thousands):

	For the three months ended March 31, 2025
Distributions declared	$	12,000
Distributions paid	$	25,200
Portion of distributions paid in cash	$	25,200

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

REIT Status and Distributions

We have elected to be treated for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2024. Furthermore, we intend to operate in such a manner as to qualify for taxation as a REIT under the applicable provisions of the Code so long as our Board determines that REIT qualification remains in our best interest. To qualify as a REIT, we must distribute to our shareholders each year dividends equal to at least 90% of our REIT taxable income (which is computed without regard to the dividends-paid deduction, excludes net capital gain and does not necessarily equal net income as calculated in accordance with GAAP). To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on our undistributed income (including net capital gain). In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any calendar year are less than minimum amounts specified under U.S. federal income tax laws. We intend to make distributions to our shareholders in a manner that will satisfy the REIT 90% distribution requirement and avoid corporate income tax and the 4% nondeductible excise tax.

Our Board intends to declare and pay distributions on a quarterly basis. We do not have a distribution reinvestment plan and expect to pay all distributions in cash. The timing and amount of any future distributions to shareholders are subject to applicable legal restrictions and the sole discretion of our Board.

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We may fund our cash distributions to shareholders from any sources of funds available to us, including, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, non-capital gain proceeds from the sale of assets, dividends or other distributions paid to us on account of preferred and common equity investments in portfolio companies. We have not established limits on the amount of funds we may use from available sources to make distributions.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we will evaluate our estimates, including those related to the matters described below. Actual results could differ from those estimates.

Valuation of Portfolio Investments

The Board is responsible for overseeing the valuation of our portfolio investments at fair value as determined in good faith pursuant to the Advisor’s valuation policy. As permitted by Rule 2a-5 of the 1940 Act, the Board has designated the Advisor as our valuation designee with day-to-day responsibility for implementing the portfolio valuation process set forth in the Advisor’s valuation policy.

Portfolio investments are reported at fair value on the Consolidated Statement of Assets and Liabilities. At least quarterly, or more frequently as needed for a drawdown date, we perform an analysis of each investment to determine fair value as follows:

Investments for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. We may also obtain quotes with respect to certain of our investments from pricing services or brokers or dealers in order to value assets. When doing so, we determine whether the quote obtained is readily available according to GAAP to determine the fair value of the security. If determined readily available, we use the quote obtained.

Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process

For an investment in an investment fund that does not have a readily determinable fair value, we measure the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC 946, as of our measurement date.

As part of our quarterly valuation process the Advisor may be assisted by one or more independent valuation firms engaged by us. The Advisor as valuation designee determines the fair value of each investment, in good faith, based on the input of the independent valuation firm(s) (to the extent applicable).

With respect to investments for which market quotations are not readily available, the Advisor undertakes a multi-step valuation process each quarter, as described below:

•Each portfolio company or loan will be valued by the Advisor, potentially with assistance from one or more independent valuation firms engaged by the Board;

•The independent valuation firm(s) conduct independent appraisals and make an independent assessment of the value of each investment; and

•The Advisor determines the fair value of each investment, in good faith, based on the input of the Advisor and independent valuation firm (to the extent applicable) and the audit committee of the Board.

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In circumstances where the Advisor deems appropriate, the Advisor’s internal valuation team values certain investments. When performing the internal valuations, the Advisor utilizes similar valuation techniques as an independent third-party pricing service would use. Such valuations will be approved by an internal valuation committee of the Advisor, with oversight from the Board.

Because there is not a readily available market value for most of the loans in its portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our Advisor, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following (which are defined in the notes to the accompanying consolidated financial statements if not defined herein):

•the Investment Advisory Agreement;

•the Administration Agreement; and

•the Expense Limitation Agreement.

See Note 3. Related Party Transactions to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Credit Risk

Our investments are subject to a high degree of credit risk. Credit risk is the exposure to loss from loan defaults. Default rates are subject to a wide variety of factors, including, but not limited to, borrower financial condition, property performance, property management, supply/demand factors, construction trends, consumer behavior, regional economics, interest rates, the strength of the U.S. economy, and other factors beyond our control. All loans are subject to a certain probability of default. We manage credit risk through the underwriting process, acquiring our investments at the appropriate discount to face value, if any, and establishing loss assumptions. We also carefully monitor the performance of the loans, as well as external factors that may affect their value.

Capital Market Risk

We are exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under repurchase obligations or other debt instruments. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt capital markets to inform our decisions on the amount, timing and terms of capital we raise.

Market uncertainty and volatility may cause fluctuation in market value of certain asset classes within our portfolio. We have and may continue to receive margin calls from our lenders as a result of the decline in the market value of the assets pledged by us to our lenders under our repurchase agreements and warehouse credit facilities, and if we fail to resolve such margin calls when due by payment of cash or delivery of additional collateral, the lenders may exercise remedies including demanding payment by us of our aggregate outstanding financing obligations and/or taking ownership of the loans or other assets securing the applicable obligations and liquidating them at inopportune prices.

Interest Rate Risk

Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of March 31, 2025, our portfolio included fifty-one variable rate investments based on SOFR (or “indexing rates”) for various terms. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 100, 200 or 300 basis points or decrease by 25 basis points, assuming that our current balance sheet was to remain constant, and no actions were taken to alter our existing interest rate sensitivity. The changes in the portfolio for each basis points increase/decrease is a change from the base scenario.

Change in Interest Rates	Increase (Decrease) in Interest Income		(Increase)/Decrease in Interest Expense		Net Increase (Decrease) in Net Investment Income
(-) 25 Basis Points	$	(2,780)	$	415	$	(2,365)
(+) 100 Basis Points	11,118		(1,661)		9,457
(+) 200 Basis Points	22,237		(3,321)		18,916
(+) 300 Basis Points	33,355		(4,982)		28,373

Real Estate Risk

The market values of commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; and demographic factors. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses.

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Inflation Risk

The Company is subject to inflation risk, which is the risk that the present value of the Company’s assets or income will be worth less in the future as inflation decreases the present value of money. The Company’s dividend rates or borrowing costs, where applicable, may also increase during periods of inflation. This may further reduce Company performance. The rate of inflation in many countries worldwide has increased in recent years due to supply chain disruptions, fiscal and/or monetary stimulus, energy price increases, wage inflation, the Russian invasion of Ukraine, and Israel-Hamas war, among other factors. The Board of Governors of the Federal Reserve System (the “Federal Reserve”) in the United States has raised the federal funds rate. There is no guarantee that actions taken by the Federal Reserve and other governmental bodies to reduce inflation will be effective.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to disclose in our reports under the Exchange Act is recorded, processed, and reported in an accurate manner and on a timely basis and the information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure and (b) operating in an effective manner.

Change in Internal Control Over Financial Reporting

No change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions in the ordinary course of business. As of March 31, 2025, we were not subject to any material legal proceedings.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I., “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition, and/or operating results. The risk described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(a) List of documents filed:

(1) The Financial Statements of the Company. (See Item 1 above.)

(2) Exhibits

Exhibit Number	Exhibit Description
3.1	Third Amended and Restated Agreement and Declaration of Trust, dated June 12, 2024 (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to the Company’s Registration Statement on Form 10 filed on June 13, 2024)
3.2	Bylaws, dated as of April 8, 2024 (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed on April 22, 2024)
3.3	Supplement to the Third Amended and Restated Agreement and Declaration of Trust of Franklin BSP Real Estate Debt BDC Relating to 12.0% Series A Cumulative Preferred Shares (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 17, 2025)
10.1	Master Repurchase and Securities Contract, dated March 13, 2025, by and between FBRED BDC WWH Seller, LLC, as Seller, and Wells Fargo Bank, National Association, as Buyer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 19, 2025)
10.2	Guarantee Agreement, dated March 13, 2025, made by Franklin BSP Real Estate Debt BDC in favor of Wells Fargo Bank, National Association, as Buyer (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 19, 2025)
10.3	First Amendment to Master Purchase Agreement, dated as of February 20, 2025, by and between Barclays Bank PLC, as Purchaser, and FBRED BDC BB FLOAT, LLC, as Seller (filed herewith)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
101.INS	XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document (filed herewith)
101.SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document (filed herewith)
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB	Inline XBRL Taxonomy Label Linkbase Document (filed herewith)
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document (filed herewith)
104	Cover Page Interactive Data File (embedded within the Inline XBRL document) (filed herewith)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date	Signature	Title
May 9, 2025	/s/ Richard J. Byrne Richard J. Byrne	Chief Executive Officer (Principal Executive Officer)
May 9, 2025	/s/ Jerome Baglien Jerome Baglien	Chief Financial Officer and Chief Operating Officer (Principal Financial Officer and Principal Accounting Officer)

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