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, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 000-56536

Blue Owl Real Estate Net Lease Trust

(Exact name of registrant as specified in charter)

Maryland	88-1672312
(State or other jurisdiction of incorporation or registration)	(I.R.S. Employer Identification No.)
30 N. LaSalle St., Suite 4140	60602
Chicago, IL	(Zip Code)
(Address of principal executive offices)

888-215-2015

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

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 and post 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 6, 2024, the issuer had the following shares outstanding: 133,716,757 Class S shares, — Class N shares, 602,912 Class D shares, and 153,454,684 Class I shares.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. These forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “identify” or other similar words or the negatives thereof, although not all forward-looking statements include these words. These may include our financial estimates and their underlying assumptions, statements about plans, objectives, intentions and expectations with respect to positioning, including the impact of macroeconomic trends and market forces, future operations, repurchases, acquisitions, future performance, and statements with respect to acquisitions. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. These risks, uncertainties and other factors include, without limitation:

• our future operating results;

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

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

• our ability to raise sufficient capital to execute our investment strategy;

• our ability to source adequate investment opportunities to efficiently deploy capital;

• our current and expected financing arrangements and investments;

• the effect of global and national economic and market conditions generally upon our operating results, including, but not limited to, changes with respect to inflation, interest rate changes and supply chain disruptions, geopolitical uncertainty, and changes in government rules, regulations and fiscal policies;

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

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

• our contractual arrangements and relationships with third parties;

• actual and potential conflicts of interest with the Adviser or any of its affiliates;

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

• our use of financial leverage;

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

• the ability of the Adviser or its affiliates to attract and retain highly talented professionals;

• our ability to structure investments in a tax-efficient manner and the effect of changes to tax legislation and our tax position;

• the tax status of the assets in which we may invest;

•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, natural disasters, epidemics or other events having a broad impact on the economy;

•investing in commercial real estate assets involves certain risks, including but not limited to: tenants’ inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and vacancies; and changes in supply of or demand for similar properties in a given market;

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

•our portfolio is currently concentrated in certain industries and geographies, and, as a consequence, our aggregate return may be substantially affected by adverse economic or business conditions affecting that particular type of asset or geography;

•limitations on our business and our ability to satisfy requirements to maintain our exclusion from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or to maintain our qualification as a real estate investment trust, for U.S. federal income tax purposes;

•since there is no public trading market for our common shares of beneficial interest par value $0.01 (“common shares” or “shares”), repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides shareholders with the opportunity to request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular calendar quarter in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our Board of Trustees may make exceptions to, modify and suspend our share repurchase plan if, in its reasonable judgement, it deems such action to be in our best interest and the best interest of our shareholders. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid;

•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 and repurchase prices for our shares are generally based on our prior month’s net asset value and are not based on any public trading market. While there will be independent valuations of our properties from time to time, the valuation of properties is inherently subjective and our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day; and

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

For more information regarding these and other risks and uncertainties that we face, refer to Part I. Item 1A “Risk Factors” in our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 18, 2024 and any such updated factors included in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or our prospectus and other filings). Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

TABLE OF CONTENTS

		Page
Part I.	FINANCIAL INFORMATION	1
Item 1.	FINANCIAL STATEMENTS	1
	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statement of Changes in Equity for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2024 and 2023	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
Item 4.	CONTROLS AND PROCEDURES	50
Part II.	OTHER INFORMATION	51
Item 1.	LEGAL PROCEEDINGS	51
Item 1A.	RISK FACTORS	51
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51
Item 3.	DEFAULTS UPON SENIOR SECURITIES	52
Item 4.	MINE SAFETY DISCLOSURES	52
Item 5.	OTHER INFORMATION	52
Item 6.	EXHIBITS	52
	SIGNATURES	54

PART I - FINANCIAL INFORMATION

ITEM 1        FINANCIAL STATEMENTS

1

Blue Owl Real Estate Net Lease Trust

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

	March 31, 2024		December 31, 2023
Assets
Investments in real estate, net	$	2,682,106	$	2,715,832
Investments in unconsolidated real estate affiliates (includes $1,527,034 and $699,570 reported at fair value as of March 31, 2024 and December 31, 2023, respectively)	1,533,116		705,628
Investment in leases – Financing receivables, net	570,466		562,690
Investments in real estate debt	82,204		87,209
Intangible assets, net	133,087		136,530
Cash and cash equivalents	55,135		59,087
Restricted cash	72,634		77,583
Other assets	68,216		49,209
Total assets	$	5,196,964	$	4,393,768
Liabilities and Equity
Mortgage notes and credit facilities, net	$	1,973,481	$	1,859,588
Affiliate line of credit	200,000		200,000
Due to affiliates	89,778		71,750
Other borrowings	153,394		—
Accounts payable and accrued expenses	86,128		81,499
Other liabilities	48,079		47,071
Total liabilities	2,550,860		2,259,908
Redeemable non-controlling interests	18,265		17,976
Redeemable common shares	49,500		38,418
Equity
Common shares — Class S, $0.01 par value per share, 117,157,624 and 92,068,163 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1,172		921
Common shares — Class D, $0.01 par value per share, 301,228 and 4,488,818 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	3		45
Common shares — Class I, $0.01 par value per share, 133,100,327 and 101,651,731 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1,331		1,016
Additional paid-in capital	2,461,018		1,948,355
Accumulated deficit and cumulative distributions	(157,716)		(132,638)
Accumulated other comprehensive income	16,087		3,052
Total Shareholders' Equity	2,321,895		1,820,751
Non-controlling interests	256,444		256,715
Total equity	2,578,339		2,077,466
Total liabilities and equity	$	5,196,964	$	4,393,768

See accompanying Notes to the Condensed Consolidated Financial Statements.

2

Blue Owl Real Estate Net Lease Trust

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

	Three months ended
	March 31, 2024		March 31, 2023
Revenues
Rental revenue	$	50,954	$	46,041
Income from Investment in leases - Financing receivables	14,534		13,669
Total revenues	65,488		59,710
Expenses
Rental property operating	6,087		7,289
General and administrative	3,980		3,308
Management fee	8,481		4,072
Performance participation allocation	6,829		—
Depreciation and amortization	23,037		13,108
Total expenses	48,414		27,777
Other income (expense)
Income from unconsolidated real estate affiliates	33,300		3,594
Interest expense	(37,265)		(24,126)
Interest income	3,245		1,889
Other expense, net	(236)		(5)
Total other expense, net	(956)		(18,648)
Net income before income taxes	$	16,118	$	13,285
Income tax expense	304		—
Net income	15,814		13,285
Net income attributable to non-controlling interests	(1,683)		(2,975)
Net income attributable to ORENT shareholders	$	14,131	$	10,310
Net income per common share – basic	$	0.06	$	0.11
Net income per common share – diluted	$	0.06	$	0.10
Weighted-average common shares outstanding, basic	237,219,985		98,086,696
Weighted-average common shares outstanding, diluted	265,957,560		127,139,959

See accompanying Notes to the Condensed Consolidated Financial Statements.

3

Blue Owl Real Estate Net Lease Trust

Condensed Consolidated Statements of Comprehensive Income

(in thousands, except per share data)

	Three months ended
	March 31, 2024		March 31, 2023
Net income	$	15,814	$	13,285
Other comprehensive income (loss):
Change in unrealized gain (loss) on derivative instruments	21,412		(10,990)
Change in unrealized gain on AFS investments in real estate debt	234		—
Foreign currency translation adjustment	(7,046)		3,640
Other comprehensive income (loss)	14,600		(7,350)
Comprehensive income	30,414		5,935
Comprehensive income attributable to non-controlling interests	(3,247)		(1,369)
Comprehensive income attributable to ORENT shareholders	$	27,167	$	4,566

See accompanying Notes to the Condensed Consolidated Financial Statements.

4

Blue Owl Real Estate Net Lease Trust

Condensed Consolidated Statement of Changes in Equity

(in thousands, except per share data)

	Par Value
	Class S Common Shares		Class D Common Shares		Class I Common Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit and Cumulative Distributions		Total Shareholders' Equity		Non-controlling Interests		Total Equity
Balance at December 31, 2023	$	921	$	45	$	1,016	$	1,948,355	$	3,052	$	(132,638)	$	1,820,751	$	256,715	$	2,077,466
Common shares issued	251		5		268		531,896		—		—		532,420		—		532,420
Offering costs	—		—		—		(14,080)		—		—		(14,080)		—		(14,080)
Distribution reinvestment	8		—		9		17,293		—		—		17,310		—		17,310
Common share repurchases	(8)		—		(8)		(16,871)		—		—		(16,887)		—		(16,887)
Converted common shares	—		(47)		46		1		—		—		—		—		—
Amortization of restricted share grants	—		—		—		(334)		—		—		(334)		—		(334)
Net income (Net income of $103 allocated to redeemable NCI)	—		—		—		—		—		14,131		14,131		1,579		15,710
Other comprehensive income (Other comprehensive income of $95 allocated to redeemable NCI)	—		—		—		—		13,035		—		13,035		1,469		14,504
Distributions declared on common shares ($0.1749 gross per share)	—		—		—		—		—		(39,209)		(39,209)		—		(39,209)
Redeemable common share measurement adjustment	—		—		—		(15)		—		—		(15)		—		(15)
Contributions from non-controlling interests	—		—		—		—		—		—		—		38		38
Distributions to and redemptions of non-controlling interests	—		—		—		—		—		—		—		(8,147)		(8,147)
Redeemable non-controlling interests measurement adjustment	—		—		—		(125)		—		—		(125)		—		(125)
Reallocation between additional paid-in capital and non-controlling interests due to changes in ownership	—		—		—		(5,102)		—		—		(5,102)		4,790		(312)
Balance at March 31, 2024	$	1,172	$	3	$	1,331	$	2,461,018	$	16,087	$	(157,716)	$	2,321,895	$	256,444	$	2,578,339

5

	Par Value
	Class S Common Shares		Class D Common Shares		Class I Common Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit and Cumulative Distributions		Total Shareholders' Equity		Non-controlling Interests		Total Equity
Balance at December 31, 2022	$	434	$	14	$	317	$	744,852	$	3,678	$	(13,212)	$	736,083	$	293,567	$	1,029,650
Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)	—		—		—		—		—		(5,162)		(5,162)		(1,995)		(7,157)
Common shares issued	116		13		176		310,979		—		—		311,284		—		311,284
Offering costs	—		—		—		(9,595)		—		—		(9,595)		—		(9,595)
Distribution reinvestment	3		—		2		6,475		—		—		6,480		—		6,480
Common share repurchases	(2)		—		—		(2,140)		—		—		(2,142)		—		(2,142)
Amortization of restricted share grants	—		—		—		37		—		—		37		—		37
Net income (Net loss of $36 allocated to redeemable NCI)	—		—		—		—		—		10,310		10,310		2,939		13,249
Other comprehensive income	—		—		—		—		(5,745)		—		(5,745)		(1,604)		(7,349)
Distributions declared on common shares ($0.1750 gross per share)	—		—		—		—		—		(16,079)		(16,079)		—		(16,079)
Redeemable common share measurement adjustment	—		—		—		3		—		—		3		—		3
Contributions from non-controlling interests	—		—		—		—		—		—		—		29		29
Distributions to and redemptions of non-controlling interests	—		—		—		—		—		—		—		(25,917)		(25,917)
Redeemable non-controlling interests measurement adjustment	—		—		—		(15)		—		—		(15)		—		(15)
Reallocation between additional paid-in capital and non-controlling interests due to changes in ownership	—		—		—		(2,567)		—		—		(2,567)		2,530		(37)
Balance at March 31, 2023	$	551	$	27	$	495	$	1,048,029	$	(2,067)	$	(24,143)	$	1,022,892	$	269,549	$	1,292,441

See accompanying Notes to the Condensed Consolidated Financial Statements.

6

Blue Owl Real Estate Net Lease Trust

Condensed Consolidated Statement of Cash Flows

(in thousands, except per share data)

	Three months ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities:
Net income	$	15,814	$	13,285
Adjustments to reconcile net income to cash provided by operating activities:
Management fee	8,481		4,072
Performance participation allocation	6,829		—
Depreciation and amortization	23,037		13,108
Amortization of tenant lease inducement	409		—
Straight-line rent adjustment	(5,112)		(4,162)
Accretion of tenant loan receivable	(3,636)		(2,460)
Amortization of below-market lease intangibles	(61)		(35)
Amortization of deferred financing costs	1,140		3,130
Income from unconsolidated real estate affiliates	(33,300)		(3,594)
Lease right of use asset amortization	164		164
Amortization of off-market caps	2,191		—
Amortization of mortgage note premium/discount	—		159
Amortization of restricted shares	113		84
Distribution of earnings from unconsolidated real estate affiliates	16,670		1,073
Non-cash interest expense on affiliate line of credit	3,558		4,076
Provision for CECL	(1,018)		(72)
Other	(21)		(12)
Change in assets and liabilities:
(Increase) decrease in other assets	(542)		7,695
Decrease in due to affiliates	(3,853)		(1,290)
Increase in accounts payable and accrued expenses	3,156		10,981
Increase in other liabilities	2,885		751
Net cash provided by operating activities	$	36,904	$	46,953
Cash flows from investing activities:
Acquisitions of real estate	—		(234,027)
Capital improvements to real estate	(2,717)		(39,855)
Investment in leases - financing receivable	(3,122)		—

7

Sale of investments in real estate debt	5,087		23,766
Investment in unconsolidated real estate affiliates	(525,575)		(212,847)
Investment in interest rate swap	—		1,894
Cash flows from off-market interest rate swaps and caps	2,544		—
Net cash used in investing activities	$	(523,783)	$	(461,069)
Cash flows from financing activities:
Proceeds from issuance of common shares	532,420		311,284
Payment of distributions to common shareholders	(18,942)		(7,808)
Proceeds from issuance of non-controlling interests	39		—
Payment of distributions to non-controlling interests	(4,992)		(4,988)
Repurchase of common share	(16,887)		(569)
Redemption of non-controlling interests	(3,513)		(20,958)
Proceeds from DST Program	4,523		—
Borrowings of term loan credit facility	—		20,000
Borrowings under revolving credit facility	300,273		104,542
Repayment of revolving credit facility	(40,196)		(27,500)
Borrowings under mortgage notes	—		44,654
Repayment of mortgage notes	(139,461)		—
Repayment of other borrowings	(134,150)		—
Payment of deferred financing costs	(989)		(650)
Net cash provided by financing activities	$	478,125	$	418,007
Net change in cash and cash equivalents and restricted cash	(8,754)		3,891
Cash and cash equivalents and restricted cash, beginning of period	136,669		133,578
Effects of currency translation on cash, cash equivalents, and restricted cash	(146)		(295)
Cash and cash equivalents and restricted cash, end of period	$	127,769	$	137,174
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheet
Cash and cash equivalents	$	55,135	$	36,898
Restricted cash	72,634		100,276
Total cash and cash equivalents and restricted cash	$	127,769	$	137,174
Supplemental disclosures:
Interest paid	$	20,388	$	28,451
Accrued unpaid amounts for capital improvements to real estate	$	1,797	$	4,861
Accrued unpaid amounts for other intangible assets	$	28,027	$	—
Non-cash investing and financing activities:
Assumption of other borrowings in conjunction with investments in unconsolidated real estate affiliates	$	287,444	$	—
Issuance of redeemable Class I Shares as interest payment for the affiliate line of credit	$	3,603	$	3,805
Issuance of redeemable Class I Shares as settlement of the management fee	$	7,463	$	7,096
Redeemable non-controlling interest issued as settlement of performance participation allocation	$	—	$	2,504
Allocation to redeemable non-controlling interest	$	125	$	15
Allocation to redeemable common shares	$	15	$	(3)
Distribution reinvestment	$	17,293	$	6,480
Accrued distributions for common shareholders	$	14,057	$	1,791
Accrued distributions for non-controlling interests	$	1,674	$	1,623
Accrued shareholder servicing fees	$	63,005	$	7,308

See accompanying Notes to the Condensed Consolidated Financial Statements.

8

Blue Owl Real Estate Net Lease Trust

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands)

1.    Organization and Nature of the Business

Blue Owl Real Estate Net Lease Trust (“we”, “us”, “our”, “ORENT”, and the “Company”) invests primarily in a diversified portfolio of single-tenant commercial real estate properties subject to long-term net leases with investment grade and other creditworthy tenants or guarantors across the United States and Canada. The Company is the sole general partner and majority limited partner in Blue Owl NLT Operating Partnership LP, a Delaware limited partnership (the “NLT OP” or “Operating Partnership”). Substantially all of the Company’s business is conducted through the NLT OP. As of March 31, 2024, ORENT owns 89.9% of the NLT OP. The Company and the NLT OP are externally managed by an adviser, Blue Owl Real Estate Capital LLC (“Blue Owl Real Estate” or “Adviser”), a subsidiary of Blue Owl Capital Inc. (“Blue Owl”). The Company’s investment decisions are made by employees of the Adviser, subject to general oversight by the Company’s investment committee and the Company’s board of trustees (the “Board”). The Company was formed under the name Oak Street Net Lease Trust on April 4, 2022 (“Inception”) as a Maryland statutory trust; however, no activity occurred until the first capital funding from Blue Owl on August 9, 2022. On July 6, 2023, the Company changed its legal name from Oak Street Net Lease Trust (the “Name Change”) and changed its resident agent and principal office in the State of Maryland (the “Agent Change”) pursuant to a certificate of amendment to its Certificate of Trust filed with the State Department of Assessments and Taxation of the State of Maryland on July 3, 2023. The Company also amended and restated its Declaration of Trust and its bylaws on July 6, 2023 to reflect the Name Change and the Agent Change. In addition, on July 6, 2023, the NLT OP changed its legal name from OakTrust Operating Partnership L.P. and the Adviser changed its legal name from Oak Street Real Estate Capital, LLC.

The Company operates in a manner to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. As a REIT, the Company is entitled to a tax deduction for some or all of the dividends paid to shareholders. Accordingly, the Company generally will not be subject to federal income taxes as long as it currently distributes to shareholders an amount equal to or in excess of the Company’s taxable income. If the Company fails to operate in a manner to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates.

The Company’s principal business is the acquisition, ownership, financing and leasing of single-tenant commercial real estate properties subject to long-term net leases with investment grade and other creditworthy tenants or guarantors, and its management does not distinguish the principal business, or group the operations, by geography or property type for purposes of measuring performance. Accordingly, the Company has only one reportable segment.

As of March 31, 2024, the Company owned 182 investments in real estate and 17 investments in real estate leases, including industrial, retail, and office properties. Additionally, the Company holds interest in three joint ventures that are included in investments in unconsolidated real estate affiliates, one of which is STORE Capital LLC (“STORE”). STORE owns 3,224 properties which are leased to 623 tenants on a triple-net lease basis. As of March 31, 2024, the Company holds a 16.0% ownership interest in STORE. The Company’s investment in STORE qualifies as a significant investment under SEC Regulation S-X 10-01(b) (refer to Note 4 - Investments in Unconsolidated Real Estate Affiliates). The Company also holds investments in real estate debt which consist of securities and loans (refer to Note 5 - Investments in Real Estate Debt).

On September 1, 2022, the Company commenced the offering of its shares through a continuous private placement offering (“Private Offering”), under regulation D of the Securities Act of 1933, as amended (the “1933 Act”). The Company is authorized to issue an unlimited number of each of its three classes of shares of its common shares (Class I shares, Class D shares, and Class S shares), each with a par value of $0.01 per common share. The share classes have different upfront selling commissions, dealer manager fees and ongoing shareholder servicing fees. The initial offering price for shares sold through the Private Offering was $10.00 per share. The Company conducts periodic closings and sells shares at the prior net asset value (“NAV”) per share as determined using the valuation methodology recommended by the Adviser and approved by the pricing committee of the Board, plus applicable fees and commissions. The NAV per share is calculated on a fully diluted basis. NAV may differ from the values of our real estate assets as calculated in accordance with accounting principles generally accepted in the United States (“GAAP”).

On August 31, 2023, the Company, through the NLT OP, initiated a program (the “DST Program”) to issue and sell up to a maximum aggregate offering amount of $3,000,000 of beneficial interests (“Interests”) in specific Delaware statutory

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trusts (the “DSTs”) holding real properties (the “DST Properties”). The Interests will be issued and sold to “accredited investors,” as that term is defined under Regulation D promulgated by the SEC under the 1933 Act in private placements exempt from registration pursuant to Section 4(a)(2) of the 1933 Act (the “DST Offerings”). Under the DST Program, DST Properties, which may be sold, contributed, sourced or otherwise seeded from the Company’s real properties held through NLT OP or from third parties, will be held in separate DSTs, and will be leased back by a wholly-owned subsidiary of NLT OP in accordance with corresponding master lease agreements. Each master lease agreement will be guaranteed by NLT OP, which will have the right, but not the obligation, to acquire the Interests in the applicable DST from the beneficial owners, in each case, in exchange for cash or units of NLT OP (“OP Units”), at a purchase price equal to the fair market value of the beneficial owner’s interest or the fair market value of the beneficial owner’s interest in one or more of the DST Properties (the “FMV Buyback Option”). The FMV Buyback Option is exercisable during the one-year option period beginning two years from the final closing of the applicable DST Offering or in such other time frame as provided for in the applicable DST arrangement. After a one-year holding period, investors who receive OP Units pursuant to the FMV Buyback Option generally have the right to cause NLT OP to redeem all or a portion of their OP Units for, at the Company’s sole discretion, common shares of the Company, cash or a combination of both.

As of March 31, 2024, the Company has raised proceeds of $18,319 from its DST program. See Note 6 - DST Program for additional information.

2.    Summary of Significant Accounting Policies and Estimates

The Company believes the following significant accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of the Condensed Consolidated Financial Statements.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information as established by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC”) including modifications issued under Accounting Standards Updates (“ASUs”). The Condensed Consolidated Financial Statements include the accounts of the Company, the Company’s subsidiaries, and investments in which the Company has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 18, 2024.

Principles of Consolidation

The Company consolidates all entities in which it has a controlling financial interest through majority ownership or voting rights and variable interest entities whereby the Company is the primary beneficiary. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity is a variable interest entity (“VIE”) and whether it is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. Entities that do not qualify as VIEs are generally considered voting interest entities (“VOEs”) and are evaluated for consolidation under the voting interest model. VOEs are consolidated when the Company controls the entity through a majority voting interest or other means.

When the requirements for consolidation are not met and the Company has significant influence over the operations of the entity, the investment is accounted for under the equity method of accounting. Equity method investments for which the Company has not elected a fair value option are initially recorded at cost and subsequently adjusted for the Company’s pro-rata share of net income, contributions and distributions. Equity method investments for which the Company has elected a fair value option (“FVO”) are initially recorded at fair value and subsequently the changes in fair value are reported in earnings.

The NLT OP is considered to be a VIE. The Company consolidates this entity as it has the ability to direct the most significant activities of the entity such as purchases, dispositions, financings, budgets, and overall operating plans.

For consolidated entities, the non-controlling partner’s share of the assets, liabilities, and operations of each entity is included in non-controlling interests as equity of the Company. The non-controlling partner’s interest is generally computed as the non-controlling interests’ ownership percentage. Any profits interest due to the other owner is reported within non-controlling interests.

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Global macroeconomic conditions including the persistence of elevated inflation and interest rates, in conjunction with geopolitical uncertainty, including the ongoing hostilities between Russia and Ukraine, as well as the conflict and escalating tensions in the Middle East, continue to weigh on industry deal activity, and may have a negative impact on the Company and its investors.

The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable based on the information available as of March 31, 2024. However, uncertainty over the current global macroeconomic environment and its impact on the Company’s operations may cause actual results to differ materially from those estimates.

Rental Revenue

The Company’s primary source of revenues is rental revenue, which is accounted for under the lease standard. Rental revenue primarily consists of fixed contractual base rent arising from tenant leases at our properties under operating leases or sales-type leases. Revenue under leases that are deemed probable of collection is recognized as revenue on a straight-line basis over the non-cancelable term of the related leases. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Base rent arising from tenant leases at our properties is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. For leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental revenue in the period of the change in the collectability determination. Our estimate of collectability includes, but is not limited to, factors such as the tenant’s payment history, financial condition, industry and geographic area. These estimates could differ materially from actual results.

Investments in Unconsolidated Real Estate Affiliates

The Company evaluates its equity method investments on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of our investment over its estimated fair value, which is determined by calculating our share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint-venture agreement. For equity investments in entities that hold real estate, the estimated fair value of the underlying investment’s real estate is calculated based on whether the acquisition of a property qualifies as a business combination or an asset acquisition. The fair value of the underlying investment’s debt, if any, is calculated based on market interest rates and other market information. The fair value of the underlying investment’s other financial assets and liabilities have fair values that generally approximate their carrying values.

The Company has elected the FVO for certain of its investments in unconsolidated real estate affiliates and therefore reports these investments at fair value in Investments in unconsolidated real estate affiliates on the Condensed Consolidated Balance Sheet. Changes in the fair value of equity method investments under the FVO are recorded as Income from unconsolidated real estate affiliates in the Condensed Consolidated Statement of Operations.

Distributions received from equity method investments are classified using the nature of distributions approach. Distributions received are classified based on the nature of the activity or activities that generated the distributions as a return on the investment, which are classified as (i) cash inflows from operating activities, or (ii) a return of investment, which are classified as cash inflows from investing activities. Transaction costs associated with the equity method investments are expensed as incurred. Investments made, including the transaction costs, for equity method investments are classified as cash outflows from investing activities in the Condensed Consolidated Statement of Cash Flows.

Foreign Currency

In the normal course of business, the Company makes investments in real estate outside the United States (“U.S.”) through subsidiaries that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rate at the reporting date and income, expenses, gains, and losses are translated at the average exchange rate over the applicable period. Cumulative translation

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adjustments arising from the translation of non-U.S. dollar denominated assets and liabilities are recorded in Other Comprehensive Income (Loss).

Fair Value Measurements

The carrying amounts of cash and cash equivalents and accounts payable and accrued expenses reasonably approximate fair value, in the Company’s judgment, because of their short-term nature.

In accordance with ASC 820, Fair Value Measurement, the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer or settle a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of the three broad levels described below:

•Level 1 — Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

•Level 2 — Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Due to inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.

The Company has estimated the fair value of its financial instruments and non-financial assets using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

Valuation of assets and liabilities measured at fair value

The Company’s investments in real estate debt and FVO equity method investments are reported at fair value. As of March 31, 2024, the Company’s investments in real estate debt, directly or indirectly, consisted of commercial mortgage-backed securities (“CMBS”), which are securities backed by one or more mortgage loans secured by real estate assets, as well as a commercial real estate loan. The Company generally determines the fair value of its investments in real estate debt by utilizing third-party pricing service providers whenever available.

In determining the fair value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models for securities such as real estate debt generally consider the attributes applicable to a particular class of the security (e.g., credit rating, seniority), current market data, and estimated cash flows for each security, and incorporate specific collateral performance, as applicable. Certain of the Company’s investments in real estate debt are unlikely to have readily available market quotations. In such cases, the Company will generally determine the initial value based on the acquisition price of such investment if acquired by the Company or the par value of such investment if originated by the Company. Following the initial measurement, the Company will determine fair value by utilizing or reviewing certain of the following: (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield or loan-to-value ratios, and (vii) borrower financial condition and performance. Refer to Note 5 - Investments in Real Estate Debt for additional details on the Company’s investments in real estate debt.

The Company has elected the FVO for certain of its investments in unconsolidated real estate affiliates and therefore, reports these investments at fair value. The Company estimates the fair market value of these investments based on its pro rata share of the investments’ equity at fair value. The investments’ underlying real estate holdings and debt are valued on a recurring basis using unobservable inputs (Level 3 inputs). The fair value of the underlying real estate holdings is generally determined using the income capitalization valuation method. As of March 31, 2024, the weighted average capitalization rate utilized was 7.3%. The fair value of the underlying debt is determined by discounting the future contractual cash flows to the present value using current market interest rates. As of March 31, 2024, the weighted average interest rate utilized was 6.8%.

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The Company’s derivative financial instruments are reported at fair value and consist of interest rate and foreign currency contracts. The fair values of the Company’s interest rate and foreign currency contracts were estimated using advice from a third-party derivative specialist, based on cash flows and observable inputs comprising of yield curves, foreign currency rates, and credit spreads (Level 2 inputs). Fair value information relating to derivative financial instruments is provided in Note 9 - Derivative Financial Instruments.

The following table details the Company’s assets measured at fair value on a recurring basis:

	March 31, 2024						December 31, 2023
	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Investments in unconsolidated real estate affiliates	$	—	$	1,527,034	$	1,527,034	$	—	$	699,570	$	699,570
Investments in real estate debt	30,388		51,816		82,204		30,974		56,235		87,209
Interest rate hedging derivatives	21,232		—		21,232		6,945		—		6,945
Foreign currency hedging derivatives	3,920		—		3,920		5,065		—		5,065
Total	$	55,540	$	1,578,850	$	1,634,390	$	42,984	$	755,805	$	798,789
Liabilities:
Interest rate hedging derivatives	1,559		$	—	1,559		$	4,651	$	—	$	4,651
Foreign currency hedging derivatives	5,074		—		5,074		6,820		—		6,820
DST financing obligation	—		18,378		18,378		—		13,694		13,694
Total	$	6,633	$	18,378	$	25,011	$	11,471	$	13,694	$	25,165

The Company has a secured borrowing related to a security included within Investment in real estate debt, which is stated at cost in Other liabilities and approximates fair value.

The following table details the Company’s assets and liabilities measured at fair value on a recurring basis using Level 3 inputs:

	Investments in real estate debt		Investments in unconsolidated real estate affiliates		Total Assets		DST Financing Obligation
Balance as of December 31, 2023	$	56,235	$	699,570	$	755,805	$	13,694
Purchases	—		813,419		813,419		—
Sales	(4,419)		—		(4,419)		—
Distributions received	—		(19,113)		(19,113)		—
DST Program proceeds	—		—		—		4,510
Included in net income
Loss on fair value of DST financing obligation	—		—		—		174
Income from unconsolidated real estate affiliates measured at fair value	—		33,158		33,158		—
Balance as of March 31, 2024	$	51,816	$	1,527,034	$	1,578,850	$	18,378

The commercial real estate loan is categorized in Level 3 of the fair value hierarchy. As of March 31, 2024, the change in value of the investment is immaterial.

Valuation of assets measured at fair value on a nonrecurring basis

Certain of the Company’s assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments, such as when there is evidence of impairment, and therefore such assets are measured at fair value on a nonrecurring basis. The Company reviews its real estate properties for impairment each quarter and when there is an event

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or change in circumstances that could indicate the carrying amount of the real estate value may not be recoverable. The Company did not recognize any impairment during the three months ended March 31, 2024 and March 31, 2023.

Valuation of liabilities not measured at fair value

As of March 31, 2024 and December 31, 2023, the fair value of the Company’s unsecured term loan credit facility, unsecured revolving credit facility, and mortgages payable was $2,379 and $2,666 below carrying value, respectively. Fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Company’s debt agreements and discounting them back to the present value using an estimated market yield. Additionally, the Company considers current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of the Company’s indebtedness are considered Level 3. Fair value information pertaining to debt is provided in Note 8 – Debt.

Allowance for credit losses

The allowance for credit losses, which is recorded as a reduction to Investment in leases - financing receivables, net on our Condensed Consolidated Balance Sheet was measured, considering the Company’s ownership of the leased asset given the nature of failed sale leaseback transactions and sales type leases accounted for as financing receivables, using a probability of default method based on the lessee’s respective credit ratings, the expected value related to releasing underlying assets or collateral, our historical loss experiences, and other factors related to other sales leasebacks accounted for as financing receivables. Included in our model are factors that incorporate forward-looking information. Changes in the allowance for credit losses are subsequently included in the Company’s Condensed Consolidated Statements of Operations within General and administrative expenses. As of March 31, 2024 and December 31, 2023, the Company has recorded an allowance for credit losses of $15,620 and $16,638, respectively.

Earnings Per Share

Basic net income per common share is determined by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. All classes of common shares are allocated net income/(loss) at the same rate per share and receive the same gross distribution per share.

Share-Based Compensation

We compensate each of our non-employee trustees on the Board who are not affiliated with Blue Owl with an annual retainer of restricted Class I shares as part of their compensation for services on the Board. See Note 12 - Equity and Non-Controlling Interest for additional information regarding share-based compensation. We recognize compensation expense related to share-based awards to our independent trustees in our condensed consolidated financial statements based on the fair value of the award on the date of grant.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all accounting standards and pronouncements issued by the FASB. Accounting standards and pronouncements not yet adopted were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s results of operations, financial position and cash flows.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 are meant to improve reportable segment disclosure requirements through enhanced disclosures in order to enable investors to better understand an entity’s overall performance and better assess the entity’s future cash flows. The enhanced disclosures include the disclosure of significant segment expenses, as well as the expansion of interim disclosure requirements to require nearly all of the annual segment disclosures. Significant segment expenses are those that are significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker (the “CODM”), and included in the reported measure of segment profit or loss. The ASU is effective for public companies for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The ASU should be adopted on a retrospective basis unless it is impracticable to do so. Early adoption is permitted, including in an interim period. The Company is currently assessing the impact of adopting the standard on the Company's financial statement disclosures.

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3.    Investments in Real Estate, net

Investments in real estate, net consisted of the following:

	March 31, 2024		December 31, 2023
Buildings	$	2,278,803	$	2,290,367
Land and land improvements	498,451		499,936
Total	2,777,254		2,790,303
Accumulated depreciation	(95,148)		(74,471)
Investments in real estate, net	$	2,682,106	$	2,715,832

No construction in progress was placed into service during three months ended March 31, 2024. During the three months ended March 31, 2023, $147,794 of construction in progress was placed into service, including $138,693 of buildings and $9,101 of land improvements.

The total rentable square feet of gross leasable area (“GLA”) of the Company was 15,296 and 14,266 thousand square feet as of March 31, 2024 and March 31, 2023, respectively, of which approximately 100% was leased.

Acquisitions

The Company did not acquire any properties during the three months ended March 31, 2024. The following table sets forth the acquisition values, number of properties and total rentable square feet of GLA of the Company for the three months ended March 31, 2023. For acquisitions not denominated in USD, the amounts have been presented in USD at the prevailing foreign exchange rate on the acquisition date:

	Three Months Ended March 31, 2023
Property Type	Acquisition Value		Number of Properties	Square Feet (in thousands)
Industrial	$	248,979	4	3,155

The following table details the purchase price allocation for the properties acquired during the three months ended March 31, 2023:

	Three Months Ended March 31, 2023
Buildings	$	206,568
Land and land improvements	42,411
Net Purchase Price	$	248,979

Tenant Bankruptcy

In March 2023, a tenant, Mountain Express, filed for Chapter 11 bankruptcy protection. The leases were terminated by the presiding bankruptcy court in August 2023. As of March 31, 2024, all 55 assets had been re-leased to new tenants and the leases had commenced.

4.    Investments in Unconsolidated Real Estate Affiliates

The Company owns interests in unconsolidated real estate investments with third parties. As of March 31, 2024 and December 31, 2023, investments in unconsolidated real estate affiliates were $1,533,116 and $705,628, respectively.

STORE

On February 3, 2023, the Company made an indirect investment through Ivory OSREC OS Aggregator LLC (“OS Aggregator”) in STORE, a publicly traded REIT invested in net-lease real estate, in an all-cash, take-private transaction. The Company has elected to account for the investment using the FVO under ASC 825.

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In connection with closing of the initial investment, OS Aggregator signed a Forward Interest Purchase Agreement (the “FIPA”) pursuant to which it agreed to purchase additional indirect interests in STORE such that OS Aggregator owns, in aggregate, an indirect 25% membership interest in STORE prior to the first anniversary of the closing of the initial investment, representing an aggregate additional investment of approximately $1,063,000 as of the signing date. Pursuant to the FIPA, the Company agreed to use available fundraising proceeds, subject to certain deductions for Company operations and previously committed acquisitions, to make purchases under the FIPA, although the FIPA contains no mandatory fundraising minimums directly from the Company. The Company guaranteed the foregoing obligations under the FIPA, and it agreed to pay an aggregate amount equal to $500,000 if it were to divert available proceeds in violation of the FIPA or fail to pursue fundraising in good faith.

On February 6, 2024, subsidiaries of the Company entered into promissory notes with SuNNNy Days, LLC, an affiliate of GIC, to borrow $287,844 (the “FIPA Loan”) in exchange for assignment of ownership of the remaining units OS Aggregator was required to purchase under the FIPA. Such assignment resulted in OS Aggregator reaching an indirect 25% membership interest in STORE, and meeting the obligations of the FIPA. The FIPA Loan has an interest rate of 9.0% and a term of 18 months, with a maturity date of August 1, 2025. In March 2024, the Company repaid $134,450 of the FIPA Loan through the use of proceeds from the issuance of common shares. The remaining outstanding balance of $153,394 is included within Other borrowings in the Company’s Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2024, the Company made incremental investments in OS Aggregator under the terms of the FIPA of $488,075, excluding the investments made using proceeds from the FIPA loan. During the three months ended March 31, 2024, the Company contributed an additional $37,500 to fund capital calls initiated by STORE to OS Aggregator. Additionally, OS Aggregator made distributions of $35,325 for the three months ended March 31, 2024, of which the Company received $18,514.

As of March 31, 2024, the Company owns a 63.8% interest in OS Aggregator. The initial and incremental investments made by the Company and affiliates of the Company in OS Aggregator were $2,350,407, representing 25.0% ownership percentage of interest in STORE. As of March 31, 2024, the fair value of the Company’s investment in STORE was $1,502,886, representing a 16.0% ownership percentage of interest in STORE.

The Company has determined that STORE is considered a significant subsidiary under SEC Regulation S-X Rule 10-01(b) as of March 31, 2024.

The following table provides summarized income statement information of STORE for the three months ended March 31, 2024 and March 31, 2023 (amounts in thousands):

	Three Months Ended
	March 31, 2024		March 31, 2023
Total revenue	$	269,859	$	163,832
Net income	$	178,743	$	102,697

The following table details the Company’s investments in unconsolidated real estate affiliates:

			Carrying Amount of Investment				ORENT's Share of Unconsolidated Entities' Income
Investment	Ownership Percentage		March 31, 2024		December 31, 2023		March 31, 2024		March 31, 2023
STORE Capital LLC (1)	16.0	%	$	1,502,886	$	675,944	$	32,037	$	3,679
Blue Owl NL Opportunity Credit REIT E LLC ("Fleet Farm JV") (2)	49.1	%	6,081		6,058		141		(85)
Blue Owl NL Opportunity Credit Holdings REIT LLC ("Tenneco JV") (3)	50.9	%	24,149		23,626		1,122		—
Total			$	1,533,116	$	705,628	$	33,300	$	3,594

(1)    The Company’s share of STORE’s net income includes our portion of STORE’s income and unrealized gains/losses based on our varying ownership percentage, which increased throughout the period, as well as our pro-rata share of OS Aggregator’s expenses.

(2) On August 12, 2022, the Company formed Oak Street NL Opportunity Credit REIT E LLC (“Fleet Farm JV”), a joint venture which the Company holds a 49.1% ownership in and accounts for under the equity method of accounting. The Company’s initial contribution into the joint venture was $6,986. The joint venture acquired two properties, which are leased on a triple net basis to the tenant. On September 18, 2023, Fleet Farm JV

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changed its legal name to Blue Owl NL Opportunity Credit REIT E LLC pursuant to a certificate of amendment to its Certificate of Formation filed with the Secretary of State of Delaware on September 18, 2023.

(3)    On June 5, 2023, the Company formed Blue Owl NL Opportunity Credit Holdings REIT LLC (“Tenneco JV”), a joint venture which the Company holds a 50.9% ownership in and accounts for under the equity method of accounting. The Company has elected to account for the investment using the FVO under ASC 825. The Company’s initial contribution into the joint venture was $41,738. The joint venture acquired four properties, which are leased on a triple net basis to the tenant. In July 2023, the Company contributed an additional $9,467 into the joint venture. The additional capital contributed pro rata by each partner was used to acquire two additional properties, which are leased on a triple net basis to the tenant. The Company received return of capital distributions of $999 and $30,487 in September and November 2023, respectively, primarily funded by a mortgage loan entered into by wholly owned subsidiaries of the Tenneco JV for its six assets in November 2023.

5.    Investments in Real Estate Debt

The following tables detail the Company’s investments in real estate debt:

	March 31, 2024
Type of Security/Loan	Weighted Average Coupon(1)		Weighted Average Maturity Date(2)	Face Amount		Cost Basis		Fair Value
CMBS	SOFR+4%		10/3/2034	$	30,327	$	30,010	$	30,388
Commercial real estate loan (3)	14	%	7/12/2025	51,816		51,816		51,816
Total investments in real estate debt	10	%		$	82,143	$	81,826	$	82,204

	December 31, 2023
Type of Security/Loan	Weighted Average Coupon(1)		Weighted Average Maturity Date(2)	Face Amount		Cost Basis		Fair Value
CMBS	SOFR + 4%		10/25/2034	$	30,995	$	30,830	$	30,974
Commercial real estate loan (3)	14	%	7/12/2025	56,235		56,235		56,235
Total investments in real estate debt	10	%		$	87,230	$	87,065	$	87,209

__________________

(1)The term SOFR refers to the relevant floating benchmark rates, one-month SOFR. Fixed rate Commercial real estate loan is reflected as a spread over the relevant floating benchmark rates, for purposes of the weighted-average.

(2)Weighted average maturity date is based on the fully extended maturity date of the instrument.

(3)The borrower for the commercial real estate loan is NLCA Real Estate Holdings, LLC.

The following table details the credit rating of the Company’s investments in real estate debt:

	March 31, 2024						December 31, 2023
Credit Rating	Cost Basis		Fair Value		Percentage Based on Fair Value		Cost Basis		Fair Value		Percentage Based on Fair Value
AAA	$	5,006	$	5,044	6	%	$	5,176	$	5,189	6	%
A3	7,008		7,052		9	%	7,009		7,026		8	%
Baa3	3,008		3,025		4	%	3,008		3,014		3	%
Ba3	1,868		1,922		2	%	2,433		2,479		3	%
BBB	5,472		5,494		7	%	5,514		5,530		6	%
BBB-	5,325		5,428		7	%	5,367		5,384		6	%
BB	2,323		2,423		3	%	2,323		2,352		3	%
Private Commercial Real Estate Loan (Unrated)	51,816		51,816		62	%	56,235		56,235		65	%
Total	$	81,826	$	82,204	100	%	$	87,065	$	87,209	100	%

The following table provides the activity for the real estate-related securities for the three months ended March 31, 2024:

	Amortized Cost Basis		Gain/(Loss)		Fair Value
Real estate-related securities as of December 31, 2023	$	30,830	$	144	$	30,974
Sale of real estate-related securities	(668)		—		(668)
Realized gain on sale of real estate-related securities	21		—		21
Decrease in accrued interest income	(173)		—		(173)

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Unrealized gain on real estate securities	—		234		234
Real estate-related securities as of March 31, 2024	$	30,010	$	378	$	30,388

6.    DST Program

On August 31, 2023, the Company, through NLT OP, initiated a DST Program to issue and sell up to a maximum aggregate offering amount of $3,000,000 of Interests in specific DSTs holding DST Properties in private placement. Under the DST Program, DST Properties, which may be sold, contributed, sourced, or otherwise seeded from the Company’s real properties held through NLT OP or from third parties, will be held in one or more DSTs and leased back by a wholly-owned subsidiary of NLT OP in accordance with corresponding master lease agreements. NLT OP will have the right, but not the obligation, to acquire the Interests in the applicable DST from the beneficial owners or the applicable DST’s right, title, interest in any portion of the DST Properties from the beneficial owners, in each case, in exchange for cash or OP Units, at a purchase price equal to the fair market value of the beneficial owner’s interest in one or more of the DST Properties. The FMV Buyback Option is exercisable during the one-year option period beginning two years from the final closing of the applicable DST Offering or in such other time frame as provided for in the applicable DST arrangement. After a one-year holding period, investors who receive OP Units pursuant to the FMV Buyback Option generally have the right to cause NLT OP to redeem all or a portion of their OP Units for, at the Company’s sole discretion, common shares of the Company, cash, or a combination of both.

The sale of interests in the DST Property will be accounted for as a failed sale-leaseback transaction due to the fair market value purchase option retained by NLT OP and as such, the property will remain on the Company’s books and records. The proceeds received from the DST will be accounted for as a financing obligation liability on the Condensed Consolidated Balance Sheets.

The Company contributed two industrial assets to the DST as part of the initial DST Program offering of $85,300, and a wholly-owned subsidiary of the Company leased back the assets in accordance with a master lease agreement. Under the master lease, the Company is responsible for subleasing the DST Property to tenants, for covering all costs associated with operating the underlying DST Property, and for paying base rent to the DST that owns such property. For financial reporting purposes, the DST Properties are included in the consolidated financial statements.

During the three months ended March 31, 2024, the Company raised gross proceeds of $4,523 from its DST Program, including $45 of upfront fees earned at closing. From inception of the DST Program through March 31, 2024, the Company has raised gross proceeds of $18,319 from its DST Program. As a result of the FMV Buyback Option, the sale of DST interests is offset by a financing obligation liability. The Company has elected to account for the DST financing obligation using the fair value option, and as such, the liability is remeasured at fair value on a recurring basis. The DST financing obligation was $18,378 and $13,659 as of March 31, 2024 and December 31, 2023, respectively, and is included within Other liabilities on the Condensed Consolidated Balance Sheets. The fair value loss for the three months ended March 31, 2024 was $241 and is included in Other income, net on the Condensed Consolidated Statement of Operations. The upfront fees earned at closing are included within Other income, net on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2024.

7.    Intangibles

The gross carrying amount and accumulated amortization of the Company’s identified intangible lease assets consisted of the following:

		March 31, 2024						December 31, 2023
	Weighted Average Life (Years)	Intangible lease assets, gross		Accumulated Amortization		Intangible lease assets, net		Intangible lease assets, gross		Accumulated Amortization		Intangible lease assets, net
Intangible lease assets
In-place lease intangibles	13.8	$	94,308	$	(10,328)	$	83,980	$	94,600	$	(8,551)	$	86,049
Other lease intangibles	17.9	52,069		(2,962)		49,107		52,693		(2,212)		50,481
Total intangible lease assets	15.2	$	146,377	$	(13,290)	$	133,087	$	147,293	$	(10,763)	$	136,530

Amortization expense related to the intangible lease assets for the three months ended March 31, 2024 was $2,556, of which $2,147 and $409 is included in Depreciation and amortization and Rental revenue, respectively within the Condensed Consolidated Statement of Operations. The amount included in rental revenue is related to tenant inducements and is a reduction to revenue. Amortization expense related to the intangible lease assets for three months ended March 31,

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2023 was $2,044 and is included in Depreciation and amortization within the Condensed Consolidated Statement of Operations.

The estimated future amortization on the Company’s intangible assets for each of the next five years and thereafter as of March 31, 2024 is as follows:

	In-Place Tenant Lease Intangible Assets		Other Lease Intangibles
2024 (remaining)	$	5,379	$	2,290
2025	7,172		3,054
2026	7,172		3,054
2027	7,172		3,054
2028	7,172		3,054
2029	7,172		3,054
Thereafter	42,741		31,547
Total	$	83,980	$	49,107

As of March 31, 2024 and December 31, 2023, the gross carrying amount of the Company’s below market lease intangibles was $3,085, with accumulated amortization of $283 and $222, respectively. The below market lease intangibles, net of accumulated amortization, are included in Other liabilities within our Condensed Consolidated Balance Sheet.

8.    Debt

The following table details the mortgage notes, credit facilities and related party note payable of the Company:

					Principal Balance Outstanding
Indebtedness	Weighted Average Interest Rate(1)(7)	Weighted Average Maturity Date	Maximum Facility Size		March 31, 2024		December 31, 2023
Mortgage notes & credit facilities:
Unsecured term loan credit facility(2)	S + 1.50%	8/11/2027	$	1,095,500	$	1,095,500	$	1,095,500
Unsecured revolving credit facility(3)	S + 1.55%	8/11/2026	569,500		490,214		231,255
Mortgages(4)	S + 2.46%	11/5/2024	N/A		400,011		546,005
Deferred financing costs, net					(12,244)		(13,172)
Total Mortgage notes & credit facility, net:					$	1,973,481	$	1,859,588
Affiliate line of credit
Affiliate line of credit(5)	S + 1.55%		$	250,000	200,000		200,000
Affiliate line of credit, net:					$	200,000	$	200,000
Other borrowings
Other borrowings(6)	9.00%	8/1/2025	N/A		153,394		—
Other borrowings					$	153,394	$	—

__________________

(1)The term “S” refers to the relevant floating benchmark rates, which include daily secured overnight financing rate (“SOFR”), 30-day SOFR, one-month euro interbank offered rate (“EURIBOR”), and one-month SONIA as applicable to each loan. As of March 31, 2024, we have outstanding interest rate swaps and interest rate caps that mitigate our exposure to potential future interest rate increases under our floating-rate debt. See further discussion of outstanding interest rate swaps and caps below.

(2)The unsecured term loan credit facility bears interest at a base rate plus a margin ranging from 0.25% to 1.85%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured term loan credit facility for the three months ended March 31, 2024 was 6.95% (unhedged) and 5.30% (hedged). As of March 31, 2024, we have outstanding interest rate swaps with aggregate notional values of $700,000, $250,000 and $145,500 that are structured such that the SOFR rates result in fixed rates of 3.65%, 3.42% and 4.23%, respectively.

(3)The unsecured revolving credit facility bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured revolving credit facility for the three months ended March 31, 2024 was 6.99% (unhedged) and 6.53% (hedged). As of

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March 31, 2024, we have an outstanding interest rate swap with an aggregate notional value of $100,000 that is structured such that the SOFR rate results in a fixed rate of 3.67%.

(4)In March 2023, certain of our mortgages were amended to transition certain London interbank offered rate (“LIBOR”)-based rates to certain replacement reference rates. As of March 31, 2024, this reference rate transition has impacted only certain of our mortgages. We have interest rate swaps and caps with an aggregate notional value of $46,712 and $382,870, respectively, as of March 31, 2024, that are structured such that the variable rates result in a fixed rate of 3.74% and a capped rate of 3.00%, respectively.

(5)The affiliate note payable bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the affiliate note payable for the three months ended March 31, 2024 was 7.04%.

(6)Other borrowings is comprised of the FIPA Loan. See Note 4.

(7)The Company’s mortgage and notes payable contain yield or spread maintenance provisions.

The Company is subject to various financial and operational covenants under certain of its mortgage notes, term loans credit facilities, and revolving credit facility agreements. These covenants require the Company to maintain certain financial ratios, which include leverage, debt service coverage, and tangible net worth thresholds, among others. As of March 31, 2024, the Company believes it was in compliance with all of its loan covenants that could result in a default under such agreements.

The following table details the future principal payments due under the Company’s outstanding third-party borrowings as of March 31, 2024:

Year	Amount
2024 (remaining)	$	553,887
2025	153,394
2026	536,338
2027	1,095,500
2028	—
2029	—
Thereafter	—
Total	$	2,339,119

Affiliate Line of Credit

On August 8, 2022, the NLT OP entered into an interest-bearing revolving promissory note with an affiliate, Blue Owl Capital Holdings LP (the “BO Lender”) in the principal amount of up to $250,000. The interest is payable monthly in arrears at the Lender’s election in (i) cash, (ii) Class I units of the NLT OP (using the most recently available net asset value per unit) or (iii) Class I shares of ORENT (using the most recently available net asset value per share). On November 9, 2023, NLT OP amended and restated the loan agreement to set a maturity date of June 30, 2024, to remove the revolving feature from the promissory note, and to allow NLT OP to borrow an additional $50,000 on a delayed draw basis. Any unpaid principal balance and unpaid accrued interest is payable on June 30, 2024.

As of March 31, 2024, $200,000 was outstanding under the affiliate line of credit and had accrued interest expense in the amount of $2,344. The Company intends to repay the amount in full prior to maturity through use of proceeds from the capital raise.

9.    Derivative Financial Instruments

The Company uses derivative financial instruments to minimize the risks and/or costs associated with the Company’s investments and financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to fluctuations in foreign exchange rates.

Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for our interest rate swap and interest rate caps will be reclassified to interest expense as interest payments are made on the Company’s mortgages and term loan credit facility. Refer to Note 2 - Summary of Significant Accounting Policies and Estimates for additional detail.

Interest Rate Contracts

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Certain of the Company’s financing transactions expose the Company to interest rate risks, which include exposure to variable interest rates on certain unsecured loans and loans secured by the Company’s real estate. The Company uses derivative financial instruments to minimize the risks and/or costs associated with the Company’s financing and to limit the Company’s exposure to the future variability of interest rates. To mitigate this risk, the Company enters into derivative financial instruments with counterparties it believes to have appropriate credit ratings and that are major financial institutions with which the Company and its affiliates may also have other financial relationships.

The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate fluctuations. To accomplish this objective, we use interest rate swap and interest rate cap contracts to manage our exposure on the variable rate interest debt. The Company has designated its derivative financial instruments as cash flow hedges as defined under GAAP as of March 31, 2024.

Foreign Currency Exchange Rate Derivatives

Certain of the Company’s foreign investments expose it to fluctuations in foreign currency exchange rates. The Company uses foreign exchange rate derivatives, including foreign currency forwards and currency options, to reduce the risk from fluctuations in foreign exchange rates associated with its assets and liabilities denominated in foreign currencies. The Company also uses foreign currency derivatives to hedge the foreign exchange risk associated with certain of its net investments in foreign operations.

The Company enters into currency options that give it the right but not the obligation, to sell the foreign currency amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on differentials in the foreign currency exchange rate and the strike price. The Company uses currency options as an economic hedge of foreign currency exposure related to the Company’s non-U.S. investments.

The following table details the Company’s outstanding derivatives:

			Notional Amount
Financial Instruments	Number of Instruments	Weighted Average Maturity Date	March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments
Interest rate swaps	5	11/19/2027	$	1,242,212	$	1,242,480
Interest rate caps	2	9/10/2024	382,870		519,000
Derivatives not designated as hedging instruments
Foreign currency forward contracts (1)	3	12/6/2028	131,037		131,037
Foreign currency option contracts (1)	2	11/30/2028	104,370		104,370
Total			$	1,860,489	$	1,996,887

__________________

(1)The notional amount reflects the balance we expect to settle at the maturity date based on the contractual strike price at trade execution.

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The fair value of our derivative financial instruments as well as their classification on our Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023 is detailed below.

		Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance Sheet Location	March 31, 2024		December 31, 2023		Balance Sheet Location	March 31, 2024		December 31, 2023
Derivatives Designated as Hedging Instruments
Interest rate swaps	Other Assets	$	17,477	$	1,654	Other Liabilities	$	(1,559)	$	(6,305)
Interest rate caps	Other Assets	3,755		6,945		Other Liabilities	—		—
Total Derivatives Designated as Hedging Instruments		$	21,232	$	8,599		$	(1,559)	$	(6,305)
Derivatives Not Designated as Hedging Instruments
Foreign currency forward contracts	Other Assets	$	188	$	—	Other Liabilities	$	(5,074)	$	(6,820)
Foreign currency option contracts	Other Assets	3,732		5,065			—		—
Total Derivatives Not Designated as Hedging Instruments		$	3,920	$	5,065		$	(5,074)	$	(6,820)

The following table details the effect of the Company’s derivative financial instrument on the Condensed Consolidated Statement of Operations during the three months ended March 31, 2024:

	Amount of Unrealized Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Derivatives Designated as Hedging Instruments	March 31, 2024			March 31, 2024
Interest rate swap	$	25,709	Interest Expense	$	5,142
Interest rate caps	3,227		Interest Expense	2,382
Total Derivatives Designated as Hedging Instruments	$	28,936		$	7,524

The following table details the effect of the Company’s derivative financial instrument on the Condensed Consolidated Statement of Operations during the three months ended March 31, 2023:

	Amount of Unrealized Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Derivatives Designated as Hedging Instruments	March 31, 2023			March 31, 2023
Interest rate swap	$	(13,219)	Interest Expense	$	(2,140)
Interest rate caps	(2,128)		Interest Expense	(2,217)
Total Derivatives Designated as Hedging Instruments	$	(15,347)		$	(4,357)

The following table details the effect of the Company’s derivative financial instruments not designated as hedging instruments on the Condensed Consolidated Statement of Operations for three months ended March 31, 2024 and March 31, 2023:

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	Income Statement Location	Three Months Ended
Derivatives Not Designated as Hedging Instruments		March 31, 2024		March 31, 2023
Foreign currency forward contracts	Other Income	$	1,934	$	—
Foreign currency option contracts	Other Income	(1,333)		—
Total Derivatives Not Designated as Hedging Instruments		$	601	$	—

10.    Related Party Transactions

Due to Affiliates

The following table details the components of due to affiliates:

	March 31, 2024		December 31, 2023
Accrued ongoing servicing fees	$	63,005	$	50,670
Accrued management fee	5,853		4,835
Performance participation allocation	5,370		—
Advanced organization and offering costs	10,778		11,919
Other advanced expenses	2,428		1,937
Accrued interest - affiliate line of credit	2,344		2,389
Total	$	89,778	$	71,750

Ongoing Servicing Fees

The Company accrues ongoing servicing fees payable to the Dealer Manager, Blue Owl Securities LLC, for ongoing services rendered to shareholders for Class S and Class D shares equal to 0.85% and 0.25%, respectively, per annum of the aggregate NAV of the respective outstanding class of shares. The ongoing servicing fees are paid monthly in arrears.

As part of the DST Program, the Company, on behalf of itself as general partner and on behalf of the limited partners of NLT OP, amended the limited partnership agreement of NLT OP to, among other things, issue two new classes of OP units, Class S-1 and Class D-1, to facilitate the issuance of OP Units in exchange for Interests in DSTs in the event NLT OP elects to exercise its FMV Buyback Option and the participation of such OP Units in the Company’s distribution reinvestment plan (the “DRIP”). NLT OP will pay to the Dealer Manager, Blue Owl Securities LLC for ongoing services rendered to shareholders for Class S-1 and Class D-1 shares equal to 0.85% and 0.25%, respectively, per annum of the aggregate NAV of the respective outstanding class of shares. The servicing fees will be paid monthly in arrears. Additionally, the DST Sponsor, Blue Owl Real Estate Exchange LLC, a wholly-owned subsidiary of the Company, will pay to the Dealer Manager, a service fee equal to 0.25% per annum of the price per Interest sold, to be paid quarterly in arrears.

Accrued Management Fees

The Company will pay the Adviser a management fee equal to 1.25% of NAV per annum payable monthly for services rendered related to ongoing operations of ORENT pursuant to the Investment Advisory Agreement. Additionally, to the extent that NLT OP issues NLT OP units to parties other than the Company, our NLT OP will pay the Adviser a management fee equal to 1.25% of the NAV of NLT OP attributable to such units not held by us per annum payable monthly.

The management fee may be paid, at the Adviser’s election, in cash, Class I shares or Class I units of our NLT OP. To date, the Adviser has elected to receive the management fee in the Company’s common shares, resulting in a non-cash expense. During the three months ended March 31, 2024 and March 31, 2023, the Company incurred management fees of $8,481 and $4,072, respectively.

During the three months ended March 31, 2024 and March 31, 2023, the Company issued 731,585 and 321,425 shares, respectively, to the Adviser as payment for management fees. Management fees of $5,853 and $4,835 were accrued and unpaid as of March 31, 2024 and December 31, 2023, respectively. The shares issued to the Adviser for payment of the management fee were issued at the applicable NAV per share at the end of each month for which the fee was earned. During the three months ended March 31, 2024, the Adviser did not submit any shares for repurchase.

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Additionally, the Company will pay the Adviser a management fee equal to 1.25% of the total consideration received by the Company or its affiliate for selling Interests to third-party investors, net of up-front fees and expense reimbursements payable out of gross sale proceeds from the sale of such Interests and any proceeds from any loans secured directly or indirectly by the DST Properties, per annum payable monthly. The Adviser has waived the fee for the initial DST Program offering.

Performance Participation Allocation

In addition to the fees paid to the Adviser for services provided pursuant to the Investment Advisory Agreement, Blue Owl Oak Trust Carry LLC, a controlled subsidiary of Blue Owl, and Blue Owl Real Estate Net Lease Trust CPV LP, controlled by senior and other officers of Blue Owl (each a “Special Limited Partner”) holds a performance participation interest in NLT OP that entitles it to receive an allocation of NLT OP’s total return. Total return is defined as total distributions plus the change in the Company’s NAV per share, adjusted for subscriptions and repurchases. The performance participation allocation is an incentive fee paid to the Adviser and receipt of the allocation is subject to the ongoing effectiveness of the Investment Advisory Agreement. Under NLT OP agreement, the Special Limited Partners are entitled to an allocation from NLT OP equal to 12.5% of total return, after the other unit holders have received a total return of 5% (after recouping any loss carryforward amount). The allocation of the performance participation interest is measured on a calendar year basis and is paid quarterly in NLT OP units, ORENT shares, or cash, at the election of the Special Limited Partners. As the performance participation allocation is associated with the performance of services rendered by the Adviser, and the Special Limited Partners are only entitled to the performance participation allocation fee provided that the Investment Advisory Agreement has not been terminated, the Company accounts for the performance participation allocation as an expense in our Condensed Consolidated Statement of Operations. During the three months ended March 31, 2024, the Company recognized $6,829 of performance participation allocation expense in the Company’s Condensed Consolidated Statement of Operations. The Company did not recognize any performance participation allocation expense during the three months ended March 31, 2023.

On February 1, 2023, the Company issued 243,536 units in NLT OP to the Special Limited Partners as payment of performance participation allocation at the NAV per unit as of December 31, 2022. Additionally, on August 1, 2023, the Company issued 788,112 units in NLT OP to the Special Limited Partners as payment of the performance participation allocation at the NAV per unit as of June 30, 2023. On November 1, 2023, the Company issued 559,048 units in NLT OP to the Special Limited Partners as payment of the performance participation allocation at the NAV per unit as of September 30, 2023. As of December 31, 2023, as a result of the issuance of units during 2023 in excess of the final fee measured on a calendar year basis, the Company recorded a receivable due to the Company from the adviser of $1,458, and is included within Other assets in our Condensed Consolidated Balance Sheets.

As of March 31, 2024, and immediately following (i) the issuance of the units and (ii) the record time for the distributions on the Company’s Class I shares, no Class I units in NLT OP were exchanged for Class I shares in the Company. As of March 31, 2024, 4,076 Class I units in NLT OP had been redeemed for cash.

Advanced Organizational and Offering Costs

The Adviser advanced all of the organization and offering costs on behalf of the Company (including legal, marketing, due diligence, administrative, accounting, design and website expenses, fees and expenses of our escrow agent and transfer agent, and other expenses attributable to the Company’s organization, but excluding ongoing servicing fees) through September 1, 2023. Such costs are recorded as a component of Due to affiliates on the Company’s Condensed Consolidated Balance Sheet and are being reimbursed to the Adviser pro rata over 60 months beginning September 1, 2023.

Accrued interest - affiliate line of credit

The amount represents the interest accrued as of March 31, 2024 on the interest-bearing revolving promissory note entered into with affiliate, Blue Owl Capital Holdings LP. Refer to Note 8 - Debt.

As of March 31, 2024, ORENT affiliate entities and their employees owned 12,196,670 ORENT Class I shares in an aggregate amount of $123,886, based on the NAV per share/unit as of March 31, 2024.

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11.    Leases

Lessor – Operating leases

The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s net lease properties which consists of fixed annual rent that escalates annually throughout the term of the applicable leases, and the tenant is generally responsible for all property-related expenses, including taxes, insurance, and maintenance. The Company's net lease properties are each leased to a single tenant.

The following table details the components of operating lease income from leases in which the Company is the lessor.

	Three Months Ended
	March 31, 2024		March 31, 2023
Base rent(1)	$	40,665	$	34,898
Straight-line rental revenue, net(2)	5,112		4,162
Variable lease payments(3)	5,116		6,946
Amortization of above/below market lease intangibles	61		35
Total Rental revenue	$	50,954	$	46,041

__________________

(1)Base rent consists of fixed lease payments.

(2)Represents lease income related to the excess (deficit) of straight-line rental revenue over fixed lease payments.

(3)Consists of reimbursement of common area maintenance (“CAM”) and real estate taxes, and amortization of tenant inducements.

The following table presents the undiscounted future minimum rents the Company expects to receive for its net lease properties classified as operating leases as of March 31, 2024.

Year	Future Minimum Rents
2024 (remaining)	$	116,967
2025	167,392
2026	170,186
2027	172,689
2028	175,294
2029	175,829
Thereafter	1,613,642
Total	$	2,591,999

Lessor – Financing receivables

In accordance with ASC 842, certain of the Company’s sales-type lease contracts are accounted for as failed-sale leaseback transactions and were recorded as an Investment in leases - Financing receivables. During the three months ended March 31, 2024, and March 31, 2023, the Company did not execute any sale-leaseback transactions that were accounted for as failed-sale leasebacks. During the three months ended March 31, 2024, and March 31, 2023, the Company recognized interest income of $14,534 and $13,669, respectively, on an effective interest basis at a constant rate of return over the term of the applicable leases. Cash received from the sales-type leasing agreements was $10,898 and $12,908 during the three months ended March 31, 2024 and March 31, 2023, respectively.

All of the lease payments are triple net basis to the tenant and the Company has rights in accordance with the individual lease agreements to protect the value of our leased properties. As of March 31, 2024, the future minimum

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payments of sales-type lease receivables were as follows:

Year	Future Minimum Payments
2024 (remaining)	$	35,730
2025	47,926
2026	48,829
2027	49,874
2028	52,110
2029	53,089
Thereafter	6,993,409
Total lease payment receivable	7,280,967
Less deferred interest income	6,694,881
Less allowance for credit losses	15,620
Total Investment in leases - Financing receivables	$	570,466

The following table reflects the change to the allowance for credit losses on our real estate portfolio for the three months ended March 31, 2024 and March 31, 2023:

	Three Months Ended
	March 31, 2024		March 31, 2023
Balance, beginning of period	$	16,638	$	—
Initial allowance upon adoption	—		7,157
Current period change in credit allowance	(1,018)		(72)
Balance, end of period	$	15,620	$	7,085

We assess the credit quality of our investments through the credit ratings of the lessee. The credit quality indicators are reviewed by us on a quarterly basis as of quarter-end. In instances where the lessee does not have a public credit rating, we use either a comparable proxy company or the overall corporate credit rating, as applicable. We also use this credit rating to determine the probability of default (“PD”) when estimating credit losses for each investment.

The following tables detail the amortized cost basis of our investments by the credit quality indicator as of March 31, 2024 and January 1, 2024:

	March 31, 2024
	Ba1		Baa2		B2		Caa2		Total
Investment in leases - Financing Receivable	$	—	$	56,493	$	317,577	$	212,016	$	586,086

	December 31, 2023
	Ba1		Baa2		B2		Caa2		Total
Investment in leases - Financing Receivable	$	204,364	$	52,247	$	111,803	$	210,914	$	579,328

Purchase Option Provisions

Certain of the Company’s leases include purchase option provisions. The provisions vary by agreement but generally allow the lessee to purchase the property during a specified period for the Company’s gross investment plus a specified proportion of appreciation. The Company expects that the purchase price will be greater than its net investment in the property at the time of potential exercise by the lessee.

Lessee - DST Program Master Lease

During the year ended December 31, 2023, the Company contributed two industrial assets to the DST as part of the initial DST Program offering. The assets are leased back to the Company by a wholly-owned subsidiary of the Company under the master lease agreement. The following table presents the undiscounted future minimum rent payment obligation of the wholly-owned subsidiary:

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Year	Future Minimum Payments
2024 (remaining)	$	3,359
2025	4,478
2026	4,478
2027	4,478
2028	4,636
2029	4,885
Thereafter	73,312
Total	$	99,626

12.    Equity and Non-Controlling Interest

Authorized Capital

As of March 31, 2024, the Company had the authority to issue an unlimited number of preferred shares and three classes of common shares including Class S shares, Class D shares, and Class I shares. Each class of common shares and preferred shares has a par value of $0.01. The Company’s Board of Trustees has the ability to establish the preferences and rights of each class or series of preferred shares, without shareholder approval, and as such, it may afford the holders of any series or class of preferred shares preferences, powers and rights senior to the rights of holders of common shares. The differences among the common share classes relate to upfront transaction fees and ongoing shareholder servicing fees. See Note 2 – Summary of Significant Accounting Policies and Estimates for a further description of such items. Other than the differences in upfront transaction fees and ongoing shareholder servicing fees, each class of common shares has the same economic and voting rights.

Common Shares

The following table details the movement in the Company’s outstanding shares of common shares:

	Three Months Ended March 31, 2024
	Class S	Class D	Class I	Total
December 31, 2023	92,068,163	4,488,818	101,651,731	198,208,712
Common shares issued	25,100,545	474,709	26,815,180	52,390,434
Distribution reinvestment	808,368	12,442	889,680	1,710,490
Common shares repurchased	(819,452)	—	(852,407)	(1,671,859)
Common shares converted(1)	—	(4,674,741)	4,596,143	(78,598)
March 31, 2024	117,157,624	301,228	133,100,327	250,559,179

__________________

(1)On January 29, 2024, 4,674,741 Class D Shares with a value of $46,636 were converted into 4,596,143 Class I shares based on the NAV per share as of December 31, 2023.

Redeemable Common Shares

In connection with the Company’s payment of its Affiliate line of credit and management fee, the Adviser holds Class I Common Shares. See Note 8 – Debt for further details of the affiliate line of credit and Note 10 – Related Party Transactions for further details on the management fee. The Adviser and BO Lender have the ability to redeem the Class I shares for cash at their election, therefore the Company has classified these Class I shares as Redeemable common shares outside of equity on the Company’s Condensed Consolidated Balance Sheet. As of March 31, 2024 and December 31, 2023, we have issued 4,820,618 and 3,735,867 redeemable common shares, respectively, which remain outstanding.

The Redeemable common shares are recorded at the greater of (i) their issuance amount, or (ii) their redemption value, which is equivalent to the fair value of the shares at the end of each measurement period. Accordingly, the Company recorded an allocation adjustment of $15 and $3 during the three months ended March 31, 2024 and March 31, 2023, respectively.

Share and Unit Repurchases

The Company adopted a share repurchase plan whereby, subject to certain limitations, from January 2023 through June 30, 2023, shareholders could request, on a monthly basis, that the Company repurchase all or any portion of their

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shares. Shares were repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. For any shares held for less than one year, the Board waived the 2% penalty that would have otherwise applied to the redemption value to shareholders. The total amount of aggregate repurchases of Class S, Class D, and Class I shares (excluding any early repurchase deduction) was limited to 2% of the aggregate NAV per month (measured using the aggregate NAV as of the end of the immediately preceding month) and 5% of the aggregate NAV per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding quarter).

The Company adopted an amended and restated repurchase plan (the “Quarterly Repurchase Plan”) that was effective from July 1, 2023 through October 17, 2023. Under the Quarterly Repurchase Plan, the Company repurchased once per quarter no more than 5% aggregate NAV per calendar quarter (measured using the average aggregate NAV as of the end of the immediately preceding three months). The Company conducted such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Securities Exchange Act of 1934, as amended.

The Company adopted an amended and restated repurchase plan (the “Amended Share Repurchase Plan”) that was effective October 18, 2023. Under the Amended Share Repurchase Plan, the Company will repurchase shares once per quarter. The repurchase price per share will generally be equal to the NAV per share as of the last calendar day of the first month of the applicable calendar quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of the transaction price. The aggregate NAV of total repurchases of Class S, Class D and Class I Shares is limited to no more than 5% of the Company’s aggregate NAV per calendar quarter (measured using the average aggregate NAV as of the end of the preceding three months for which NAV is available). Shareholders may request on a quarterly basis that the Company repurchase all or any portion of their shares and may submit such repurchase requests beginning after the start of the second month of the applicable calendar quarter.

The Company adopted an amended and restated share repurchase plan (the “Third Amended Share Repurchase Plan”) effective March 13, 2024. Under the Third Amended Share Repurchase Plan, the Company will not apply the Early Repurchase Deduction on repurchases of the Company’s common shares submitted by discretionary model portfolio management programs (and similar arrangements) as approved by the Company.

Other than as described for Redeemable Common Shares and Redeemable Non-Controlling Interests, the Company is not obligated to repurchase any shares and could choose to repurchase fewer shares than were requested to be repurchased, or none at all. Further, the Board may modify and suspend the Company’s share repurchase plan if it deems such action to be in the Company’s best interest and the best interest of its shareholders. In the event that the Company determined to repurchase some but not all of the shares submitted for repurchase during any month, shares repurchased at the end of the month would be repurchased on a pro rata basis.

For the three months ended March 31, 2024, the Company repurchased 1,671,859 shares of common shares and 12,660 OP Units for a total of $16,887 and $131, respectively. Additionally, the Company converted 323,302 OP Units to REIT Shares with a value of $3,341. For the three months ended March 31, 2023, the Company repurchased 208,694 shares of common shares and 2,057,267 OP Units for a total of $2,142 and $20,958, respectively. The Company had no unfulfilled repurchase requests during the three months ended March 31, 2024.

Distributions

The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to its shareholders each year to comply with the REIT provisions of the Internal Revenue Code. Each class of common shares receive the same gross distribution per share. The net distribution varies for each class based on the applicable shareholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor.

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The following table details the aggregate distributions declared for each applicable class of common shares for the three months ended March 31, 2024 and March 31, 2023:

	Three Months Ended
	March 31, 2024						March 31, 2023
	Class S		Class D		Class I		Class S		Class D		Class I
Aggregate gross distributions declared per common share	$	0.1749	$	0.1749	$	0.1749	$	0.1750	$	0.1750	$	0.1750
Shareholder servicing fee per common share	(0.0213)		(0.0061)		0.0000		(0.0217)		(0.0063)		—
Net distributions declared per common share	$	0.1536	$	0.1688	$	0.1749	$	0.1533	$	0.1687	$	0.1750

The Company has adopted a distribution reinvestment plan whereby shareholders will have their cash distributions automatically reinvested in additional common shares unless they elect to receive their distributions in cash. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the transaction price at the time the distribution is payable. Shareholders will not pay an upfront transaction fee when purchasing shares pursuant to the distribution reinvestment plan. The ongoing servicing fees with respect to shares of Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV.

Redeemable Non-controlling Interest

In connection with its performance participation interest, the Special Limited Partners hold Class I units in NLT OP. See Note 10 - Related Party Transactions for further details of the Special Limited Partner’s performance participation interest. Because the Special Limited Partners have the ability to redeem its Class I units for Class I shares in the Company or cash at their election, the Company has classified these Class I units as Redeemable Non-controlling Interest in mezzanine equity on the Company’s Condensed Consolidated Balance Sheet.

The following table details the redeemable non-controlling interest activity related to the Special Limited Partners for the three months ended March 31, 2024 and March 31, 2023:

	Three Months Ended
	March 31, 2024		March 31, 2023
Balance, beginning of period	$	17,976	$	1,657
Settlement of prior performance participation allocation	—		2,504
Repurchases	(41)		—
GAAP income allocation	103		36
Other comprehensive income	95		(1)
Distributions	(305)		(58)
Fair value allocation	125		15
Reallocation between additional paid-in capital and non-controlling interests due to changes in NLT OP ownership	312		38
Balance, end of period	$	18,265	$	4,191

During the three months ended March 31, 2024 and March 31, 2023, the Company issued Class I units in NLT OP to the Special Limited Partners as payment of the performance participation allocation. As of March 31, 2024, 4,076 units had been redeemed for cash, and no units had been exchanged for Class I shares in the Company.

The Redeemable Non-controlling Interests are recorded at the greater of (i) their carrying amount, adjusted for their share of the allocation of GAAP net income or loss and distributions, or (ii) their redemption value, which is equivalent to the fair value of such interests at the end of each measurement period. Accordingly, the Company recorded an allocation adjustment of $125 and $15 during the three months ended March 31, 2024 and March 31, 2023, respectively, between Additional Paid-in Capital and Redeemable Non-controlling Interest.

Share-Based Compensation

In January 2024, we awarded independent members of the Board a total of 38,683 shares of restricted Class I shares subject to a vesting period of 13.5 months and recognized approximately $47 of compensation expense for the three months ended March 31, 2024 related to these awards. The Company incurred a total of approximately $113 and $84 of share-based compensation expense for the three months ended March 31, 2024 and March 31, 2023, respectively.

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13.    Commitments and Contingencies

The Company is involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, the Company believes the ultimate resolution of such claims and litigation will not have a material adverse effect on its financial position, results of operations or liquidity.

14.    Earnings Per Share

Basic net income/(loss) per common share is determined by dividing net income/(loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period, excluding unvested restricted Class I shares. The restricted Class I shares are considered to be participating securities because they contain non-forfeitable rights to distributions. The restricted Class I shares participate equally with all classes of common shares, therefore net income/(loss) has not been presented separately.

All classes of common shares are allocated net income/(loss) at the same rate per share and receive the same gross distribution per share.

	Three Months Ended
	March 31, 2024		March 31, 2023
Net income	$	15,814	$	13,285
Net income attributable to non-controlling interests	(1,683)		(2,975)
Net income attributable to ORENT shareholders	$	14,131	$	10,310
Net income attributable to dilutive OP units	1,683		2,975
Net income attributable to ORENT shareholders - dilutive	$	15,814	$	13,285
Weighted average number of common shares outstanding - basic	$	237,219,985	$	98,086,696
Effect of dilutive unvested grants of restricted Class I shares	38,683		16,212
Effect of dilutive OP units	28,698,892		29,037,051
Weighted average shares of common shares outstanding - dilutive	$	265,957,560	$	127,139,959
Net income per common share - basic	$	0.06	$	0.11
Net income per common share - diluted	$	0.06	$	0.10

The computation of diluted net income per common share for the three months ended March 31, 2024 includes 38,683 dilutive restricted Class I shares and 28,698,892 dilutive NLT OP units. The computation of diluted net income per common share for three months ended March 31, 2023 includes 16,212 dilutive restricted Class I shares and 29,037,051 dilutive NLT OP units.

15.    Segment Reporting

The Company’s principal business is the acquisition, ownership, financing and leasing of single-tenant commercial real estate properties subject to long-term net leases with investment grade and other creditworthy tenants or guarantors.

The Company’s Chief Executive Officer is responsible for allocating resources and assessing performance, and as such is the CODM. The CODM reviews information at the consolidated entity level, and does not distinguish the principal business, or group the operations, by geography or property type for purposes of measuring performance or allocating resources. Accordingly, the Company has one operating segment and one reportable segment as of March 31, 2024.

16.     Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 2022. The Company has also elected for some of its subsidiaries to be treated as taxable REIT subsidiaries (“TRSs”), which are subject to federal and state income taxes.

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For the three months ended March 31, 2024, the Company incurred income tax expense of $304 related to its DST Program through its TRS. The Company did not incur any income tax expense for the three months ended March 31, 2023. The components of income tax expense for three months ended March 31, 2024 were as follows:

Current Expense
Federal	$	38
State	41
Total current expense	$	79
Deferred Tax Expense
Federal	$	157
State	67
Total deferred tax expense	$	225
Total income tax expense, net	$	304

Income tax expense is higher than expected pretax book income of the TRS at the 21% federal statutory rate as a result of basis differences on intercompany transfers of property to the TRS and state and local tax expense.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for GAAP purposes and the amount used for income tax purposes. As of March 31, 2024, the Company had a net deferred tax liability of $154 included within Other liabilities in the Condensed Consolidated Balance Sheets, comprised of a deferred tax asset of $404 for organization expenses and a deferred tax liability of $558 for basis differences in real property. As of December 31, 2023, the Company had a net deferred tax asset of $71 included within Other assets in the Condensed Consolidated Balance Sheets, comprised of a deferred tax asset of $390 for organization expenses and a deferred tax liability of $319 for basis differences in real property.

Generally, the Company is subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2022 and subsequent years. The Company is subject to audit under the statutes of limitation by the Canada Revenue Agency and provincial authorities with respect to its Canadian entities for the year ended December 31, 2022 and subsequent years.

17.    Subsequent Events

In preparation of the accompanying Condensed Consolidated Financial Statements, the Company has evaluated events and transactions that occurred after March 31, 2024 for recognition or disclosure purposes. Based on this evaluation, we identified the following subsequent events, from March 31, 2024 through the date the financial statements were issued.

Financings

On April 2, 2024, the Company repaid the remaining outstanding principal balance on the FIPA Loan of $153,394 through the use of proceeds from the issuance of common shares.

On April 4, 2024, the Company entered into a mortgage loan agreement on four wholly-owned Tenneco assets for a total principal amount of $43,000. The mortgage loan has a maturity date of April 6, 2029 and a fixed interest rate of 6.25%. The net proceeds were used to repay principal on the revolving credit facility.

On May 3, 2024, the Company repaid $93,400 on its outstanding affiliate line of credit, resulting in a remaining balance of $106,600. The payments was funded by proceeds from the issuance of common shares.

Common Shares

Effective April 19, 2024, the Company has designated a new class of Class N common shares, par value $0.01 per share (the “Class N shares”). The preferences, rights, voting powers, restrictions, qualifications, and terms and conditions of redemption for the Class N shares are substantially similar to the rights, preferences and terms of the Company’s Class S, Class D and Class I shares, including the same proportional rights to the Company’s assets.

In connection with the designation of the new Class N shares, the Company amended certain of its documents. On April 19, 2024, the Company, on behalf of itself as a general partner and on behalf of the limited partners thereto, entered into the Fourth Amended and Restated Limited Partnership Agreement (the “Amended Operating Partnership Agreement”)

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of the Operating Partnership. The Amended Operating Partnership Agreement amends the prior version of the agreement to make certain updates to reflect the new Class N shares of the Company and to establish two new classes of OP Units, designated as Class N Units and Class N-1 Units. The preferences, rights, restrictions, qualifications, and terms and conditions of conversion and redemption for the Class N Units are substantially similar to the rights, preferences and terms of the Operating Partnership’s Class S Units, Class D Units and Class I Units. The preferences, rights, restrictions, qualifications, and terms and conditions of conversion and redemption for the Class N-1 Units are substantially similar to the rights, preferences and terms of the Operating Partnership’s Class S-1 Units and Class D-1 Units, except that the investor servicing fee for a Class N-1 Unit shall equal 0.50% per annum of the net asset value of each Class N-1 Unit.

On April 19, 2024, the Company, Blue Owl Real Estate Capital LLC and Blue Owl Securities LLC entered into the Amended and Restated Dealer Manager Agreement (the “Amended Dealer Manager Agreement”), including a revised form of Participating Broker-Dealer Agreement (the “Amended Form of Participating Broker-Dealer Agreement”) to be entered into with certain broker-dealers and Blue Owl Securities LLC. The Amended Dealer Manager Agreement and the Amended Form of Participating Broker-Dealer Agreement amend and restate the prior versions of the agreements to make certain updates to reflect the designation of the new Class N shares of the Company.

On April 19, 2024, the Company adopted the Third Amended and Restated Declaration of Trust (the “Amended Declaration of Trust”) pursuant to which the Company designated the new Class N shares.

Effective April 19, 2024, the Board amended the Company’s distribution reinvestment plan (the “DRIP”) to incorporate Class N shares in the DRIP.

Effective April 19, 2024, the Company adopted an amended and restated share repurchase plan (the “Fourth Amended Share Repurchase Plan”) to incorporate the Class N shares.

Proceeds from the Issuance of Common Shares

From April 1, 2024 through the date the financial statements were issued, the Company sold an aggregate of 30,792,621 shares of its common shares (consisting of 16,228,178 Class S shares, — Class N shares, 299,991 Class D shares, and 14,264,451 Class I shares) resulting in net proceeds of $311,999 to the Company as payment for such shares.

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

References herein to “Blue Owl Real Estate Net Lease Trust,” “Company,” “we,” “us,” or “our” refer to Blue Owl Real Estate Net Lease Trust and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part I. Item 1A — “Risk Factors” in our 2023 Annual Report on Form 10-K filed with the SEC on March 18, 2024. Dollars are in thousands, except for per share amounts.

Overview

Blue Owl Real Estate Net Lease Trust invests primarily in stabilized income-generating commercial real estate in the United States. To a lesser extent, we may invest outside the U.S. and in real estate debt. The Company is the sole general partner and majority limited partner in Blue Owl NLT Operating Partnership LP, a Delaware limited partnership (“NLT OP” or the “Operating Partnership”), and we own substantially all of our assets through NLT OP. We are externally managed by our Adviser, Blue Owl Real Estate Capital, LLC. The Company’s principal business is the acquisition, ownership, financing and leasing of single-tenant commercial real estate properties subject to long-term net leases with investment grade and other creditworthy tenants or guarantor, and its management does not distinguish the principal business, or group the operations, by geography or property type for purposes of measuring performance. Accordingly, the Company has only one reportable segment.

The Company was formed on April 4, 2022 (“Inception”) under the name Oak Street Net Lease Trust as a Maryland statutory trust; however, no activity occurred until the first capital funding from Blue Owl on August 9, 2022. On July 6, 2023, the Company changed its legal name from Oak Street Net Lease Trust (the “Name Change”) and changed its resident agent and principal office in the State of Maryland (the “Agent Change”) pursuant to a certificate of amendment to its Certificate of Trust filed with the State Department of Assessments and Taxation of the State of Maryland on July 3, 2023. The Company also amended and restated its Declaration of Trust and its bylaws on July 6, 2023 to reflect the Name Change and the Agent Change. In addition, on July 6, 2023, NLT OP changed its legal name from OakTrust Operating Partnership L.P. and the Adviser changed its legal name from Oak Street Real Estate Capital, LLC.

The Company is a non-listed, perpetual life real estate investment trust (“REIT”) that qualifies as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income to Shareholders and maintain our qualification as a REIT.

As of March 31, 2024, we have received net proceeds of $2,519,740 from the sale of our common shares. We have contributed the net proceeds to NLT OP in exchange for a corresponding number of Class S, Class D, and Class I units of NLT OP. NLT OP has primarily used the net proceeds to make investments in real estate and real estate debt as further described below under “Investment Portfolio.” We intend to continue selling shares on a monthly basis.

DST Program

On August 31, 2023, the Company, through NLT OP, initiated a program (the “DST Program”) to issue and sell up to a maximum aggregate offering amount of $3,000,000 of beneficial interests (“Interests”) in one or more Delaware statutory trusts (the “DSTs”) holding real properties (the “DST Properties”). The Interests will be issued and sold to “accredited investors,” as that term is defined under Regulation D promulgated by the SEC under the 1933 Act in private placements exempt from registration pursuant to Section 4(a)(2) of the 1933 Act (the “DST Offerings”). Under the DST Program, DST Properties, which may be sold, contributed, sourced or otherwise seeded from the Company’s real properties held through NLT OP or from third parties, will be held in one or more DSTs, and will be leased back by a wholly-owned subsidiary of NLT OP in accordance with corresponding master lease agreements. Each master lease agreement will be guaranteed by NLT OP, which will have the right, but not the obligation, to acquire the Interests in the applicable DST from the beneficial owners, in each case, in exchange for cash or units of NLT OP (“OP Units”), at a purchase price equal to the fair market value of the beneficial owner’s Interest or the fair market value of the beneficial owner’s interest in one or more of the DST Properties (the “FMV Buyback Option”). The FMV Buyback Option is exercisable during the one-year option period beginning two years from the final closing of the applicable DST Offering or in such other time frame as provided for in the applicable DST arrangement. After a one-year holding period, investors who receive OP Units pursuant to the FMV

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Buyback Option generally have the right to cause NLT OP to redeem all or a portion of their OP Units for, at the Company’s sole discretion, common shares of the Company, cash or a combination of both.

We expect that the DST Program will give us the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Affiliates of the Adviser are expected to receive fees in connection with the sale of the Interests and the management of the DSTs. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, fund the repurchase of shares of all classes of our common shares under our share repurchase plan and for other corporate purposes. We have not allocated specific amounts of the net proceeds from the DST Program for any specific purpose.

As of March 31, 2024, the Company has raised proceeds of $18,319 from its DST program including $183 of upfront fees earned at closing. As a result of the FMV Buyback Option, the sale of DST interests is offset by a financing obligation liability. The Company has elected to account for its DST financing obligation using the fair value option, and as such, the liability is remeasured at fair value on a recurring basis.

Emerging Growth Company Status

We are and we will remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the date of an initial public offering pursuant to an effective registration statement under the 1933 Act, (ii) in which we have total annual gross revenue of at least $1,235,000, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our shares that is held by non-affiliates exceeds $700,000 as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1,000,000 in non-convertible debt during the prior three-year period. For so long as we remain an “emerging growth company” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We cannot predict if investors will find our Shares less attractive because we may rely on some or all of these exemptions.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the 1933 Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our financial statements may not be comparable to companies that comply with public company effective dates and may result in less investor confidence.

Recent Developments

The Company’s businesses are materially affected by conditions in the financial markets and economic conditions in the U.S. and to a lesser extent, elsewhere in the world.

During the three months ended March 31, 2024, the persistence of both elevated inflation and interest rates, in conjunction with geopolitical uncertainty, including the ongoing hostilities between Russia and Ukraine as well as the conflict and escalating tensions in the Middle East, continued to weigh on industry deal activity. It remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation.

Industry valuations remain under pressure due to a combination of rising interest rates, cost inflation, elevated vacancy rates, and uncertainty around future capital availability. However, industry transaction volumes increased slightly compared to the previous quarter. In contrast, our real estate business, focused on triple net lease, continued to deploy significant capital. Our investors continue to benefit from the inflation-mitigating characteristics of the net lease structure, highly predictable net rent growth, and long-duration contractual income across the portfolio.

We are continuing to closely monitor developments related to the macroeconomic factors that have contributed to market volatility, and to assess the impact of these factors on financial markets and on our business. Our future results may be adversely affected by slowdowns in fundraising activity and the pace of capital deployment. It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy, and our Financial Statements. See “Part I. Item 1A. Risk Factors — Risks Related to Our Business and Operations” in our 2023 Annual Report on Form 10-K filed with the SEC on March 18, 2024.

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Effective April 19, 2024, the Company has designated a new class of Class N common shares, par value $0.01 per share (the “Class N shares”). The preferences, rights, voting powers, restrictions, qualifications, and terms and conditions of redemption for the Class N shares are substantially similar to the rights, preferences and terms of the Company’s Class S, Class D and Class I shares, including the same proportional rights to the Company’s assets.

Q1 2024 Highlights (Results of Operations)

Operating Results

•Declared monthly net distributions totaling $44,223 for the three months ended March 31, 2024. The details of the average annualized distribution rates and total returns are shown in the following table:

	Class S		Class D		Class I
Annualized Distribution Rate(1)	6.06	%	6.74	%	6.88	%
Year-to-Date Total Return, without upfront selling commissions(2)	1.7	%	1.95	%	1.84	%
Year-to-Date Total Return, assuming maximum upfront selling commissions(2)	(3.09)	%	(0.85)	%	N/A
Inception-to-Date Total Return, without upfront selling commissions(2)	6.85	%	6.89	%	8.10	%
Inception-to-Date Total Return, assuming maximum upfront selling commissions(2)	4.55	%	5.89	%	N/A

__________________

(1)The annualized distribution rate is calculated as the current month's distribution annualized and divided by the prior month's net asset value, which is inclusive of all fees and expenses. The Company believes the annualized distribution rate is a useful measure of overall investment performance of our shares.

(2)Total return is calculated as the change in NAV per share during the respective periods plus any distributions per share declared in the period and assumes any distributions are reinvested in accordance with our distribution reinvestment plan. Total return for periods greater than one year are annualized. The Company believes total return is a useful measure of the overall investment performance of our shares.

Investments

•Made additional investments in STORE Capital, LLC (“STORE”) of $775,919 during the three months ended March 31, 2024 and funded a capital call initiated by STORE of $37,500. The Company’s investment, combined with those of affiliates of the Company, through Ivory OSREC OS Aggregator (“OS Aggregator”) totaled $2,350,407, representing 25.0% of the closing capital contribution of STORE.

Capital Activity and Financings

•Raised net proceeds of $532,420 from the sale of our common shares and repurchased 1,671,859 of our common shares for $16,887 during the three months ended March 31, 2024.

•Incurred additional unsecured debt of $300,273, and paid down $40,196 and $139,461 of unsecured debt and secured debt, respectively, during the three months ended March 31, 2024.

•Entered into promissory notes with SuNNNy Days, LLC, an affiliate of GIC, to borrow $287,844 to purchase the remaining interests under the STORE Forward Interest Purchase Agreement, and repaid $134,450 during the quarter.

Overall Portfolio

•Our portfolio as of March 31, 2024 consisted of investments in real estate (57%), investments in leases (12%), investments in real estate debt (2%), and investments in unconsolidated real estate affiliates (29%), based on fair value.

•Our 207 properties as of March 31, 2024 consisted of Industrial (61%), Retail (25%), Land (7%), and Office (7%), based on fair value.

•Our investments in real estate debt as of March 31, 2024, consisted of a commercial real estate loan and CMBS. For further details on credit rating and underlying real estate collateral, refer to “Investment Portfolio – Investments in Real Estate Debt”.

•Our investments in unconsolidated real estate affiliates consisted of equity investments in STORE, Tenneco JV, and Fleet Farm JV. As of March 31, 2024, our investments in STORE, Tenneco JV, and Fleet Farm JV were $1,502,886, $24,149, and $6,081, respectively.

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Investment Portfolio

Real Estate Investments

The following chart describes the diversification of our investments in real estate by property type1 based on fair value as of March 31, 2024:

Property Type 1

The following table provides a summary of our portfolio as of March 31, 2024, including Investments in real estate and Investments in leases – financing receivables:

Property Type (1)	Number of Properties	Sq. Feet (in thousands)	Occupancy Rate (4) (5)	Average Effective Annual Base Rent Per Leased Sq. Foot	Gross Asset Value (3)		Annual Base Rent		Percentage of Total Revenue
Industrial (2)	40	15,900	100%	8.4	$	2,280,137	$	133,695	59%
Retail (2)	161	2,434	100%	23.8	937,668		57,954		26%
Land	2	1,526	N/A	9.2	269,057		14,000		6%
Office	4	1,006	100%	19.5	257,663		19,639		9%
Total	207	20,866			$	3,744,525	$	225,288	100%

__________

(1)Excludes indirect investment in STORE.

(2)Includes properties owned by unconsolidated entities.

(3)Based on fair value as of March 31, 2024.

(4)Occupancy rate is calculated as the percentage of square footage leased.

(5)Land investments are excluded from Occupancy Rate.

1     Property Type weighting is measured as the asset value of our real estate investments for each sector category against the total asset value of all real estate investments, excluding the value of any third-party interests in such real estate investments. “Real estate investments” include our direct property investments and properties held within joint ventures managed by our Adviser. “Real estate investments” excludes properties held in joint ventures managed by third parties, including the Company’s investment in STORE.

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Real Estate and Leases

The following table provides information regarding our real estate property types as of March 31, 2024:

Property Type and Investment (1)	Number of Properties	Location	Acquisition/Commencement Date	Ownership Interest	Sq. Feet (in thousands)	Occupancy Rate (6)
Industrial:
Amazon	5	Various	Aug. - Dec. 2022	100%	4,964	100%
Dorel Industries	1	Cornwall, ON	November 2022	100%	492	100%
EquipmentShare.com	11	Various	Oct. - Nov. 2022	100%	222	100%
Magna International	1	Bowling Green, KY	September 2022	100%	1,176	100%
Paradigm	3	Various	October 2022	100%	314	100%
Whirlpool	1	Amana, IA	November 2022	100%	1,572	100%
Tenneco(2)	11	Various	Dec. 2022 - Jul. 2023	100% / 51%	3,437	100%
LOC Performance	2	Various	March 2023	100%	990	100%
QVC	2	Various	January 2023	100%	2,166	100%
Save Mart (4)	2	Various	September 2023	100%	555	100%
Johnson Controls	1	Seattle, WA	September 2022	100%	12	100%
Retail:
Cracker Barrel	53	Various	September 2022	100%	537	100%
Fleet Farm(2)	2	Various	August 2022	49%	428	100%
Ramoco Fuels NC LLC(5)	27	Various	September 2023	100%	94	100%
SQRL Holdings(5)	28	Various	September 2023	100%	143	100%
Walgreen Co.	30	Various	September 2022	100%	440	100%
Maverick Gaming	11	Various	Sept. 2022 - Jul. 2023	100%	317	100%
Save Mart	10	Various	July 2023	100%	475	100%
Office:
Chubb	2	Whitehouse, NJ	November 2022	100%	429	100%
Energy Center	1	Houston, TX	October 2022	100%	524	100%
EquipmentShare.com	1	Colombia, MO	October 2022	100%	53	100%
Land:
Bally's	1	Chicago, IL	November 2022	100%	1,311	N/A(3)
HOF Village Waterpark	1	Canton, OH	November 2022	100%	215	N/A(3)
Total	207				20,866

__________________

(1)Excludes indirect investment in STORE which owns properties leased to tenants on a triple-net lease basis

(2)Some or all of investment is through an unconsolidated real estate affiliate. Ownership Interest less than 100% represents percentage of unconsolidated affiliate owned by the Company

(3)Land investments are excluded from Occupancy Rate.

(4)Properties contributed to DST Program, but remain consolidated under GAAP. As of March 31, 2024, approximately 21% of the DST interests has been sold to third parties.

(5)Properties previously leased to Mountain Express and initially acquired in September 2022.

(6)Occupancy Rate is calculated as the percentage of square footage leased.

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Lease Expirations

The following schedule details the expiring leases at our real estate properties by annualized base rent and square footage as of March 31, 2024 (square feet data in thousands):

Year	Number of Expiring Leases	Annualized Base Rent		% of Total Annualized Base Rent Expiring		Square Feet (in thousands)	% of Total Square Feet Expiring
2024 (remaining)	—	$	—	—	%	—	—	%
2025	—	—		—	%	—	—	%
2026	—	—		—	%	—	—	%
2027	—	—		—	%	—	—	%
2028	1	1,946		1	%	191	1	%
2029	—	—		—	%	—	—	%
2030	—	—		—	%	—	—	%
2031	—	—		—	%	—	—	%
2032	2	10,554		5	%	1,187	6	%
2033	17	5,395		2	%	247	1	%
Thereafter	187	207,393		92	%	19,241	92	%
Total	207	$	225,288	100	%	20,866	100	%

STORE

As of March 31, 2024, the Company holds a 16.0% ownership interest in STORE, which owns 3,224 properties in the United States, leased to 623 tenants in various industries on a triple-net basis. We initially acquired the investment in STORE in February 2023 with incremental interests purchased throughout 2023 and during the three months ended March 31, 2024. We have determined that STORE is a significant subsidiary under SEC Regulation S-X 10-01(b) as of March 31, 2024. Accordingly, the Company is required to include STORE’s summarized statement of operations information for the three months ended March 31, 2024. See “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements—4. Investments in Unconsolidated Real Estate Affiliates” for the summarized statement of operations.

Investments in Real Estate Debt

The following table details our investments in real estate debt as of March 31, 2024 (in thousands):

Type of Security/Loan	Weighted Average Coupon (1)		Weighted Average Maturity Date (2)	Face Amount		Cost Basis		Fair Value
CMBS	SOFR +4%		10/3/2034	$	30,327	$	30,010	$	30,388
Commercial real estate loan (3)	14	%	7/12/2025	51,816		51,816		51,816
Total investments in real estate debt	10	%		$	82,143	$	81,826	$	82,204

__________________

(1)The term secured overnight financing rate (“SOFR”) refers to the relevant floating benchmark rates, one-month SOFR. Fixed rate Commercial real estate loan is reflected as a spread over the relevant floating benchmark rates, for purposes of the weighted-average.

(2)Weighted average maturity date is based on the fully extended maturity date of the instrument.

(3)The borrower for the commercial real estate loan is NLCA Real Estate Holdings, LLC.

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Results of Operations

The following table sets forth the results of our operations for the three months ended March 31, 2024, and the period March 31, 2023(in thousands):

	Three Months Ended				Change
	March 31, 2024		March 31, 2023		$
Revenues
Rental revenue	$	50,954	$	46,041	$	4,913
Income from Investment in leases - Financing receivables	14,534		13,669		865
Total revenues	65,488		59,710		5,778
Expenses
Rental property operating	6,087		7,289		(1,202)
General and administrative	3,980		3,308		672
Management fee	8,481		4,072		4,409
Performance participation allocation	6,829		—		6,829
Depreciation and amortization	23,037		13,108		9,929
Total expenses	48,414		27,777		20,637
Other income (expense)
Income from unconsolidated real estate affiliates	33,300		3,594		29,706
Interest expense	(37,265)		(24,126)		(13,139)
Interest income	3,245		1,889		1,356
Other expense, net	(236)		(5)		(231)
Total other expense, net	(956)		(18,648)		17,692
Net income before income taxes	16,118		13,285		2,833
Income tax expense	304		—		304
Net income	15,814		13,285		2,529
Net income attributable to non-controlling interests	(1,683)		(2,975)		1,292
Net income attributable to ORENT shareholders	$	14,131	$	10,310	$	3,821
Net income per common share – basic	$	0.06	$	0.11
Net income per common share – diluted	$	0.06	$	0.10
Weighted-average common shares outstanding, basic	237,219,985		98,086,696
Weighted-average common shares outstanding, diluted	265,957,560		127,139,959

Rental Revenue

Rental revenue from our income property operations was $50,954 for the three months ended March 31, 2024 and $46,041 for the three months ended March 31, 2023. The increase in respective revenues during the periods presented is primarily due to an increase in the real estate portfolio from 170 properties as of March 31, 2023 to 182 properties as of March 31, 2024, as well as contractual rent increases across the existing portfolio from March 31, 2023 to March 31, 2024.

Income from Investment in Leases - Financing Receivables

Income from investment in leases - financing receivables was $14,534 for the three months ended March 31, 2024 and $13,669 for the three months ended March 31, 2023. The increase in respective revenues during the periods presented is due to an increase in the investment properties that were accounted for as financing receivables from 14 at March 31, 2023

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to 17 at March 31, 2024, resulting from failed sales-leaseback transactions under U.S. GAAP for the three months ended March 31, 2024.

Rental Property Operating Expenses

Rental property expenses were $6,087 for the three months ended March 31, 2024, and $7,289 for the three months ended March 31, 2023. The decrease is primarily the result of a decrease in our current year real estate tax expense estimate compared to the prior year estimate.

General & Administrative Expenses

General & Administrative Expenses were $3,980 for the three months ended March 31, 2024 and $3,308 for the three months ended March 31, 2023. The increase in respective General & Administrative Expenses is primarily due to increases in salaries expense and legal fees, partially offset by a favorable credit allowance adjustment under the current expected credit losses (“CECL”) model.

Management Fee

The management fee for the three months ended March 31, 2024 and March 31, 2023 was $8,481 and $4,072, respectively. The increase was primarily due to an increase in NAV.

Performance Participation Allocation

Performance Participation Allocation was $6,829 for the three months ended March 31, 2024. The Company did not recognize any performance participation allocation expense for the three months ended March 31, 2023, as certain thresholds were not achieved for the period.

Depreciation and Amortization

Depreciation and Amortization was $23,037 for the three months ended March 31, 2024 and $13,108 for the three months ended March 31, 2023. The increase in Depreciation and Amortization during the periods presented is due to an increase in the real estate portfolio from 170 properties as of March 31, 2023, to 182 properties as of March 31, 2024, as well as assets placed in service during 2023 that were previously under construction.

Income from Unconsolidated Real Estate Affiliates

Income from Unconsolidated Real Estate Affiliates was $33,300 for the three months ended March 31, 2024, and $3,594 for the three months ended March 31, 2023. The increase in Income from Unconsolidated Real Estate Affiliates is due to the Company’s investments in new joint ventures, primarily STORE.

Interest Expense

Interest expense was $37,265 for the three months ended March 31, 2024, and $24,126 for the three months ended March 31, 2023. The increase in expense was primarily due to an increase in credit facility borrowings, interest on the FIPA loan incurred during the three months ended March 31, 2024, and a reduction in capitalized interest for properties under construction, as the properties were placed in service in 2023.

Interest Income

Interest income was $3,245 and $1,889 for the three months ended March 31, 2024 and March 31, 2023, respectively. The increase in interest income in the current year was primarily due to higher interest income on our investments in real estate debt, as well as an increase in interest earned on our deposits with banks.

Other Expense, net

Other expense, net was $236 for the three months ended March 31, 2024, and $5 for the three months ended March 31, 2023. The increase in expense was primarily due to higher transaction expenses as well as expenses related to our DST Program, offset by gains on derivatives for which the Company has not elected hedge accounting.

Net Asset Value and NAV Per Share Calculation

Each class has an undivided interest in our assets and liabilities, other than class-specific ongoing servicing fees. In accordance with the valuation guidelines, our NAV per share for each class as of the last calendar day of each month, using a process that reflects several components, including the estimated fair value of (1) each of our properties (including the

40

DST Properties), (2) our real estate debt and other securities for which third-party market quotes are available, (3) our other real estate debt and other securities, if any, and (4) our other assets and liabilities. The NAV for each class of shares will be based on the net asset values of our investments (including real estate debt and other securities), the addition of any other assets (such as cash on hand), and the deduction of any liabilities (including the allocation/accrual of any performance participation to Blue Owl Oak Trust Carry LLC, a controlled subsidiary of Blue Owl, and Blue Owl Real Estate Net Lease Trust CPV LP, controlled by senior and other officers of Blue Owl (each a “Special Limited Partner”) and the deduction of any ongoing servicing fees specifically applicable to such class of shares). At the end of each month, before taking into consideration repurchases or class-specific expense accruals for that month, any change in our aggregate NAV (whether an increase or decrease) is allocated among each class of shares based on each class’s relative percentage of the previous aggregate NAV plus issuances of shares that were effective on the first calendar day of such month. Following the aggregation of the net asset values of our investments, the addition of any other assets (such as cash on hand), and the deduction of any other liabilities, any class-specific adjustments are incorporated into our NAV, including additional issuances and repurchases of our Shares and accruals of class-specific ongoing servicing fees. For each applicable class of shares, the ongoing servicing fee is calculated as a percentage of the aggregate NAV for such class of shares. At the close of business on the date that is one business day after each record date for any declared distribution, our NAV for each class will be reduced to reflect the accrual of our liability to pay any distribution to our shareholders of record of each class as of the record date. NAV per share for each class is calculated by dividing such class’s NAV at the end of each month by the number of Shares outstanding for that class at the end of such month.

Our total NAV presented in the following tables includes the NAV of our Class S, Class D, and Class I common shares, as well as the partnership interests of NLT OP held by parties other than the Company. The following table provides a breakdown of the major components of our NAV as of March 31, 2024 (dollars are in thousands):

Components of NAV	March 31, 2024
Cash and cash equivalents	$	55,135
Restricted cash	72,634
Investments in real estate, net	2,844,141
Investment in leases - financing receivables	570,189
Investments in real estate debt	82,204
Intangible assets, net	155,409
Investments in unconsolidated real estate affiliates	1,534,088
Other assets	42,075
Mortgage notes and credit facility	(1,971,101)
Affiliate line of credit	(200,000)
Other borrowings	(153,394)
Due to Affiliates	(15,995)
Accounts payable and accrued expenses	(86,493)
Other Liabilities	(50,325)
Net Asset Value	$	2,878,567
Number of outstanding shares/units	284,070,013

The following table provides a breakdown of our total NAV and NAV per share/unit by class as of March 31, 2024 (dollars are in thousands except for per share amounts):

NAV per share	Class S Shares		Class D Shares		Class I Shares			Third - Party Operating Partnership Units (2)		Total
NAV	$	1,183,227	$	3,012	$	1,400,912		$	291,416	$	2,878,567
Number of outstanding shares/units	117,157,624		301,228		137,920,945		(1)	28,690,216		284,070,013
NAV Per Share/Unit as of March 31, 2024	$	10.0994	$	10.0003	$	10.1574		$	10.1574

__________________

(1)Includes Class I Shares subject to redemption features, classified as Redeemable common shares.

(2)Includes the partnership interests of NLT OP held by the Special Limited Partners and parties other than us.

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The following table details the weighted average capitalization rate by property type, which is the key assumptions used in the valuations as of March 31, 2024:

Property Type	Capitalization Rate (1)
Industrial	6.0	%
Land	7.0	%
Office	7.8	%
Retail	6.2	%

__________________

(1)Includes our direct property investments and properties held within joint ventures managed by our Adviser. Excludes properties held in joint ventures managed by third parties, including the Company’s investment in STORE.

These assumptions are determined by the Adviser and reviewed by our independent valuation advisor. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:

Input	Hypothetical Change	Industrial		Land		Office		Retail
Capitalization Rate	0.25 % Decrease	+3.9	%	+3.4	%	+3.5	%	+4.5	%
(weighted average)	0.25 % Increase	(4.0)	%	(3.2)	%	(3.3)	%	(4.1)	%

The following table reconciles shareholders’ equity and NLT OP partner’s capital per our Consolidated Balance Sheet to our NAV (in thousands):

	March 31, 2024
Shareholder's equity	$	2,321,895
Non-controlling interests attributable to NLT OP	256,193
Redeemable non-controlling interests	18,265
Redeemable common shares	49,500
Total partners' capital of NLT OP under GAAP	2,645,853
Adjustments:
Accrued shareholder servicing fee	62,165
Accrued organization and offering costs	10,778
Accumulated depreciation and amortization under GAAP	124,952
Unrealized net real estate and real estate debt appreciation	79,272
Accrued interest on financing receivable	(15,896)
Straight-line rent	(28,557)
NAV	$	2,878,567

The following details the adjustments to reconcile GAAP shareholders’ equity and total partners’ capital of NLT OP to our NAV:

•Under GAAP, we accrue the ongoing shareholder servicing fee as an offering cost at the time we sell the Class S and Class D shares. For purposes of calculating NAV, we recognize the ongoing servicing fee as a reduction of NAV on a monthly basis when such fee is paid.

•The Adviser agreed to advance certain organization and offering costs on our behalf through September 1, 2023. Such costs will be reimbursed to the Adviser on a pro-rata basis over a 60 month period beginning September 1, 2023. Under GAAP, organization costs have been accrued as a liability. For purposes of calculating NAV, such costs will be recognized as paid over the 60-month reimbursement period.

•We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of calculating our NAV. Our mortgage notes, term loan credit facilities, and unsecured revolving credit facilities (“Debt”) are presented at their amortized cost basis in our consolidated GAAP financial statements. As such, any increases or decreases in the fair market value of our investments in real estate or our Debt are not included in our GAAP results. For purposes of calculating our NAV, our investments in real estate and our Debt are recorded at fair value.

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•In accordance with GAAP, the Company accrues interest income from Investments in leases – financing receivables under the effective interest method. Interest income in excess of the payment is recorded as interest receivable, which is not recognized for purposes of calculating NAV.

•We recognize rental revenue on a straight-line basis under GAAP. Such straight-line rent adjustments are excluded for purposed of calculating NAV.

Distributions

Beginning September 21, 2022, we declared monthly distributions for each class of our common shares, which are generally paid 20 days after month-end. We have paid distributions consecutively each month since such time. Each class of our common shares received the same aggregate gross distribution per share, which was $0.1749 per share for the three months ended March 31, 2024, respectively. The net distribution varies for each class based on the applicable shareholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the Dealer Manager for further remittance to the applicable distributor.

The following table details the total net distribution for each of our share classes for the three months ended March 31, 2024 and March 31, 2023:

Record Date	Class S		Class D		Class I
January 31, 2024	$	0.0512	$	0.0563	$	0.0583
February 29, 2024	0.0512		0.0563		0.0583
March 31, 2024	0.0512		0.0562		0.0583
Total	$	0.1536	$	0.1688	$	0.1749

Record Date	Class S		Class D		Class I
January 31, 2023	$	0.0511	$	0.0562	$	0.0583
February 28, 2023	0.0512		0.0563		0.0583
March 31, 2023	0.0510		0.0562		0.0583
Total	$	0.1533	$	0.1687	$	0.1749

The following table details our distributions declared for the three months ended March 31, 2024 and March 31, 2023 (in thousands):

	Three Months Ended
	March 31, 2024				March 31, 2023
	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	25,106	57	%	$	13,739	65	%
Reinvested in shares	19,117		43	%	7,303		35	%
Total distributions	$	44,223	100	%	$	21,042	100	%
Sources of Distributions
Cash flows from operating activities (1)	$	44,223	100	%	$	21,042	100	%
Offering proceeds	—		—	%	—		—	%
Total sources of distributions	$	44,223	100	%	$	21,042	100	%
Cash flows from operating activities	$	36,904			$	46,953
Funds from Operations (2)	$	34,809			$	20,685
Adjusted Funds from Operations (2)	$	34,945			$	23,455

______________

(1)As of March 31, 2024, our inception to date cash flows from operating activities have funded 100% of our distributions.

(2)See "Funds from Operations and Adjusted Funds from Operations" below for a description of Funds from Operations and Adjusted Funds from Operations. Refer to below for reconciliations of these amounts to GAAP net income attributable to ORENT shareholders and for considerations on how to review these metrics.

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Funds from Operations and Adjusted Funds from Operations

We believe funds from operations (“FFO”) is a meaningful non-GAAP supplemental measure of our operating results. Our consolidated financial statements are presented using historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments have decreased over time. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and, as such, depreciation under historical cost accounting may be less informative as a measure of our performance. FFO is an operating measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) that is broadly used in the REIT industry. FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding (i) depreciation and amortization, (ii) impairment of investments in real estate, (iii) net gains or losses from sales of real estate, and (iv) similar adjustments for non-controlling interests and unconsolidated entities.

We also believe that adjusted FFO (“AFFO”) is an additional meaningful non-GAAP supplemental measure of our operating results. AFFO further adjusts FFO to reflect the performance of our portfolio by adjusting for items we believe are not directly attributable to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income and expense, (ii) deferred income amortization, (iii) amortization of above- and below-market lease intangibles, (iv) amortization of mortgage premium/discount, (v) unrealized gains or losses from changes in the fair value of real estate debt, investments in unconsolidated real estate affiliates, and other financial instruments, (vi) gains and losses resulting from foreign currency translations, (vii) provision for credit losses, (viii) non-cash income, (ix) non-cash performance participation allocation, even if repurchased by us, (x) management fees paid in shares or NLT OP units, even if subsequently repurchased by us, (xi) non-cash interest expense on affiliate line of credit paid in shares or NLT OP units, even if subsequently repurchased by us, (xii) organization costs, (xiii) amortization of deferred financing costs, (xiv) shareholder servicing fees paid during the period, and (xv) similar adjustments for non-controlling interests and unconsolidated entities. AFFO is not defined by NAREIT and our calculation of AFFO may not be comparable to disclosures made by other REITs.

The Company’s definition of AFFO excludes the impact of the amortization of deferred financing costs (“DFCs”) on our debt, which is included in GAAP net income (loss). We do not consider the amortization of DFCs to be directly attributable to our operations and view DFCs similar to acquisition expenses, which are capitalized into the cost basis of our investments, and therefore excluded from AFFO. We believe that excluding amortization of DFCs from our calculations of AFFO and results in metrics that better reflect the results of our operations.

FFO and AFFO should not be considered more relevant or accurate than GAAP net income (loss) in evaluating our operating performance. In addition, FFO and AFFO should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO and AFFO are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our shareholders. In addition, our methodology for calculating AFFO may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported AFFO may not be comparable to the AFFO reported by other companies.

The following table presents a reconciliation of net income (loss) attributable to ORENT shareholders to FFO and AFFO attributable to ORENT shareholders (in thousands):

	March 31, 2024		March 31, 2023
Net income attributable to ORENT shareholders	$	14,131	$	10,310
Adjustments to arrive at FFO:
Depreciation and amortization	23,037		13,108
Amount attributable to investment in unconsolidated affiliate	149		149
Amount attributable to non-controlling interests for above adjustments	(2,508)		(2,882)
FFO attributable to ORENT shareholders	34,809		20,685
Adjustments to arrive at AFFO:
Straight-line rental income	(5,112)		(4,162)
Amortization of ground lease and below market lease intangibles	102		129
Amortization of mortgage discount	—		159
Unrealized gains on foreign currency derivatives	(601)		—

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Unrealized gains from changes in fair value of financial instruments	(234)		—
Adjustment for investments accounted for under fair value option	(8,999)		—
Unrealized loss from changes in fair value of DST financing obligation	241		—
Provision for credit losses	(1,018)		(72)
Accretion of tenant loan receivable	(3,636)		(2,460)
Performance participation allocation	6,829		—
Management fee	8,481		4,072
Interest on affiliate line of credit	3,558		4,076
Organization costs	(149)		118
Amortization of deferred financing costs	3,331		3,130
Shareholder servicing fees	(2,311)		(1,093)
Amount attributable to investment in unconsolidated affiliate	(49)		(54)
Amount attributable to non-controlling interests for above adjustments	(297)		(1,073)
AFFO attributable to ORENT shareholders	$	34,945	$	23,455

Liquidity and Capital Resources

Liquidity

We believe we have sufficient liquidity to operate our business, with immediate liquidity comprised of cash and cash equivalents of $55,135, $49,046 available under our credit facility, and $50,000 available under our affiliate line of credit as of March 31, 2024. In addition to our immediate liquidity, we obtain incremental liquidity through the sale of our common shares, from which we generated net proceeds of $532,420 for the three months ended March 31, 2024, as well as through the ability to sell our CMBS investments with a fair value of $30,388 as of March 31, 2024. Additionally, we may incur indebtedness secured by our real estate and real estate debt investments, borrow money through unsecured financings, or incur other forms of indebtedness. We may also generate incremental liquidity through the sale of our real estate.

Our primary liquidity needs are to fund our investments, make distributions to our shareholders, repurchase common shares pursuant to our share repurchase plan, pay operating expenses, fund capital expenditures, and repay indebtedness. Our operating expenses include, among other things, the management fee we pay to the Adviser and the performance participation allocation that NLT OP pays to the Special Limited Partners, both of which will impact our liquidity to the extent the Adviser or the Special Limited Partners elect to receive such payments in cash, or subsequently redeem shares or NLT OP units previously issued to them.

Our cash needs for acquisitions and other capital investments will be funded primarily from the sale of common shares and through the incurrence or assumption of debt. Other potential future sources of capital include secured or unsecured financings from banks or other lenders and proceeds from the sale of assets. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures. We expect to be able to refinance debt obligations maturing in the near term through the use of capacity on our unsecured line of credit or exercise of existing extension options.

We continue to believe that our current liquidity position is sufficient to meet the need of our expected investment activity.

Capital Resources

As of March 31, 2024, our indebtedness included loans secured by our properties, unsecured credit facilities, and an affiliate note payable.

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The following table is a summary of our indebtedness as of March 31, 2024 (in thousands):

						Principal Balance as of
Indebtedness	Weighted Average Interest Rate(1)(7)		Weighted Average Maturity Date	Maximum Facility Size		March 31, 2024		December 31, 2023
Mortgage notes & credit facility:
Unsecured term loan credit facility(2)	S + 1.50%		8/11/2027	$	1,095,500	$	1,095,500	$	1,095,500
Unsecured revolving credit facility(3)	S + 1.55%		8/11/2026	$	569,500	490,214		231,255
Mortgages(4)	S + 2.46%		11/5/2024	N/A		400,011		546,005
Deferred financing costs, net						(12,244)		(13,172)
Total Mortgage notes & credit facility, net:						1,973,481		1,859,588
Affiliate line of credit
Affiliate line of credit(5)	S + 1.55%			$	250,000	200,000		200,000
Affiliate line of credit, net:						200,000		200,000
Other borrowings
Other borrowings(6)	9.00	%	8/1/2025	N/A		153,394		—
Other borrowings:						153,394		—
Total indebtedness						$	2,326,875	$	2,059,588

_______________

(1)The term “S” refers to the relevant floating benchmark rates, which include daily SOFR, 30-day SOFR, one-month euro interbank offered rate (“EURIBOR”), and one-month SONIA as applicable to each loan. As of March 31, 2024, we have outstanding interest rate swaps and interest rate caps that mitigate our exposure to potential future interest rate increases under our floating-rate debt.

(2)The unsecured term loan credit facility bears interest at a base rate plus a margin ranging from 0.25% to 1.85%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured term loan credit facility for the three months ended March 31, 2024 was 6.95% (unhedged) and 5.30% (hedged). As of March 31, 2024, we have outstanding interest rate swaps with aggregate notional values of $700,000, $250,000 and $145,500 that are structured such that the SOFR rates result in fixed rates of 3.65%, 3.42%, and 4.23%, respectively.

(3)The unsecured revolving credit facility bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the unsecured revolving credit facility for the three months ended March 31, 2024 was 6.99% (unhedged) and 6.53% (hedged). As of March 31, 2024, we have an outstanding interest rate swap with an aggregate notional value of $100,000 that is structured such that the SOFR rate results in a fixed rate of 3.67%.

(4)In March 2023, certain of our mortgages were amended to transition certain London interbank offered rate (“LIBOR”)-based rates to certain replacement reference rates. As of March 31, 2024, this reference rate transition has impacted only certain of our mortgages. We have interest rate swaps and caps with an aggregate notional value of $46,712 and $382,870 respectively as of March 31, 2024, that are structured such that the variable rates result in a fixed rate of 3.74% and a capped rate of 3.00% respectively.

(5)The affiliate note payable bears interest at a base rate plus a margin ranging from 0.30% to 1.90%. The base rate is the greater of (a) Keybank N.A.’s announced prime rate, (b) 0.5% above the federal funds effective rate, (c) SOFR plus 0.10%, and (d) 1.0%. The weighted average interest rate for the affiliate note payable for the three months ended March 31, 2024 was 7.04%.

(6)Other borrowings is comprised of the FIPA Loan. See “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements—4. Investments in Unconsolidated Real Estate Affiliates.”

(7)The Company’s mortgage and notes payable contain yield or spread maintenance provisions.

On September 1, 2022, the Company commenced the offering of its shares through a continuous private placement offering. The Company is authorized to issue an unlimited number of each of its four classes of shares of its common shares (Class S shares, Class N shares, Class D shares, and Class I shares).

As of May 6, 2024, we had received net proceeds of $2,799,947 from selling an aggregate 274,970,603 common shares in the private offering (consisting of 132,664,617 Class S shares, — Class N shares, 5,404,418 Class D shares, and 136,901,569 Class I shares).

Cash Flows

Cash flows provided by operating activities was $36,904 for the three months ended March 31, 2024 compared to $46,953 for the three months ended March 31, 2023. The change in cash flows provided by operating activities was primarily due to an increase in payments of operating liabilities compared to the three months ended March 31, 2023.

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Cash flows used in investing activities was $523,783 for the three months ended March 31, 2024 compared to $461,069 for the three months ended March 31, 2023. The change in cash flows used in investing activities was primarily due to investments in unconsolidated real estate affiliates of $525,575 for the three months ended March 31, 2023.

Cash flows provided by financing activities was $478,125 for the three months ended March 31, 2024 compared to $418,007 for the three months ended March 31, 2023. The change in cash flows provided by financing activities was primarily due to $532,420 from the issuance of our common shares offset by distributions.

Critical Accounting Estimates

The preparation of the financial statements in accordance with GAAP involve significant judgments and assumptions and require estimates about matters that are inherently uncertain. These judgments will affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. The following is a summary of our significant accounting policies that we believe are the most affected by our judgments, estimates, and assumptions. See Note 2 to our condensed consolidated financial statements for further descriptions of the below accounting policies.

Investments in Real Estate

We expect that most of our acquisitions will qualify as asset acquisitions rather than business combinations pursuant to ASC 805. Upon the acquisition of a property, we assess the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and we allocate the purchase price to the acquired assets and assumed liabilities, on a relative fair value basis. The most significant portion of the allocation is to building, land, and construction in process and requires the use of market based estimates and assumptions. We assess and consider fair value based on estimated cash flow projections that utilize appropriate discount and/or capitalization rates, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. We also consider an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals.

Acquired above-market and below-market leases are recorded at their fair values (using a discount rate which reflects the risks associated with the leases acquired) equal to the difference between (1) the contractual amounts to be paid pursuant to each in-place lease and (2) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases. Other intangible assets acquired include amounts for in-place lease values that are based on our evaluation of the specific characteristics of each tenant’s lease. Factors to be considered include estimates of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, we consider leasing commissions, legal and other related expenses.

Impairment of Investments in Real Estate

We review real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates an impaired value. If the carrying amount of the real estate investment is no longer recoverable and exceeds the fair value of such investment, an impairment loss is recognized. The impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. The evaluation of anticipated future cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Since cash flows on real estate properties considered to be “long-lived assets to be held and used” are considered on an undiscounted basis to determine whether an asset has been impaired, our strategy of holding properties over the long-term directly decreases the likelihood of recording an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized, and such loss could be material to our results. If we determine that an impairment has occurred, the affected assets must be reduced to their fair value.

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We review investments in unconsolidated entities for impairment each quarter or when there is an event or change in circumstances that indicates a decrease in value. If there is a decrease in value due to a series of operating losses or other factors, the investment is evaluated to determine if the loss in value is considered other-than-temporary. Although a current fair value below the carrying value of the investment is an indicator of impairment, we will only recognize an impairment if the loss in value is determined to be an other than temporary impairment (“OTTI”). If an impairment is determined to be other-than-temporary, we will record an impairment charge sufficient to reduce the investment’s carrying value to its fair value, which would result in a new cost basis. This new cost basis will be used for future periods when recording subsequent income or loss and cannot be written up to a higher value as a result of increases in fair value.

Investments in Unconsolidated Real Estate Affiliates

For investments that do not meet the consolidation requirements and for which we have significant influence over the operations of the entity, the investment is accounted for under the equity method of accounting (ASU 823). We have elected the fair value option (“FVO”) under ASU 825, for certain of our investments in unconsolidated real estate affiliates, as such election aligns the accounting for GAAP and the calculation of monthly NAV for these investments.

We evaluate our equity method investments on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value, which is determined by calculating our share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint-venture agreement. For equity investments in entities that hold real estate, the estimated fair value of the underlying investment’s real estate is calculated based on whether the acquisition of a property qualifies as a business combination or an asset acquisition. The fair value of the underlying investment’s debt, if any, is calculated based on market interest rates and other market information. The fair value of the underlying investment’s other financial assets and liabilities have fair values that generally approximate their carrying values.

The investments for which we have elected the FVO are reported in Investments in unconsolidated real estate affiliates on the Consolidated Balance Sheet. These investments are initially recorded at fair value and subsequently, changes in fair value are recorded as Income from unconsolidated real estate affiliates in the Consolidated Statement of Operations. Distributions received from equity method investments are classified using the nature of distributions approach. Distributions received are classified based on the nature of the activity or activities that generated the distribution as a return on investment, which are classified as cash inflows from operating activities, or a return on investment, which are classified as cash inflows from investing activities. Transaction costs associated with the equity method investments are expensed as incurred. Investments made, including the transaction costs, for equity method investments are classified as cash outflows from investing activities in the Condensed Consolidated Statement of Cash Flows.

Investment in Leases – Financing Receivables

We account for our investments in leases under ASC 842, which requires significant estimates and judgments by management in its application. Upon lease inception or lease modification, we assess the lease classification of both the land and building components of the property to determine whether each component should be classified as a direct financing, sales-type, or operating lease. The determination of lease classification requires the calculation of the rate implicit in the lease, which is driven by significant estimates, including the estimation of both the value assigned to the land and building property components upon acquisition and the estimation of the unguaranteed residual value of such components at the end of the non-cancellable lease term. If the lease component is determined to be a direct financing or sales-type lease, revenue is recognized over the life of the lease using the rate implicit in the lease.

In accordance with ASC 842, for transactions in which we enter into a contract to acquire an asset and lease it back to the seller under a sales-type lease (i.e. a sale leaseback transaction), the Company must determine whether control of the asset has transferred to us. In cases whereby control has not transferred to the Company, we do not recognize the underlying asset but instead recognize a financial asset in accordance with ASC 310 “Receivables”. The accounting for the financing receivable under ASC 310 is materially consistent with the accounting for sales type leases under ASC 842. We have concluded that the sales-type leases are required to be accounted for as an Investment in leases – financing receivable on our Condensed Consolidated Balance Sheet in accordance with ASC 310, since control of the underlying assets was not considered to have transferred to the Company under GAAP.

Valuation of Derivatives

We enter into derivative instruments for risk management purposes to hedge our exposure to cash flow variability caused by changing interest rates on our variable rate notes payable and the impact of foreign currency exchange rates on

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our foreign operations. We record these derivative instruments at fair value within Other assets or Other liabilities on the accompanying consolidated balance sheets.

The calculation of the fair value of derivative instruments is complex and different inputs used in the model can result in significant changes to the fair value of derivative instruments and the related gain or loss on derivative instruments included as interest expense in the accompanying consolidated statement of operations. The valuation of our derivative instruments is based on a proprietary model using the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including foreign currency rates and interest rate curves. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments and included in Other (expense) income, net as presented in the accompanying consolidated statement of operations

Recent Accounting Pronouncements

See “Item 1. Financial Statements—Notes to Condensed Consolidated Financial Statements—2. Summary of Significant Accounting Policies and Estimates” for a discussion concerning recent accounting pronouncements.

Future Cash Requirements

The following table aggregates our contractual obligations and commitments as of March 31, 2024 (in thousands):

Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Indebtedness	$	2,339,119	$	553,887	$	1,785,232	$	—	$	—
Organizational and offering costs	10,778		2,269		6,807		1,702		—
Total	$	2,349,897	$	556,156	$	1,792,039	$	1,702	$	—

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to interest rate risk with respect to our variable-rate indebtedness, whereas an increase in interest rates would directly result in higher interest expense. We seek to manage our exposure to interest rate risk by utilizing a mix of floating rate financings with staggered maturities and through interest rate hedging agreements to fix all or a portion of our variable rate debt. As of March 31, 2024, the outstanding principal balance of our indebtedness was $2.3 billion and consisted of mortgage notes, term loan credit facilities, unsecured revolving credit facilities, and an affiliate note payable.

Certain of our mortgage notes, term loan credit facilities, unsecured revolving credit facilities and affiliate note payable are variable rate and indexed to one-month SOFR, three-month SOFR, one-month EURIBOR, and one-month SONIA (collectively, the “Reference Rates”). We have executed interest rate swaps for a portion of these borrowings to hedge the risk of increasing interest rates. For the three months ended March 31, 2024, a 10 basis point increase in each of the Reference Rates would have resulted in increased interest expense of $0.4 million.

LIBOR and certain other floating rate benchmark indices to which our floating rate loans and other loan agreements are tied, including, the Euro Interbank Offered Rate, are the subject of recent national, international and regulatory guidance and proposals for reform. As of December 31, 2022, the ICE Benchmark Association, or IBA, ceased publication of all non-USD LIBOR and ceased publication of remaining U.S. dollar LIBOR settings immediately after June 30, 2023. While we have transitioned all of our variable rate mortgage notes, term loan credit facilities, unsecured revolving credit facilities, and affiliate note payable away from LIBOR, at this time it is not possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from USD LIBOR proceeds.

Investments in Real Estate Debt

As of March 31, 2024 and December 31, 2023, we held $82.2 million and $87.2 million of investments in real estate debt, respectively, which are reported at fair value on our Condensed Consolidated Balance Sheet. Our investments in real estate debt consist of floating-rate and fixed rate. The floating rates are indexed to the Reference Rates, and as such, are exposed to interest rate risk. Our net income will increase or decrease depending on interest rate movements. While we cannot predict factors that may or may not affect interest rates, for the three months ended March 31, 2024, a 10 basis point increase or decrease in the Reference Rates would have resulted in an inconsequential increase or decrease to income from investments in real estate debt.

We may also be exposed to market risk with respect to our investments in real estate debt due to changes in the fair value of our investments. We seek to manage our exposure to market risk with respect to our investments in real estate debt by making investments in real estate debt backed by different types of collateral and varying credit ratings. The fair value of our investments may fluctuate, therefore the amount we will realize upon any sale of our investments in real estate debt is unknown. However, as of March 31, 2024 and December 31, 2023, a 10% change in the fair value of our investments in real estate debt would result in a change in the carrying value of our investments in real estate debt of $8.2 million and $8.7 million, respectively.

ITEM 4.     CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this quarterly report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the most recent quarter, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) identified in connection with the evaluation described above that have materially affected, or are 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 a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. We may also be subject to regulatory proceedings. While the outcome of these legal or regulatory proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations. As of March 31, 2024, we were not involved in any material legal proceedings.

ITEM 1A.     RISK FACTORS

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 18, 2024.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

In conjunction with our commencement of operations, on August 9, 2022, we issued and sold 190,000 shares of our Class I Shares to Blue Owl Capital Holdings, for an aggregate purchase price of $1.9 million. On January 18, 2023, Blue Owl Capital Holdings acquired 210,000 of our Class I Shares from Owl Rock Feeder FIC LLC, an entity owned and controlled by certain of Blue Owl’s senior management, for an aggregate purchase price of $2.2 million. On February 1, 2023, we issued and sold an additional 2,042,841 of our Class I Shares to Blue Owl Capital Holdings, for an aggregate purchase price of $21.0 million. These shares were issued and sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the 1933 Act.

In September 2022, we began accepting subscriptions from investors providing for the private placement of our Shares. As of May 6, 2024, we have sold 132,664,617 Class S Shares, — Class N Shares, 5,404,418 Class D Shares and 136,901,569 Class I Shares for an aggregate price of $2,799,947. These Shares have been issued and sold in reliance upon the available exemption from registration requirements of the 1933 Act under Section 4(a)(2) thereof and Regulation D thereunder.

Share Repurchases

Our Board of Trustees adopted the Amended Share Repurchase Plan effective starting March 13, 2024. Under the Amended Share Repurchase Plan, rather than repurchase Shares on a monthly basis or quarterly through repurchase offers made in accordance with the requirements of Rule 13e-4 of the Exchange Act, we repurchase shares once per quarter no more than 5% aggregate NAV per calendar quarter (measured using the average aggregate NAV as of the end of the immediately preceding three months). Effective April 19, 2024, the Company adopted a further amended and restated share repurchase plan, which incorporated the Class N shares.

Other than as described for Redeemable Common Shares and Redeemable Non-Controlling Interests, the Company is not obligated to repurchase any shares and may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, our Board of Trustees may modify and suspend the Company’s share repurchase plan if it deems such action to be in the Company’s best interest and the best interest of its shareholders. In the event that the Company determines to repurchase some but not all of the shares submitted for repurchase during any month, shares repurchased at the end of the month will be repurchased on a pro rata basis.

The following table sets forth purchases by the Company of its common shares during the three months ended March 31, 2024 under this publicly announced share repurchase program in effect for the period.

Repurchase Request Deadline	Total Number of Common Shares Purchased (a)	Average Price per Common Share (b)(1)		Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (c)	Maximum Approximately Dollar Value of Common Shares That May Yet be Purchased as Part of Publicly Announced Plans or Programs(2)
March 6, 2024	1,671,859	10.1009		1,671,859	—
Total	1,671,859	$	10.1009	1,671,859	$	—

_______________

(1)Repurchase pricing date was January 31, 2024.

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(2)Repurchases are limited as set forth in our share repurchase plan described above. All requests under the share repurchase plan were satisfied.

From Inception through March 31, 2024, 1,754,777 Class I units in the Operating Partnership were issued to the Special Limited Partners. Subsequent to initial issuance, 1,390,806 Class I units were distributed to participants in the Special Limited Partners, with the remaining 363,970 Class I units held directly by the Special Limited Partners as of March 31, 2024. As of March 31, 2024, the Adviser held 7,263,459 Class I REIT shares, of which 4,820,618 shares were issued as payment of management fees and interest on the affiliate loan. The redemption of any Class I units held by the Special Limited Partner or Class I REIT shares held by the Adviser acquired as payment of management fee and interest earned by the Adviser occurs outside of our share repurchase plan.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.     MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.     OTHER INFORMATION

During the three months ended March 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, (as such terms are defined in Item 408(a) of Regulation S-K of the 1933 Act).

ITEM 6.     EXHIBITS

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(b)Exhibits

3.1	Certificate of Trust of the Company, dated March 31, 2022 (filed as Exhibit 10.1 to the Registrant’s Registration Statement on Form 10 filed on April 5, 2023 and incorporated herein by reference)
3.2	Certificate of Amendment to Certificate of Trust of Blue Owl Real Estate Net Lease Trust, effective July 6, 2023 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 10, 2023 and incorporated herein by reference)
3.3	Third Amended and Restated Declaration of Trust of Blue Owl Real Estate Net Lease Trust as of April 19, 2024 (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on April 23, 2024 and incorporated here by reference)
3.4	Second Amended and Restated Bylaws of Blue Owl Real Estate Net Lease Trust as of July 6, 2023 (filed as Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on July 10, 2023 and incorporated herein by reference)
4.1	Fourth Amended and Restated Share Repurchase Plan, dated April 19, 2024 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 23, 2024 and incorporated herein by reference)
4.2	Amended and Restated Distribution Reinvestment Plan of the Company (filed as exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on April 23, 2024 and incorporated herein by reference)
10.1	Second Amended and Restated Investment Advisory Agreement, dated March 13, 2024, by and among Blue Owl Real Estate Net Lease Trust, Blue Owl NLT Operating Partnership LP and Blue Owl Real Estate Capital LLC (filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K filed on March 18, 2024 and incorporated herein by reference)
10.2	Fourth Amended and Restated Limited Partnership Agreement of Blue Owl NLT Operating Partnership LP (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 23, 2024 and incorporated herein by reference)
10.3	Amended and Restated Administration Agreement, dated March 13, 2024 between the Company and the Adviser (filed as Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K filed on March 18, 2024 and incorporated herein by reference.)
10.4	Amended and Restated Dealer Manager Agreement, dated April 19, 2024, between the Company, the Adviser and the Dealer Manager (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 23, 2024 and incorporated herein by reference)
10.5	Form of Participating Broker-Dealer Agreement between the Dealer Manager and participating broker-dealers (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on April 23, 2024 and incorporated herein by reference)
31.1*	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

*    Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 12 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.

Blue Owl Real Estate Net Lease Trust
By:	/s/ Kevin Halleran
	Name: Kevin Halleran
	Title: Chief Financial Officer
	(Principal Financial Officer)

Date: May 9, 2024

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