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Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Due to Affiliates
The following table details the components of due to affiliates:
June 30, 2024December 31, 2023
Accrued ongoing servicing fees$78,477 $50,670 
Accrued management fee7,094 4,835 
Performance participation allocation8,333 — 
Advanced organization and offering costs10,594 11,919 
Other advanced expenses 2,257 1,937 
Accrued interest - affiliate line of credit— 2,389 
Total$106,755 $71,750 
Ongoing Servicing Fees
The Company accrues ongoing servicing fees payable to the Dealer Manager, Blue Owl Securities LLC (the “Dealer Manager”), for ongoing services rendered to shareholders for Class S, Class N, and Class D shares equal to 0.85%, 0.50%, 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, NLT OP is authorized to issue three classes of OP Units (Class S-1, Class N-1 and Class D-1) 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 a service fee to the Dealer Manager for ongoing services rendered to shareholders for Class S-1, Class N-1 and Class D-1 shares equal to 0.85%, 0.50% 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 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 and six months ended June 30, 2024, the Company incurred management fees of $10,323 and $18,804, respectively. During the three and six months ended June 30, 2023, the Company incurred management fees of $4,986 and $9,058, respectively.
During the six months ended June 30, 2024 and June 30, 2023, the Company issued 1,624,473 and 750,606 shares, respectively, to the Adviser as payment for management fees. Management fees of $7,094 and $4,835 were accrued and unpaid as of June 30, 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 six months ended June 30, 2024, the Adviser did not submit any shares for repurchase.
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”) hold a performance participation interest in NLT OP that entitles them 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 and six months ended June 30, 2024, the Company recognized $8,333 and $15,162, respectively, of performance participation allocation expense in the Company’s Condensed Consolidated Statement of Operations. During the three and six months ended June 30, 2023, the Company recognized $8,134 of performance participation allocation expense in the Company’s Condensed Consolidated Statement of Operations.
During the six months ended June 30, 2024 and June 30, 2023, the Company issued 528,732 and 243,536 shares, respectively, to the Special Limited Partners as payment of performance participation allocation at the respective NAV per unit. 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 June 30, 2024, there was no receivable due the Company from the Adviser as the receivable was netted against fees earned by the Advisor during the six months ended June 30, 2024.
As of June 30, 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 June 30, 2024, 20,439 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
During the six months ended June 30, 2024 and June 30, 2023, the Company issued 695,189 and 774,879 Class I shares, respectively, to our affiliate, Blue Owl Capital Holdings LP, as payment for interest on the revolving promissory note. As of June 30, 2024, the Company has repaid the outstanding balance under the affiliate line of credit as well as the remaining accrued interest. Accrued interest of $2,389 on the affiliate line of credit was accrued and unpaid as of December 31, 2023. Refer to Note 8 - Debt for additional detail.
As of June 30, 2024, ORENT affiliates and their employees owned 13,472,887 ORENT Class I shares in an aggregate amount of $136,956, based on the NAV per share/unit as of June 30, 2024.