UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

OR

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

FOR THE TRANSITION PERIOD FROM                      TO                     

Commission File Number: 000-56428

Brookfield Real Estate Income Trust Inc.

(Exact name of registrant as specified in its charter)

Maryland	82-2365593
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

250 Vesey Street, 15th Floor

New York, NY 10281

(Address of principal executive offices) (Zip Code)

(212) 417-7000

(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  X    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  X    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	X	Smaller reporting company	☐
		Emerging growth company	X

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  X

As of July 31, 2024, the registrant had the following shares outstanding: 40,769,954 Class I shares, par value $0.01 per share, 29,364,871 Class S shares, par value $0.01 per share, 160,631 Class D shares, par value $0.01 per share, 8,475,900 Class C shares, no par value per share, and 3,426,925 Class E shares, no par value per share.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	1
	Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023	3
	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023	4
	Consolidated Statements of Cash Flows for the three and six months ended June 30, 2024 and 2023	6
	Notes to Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	54
ITEM 4.	CONTROLS AND PROCEDURES	54
PART II.	OTHER INFORMATION	55
ITEM 1.	LEGAL PROCEEDINGS	55
ITEM 1A.	RISK FACTORS	55
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	55
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	58
ITEM 4.	MINE SAFETY DISCLOSURES	58
ITEM 5.	OTHER INFORMATION	58
ITEM 6.	EXHIBITS	59
SIGNATURES		60

WEBSITE DISCLOSURE

Investors and others should note that we use our website, www.BrookfieldREIT.com, to announce material information to investors and the marketplace. While not all of the information that we post on our website is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others interested in us to review the information that we share on our website. Information contained on, or available through, our website is not incorporated by reference into this document.

PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Brookfield Real Estate Income Trust Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

	June 30, 2024		December 31, 2023
Assets
Investments in real estate, net	$	1,668,545	$	1,525,156
Investments in real estate-related loans and securities, net	120,818		240,108
Investments in unconsolidated entities	81,034		78,569
Intangible assets, net	41,536		41,459
Cash and cash equivalents	13,053		24,272
Restricted cash	32,557		16,429
Accounts and other receivables, net	9,174		10,794
Other assets	24,352		53,120
Total Assets	$	1,991,069	$	1,989,907
Liabilities and Equity
Mortgage loans, secured term loan and secured credit facility, net	$	1,149,358	$	1,058,343
Due to affiliates	37,841		43,971
Intangible liabilities, net	25,454		26,127
Accounts payable, accrued expenses and other liabilities	42,562		39,224
Subscriptions received in advance	17,531		3,003
Total Liabilities	1,272,746		1,170,668
Commitments and contingencies	—		—
Redeemable non-controlling interests attributable to OP unitholders	923		933
Stockholders’ Equity
Preferred stock, $0.01 par value per share, 50,000 shares authorized; no shares issued nor outstanding at June 30, 2024 and December 31, 2023, respectively	—		—
Common stock - Class S shares, $0.01 par value per share, 225,000 shares authorized; 30,042 and 34,244 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	300		342
Common stock - Class I shares, $0.01 par value per share, 250,000 shares authorized; 40,708 and 41,504 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	407		415
Common stock - Class T shares, $0.01 par value per share, 225,000 shares authorized; no shares issued nor outstanding as of June 30, 2024 and December 31, 2023.	—		—
Common stock - Class D shares, $0.01 par value per share, 100,000 shares authorized; 160 and 148 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.	2		1
Common stock - Class C shares, no par value per share, 100,000 shares authorized; 8,476 and 9,347 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	74		83
Common stock - Class E shares, no par value per share, 100,000 shares authorized; 3,411 and 3,353 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	965,258		1,028,028
Accumulated deficit	(254,028)		(213,960)
Total Stockholders’ Equity	712,013		814,909
Non-controlling interests attributable to third party joint ventures	4,637		3,022
Non-controlling interests attributable to preferred stockholders	750		375
Total Equity	717,400		818,306
Total Liabilities and Stockholders’ Equity	$	1,991,069	$	1,989,907

See accompanying notes to consolidated financial statements.

1

The following table presents the assets and liabilities of investments consolidated as variable interest entities for which the Company is determined to be the primary beneficiary ($ in thousands):

	June 30, 2024		December 31, 2023
Assets
Investments in real estate, net	$	310,581	$	199,136
Intangible assets, net	5,974		5,398
Cash and cash equivalents	3,023		1,374
Restricted cash	10,634		10,761
Accounts and other receivables, net	2,964		2,274
Other assets	1,843		2,651
Total Assets	$	335,019	$	221,594
Liabilities
Mortgage loans, net	$	242,627	$	178,458
Due to affiliates	20		—
Intangible liabilities, net	15		18
Accounts payable, accrued expenses and other liabilities	7,097		6,362
Total Liabilities	$	249,759	$	184,838

See accompanying notes to consolidated financial statements.

2

Brookfield Real Estate Income Trust Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues
Rental revenues	$	32,193	$	33,502	$	63,049	$	63,975
Other revenues	3,333		3,646		5,690		6,205
Total revenues	35,526		37,148		68,739		70,180
Expenses
Rental property operating	13,262		14,880		25,636		26,608
General and administrative	1,570		2,229		3,783		4,545
Management fee	2,833		3,579		5,828		7,257
Depreciation and amortization	14,337		12,765		27,098		25,569
Total expenses	32,002		33,453		62,345		63,979
Other income (expense)
Income from real estate-related loans and securities	3,311		3,841		10,369		10,844
Interest expense	(17,001)		(14,498)		(33,327)		(28,430)
Gain (loss) from unconsolidated entities	2,991		1,649		3,724		(2,404)
Other income, net	30		6,512		2,184		5,248
Total other income (expense)	(10,669)		(2,496)		(17,050)		(14,742)
Net (loss) income	$	(7,145)	$	1,199	$	(10,656)	$	(8,541)
Net loss (income) attributable to non-controlling interests in third party joint ventures	$	230	$	(67)	$	433	$	42
Net income attributable to non-controlling interests - preferred stockholders	(65)		(45)		(65)		(45)
Net loss (income) attributable to redeemable non-controlling interests	7		(2)		10		6
Net (loss) income attributable to stockholders	$	(6,973)	$	1,085	$	(10,278)	$	(8,538)
Per common share data:
Net (loss) income per share of common stock - basic and diluted	$	(0.08)	$	0.01	$	(0.12)	$	(0.09)
Weighted average number of shares outstanding - basic and diluted	85,462		94,231		86,806		94,120

See accompanying notes to consolidated financial statements.

3

Brookfield Real Estate Income Trust Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(in thousands)

Three months ended June 30, 2024
	Par Value
	Common Stock Class I		Common Stock Class S		Common Stock Class C		Common Stock Class E		Common Stock Class D		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’  Equity		Non-controlling Interests Attributable to Third Party Joint Ventures		Non-controlling Interests Attributable to Preferred Stockholders		Total Equity
Balance at March 31, 2024	$	408	$	327	$	74	$	—	$	2	$	994,255	$	(232,397)	$	762,669	$	2,977	$	750	$	766,396
Common stock issued	14		2		—		—		—		17,084		—		17,100		—		—		17,100
Stock-based compensation	—		—		—		—		—		58		—		58		—		—		58
Distribution reinvestment	4		2		—		—		—		8,710		—		8,716		—		—		8,716
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		1,890		—		1,890
Distributions	—		—		—		—		—		—		(14,651)		(14,651)		—		(65)		(14,716)
Common stock repurchased	(19)		(31)		—		—		—		(56,953)		—		(57,003)		—		—		(57,003)
Offering costs	—		—		—		—		—		2,119		—		2,119		—		—		2,119
Net (loss) income	—		—		—		—		—		—		(6,980)		(6,980)		(230)		65		(7,145)
Allocation to redeemable non-controlling interests	—		—		—		—		—		(15)		—		(15)		—		—		(15)
Balance at June 30, 2024	$	407	$	300	$	74	$	—	$	2	$	965,258	$	(254,028)	$	712,013	$	4,637	$	750	$	717,400
Three months ended June 30, 2023
	Par Value
	Common Stock Class I		Common Stock Class S		Common Stock Class C		Common Stock Class E		Common Stock Class D		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’  Equity		Non-controlling Interests Attributable to Third Party Joint Ventures		Non-controlling Interests Attributable to Preferred Stockholders		Total Equity
Balance at March 31, 2023	$	422	$	369	$	94	$	—	$	1	$	1,066,521	$	(127,453)	$	939,954	$	3,979	$	375	$	944,308
Common stock issued	21		8		—		—		—		45,603		—		45,632		—		—		45,632
Stock-based compensation	—		—		—		—		—		96		—		96		—		—		96
Distribution reinvestment	4		2		—		—		—		9,355		—		9,361		—		—		9,361
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		87		—		87
Distributions	—		—		—		—		—		—		(16,076)		(16,076)		(6)		(45)		(16,127)
Common stock repurchased	(24)		(15)		—		—		—		(51,979)		—		(52,018)		—		—		(52,018)
Offering costs	—		—		—		—		—		(75)		—		(75)		—		—		(75)
Net income	—		—		—		—		—		—		1,087		1,087		67		45		1,199
Allocation to redeemable non-controlling interests	—		—		—		—		—		14		—		14		—		—		14
Balance at June 30, 2023	$	423	$	364	$	94	$	—	$	1	$	1,069,535	$	(142,442)	$	927,975	$	4,127	$	375	$	932,477

See accompanying notes to financial statements

4

Six Months Ended June 30, 2024
	Par Value
	Common Stock Class I		Common Stock Class S		Common Stock Class C		Common Stock Class E		Common Stock Class D		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’  Equity		Non-controlling Interests Attributable to Third Party Joint Ventures		Non-controlling Interests Attributable to Preferred Stockholders		Total Equity
Balance at December 31, 2023	$	415	$	342	$	83	$	—	$	1	$	1,028,028	$	(213,960)	$	814,909	$	3,022	$	375	$	818,306
Common stock issued	19		5		—		—		1		27,714		—		27,739		—		—		27,739
Preferred equity issued																			375		375
Stock-based compensation	—		—		—		—		—		139		—		139		—		—		139
Distribution reinvestment	9		4		—		—		—		17,615		—		17,628		—		—		17,628
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		2,048				2,048
Distributions	—		—		—		—		—		—		(29,780)		(29,780)		—		(65)		(29,845)
Common stock repurchased	(36)		(51)		(9)		—		—		(110,927)		—		(111,023)		—		—		(111,023)
Offering costs	—		—		—		—		—		2,689		—		2,689		—		—		2,689
Net (loss) income	—		—		—		—		—		—		(10,288)		(10,288)		(433)		65		(10,656)
Allocation to redeemable non-controlling interests	—		—		—		—		—		—		—		—		—		—		—
Balance at June 30, 2024	$	407	$	300	$	74	$	—	$	2	$	965,258	$	(254,028)	$	712,013	$	4,637	$	750	$	717,400
Six Months Ended June 30, 2023
	Par Value
	Common Stock Class I		Common Stock Class S		Common Stock Class C		Common Stock Class E		Common Stock Class D		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’  Equity		Non-controlling Interests Attributable to Third Party Joint Ventures		Non-controlling Interests Attributable to Preferred Stockholders		Total Equity
Balance at December 31, 2022	$	424	$	367	$	94	$	—	$	—	$	1,063,079	$	(100,750)	$	963,214	$	4,071	$	375	$	967,660
Common stock issued	39		23		—		—		1		94,323		—		94,386		—		—		94,386
Stock-based compensation	—		—		—		—		—		177		—		177		—		—		177
Distribution reinvestment	8		5		—		—		—		19,569		—		19,582		—		—		19,582
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		104		—		104
Distributions	—		—		—		—		—		—		(33,148)		(33,148)		(6)		(45)		(33,199)
Common stock repurchased	(48)		(31)		—		—		—		(106,645)		—		(106,724)		—		—		(106,724)
Offering costs	—		—		—		—		—		(990)		—		(990)		—		—		(990)
Net (loss) income	—		—		—		—		—		—		(8,544)		(8,544)		(42)		45		(8,541)
Allocation to redeemable non-controlling interests	—		—		—		—		—		22		—		22		—		—		22
Balance at June 30, 2023	$	423	$	364	$	94	$	—	$	1	$	1,069,535	$	(142,442)	$	927,975	$	4,127	$	375	$	932,477

See accompanying notes to financial statements.

5

Brookfield Real Estate Income Trust Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(10,656)	$	(8,541)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	27,098		25,569
Management fees	5,828		7,257
Amortization of above and below market leases and lease inducements	(377)		(538)
Amortization of restricted stock grants	161		177
Amortization of deferred financing costs	1,591		1,590
Amortization of upfront derivative acquisition costs	1,004		911
Provision for current expected credit losses	(230)		1,300
Amortization of origination fees and discount	—		(49)
Paid-in-kind interest	(422)		—
Realized gain on sale of derivatives	(3,615)		—
Realized gain on investments in real estate-related loans and securities	(4,255)		(504)
Unrealized loss (gain) on investments	680		(1,567)
Distributions of earnings from unconsolidated entities	764		2,333
Changes in assets and liabilities:
Increase in lease inducements and origination costs	(1,082)		(423)
Upfront derivative acquisition costs	(369)		(8,781)
Proceeds from settlement of derivative contracts	10,350		—
Increase in other assets	(600)		(222)
Decrease (increase) in accounts and other receivables	1,136		(929)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	655		(2,327)
Increase in due to affiliates	349		1,846
Net cash provided by operating activities	28,010		17,102
Cash flows from investing activities
Acquisitions of real estate	(162,990)		(1,883)
Purchase of real estate-related loans and securities	(15,871)		(49,160)
Proceeds from sale of real estate-related loans and securities	130,620		62,600
Proceeds from principal repayments of real estate-related loans and securities	6,588		7,971
Capital improvements to real estate	(2,368)		(3,568)
Purchase of trading securities	(139,979)		(156,771)
Proceeds from sale of trading securities	161,276		143,847
Net cash (used in) provided by investing activities	(22,724)		3,036
Cash flows from financing activities:
Borrowings from mortgage loans	65,000		—
Borrowings from secured credit facility	25,500		—
Repayment of mortgage loans	(27)		—
Payment of deferred financing costs	(1,048)		(25)
Proceeds from issuance of common stock	18,765		72,318
Proceeds from issuance of preferred equity	375		—
Repurchases of common stock	(112,716)		(93,348)
Subscriptions received in advance	17,531		3,804
Payment of organizational and offering costs	(3,289)		(3,496)
Distributions to non-controlling interests	—		(6)
Contributions from non-controlling interests	2,048		104
Distributions	(12,451)		(13,513)
Distributions to non-controlling interests attributable to preferred stockholders	(65)		(45)
Net cash used in financing activities	(377)		(34,207)
Net change in cash and cash-equivalents and restricted cash	4,909		(14,069)
Cash and cash-equivalents and restricted cash, beginning of period	40,701		79,999
Cash and cash-equivalents and restricted cash, end of period	$	45,610	$	65,930

6

See accompanying notes to financial statements.

Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets:
	Six Months Ended June 30,
	2024		2023
Cash and cash equivalents	$	13,053	$	49,561
Restricted cash	32,557		16,369
Total cash and cash equivalents and restricted cash	$	45,610	$	65,930
Supplemental disclosures:
Interest paid	$	32,216	$	27,723
Non-cash investing and financing activities:
Accrued distributions	$	(292)	$	101
Accrued stockholder servicing fee due to affiliate	$	(2,998)	$	571
Accrued offering costs	$	110	$	245
Accrued capital improvements	$	(14)	$	31
Accrued repurchases of common stock in accounts payable	$	(1,297)	$	9,784
Accrued repurchases of common stock in due to affiliates	$	(395)	$	3,591

See accompanying notes to financial statements.

7

Brookfield Real Estate Income Trust Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization and Business Purpose

Brookfield Real Estate Income Trust Inc. (the “Company”) was formed on July 27, 2017 as a Maryland corporation and has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2019. The Company invests primarily in well-located, high-quality real estate properties that generate strong current cash flow and could further appreciate in value through proactive, best-in-class asset management. To a lesser extent, the Company invests in real estate-related debt investments, including real estate-related loans and real estate-related securities. Brookfield REIT OP GP LLC, a wholly owned subsidiary of the Company, is the sole general partner of Brookfield REIT Operating Partnership L.P. (the “Operating Partnership”). Substantially all of the Company’s business is conducted through the Operating Partnership. The Company and the Operating Partnership are externally managed by Brookfield REIT Adviser LLC (the “Adviser”), an affiliate of Brookfield Asset Management Ltd. (together with its affiliates, “Brookfield”). Prior to November 2, 2021, the Company was externally managed by Oaktree Fund Advisors, LLC (the “Oaktree Adviser” or the “Sub-Adviser”), an affiliate of Oaktree Capital Management, L.P. (“Oaktree”). Brookfield holds a majority stake in Oaktree. The Company and the Adviser have engaged the Sub-Adviser to select and manage certain of the Company’s liquid assets.

The Company had previously registered with the Securities and Exchange Commission (the “SEC”) its initial public offering of up to $2.0 billion in shares of common stock (the “Initial Public Offering”), which was declared effective on April 30, 2018 and terminated on November 2, 2021. The Company subsequently registered a follow-on offering with the SEC of up to $7.5 billion in shares of common stock, consisting of up to $6.0 billion in shares in its primary offering and up to $1.5 billion in shares pursuant to its distribution reinvestment plan, which was declared effective on November 2, 2021 (the “Current Offering” and with the Initial Public Offering, the “Offering”).

Pursuant to the Current Offering, the Company is offering to the public any combination of four classes of shares of its common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The publicly offered share classes have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. The purchase price per share for each class of common stock varies and generally equals the Company’s prior month’s net asset value (“NAV”) per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. The Company intends to continue selling shares on a monthly basis.

In addition to the Current Offering, the Company is conducting private offerings of Class I and Class C shares to feeder vehicles that offer interests in such vehicles to non-U.S. persons. The offer and sale of Class I and Class C shares to the feeder vehicles is exempt from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) and Regulation S promulgated thereunder. The Company is also offering Class E shares to Brookfield and its affiliates and certain of Brookfield’s and Oaktree’s employees and the Company’s independent directors in one or more private offerings. The offer and sale of Class E shares is exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

As of June 30, 2024, the Company owned 20 investments in real estate, two investments in unconsolidated real estate ventures, three investments in real estate-related loans, and 48 investments in real estate-related debt securities. The Company currently operates in five reportable segments: rental housing, net lease, office, logistics, and real estate-related loans and securities. Financial results by segment are reported in Note 14.

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2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. All significant intercompany balances and transactions have been eliminated in consolidation. Certain comparative figures have been reclassified to conform to the current year presentation. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The accompanying unaudited 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 fiscal year ended December 31, 2023 filed with the SEC.

The Company consolidates all entities in which it retains a controlling financial interest through majority ownership or voting rights and entities that meet the definition of a variable interest entity (“VIE”) for which it is deemed to be the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE. The Operating Partnership is considered a VIE. The Company consolidates the Operating Partnership because it has the ability to direct the most significant activities of the entity as its sole general partner. The Company also consolidates all VIEs for which it is the primary beneficiary. Where the Company does not have the power to direct the activities of the VIE that most significantly impact its economic performance, the Company’s interest for those partially owned entities is accounted for using the equity method of accounting. Equity method investments for which the Company has not elected a fair value option (“FVO”) are initially recorded at cost and subsequently adjusted for the Company’s pro-rata share of net income, contributions, and distributions. When the Company elects the FVO, the Company records its share of net asset value of the entity and any related unrealized gains and losses.

The Operating Partnership and the Company’s joint ventures are considered to be VIEs. The Company consolidates these entities, excluding its equity method investments, because it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans.

For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities, and operations of each joint venture is included in non-controlling interests as equity of the Company. The non-controlling joint venture partner’s interest is generally computed as the joint venture partner’s ownership percentage. Certain of the joint ventures formed by the Company provide the other partner a profits interest based on certain internal rate of return hurdles being achieved. Any profits interest due to the other partner is reported within non-controlling interest.

Certain amounts in the Company’s prior period Consolidated Statements of Operations have been reclassified to conform to the current period presentation. For the three and six months ended June 30, 2023, $1.3 million and $0.3 million, respectively, of unrealized losses related to changes in the fair value of the Company’s investments in real estate-related securities has been reclassified from Unrealized (loss) gain on investments, net to Income from real estate-related loans and securities to conform to the current period presentation. For the three and six months ended June 30, 2023, $0.0 million of realized gains and $0.2 million of realized losses, respectively, related to sales of investments in real estate-related loans and securities has been reclassified from Realized gain on real estate investments, net to Income from real estate-related loans and securities to conform with the current period presentation. For the three and six months ended June 30, 2023, $1.6 million of unrealized gains and $2.5 million of unrealized losses, respectively, related to changes in the fair value of the Company’s investments in unconsolidated entities has been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.0 million and $0.1 million, respectively, of realized gains related the Company’s foreign currency swap have been reclassified from Realized gain on financial instruments to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.0 million, respectively, of unrealized gains related the Company’s foreign currency swap have been reclassified from Unrealized (loss) gain on investments, net to Gain (loss) from unconsolidated entities to conform with the current period presentation. For the three and six months ended June 30, 2023, $5.8 million and $4.3 million, respectively, of unrealized gains related to changes in the fair value of the Company’s interest rate derivatives have been reclassified from Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.7 million and $0.8 million, respectively, of net realized gains related to trading securities has been reclassified from Realized gain on real estate investments, net and Unrealized (loss) gain on investments, net to Other income, net to conform with the current period presentation. For the three and six months ended June 30, 2023, $0.1 million and $0.1 million, respectively, of interest income related to operating properties has been reclassified from Income from real estate-related loans and securities to Other income, net to conform with the current period presentation.

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Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities and accrued expenses at the date of the balance sheet. The Company believes the estimates and assumptions underlying the consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2024.

Investments in Real Estate

In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired does not constitute a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations states that when substantially all of the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business.

The Company evaluates each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business. Generally, acquisitions of real estate or in-substance real estate are not expected to meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. All property acquisitions to date have been accounted for as asset acquisitions because substantially all of the fair value was concentrated in the land, buildings and related intangible assets.

The Company capitalizes acquisition-related costs associated with asset acquisitions. Upon acquisition of a property, the Company assesses the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, above- or below-market leases, acquired in-place leases, and other intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, 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 estimated fair value of acquired in-place leases include the costs the Company would have incurred to lease the properties to their occupancy levels at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs and other direct costs that would be incurred to lease the properties to such occupancy levels. The Company evaluates avoided costs over the time period over which occupancy levels at the date of acquisition would be achieved had the property been acquired vacant. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases are amortized over the remaining lease terms as a component of depreciation and amortization expense.

For acquired in-place leases, above- and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases. The values of acquired above- and below-market leases are amortized over the terms of the related leases and recognized as either increases (for below-market leases) or decreases (for above-market leases) to rental revenue. Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of the above- or below-market lease value is charged to rental revenue.

Significant improvements to properties are capitalized and depreciated over their estimated useful life. Expenditures for ordinary repairs and maintenance are expensed to operations as incurred.

The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows:

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Description	Depreciable Life
Building	30-40 years
Building and site improvements	5-21 years
Furniture, fixtures and equipment	1-9 years
Tenant improvements	Shorter of estimated useful life or lease term
In-place lease intangibles	Over lease term
Above and below market leases	Over lease term
Lease origination costs	Over lease term
Present value of tax abatement savings	Over tax abatement period

When assets are sold or retired, their costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses reflected in net income or loss for the period.

The Company’s management reviews its real estate properties for impairment when there is an event or change in circumstances that indicates an impaired value. In reviewing the portfolio, the Company’s management examines the type of asset, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, changes in holding period, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset for which indicators of impairment are identified, the Company performs a recoverability analysis that compares future undiscounted cash flows expected to result from the Company’s use and eventual disposition of the asset to its carrying value. If the undiscounted cash flow analysis yields an amount that is less than the asset’s carrying amount, an impairment loss will be recorded equal to the amount by which the carrying value of the asset exceeds its estimated fair value. 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, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. During the periods presented, no such impairment occurred.

Assets Held for Sale

The Company classifies the assets and liabilities related to its real estate investments as held for sale when a sale is probable to occur within one year. The Company considers a sale to be probable when a binding contract has been executed, the buyer has posted a non-refundable deposit, and there are limited contingencies to closing. The Company classifies held for sale assets and liabilities at the lower of depreciated cost or fair value less closing costs. There were no properties held for sale as of June 30, 2024 and December 31, 2023.

Investments in Unconsolidated Entities

The Company has elected the FVO for its investment in unconsolidated entities and therefore reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. For further details on the Company’s investments in unconsolidated entities, see Note 4 — “Investments in Unconsolidated Entities” to the Company’s Consolidated Financial Statements.

Investments in Real Estate-Related Loans and Securities

Real estate-related loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred.

Interest income related to the Company’s loans is recognized based upon the contractual interest rate and unpaid principal balance of the loans as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan are recognized as additional interest income.

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The Company assesses the collectability of its real estate-related loans to estimate credit losses over the contractual term of each loan on a periodic basis. The Company’s estimate of credit losses is based on relevant factors, including historical realized loss rates, current market conditions, and reasonable and supportable forecasts that affect the collectability of its investments. The Company also considers, among other things, payment status, lien position, borrower or tenant financial resources, and underlying collateral. The Company recognizes an allowance for credit loss when the carrying amount of a loan differs from the amount expected to be collected. For further details on the Company’s allowance for credit loss, see Note 6 — “Investments in Real Estate-Related Loans and Securities” to the Company’s Consolidated Financial Statements.

The Company has elected to classify its real estate debt securities as trading securities and carry such investments at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security. Interest income from real estate-related debt securities is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations.

Revenue Recognition

Rental revenue primarily consists of base rent arising from tenant leases at the Company’s properties. Base rent is recognized on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. The Company begins to recognize revenue upon the acquisition of the related property or when a tenant takes possession of the leased space. Other rental revenues include amounts due from tenants for costs related to common area maintenance, real estate taxes, and other recoverable costs included in lease agreements. The Company recognizes the reimbursement of such costs incurred as tenant reimbursement income.

The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. In making this determination, the Company considers the length of time a receivable has been outstanding, tenant creditworthiness, payment history, available information about the financial condition of the tenant, and current economic trends, among other factors. Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue. The Company will recognize revenue from such leases prospectively, based on actual amounts received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance. As of June 30, 2024 and December 31, 2023, the allowance for doubtful accounts was approximately $0.7 million and $1.0 million, respectively. These amounts are included in Accounts and other receivables on the Company’s Consolidated Balance Sheets.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure.

Restricted Cash

Restricted cash primarily consists of tenant security deposits and reserves held in escrow related to real estate taxes, interest rate derivatives, capital expenditures and insurance in connection with mortgages at certain of the Company’s properties. Restricted cash also consists of cash received for subscriptions prior to the date in which the subscriptions are effective, which is held in a bank account controlled by the Company’s transfer agent but in the name of the Company.

Trading Securities

Trading securities consist of U.S. government securities that are available to support the Company’s current operations and liquidity. Trading securities are measured at fair value. As such, the resulting unrealized gains and losses of such securities are recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. Interest income from trading securities is recognized based on the stated terms of the security and is recorded as a component of Other income, net on the Company’s Consolidated Statements of Operations. During the three and six months ended June 30, 2024, income from trading securities was $0.3 million and $0.5 million, respectively. During the three and six months ended June 30, 2023, income from trading securities was $0.7 million and $0.8 million, respectively.

Foreign Currency

In the normal course of business, the Company makes investments in real estate outside the United States 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. Gains and losses from translation of foreign denominated transactions into U.S. dollars are included in current results of operations as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations.

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Deferred Charges

The Company’s deferred charges include financing and leasing costs. Deferred financing costs include legal, structuring, and other loan costs incurred by the Company for its financing agreements. Deferred financing costs related to the Company’s mortgage notes and term loans are recorded as an offset to the related liability and amortized over the term of the applicable financing instruments. Deferred financing costs related to the Company’s revolving credit facility are recorded as a component of Other assets on the Company’s Consolidated Balance Sheets and amortized over the term of the applicable financing agreements. Deferred leasing costs incurred in connection with new leases, which consist primarily of brokerage and legal fees, are recorded as a component of Other assets on the Company’s Consolidated Balance Sheets and amortized over the life of the related lease.

Derivative Instruments

In the normal course of business, the Company is exposed to the effect of interest rate changes and, with regard to its non-U.S. investments, changes in foreign currency exchange rates. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate and currency rate risk. These financial instruments may include interest rate swaps and other derivative contracts. Upfront costs paid in connection with acquiring interest rate swaps and caps are amortized over the term of the applicable derivative instrument as a component of Interest expense on the Company’s Consolidated Statements of Operations.

The Company recognizes all derivatives as either assets or liabilities in the accompanying Consolidated Balance Sheets and measures those instruments at fair value. Realized and unrealized gains or losses on the Company’s interest rate swaps and caps are recorded in current-period earnings as a component of Other income, net on the Company’s Consolidated Statements of Operations. The Company recognized $0.3 million of net losses and $1.5 million of net gains during the three and six months ended June 30, 2024, respectively. The Company recognized $5.8 million and $4.3 million of net gains during the three and six months ended June 30, 2023, respectively. Realized and unrealized gains or losses on foreign currency derivatives are related to the Company’s unconsolidated non-U.S investment and are recorded as a Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. The Company recognized $0.1 million of net losses and $0.5 million of net gains on its foreign currency swap contracts during the three and six months ended June 30, 2024, respectively. The Company recognized $2.2 million and $3.8 million of net losses on its foreign currency swap contracts during the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, the Company’s derivative instruments consisted of the following ($ and £ in thousands):

	Number of Instruments	Notional Amount		Weighted Average Strike Rate	Weighted Average Maturity (years)
Interest Rate Swaps	1	$	33,800	0.6%	0.1
Interest Rate Caps	5	$	591,810	5.7%	0.6
Foreign Currency Swap Contracts(1)	1	£	62,100	N/A	1.1

(1) The Company’s foreign currency swap matured in August 2024, at which time the Company entered into a new foreign currency swap contract with a one-year term for the same notional amount.

Refer to Note 6 — “Investments in Real Estate-Related Loans and Securities” for information regarding the Company’s interest rate derivatives related to its investments in real estate-related securities.

Fair Value Measurement    

Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy:

Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments.

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Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the 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.

Valuation of Assets and Liabilities Measured at Fair Value

The Company’s investments in real estate-related securities and trading securities are reported at fair value. The Company generally determines the fair value of its investments in real estate-related securities and trading securities by utilizing third-party pricing service providers. In determining the value of a particular investment, the 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 class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. The inputs used in determining the Company’s real estate-related securities and trading securities reported at fair value are considered Level 2 and Level 3.

The Company’s derivative financial instruments are reported at fair value. The Company’s interest rate swaps are valued using a discounted cash flow analysis based on the terms of the contract and the forward interest rate curve adjusted for the Company’s nonperformance risk. The Company’s interest rate caps are valued using models developed by the respective counterparty as well as third-party pricing service providers that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). The fair value of the Company’s foreign currency swap is determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying instruments. The inputs used in determining the Company’s derivative financial instruments reported at fair value are considered Level 2.

The Company has elected the FVO for its equity method investment and therefore, reports this investment at fair value. As such, the resulting unrealized gains and losses are recorded as a component of Gain (loss) from unconsolidated entities on the Company’s Consolidated Statements of Operations. The Company separately values the assets and liabilities of the equity method investment. To determine the fair value of the assets of the equity method investments, the Company utilizes a discounted cash flow methodology, taking into consideration various factors including discount rate and exit capitalization rate. The Company determines the fair value of the indebtedness of the equity method investment by modeling the cash flows required by the 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. After the fair value of the assets and liabilities are determined, the Company applies its ownership interest to the net asset value and reflects this amount as its equity method investment at fair value. The inputs used in determining the Company’s equity method investment carried at fair value are considered Level 3.

The Company’s carrying values of cash and cash equivalents, restricted cash, accounts receivable and other receivables, accounts payable, accrued liabilities and other liabilities approximate fair value because of the short-term nature of these instruments.

The following table details the Company’s assets and liabilities measured at fair value on a recurring basis ($ in thousands):

	June 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Investments in real estate-related securities	$	—	$	85,453	$	18,390	$	103,843	$	—	$	223,605	$	—	$	223,605
Investments in unconsolidated entities	—		—		81,034		81,034		—		—		78,569		78,569
Trading securities	—		18,972		—		18,972		—		39,824		—		39,824
Derivatives	—		1,647		—		1,647		—		10,657		—		10,657
Total	$	—	$	106,072	$	99,424	$	205,496	$	—	$	274,086	$	78,569	$	352,655
Liabilities:
Interest rate swaps related to investments in real estate-related securities	$	—	$	180	$	—	$	180	$	—	$	—	$	—	$	—
Total	$	—	$	180	$	—	$	180	$	—	$	—	$	—	$	—

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The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):

	Investments in real estate-related securities		Investments in unconsolidated entities		Total Assets
Balance as of December 31, 2023	$	—	$	78,569	$	78,569
Transfer into Level 3	19,283		—		19,283
Distributions of earnings from unconsolidated entities	—		(764)		(764)
Unrealized (loss) gain	(893)		3,770		2,877
Loss on foreign currency translation	—		(541)		(541)
Balance as of June 30, 2024	$	18,390	$	81,034	$	99,424

The following tables contain the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands):

	June 30, 2024
	Fair Value		Valuation Technique	Unobservable Inputs	Average	Impact to Valuation from an Increase in Input
Investments in real estate-related securities	$	18,390	Discounted cash flow	Discount rate	13.4%	Decrease
Investments in unconsolidated entities	$	81,034	Discounted cash flow	Discount rate	6.3%	Decrease
				Exit capitalization rate	5.2%	Decrease

	December 31, 2023
	Fair Value		Valuation Technique	Unobservable Inputs	Average	Impact to Valuation from an Increase in Input
Investments in unconsolidated entities	$	78,569	Discounted cash flow	Discount rate	5.8%	Decrease
				Exit capitalization rate	4.8%	Decrease

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 measured at fair value on a nonrecurring basis. The Company reviews its real estate properties for impairment each quarter or when there is an event or change in circumstances that could indicate the carrying amount of the real estate value may not be recoverable.

Valuation of Liabilities Not Measured at Fair Value

The 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 appropriate discount rate. Additionally, the Company considers current market rate 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. As of June 30, 2024, the fair value of the Company’s mortgage loans and other indebtedness was approximately $39.7 million below the outstanding principal balance.

Income Taxes

The Company believes that it qualifies to be taxed as a REIT for U.S. federal income tax purposes. The Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

The Company has formed wholly-owned subsidiaries that are taxed as taxable REIT subsidiaries (“TRSs”) that are subject to taxation at the federal, state and local levels, as applicable, at regular corporate tax rates. In general, a TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate-related business. For the three and six months ended June 30, 2024, the Company recognized income tax expense of $0.0 million and $0.4 million, respectively, related to its TRSs within General and administrative on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, the Company recognized income tax benefit and expense of $0.1 million and $0.2 million, respectively, related to its TRSs within General and administrative on the Company’s Consolidated Statements of Operations.

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The Company accounts for applicable income taxes by utilizing the asset and liability method. As such, the Company records deferred tax assets and liabilities for the future tax consequences resulting from the difference between the carrying value of existing assets and liabilities and their respective tax basis. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. The Company has not recorded a deferred tax asset related to its non-U.S. investment as it is more likely than not that it will not realize the benefit.

Organization and Offering Expenses

Organizational expenses are expensed as incurred on the Company’s Consolidated Statements of Operations, and offering costs are charged to equity as incurred on the Company’s Consolidated Statements of Changes in Stockholders’ Equity.

The Adviser and its affiliates advanced $12.5 million of organization and offering expenses on the Company’s behalf through July 5, 2022, and the Company reimburses the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2022. Additionally, the Adviser advanced $1.1 million of organization and offering costs from July 6, 2022 through July 5, 2023, and the Company reimburses the Adviser for all such advanced expenses ratably over the 60 months following July 6, 2023. The Company reimburses the Adviser for any organization and offering expenses that it incurs on the Company’s behalf as and when incurred after July 6, 2023. Any amount due to the Adviser but not paid is recorded as a component of Due to affiliates on the Company’s Consolidated Balance Sheets.

Earnings Per Share

The Company uses the two-class method in calculating earnings per share (“EPS”) when it issues securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company when, and if, the Company declares dividends on its common stock. Basic earnings per share (“Basic EPS”) for the Company’s common stock are computed by dividing net income allocable to common stockholders by the weighted average number of shares of common stock outstanding for the period, respectively. Diluted earnings per share (“Diluted EPS”) is calculated similarly, however, it reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

The Company includes unvested shares of restricted stock in the computation of diluted EPS by using the more dilutive of the two-class method or treasury stock method. Any anti-dilutive securities are excluded from the diluted EPS calculation. For the three and six months ended June 30, 2024 and 2023, there were no dilutive participating securities.

Stockholder Servicing Fee

The Company has entered into a dealer manager agreement with Brookfield Oaktree Wealth Solutions LLC, a registered broker-dealer affiliated with the Adviser (“Dealer Manager”), to serve as the dealer manager for the Current Offering. The Dealer Manager is entitled to receive upfront selling commissions and dealer manager fees of up to 3.5% of the transaction price and ongoing stockholder servicing fees of 0.85% per annum of the aggregate NAV for outstanding Class S and Class T shares with a limit of up to, in the aggregate, 8.75% of the gross proceeds from such shares. The Dealer Manager is entitled to receive upfront selling commissions of up to 1.5% of the transaction price and ongoing stockholder servicing fees of 0.25% per annum of the aggregate NAV for outstanding Class D shares with a limit of up to, in the aggregate, 8.75% of the gross proceeds from such shares. There are no upfront selling commissions, dealer manager fees or ongoing stockholder servicing fees with respect to Class I shares. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Current Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fees and all or a portion of the stockholder servicing fees received by the Dealer Manager to such selected dealers. The Company accrues the full cost of the stockholder servicing fee as an offering cost at the time each Class T, Class S and Class D share is sold, which is recorded as a component of Due to affiliates in the Company’s Consolidated Balance Sheets.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance which provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform Accounting Standards Update (“ASU”) 2020-04, and 2022-06 - Reference Rate Reform (“Topic 848”). Among other things, for all types of hedging relationships, Topic 848 allows an entity to change the reference rate and other critical terms related to reference rate reform without having to remeasure the value or reassess a previous accounting determination. The amendments in this guidance may be applied immediately on a prospective basis to any related changes through December 31, 2024. During the three months ended June 30, 2023, the Company entered into loan modifications in connection with the transition from LIBOR to Secured Overnight Financing Rate (“SOFR”) for its variable rate loans and applied the practical

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expedient to all such modifications. As of December 31, 2023, the Company adopted the guidance and it did not have a significant impact on the Company’s consolidated financial statements or disclosures.

In August 2023, the FASB issued ASU 2023-05, an update to ASC Topic 805, Business Combinations. ASU 2023-05 clarifies existing guidance by requiring a joint venture to recognize and initially measure assets contributed and liabilities assumed at fair value, upon its formation. These amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. The Company will apply the provisions of ASU 2023-05 to new joint ventures, as applicable, but does not believe the adoption of ASU 2023-05 will have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on the Company’s consolidated financial statements.

In March 2024, the SEC issued a final rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors that requires registrants to provided climate disclosures in their annual reports and registration statements beginning with annual reports for the years ended December 31, 2027, for calendar year end non-accelerated filers. Registrants must provide information about specified financial statement effects of severe weather events and other natural conditions, certain carbon offsets and renewable energy certificates, and material impacts on financial estimates and assumptions that are due to severe weather events and other natural conditions or disclosed climate-related targets or transition plans. Disclosures required outside of the financial statements include governance and oversight of material climate-related risks, the material impact of climate risks on the company’s strategy, business model, and outlook, risk management processes for material climate-related risks and, material climate targets and goals. The Company is currently evaluating the impact of this rule on the Company’s consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02 Codification Improvements - Amendments to Remove References to the Concepts Statements (the "Codification"). ASU 2024-02 contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas. The amendments in ASU 2024-02 affect a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance and are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments is permitted. The Company is currently evaluating the impact of ASU 2024-02, but does not believe the adoption of ASU 2024-02 will have a material impact on the Company’s consolidated financial statements.

3. Investments in Real Estate

As of June 30, 2024 and December 31, 2023, the Company’s investments in real estate, net, consisted of the following ($ in thousands):

	June 30, 2024		December 31, 2023
Building and building improvements	$	1,419,355	$	1,304,336
Land and land improvements	296,165		262,323
Tenant improvements	30,199		35,877
Furniture, fixtures and equipment	42,461		29,071
Total	1,788,180		1,631,607
Accumulated depreciation	(119,635)		(106,451)
Investments in real estate, net	$	1,668,545	$	1,525,156

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Acquisitions

During the six months ended June 30, 2024, the Company acquired $167.9 million of investments in real estate, comprised of 181 single-family rental properties and one student housing property, which are included in the Company’s rental housing segment.

During the year ended December 31, 2023, the Company acquired $1.7 million of real estate investments, comprised of six single-family rental properties, which are included in the Company’s rental housing segment.

The following table provides further details of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands):

Investment	Ownership Interest	Location	Segment	Acquisition Date	Units	Purchase Price(1)
Single-Family Rentals	100%	Various	Rental Housing	Various 2023	6	$	1,681
Single-Family Rentals	100%	Various	Rental Housing	Various 2024	181	50,448
Reflection	97%	Atlanta, GA	Rental Housing	June 2024	741	117,408
Total						$	169,537

(1) Purchase price is inclusive of closing costs.

The following table summarizes the purchase price allocation of the properties acquired during the six months ended June 30, 2024 and year ended December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Building and building improvements	$	114,073	$	1,418
Land and land improvements	36,503		263
Tenant improvements	115		—
Furniture, fixtures and equipment	13,933		—
In-place lease intangibles	3,171		—
Lease origination costs	61		—
Total purchase price(1)	$	167,856	$	1,681

(1) Purchase price is inclusive of closing costs.

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4. Investments in Unconsolidated Entities

The Company holds two investments in unconsolidated joint ventures that it has elected to account for using the FVO, as the Company’s ownership interests in the joint ventures do not meet the requirements for consolidation.

On December 15, 2023, the Company acquired a 2% equity interest in The Avery, a condo and multifamily property located in San Francisco, California, through an indirect interest in a joint venture that owns the property. The Company did not pay any consideration for its interest, which was granted to the Company by the borrower on the Company’s investments in The Avery Senior Loan and The Avery Mezzanine Loan. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s equity interest in The Avery was zero.

The Company holds a 20% interest in Principal Place, a net lease property located in London, United Kingdom, through an indirect interest in the joint venture that owns the property. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s interest in Principal Place was $81.0 million and $78.6 million, respectively.

The following tables provide summarized financial information of the joint venture that owns Principal Place as of and for the periods set forth below ($ in thousands):

	As of June 30, 2024		As of December 31, 2023
Total Assets	$	1,028,300	$	1,042,957
Total Liabilities	627,446		634,183
Total Equity	$	400,854	$	408,774

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total Revenues	$	12,455	$	12,010	$	24,936	$	23,483
Total Expenses	12,904		13,949		26,201		26,786
Net Loss	$	(449)	$	(1,939)	$	(1,265)	$	(3,303)

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5. Intangibles

The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities consisted of the following as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Intangible assets:
In-place lease intangibles	$	33,860	$	32,513
Lease origination costs	13,677		14,203
Lease inducements	2,208		2,690
Tax intangibles	5,249		5,249
Above-market lease intangibles	114		114
Total intangible assets	55,108		54,769
Accumulated amortization:
In-place lease intangibles	(7,121)		(6,644)
Lease origination costs	(4,093)		(4,188)
Lease inducements	(637)		(1,101)
Tax intangibles	(1,676)		(1,340)
Above-market lease intangibles	(45)		(37)
Total accumulated amortization	(13,572)		(13,310)
Intangible assets, net	$	41,536	$	41,459
Intangible liabilities:
Below-market lease intangibles	$	(28,909)	$	(28,919)
Accumulated amortization	3,455		2,792
Intangible liabilities, net	$	(25,454)	$	(26,127)

The weighted average amortization periods of the Company’s intangible assets is 174 months and intangible liabilities is 266 months.

As of June 30, 2024, the estimated future amortization of the Company’s intangibles for each of the next five years and thereafter is as follows ($ in thousands):

	In-place Lease Intangibles		Above-market Lease Intangibles		Other Intangibles		Below-market Lease Intangibles
2024 (remaining)	$	2,960	$	10	$	1,481	$	(672)
2025	1,782		18		2,366		(1,340)
2026	1,629		18		2,139		(1,332)
2027	1,521		7		2,039		(1,327)
2028	1,436		5		1,604		(1,327)
2029	1,322		5		1,352		(1,327)
Thereafter	16,089		6		3,747		(18,129)
Total	$	26,739	$	69	$	14,728	$	(25,454)

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6. Investments in Real Estate-Related Loans and Securities

The following table summarizes the components of investments in real estate-related loans and securities as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Real estate-related securities	$	103,843	$	223,605
Real estate-related loans	17,155		16,503
Interest rate swaps	(180)		—
Total investments in real estate-related loans and securities	$	120,818	$	240,108

The following tables detail the Company’s real estate-related loan investments as of June 30, 2024 and December 31, 2023 ($ in thousands):

					June 30, 2024
Investment	Collateral	Interest Rate(1)	Maturity Date	Payment Terms	Face Amount		Allowance Adjustment		Carrying Amount
IMC/AMC Bond Investment	International Markets Center AmericasMart Atlanta	SOFR+8.15%	June 2026	Principal due at maturity	$	10,000	$	—	$	10,000
The Avery Senior Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	7,221		(1,482)		5,739
The Avery Mezzanine Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	1,749		(332)		1,416
Total					$	18,970	$	(1,814)	$	17,155

					December 31, 2023
Investment	Collateral	Interest Rate(1)	Maturity Date	Payment Terms	Face Amount		Allowance Adjustment		Carrying Amount
IMC/AMC Bond Investment	International Markets Center AmericasMart Atlanta	SOFR+8.15%	June 2026	Principal due at maturity	$	10,000	$	—	$	10,000
The Avery Senior Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	6,878		(1,670)		5,208
The Avery Mezzanine Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	1,669		(374)		1,295
Total					$	18,547	$	(2,044)	$	16,503

`

(1)	As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively.
(2)	The Company’s investment is held through its membership interest in an entity which aggregates the Company’s interest with interests held by other funds managed by the Sub-Adviser. The Company has been allocated its proportionate share of the loan based on its membership interest in the aggregating entity. In December 2023, the loan agreements were amended to change the interest rate to 10.00% and extend the maturity date to December 2024.
(3)	The maturity date may be extended for additional one-year periods, but no later than February 2028, subject to the borrower meeting minimum annual repayment requirements. Generally, loan repayments are made simultaneous with the closing of the sale of any condominium unit.

For the three months ended June 30, 2024 the Company recognized no credit loss allowance adjustment. For the six months ended June 30, 2024, the Company recognized $0.2 million as an allowance recovery for estimated credit loss, which is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. The allowance recovery is related to The Avery Senior Loan and The Avery Mezzanine Loan and is based on the expected timing of loan repayments, forecasted cash flows from the underlying collateral, and the current macroeconomic environment. The Company estimates its credit loss allowance primarily using the discounted cash flow method based on projected future principal cash flows for each individual loan. For the year ended December 31, 2023 the Company recognized $2.0 million as an allowance adjustment for estimated credit loss. There have been no write-offs related to the Company’s investments in real estate-related loans.

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The Company’s investments in real estate-related securities consist of commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), and interest rate swap contracts related to its investments in real estate-related securities.

The following tables detail the Company’s investments in real estate-related securities as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024
Type of Security	Number of Positions	Weighted Average Coupon(1)	Weighted Average Maturity Date(2)	Face Amount		Cost Basis		Fair Value
CMBS - floating	13	SOFR+3.79%	March 2026	$	47,945	$	44,182	$	44,123
CMBS - fixed	7	4.62%	November 2026	36,413		32,384		22,638
RMBS - fixed	28	5.37%	August 2026	38,059		37,091		37,082
Interest rate swaps	3	4.46%	July 2026	—		—		(180)
Total	51	6.62%(3)	July 2026	$	122,417	$	113,657	$	103,663

	December 31, 2023
Type of Security	Number of Positions	Weighted Average Coupon(1)	Weighted Average Maturity Date(2)	Face Amount		Cost Basis		Fair Value
CMBS - floating	29	SOFR+3.64%	November 2025	$	149,282	$	141,971	$	143,423
CMBS - fixed	7	4.26%	April 2026	37,913		33,413		24,322
RMBS - floating	6	SOFR+1.58%	October 2024	10,752		10,757		10,765
RMBS - fixed	30	4.71%	July 2026	46,611		45,105		45,095
Total	72	7.37%	January 2026	$	244,558	$	231,246	$	223,605

(1)	As of June 30, 2024 and December 31, 2023, SOFR was equal to 5.34% and 5.38%, respectively.
(2)	Weighted average maturity date is based on the fully extended maturity date of the investments.
(3)	Total weighted average coupon is calculated on CMBS and RMBS and excludes interest rate swaps.

During the three and six months ended June 30, 2024, the Company recorded net losses of $0.4 million and net gains of $1.4 million, respectively, on its investments in real estate-related securities. During the three and six months ended June 30, 2023, the Company recorded net losses on its investments in real estate-related securities of $1.2 million and $0.6 million, respectively. Such amounts are recorded as components of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations.

Certain of the Company’s investments in real estate-related securities are floating rate and indexed to SOFR. As such, the Company is exposed to interest rate risk and net income will increase or decrease depending on interest rate movements. The Company seeks to manage this risk by entering into interest rate swap contracts related to its investments in real estate-related securities. As of June 30, 2024, the Company had three interest rate swap contracts related to its investments in real estate-related securities with an aggregate notional amount of $72.0 million and a weighted average strike rate of 4.46%. The Company did not have any interest rate swap contracts related to its investments in real estate-related securities as of December 31, 2023. Interest paid or received by the Company related to such instruments is recorded as a component of Income from real estate-related loans and securities on the Company’s Consolidated Statements of Operations. The Company measures its interest rate swap contracts at fair value and records the value of such instruments as a component of Investments in real estate-related loans and securities, net in its Consolidated Balance Sheets and any realized and unrealized gains or losses as a component of Income from real estate-related loans and securities on its Consolidated Statements of Operations.

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7. Accounts and Other Receivables and Other Assets

The following tables summarize the components of Accounts and other receivables, net and Other assets as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Straight-line rent receivables	$	6,685	$	5,058
Accounts receivable, net	1,805		4,700
Interest receivable	684		1,036
Total accounts and other receivables, net	$	9,174	$	10,794
	June 30, 2024		December 31, 2023
Trading securities	$	18,972	$	39,824
Prepaid expenses	2,817		2,170
Derivative instruments	1,647		10,657
Other	916		469
Total other assets	$	24,352	$	53,120

8. Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the components of Accounts payable, accrued expenses and other liabilities as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Accounts payable and accrued expenses	$	12,574	7,547
Stock repurchases payable	12,601		$	13,898
Real estate taxes payable	5,166		3,665
Distributions payable	4,840		5,132
Tenant security deposits	4,008		3,400
Accrued interest expense	2,497		4,204
Prepaid rent	876		1,378
Total accounts payable, accrued expenses and other liabilities	$	42,562	$	39,224

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9. Mortgage Loans and Secured Credit Facility

The following table summarizes the components of total indebtedness, net as of June 30, 2024 and December 31, 2023 ($ in thousands):

				Principal Balance Outstanding
Indebtedness	Weighted Average Interest Rate(1)	Weighted Average Maturity Date(2)	Maximum Facility Size	June 30, 2024		December 31, 2023
Fixed rate loans:
Fixed rate mortgages	3.77%	December 2028	N/A	$	328,720	$	263,720
Total fixed rate loans				328,720		263,720
Variable rate loans:
Floating rate mortgages	SOFR+1.71%	May 2027	N/A	680,383		680,410
Secured credit facility(3)	SOFR+2.00%	January 2025	$300,000	144,485		118,985
Affiliate line of credit(4)	SOFR+2.25%	November 2024	$125,000	—		—
Total variable rate loans				824,868		799,395
Total indebtedness				1,153,588		1,063,115
Deferred financing costs, net				(4,230)		(4,772)
Total indebtedness, net				$	1,149,358	$	1,058,343

(1)	As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively.
(2)	Includes the fully extended maturity date for loans with extension options that are at the Company’s discretion and the Company currently expects to be able to exercise.
(3)	As of June 30, 2024 borrowings on the Secured Credit Facility (defined below) were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals. As of December 31, 2023 borrowings on the Secured Credit Facility were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, and certain single-family rentals.
(4)	Borrowings under the Affiliate Line of Credit (defined below) bear interest at a rate of the lowest then-current interest rate for any similar credit product offered by a third-party lender to the Company or its subsidiaries or, if not available, SOFR plus a 0.10% credit adjustment and a 2.25% margin.

The following table presents the future principal payments due under the Company’s mortgage loans and other indebtedness as of June 30, 2024 ($ in thousands):

Year	Amount
2024 (remaining)	$	62,283
2025	171,503
2026	49,989
2027	454,208
2028	118,034
2029	254,696
Thereafter	42,875
Total	$	1,153,588

The mortgage loans and Secured Credit Facility are subject to various financial and operational covenants. These covenants require the Company to maintain certain financial ratios, which may include leverage, debt yield, and debt service coverage, among others. As of June 30, 2024, the Company is in compliance with all of its loan covenants that could result in a default under such agreements. At Two Liberty Center, cash flows from the property are currently held in a restricted cash account due to a debt service coverage ratio requirement.

Mortgage Loans

During the six months ended June 30, 2024 the Company obtained a $65.0 million fixed rate mortgage loan related to the acquisition of a property, which was subject to customary terms and conditions. During the year ended December 31, 2023, the Company did not obtain any new mortgage loans but received $0.9 million of additional borrowings on an existing mortgage loan during the year ended December 31, 2023. During the six months ended June 30, 2024 and year ended December 31, 2023 the Company did not repay any mortgage loans.

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Secured Credit Facility

In November 2021, the Company entered into a credit agreement with a lender (the “Secured Credit Facility”) providing for a senior secured credit facility to be used for the acquisition or refinancing of properties. Borrowings on the Secured Credit Facility are secured by certain properties owned by the Company.

The initial maximum aggregate principal amount of the facility was $250.0 million, which was increased to $500.0 million in March 2022. In May 2022, the interest rate benchmark was converted from LIBOR to SOFR plus 1.95%. The Secured Credit Facility had an initial maturity date in November 2022, which was extended to January 2023.

In December 2022, the Company refinanced the Secured Credit Facility with the lender. The maximum aggregate principal amount of the facility was amended to $300.0 million, inclusive of a $100.0 million revolving credit amount that the Company may repay and re-borrow upon request, subject to certain conditions. The Company may increase the available capacity on the Secured Credit Facility by an additional $1.2 billion, subject to lender approval. The Secured Credit Facility bears interest at a rate of SOFR plus 2.00% and has a maturity date of January 2025.

Affiliate Line of Credit

In November 2021, the Company entered into a revolving line of credit with an affiliate of Brookfield (the “Affiliate Line of Credit”), providing for a discretionary, unsecured, uncommitted credit facility in a maximum aggregate principal amount of $125.0 million. The Affiliate Line of Credit had an initial maturity date of November 2, 2022, with one-year extension options subject to the lender’s approval. Effective November 2, 2022, the maturity date was extended to November 2, 2023, and the interest rate benchmark was converted from LIBOR to SOFR. Effective November 2, 2023, the maturity date of the Affiliate Line of Credit was extended for another 12 months to November 2, 2024. As of June 30, 2024 and December 31, 2023, there were no outstanding borrowings on the Affiliate Line of Credit.

10. Related Party Transactions

Advisory Agreement

Pursuant to the advisory agreement among the Adviser, the Operating Partnership and the Company (the “Advisory Agreement”), the Adviser is entitled to an annual management fee equal to 1.25% of the Company’s NAV on its Class C, Class D, Class I, Class S and Class T shares of common stock (no management fee is paid on the Class E shares), payable monthly, as compensation for the services it provides to the Company. The management fee can be paid, at the Adviser’s election, in cash or shares of the Company’s common stock. To date, the Adviser has elected to receive the management fee in Class I and Class E shares of the Company’s common stock. During the three and six months ended June 30, 2024, management fees earned by the Adviser were $2.8 million and $5.8 million, respectively. During the three and six months ended June 30, 2023, management fees earned by the Adviser were $3.6 million and $7.3 million, respectively.

During the six months ended June 30, 2024, the Company issued 594,307 unregistered Class I shares of common stock to the Adviser for the payment of management fees earned from December 2023 through May 2024. The Company also had an accrued payable of $0.9 million related to the management fee as of June 30, 2024, which is included in Due to affiliates on the Company’s Consolidated Balance Sheets. During July 2024, the Adviser was issued 82,325 unregistered Class I shares as payment for the $0.9 million management fee accrued as of June 30, 2024.

The Adviser is entitled to a performance fee based on the total return of the Company’s Class C, Class D, Class I, Class S and Class T shares of common stock (no performance fee is paid on the Class E shares). Total return is defined as distributions paid or accrued plus the change in the Company’s NAV, adjusted for subscriptions and repurchases. Pursuant to the Advisory Agreement, the performance fee is equal to 12.5% of the total return in excess of a 5% total return (after recouping any loss carryforward amount), subject to a catch-up. The performance fee becomes payable at the end of each calendar year and can be paid, at the Adviser’s election, in cash, shares of the Company’s common stock, or units of the Operating Partnership. During the three and six months ended June 30, 2024 and 2023, the Company accrued no performance fees in the Company’s Consolidated Statements of Operations.

Repurchase of Adviser Shares

During the six months ended June 30, 2024, the Company repurchased 532,352 shares of Class I common stock from the Adviser outside of its share repurchase plan for total consideration of $6.0 million. During the six months ended June 30, 2023, the Company repurchased 1,039,789 shares of Class I common stock from the Adviser outside of its share repurchase plan for total consideration of $13.6 million.

Sub-Adviser Agreement

The Company and the Adviser have engaged the Sub-Adviser to select and manage certain of the Company’s liquid assets (cash, cash equivalents, other short-term investments, U.S. government securities, agency securities, corporate debt, liquid real

25

estate-related, equity or debt securities, private debt investments and other investments for which there is reasonable liquidity) (the “Investment Sleeve”) in accordance with, and subject to, the Company’s investment objectives, strategy, guidelines, policies and limitations pursuant to a sub-advisory agreement among the Company, the Adviser, the Operating Partnership and the Sub-Adviser (the “Sub-Advisory Agreement”).

The Sub-Adviser earns management and performance fees pursuant to the terms of the Sub-Advisory Agreement. These fees are paid by the Adviser out of the management and performance fees earned by the Adviser; therefore, no management or performance fees related to the Sub-Advisory Agreement have been recognized in the Company’s Consolidated Statements of Operations.

Dealer Manager Agreement

The Company has engaged the Dealer Manager, a registered broker-dealer affiliated with the Adviser, as the dealer manager for the Current Offering. The Company pays to the Dealer Manager selling commissions, dealer manager fees and stockholder servicing fees in connection with sales of the Company’s common stock in the Current Offering. The Company accrues the full amount of the future stockholder servicing fees payable to the Dealer Manager for Class S, Class T, and Class D shares up to the 8.75% of gross proceeds limit at the time such shares are sold. The Dealer Manager has entered into agreements with the selected dealers distributing the Company’s shares in the Current Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fees and all or a portion of the stockholder servicing fees received by the Dealer Manager to such selected dealers.

Advanced Organization and Offering Costs

The Adviser and its affiliates advanced all of the Company’s organization and offering expenses (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 5, 2023, subject to the following reimbursement terms: (1) the Company reimburses the Adviser for all such advanced expenses paid through July 5, 2022 ratably over the 60 months following July 6, 2022; and (2) the Company reimburses the Adviser for all such advanced expenses paid from July 6, 2022 through July 5, 2023 ratably over the 60 months following July 6, 2023. The Company reimburses the Adviser for any organization and offering expenses that it incurs on the Company’s behalf as and when incurred after July 6, 2023.

Affiliate Line of Credit

In November 2021, the Company entered into the Affiliate Line of Credit, providing for a discretionary, unsecured, uncommitted credit facility in a maximum aggregate principal amount of $125.0 million. For further details on the Affiliate Line of Credit, see Note 9 — “Mortgage Loans and Secured Credit Facility” to the Company’s Consolidated Financial Statements.

Brookfield Repurchase Arrangement

One or more affiliates of Brookfield (individually or collectively, as the context may require, the “Brookfield Investor”) was issued shares of the Company’s common stock and Class E units of the Operating Partnership (“OP Units”) in connection with its contribution of certain properties on November 2, 2021 (the “Brookfield Portfolio”). The Company and the Operating Partnership have entered into a repurchase arrangement with the Brookfield Investor (the “Brookfield Repurchase Arrangement”) pursuant to which the Company and the Operating Partnership will offer to repurchase shares of common stock or Class E OP Units from the Brookfield Investor at a price per unit equal to the most recently determined NAV per share or unit immediately prior to each repurchase. The Brookfield Investor has agreed to not seek repurchase of the shares of common stock and Class E OP Units that it owns if doing so would bring the value of its equity holdings in the Company and the Operating Partnership below $50.0 million. In addition, the Brookfield Investor has agreed to hold all of the shares of common stock and Class E OP Units that it received in consideration for the contribution of the Brookfield Portfolio until the earlier of (i) the first date that the Company’s NAV reaches $1.5 billion and (ii) the date that is the third anniversary of November 2, 2021. Following such date, the Brookfield Investor may cause the Company to repurchase its shares and Class E OP Units (above the $50.0 million minimum), in an amount equal to the sum of (a) the amount available under the Company’s share repurchase plan’s 2% monthly and 5% quarterly caps (after accounting for third-party investor repurchases) and (b) 25% of the amount by which net proceeds from the Offering and the Company’s private offerings of common stock for a given month exceed the amount of repurchases for such month pursuant to the Company’s share repurchase plan. The Company will not effect any such repurchase during any month in which the full amount of all shares requested to be repurchased by third-party investors under the share repurchase plan is not repurchased. The Brookfield Repurchase Arrangement does not apply to shares of common stock or OP Units held by affiliates of Brookfield that are feeder vehicles primarily created to offer interests in such feeder vehicles to non-U.S. persons. During the six months ended June 30, 2024, the Company and the Operating Partnership did not repurchase any shares or Class E OP Units from the Brookfield Investor as part of the Brookfield Repurchase Arrangement.

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Brookfield Investor Subscriptions

On November 30, 2021, the Operating Partnership and the Brookfield Investor entered into a subscription agreement (the “Brookfield Subscription Agreement”) pursuant to which the Brookfield Investor agreed to purchase up to $83.0 million of Class E OP Units upon the request of the general partner of the Operating Partnership, of which the Company is the sole member. On December 1, 2021, the Brookfield Investor was issued 3,756,480 Class E OP Units in exchange for $45.0 million. On January 3, 2022, the Brookfield Investor was issued 3,075,006 Class E OP Units in exchange for $38.0 million. On June 29, 2022, the Company, the Operating Partnership and the Brookfield Investor entered into an agreement pursuant to which all such Class E OP Units issued to the Brookfield Investor in connection with the Brookfield Subscription Agreement were converted to Class I shares of the Company’s common stock at the then-applicable conversion factor per unit based on the most recently determined NAV of Class E OP Units and Class I shares.

On April 3, 2023, the Brookfield Investor was issued 756,475 Class I shares in the Current Offering in exchange for $10.0 million. On May 1, 2023, the Brookfield Investor was issued 617,909 Class I shares in the Current Offering in exchange for $8.0 million. The Class I shares held by the Brookfield Investor in connection with the Brookfield Subscription Agreement and subsequent subscriptions are not subject to the Brookfield Repurchase Arrangement, but the Brookfield Investor may request the Company repurchase its shares, in whole or in part, subject to the terms and conditions of the Company’s share repurchase plan.

Affiliate Service Provider Expenses

The Company may retain certain of the Adviser’s affiliates for necessary services relating to the Company’s investments or its operations, including any administrative services, construction, special servicing, leasing, development, property oversight and other property management services, as well as services related to group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, loan servicing, property, title and/or other types of insurance, management consulting and other similar operational matters.

The Company has engaged Brookfield Properties, a Brookfield affiliate, to provide operational services (including, without limitation, property management, leasing, and construction management) and corporate support services (including, without limitation, accounting and administrative services) for the Company and certain of its properties. The Company has also engaged Maymont Homes, a Brookfield affiliate, to provide operational services (including, without limitation, property management, renovation, leasing, and turnover and maintenance oversight) for the Company’s single-family rental properties.

The Company also reimburses Brookfield Properties, Maymont Homes and other Brookfield affiliates for corporate support and operating personnel expenses, including, but not limited to, employees who provide on-site maintenance, leasing, administrative and operational support services. Such employees may be fully dedicated or a shared resource amongst other investments. Employees’ compensation and expenses continue to be an expense of the affiliate, and if they are a shared resource, the affiliate allocates such expense to the Company according to their policies and procedures. Personnel expenses may include IT costs, HR support (i.e. payroll and benefits), rent and office services, basic financial services (i.e., account receivables, bank account administration), professional development, travel, professional fees and similar expenses.

The following table summarizes the Company’s affiliate service provider expenses for the three and six months ended June 30, 2024 and 2023 ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Property management fees(1)	$	830	$	714	$	1,585	$	1,432
Single-family rental leasing, maintenance and turnover oversight fees(1)	200		189		316		278
Capitalized construction management fees(2)	22		23		42		36
Capitalized single-family rental renovation oversight fees(2)	1		10		1		32
Reimbursed personnel costs(3)	2,010		1,711		3,687		3,313
Total	$	3,063	$	2,647	$	5,631	$	5,091

(1)	Included in Rental property operating expenses on the Company’s Consolidated Statements of Operations.
(2)	Included in Investments in real estate, net on the Company’s Consolidated Balance Sheets.
(3)	For the three and six months ended June 30, 2024, $1.7 million and $3.1 million, respectively, included in Rental property operating expenses and $0.3 million and $0.6 million, respectively, included in General and administrative expenses on the Company’s Consolidated Statements of Operations. For the three and six months ended June 30, 2023, $1.5 million and $2.8 million, included in Rental property operating expenses and $0.2 million and $0.5 million included in General and administrative expenses on the Company’s Consolidated Statements of Operations.

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Captive Insurance Company

BPG Bermuda Insurance Limited (“BAM Insurance Captive”), a Brookfield affiliate, provides property and liability insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums. For the three and six months ended June 30, 2023, the Company incurred $0.0 million and $0.1 million, respectively, for insurance premiums.

On March 31, 2023, Obsidian Mutual IC (“Obsidian”), a Brookfield affiliate, replaced BAM Insurance Captive in providing property insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums provided by Obsidian.

On March 15, 2024, Onyx Mutual Insurance IC (“Onyx”), a Brookfield affiliate, replaced BAM Insurance Captive in providing liability insurance for certain of the Company’s properties. For the six months ended June 30, 2024, the Company incurred an insignificant amount for insurance premiums provided by Onyx.

Terrorism Insurance Provider

Liberty IC Casualty LLC (“Liberty”), a Brookfield affiliate, provides terrorism insurance for certain of the Company’s properties. For the three and six months ended June 30, 2024 and 2023, the insurance premiums incurred by the Company were insignificant.

Submetering Services

Certain of the Company’s properties sold submetering infrastructure and associated equipment to Metergy, a Brookfield affiliate. Sale proceeds earned by the Company for the three and six months ended June 30, 2024 and 2023 was zero. Metergy provides submetering services to certain of the Company’s properties. For the three and six months ended June 30, 2024 and 2023, the Company incurred fees of an insignificant amount.

Due to Affiliates

The following table details the components of Due to affiliates as of June 30, 2024 and December 31, 2023 ($ in thousands):

	June 30, 2024		December 31, 2023
Accrued stockholder servicing fee	$	20,792	$	25,507
Advanced organization and offering costs	8,374		9,734
Stock repurchase payable to the Adviser for management fees	2,958		3,353
Other(1)	2,435		2,410
Accrued management fee	928		1,046
Accrued affiliate service provider expenses	2,348		1,915
OP Units distributions payable	6		6
Total	$	37,841	$	43,971

(1) Represents costs advanced by the Adviser and the Sub-Adviser on behalf of the Company for general corporate expenses provided by unaffiliated third parties.

11. Stockholders’ Equity and Redeemable Non-controlling Interests

Authorized Capital

On April 30, 2018, the SEC declared effective the Company’s registration statement on Form S-11 for the Initial Public Offering. On November 2, 2021, the SEC declared effective the Company’s registration statement on Form S-11 (File No. 333-255557) for the Current Offering of up to $6.0 billion in shares in its primary offering and up to $1.5 billion in shares pursuant to its distribution reinvestment plan. The Initial Public Offering terminated upon the commencement of the Current Offering. Pursuant to the Current Offering, the Company is offering to sell any combination of four classes of shares of its common stock Class S shares, Class I shares, Class T shares and Class D shares with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees. The Company is also offering Class I, Class C and Class E shares in private offerings exempt from registration. Other than the differences in upfront selling commissions, dealer manager fees, ongoing stockholder servicing fees, management fees and performance fees, each class of common stock has the same economic and voting rights.

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Classification	No. of Authorized Shares (in thousands)	Par Value Per Share
Preferred stock	50,000	$	0.01
Class S common stock	225,000	$	0.01
Class I common stock	250,000	$	0.01
Class T common stock	225,000	$	0.01
Class D common stock	100,000	$	0.01
Class C common stock	100,000	$	0.00
Class E common stock	100,000	$	0.00
	1,050,000

Common Stock

The following table details the movement in the Company’s outstanding shares of common stock for the six months ended June 30, 2024 (in thousands):

	Six Months Ended June 30, 2024
	Class S	Class I	Class D	Class T(1)	Class C	Class E	Total
December 31, 2023	34,244	41,504	148	—	9,347	3,353	88,596
Common stock issued(2)	460	1,871	17	—	—	71	2,419
Distribution reinvestment	459	954	—	—	—	108	1,521
Common stock repurchased	(5,121)	(3,621)	(5)	—	(871)	(121)	(9,739)
June 30, 2024	30,042	40,708	160	—	8,476	3,411	82,797

(1)	As of June 30, 2024, no Class T shares had been issued.
(2)	Includes conversions between share classes.

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 stockholders each year to comply with the REIT provisions of the Code.

Each class of the Company’s common stock receives the same gross distribution per share. The net distribution varies for each class based on the applicable stockholder servicing fees, management fees and performance fees, which are deducted from the monthly distribution per share.

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The following table details the aggregate net distributions declared for each applicable class of common stock for the three and six months ended June 30, 2024: 

	Three Months Ended June 30, 2024
	Class S		Class I		Class D		Class T(1)		Class C		Class E
Aggregate gross distributions declared per share of common stock	$	0.2147	$	0.2147	$	0.2147	$	—	$	0.2147	$	0.2147
Stockholder servicing fee per share of common stock	(0.0237)		—		(0.0070)		—		—		—
Management fee per share of common stock	(0.0350)		(0.0353)		(0.0356)		—		(0.0345)		—
Net distributions declared per share of common stock	$	0.1560	$	0.1794	$	0.1721	$	—	$	0.1802	$	0.2147

	Six Months Ended June 30, 2024
	Class S		Class I		Class D		Class T(1)		Class C		Class E
Aggregate gross distributions declared per share of common stock	$	0.4305	$	0.4305	$	0.4305	$	—	$	0.4305	$	0.4305
Stockholder servicing fee per share of common stock	(0.0482)		—		(0.0143)		—		—		—
Management fee per share of common stock	(0.0711)		(0.0717)		(0.0722)		—		(0.0701)		—
Net distributions declared per share of common stock	$	0.3112	$	0.3588	$	0.3440	$	—	$	0.3604	$	0.4305

(1) No Class T shares of common stock were issued or outstanding, thus no distributions were declared for Class T common stock during the six months ended June 30, 2024.

Distribution Reinvestment Plan

The Company has adopted a distribution reinvestment plan whereby stockholders will have their cash distributions attributable to the shares they own automatically reinvested in additional shares of common stock; provided, however, that clients of certain participating broker-dealers that do not permit automatic enrollment in the distribution reinvestment plan and stockholders that are residents of certain states that do not permit automatic enrollment in the distribution reinvestment plan will automatically receive their distributions in cash unless they elect to participate in the distribution reinvestment plan. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the offering price before upfront selling commissions and dealer manager fees (the “transaction price”) at the time the distribution is payable, which will generally be equal to the Company’s prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees with respect to shares of the Company’s Class T shares, Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan. During the six months ended June 30, 2024 and 2023, $17.6 million and $19.6 million of distributions were reinvested for 1,521,358 and 1,485,033 shares of common stock, respectively.

Non-controlling Interests Attributable to Preferred Shareholders

Certain subsidiaries of the Company have elected to be treated as REITs for U.S. federal income tax purposes. These subsidiaries have issued preferred non-voting shares to be held by investors to ensure compliance with the Code requirement that REITs have at least 100 shareholders. The preferred shares have a price of $1,000 and an annual dividend payable ranging between 12.0% and 12.5%. As of June 30, 2024, there were $750,000 of preferred non-voting shares outstanding.

Redeemable Non-controlling Interest

The Brookfield Investor was issued Class E OP Units in connection with its contribution of the Brookfield Portfolio on November 2, 2021 and subsequent cash contributions to the Operating Partnership pursuant to the Brookfield Subscription Agreement. Because the Brookfield Investor has the ability to redeem its Class E OP Units for shares of common stock or cash, subject to certain restrictions, the Company has classified the Class E OP Units held by the Brookfield Investor as Redeemable non-controlling interest in mezzanine equity on the Company’s Consolidated Balance Sheets. The Redeemable non-controlling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period.

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The following table summarizes the Redeemable non-controlling interest activity for the six months ended June 30, 2024 and 2023 ($ in thousands):

	Six Months Ended June 30, 2024		Six Months Ended June 30, 2023
Balance at beginning of the year	$	933	$	990
GAAP net loss allocation	(10)		(6)
Distributions	(35)		(58)
Distributions reinvested	35		57
Fair value allocation	—		(22)
Ending balance	$	923	$	961

Share Repurchase Plan

The Company has adopted a share repurchase plan, whereby, subject to certain limitations, stockholders may request on a monthly basis that the Company repurchase all or any portion of their shares. Should repurchase requests, in the Company’s judgment, place an undue burden on its liquidity, adversely affect its operations or risk having an adverse impact on the Company as a whole, or should the Company otherwise determine that investing its liquid assets in real properties or other illiquid investments rather than repurchasing its shares is in the best interests of the Company as a whole, then the Company may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, the Company’s board of directors 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 stockholders.

In addition, the total amount of shares that the Company will repurchase is limited, in any calendar month, to shares whose aggregate value (based on the repurchase price per share on the date of the repurchase) is no more than 2% of its aggregate NAV attributable to its stockholders as of the last day of the previous calendar month and, in any calendar quarter, to shares whose aggregate value is no more than 5% of its aggregate NAV attributable to its stockholders as of the last day of the previous calendar quarter. The monthly and quarterly repurchase limits exclude shares repurchased from the Adviser that were issued as payment of management or performance fees. 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. All unsatisfied repurchase requests must be resubmitted after the start of the next month or quarter, or upon the recommencement of the share repurchase plan, as applicable.

Shares are repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. Shares that have not been outstanding for at least one year are repurchased at 98% of the transaction price.

During the six months ended June 30, 2024 and 2023, the Company repurchased 9,206,422 and 7,189,628 shares of common stock representing a total of $105.0 million and $93.1 million, respectively, under its share repurchase plan. The Company’s board of directors, including all of the independent directors, unanimously authorized repurchases for April 2024 in excess of the 2% monthly repurchase limitation and repurchases during the quarter ended June 30, 2024 in excess of the 5% quarterly limitation, such that 100% of share repurchase requests received during the calendar quarter ended June 30, 2024 were satisfied. The Company satisfied all repurchase requests during the six months ended June 30, 2024 and 2023.

12. Commitments and Contingencies

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2024, the Company was not subject to any material litigation nor was the Company aware of any material litigation threatened against it. The Company may, from time to time, enter into payment guarantees related to mortgage loans at its investments in unconsolidated entities. As of June 30, 2024, the Company has a payment guarantee of $1.6 million.

13. Leases

The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s rental housing, office, logistics, and net lease properties. Leases at the Company’s office, logistics, and net lease properties generally include a fixed base rent and certain leases also contain a variable component. The variable component of the Company’s operating leases at its office, logistics, and net lease properties primarily consist of the reimbursement of operating expenses such as real estate taxes, insurance, and common area maintenance costs. Rental revenue earned from leases at the Company’s rental housing properties

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primarily consist of a fixed base rent and certain leases contain a variable component that allows for the pass-through of certain operating expenses such as utilities.

The following table details the components of operating lease income from leases in which the Company is the lessor for the periods set forth below ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Fixed lease payments	$	30,023	$	29,226	$	58,936	$	58,327
Variable lease payments	2,170		4,276		4,113		5,648
Total rental revenues	$	32,193	$	33,502	$	63,049	$	63,975

The following table details the undiscounted future minimum rents the Company expects to receive for its logistics, net lease, and office properties as of June 30, 2024. The table below excludes the Company’s rental housing properties as substantially all leases are shorter term in nature ($ in thousands):

Year	Future Minimum Rents
2024 (remaining)	$	15,696
2025	29,754
2026	27,377
2027	26,425
2028	25,808
2029	23,594
Thereafter	103,382
Total	$	252,036

14. Segment Reporting

As of June 30, 2024, the Company operates in five reportable segments: rental housing, office, logistics, net lease and real estate-related loans and securities. The Company continually evaluates the financial information used by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Effective June 30, 2023, rental housing was established as a new reportable segment, consisting of multifamily, student housing, and single-family rental properties due to the similar operating nature of these investments. Comparative periods have been recast to reflect these changes.

The Company allocates resources and evaluates results based on the performance of each segment individually. The Company believes that segment net operating income is the key performance metric that captures the unique operating characteristics of each segment.

The following table sets forth the Company’s assets by segment ($ in thousands):

	June 30, 2024		December 31, 2023
Rental Housing	$	1,205,942	$	1,061,941
Office	100,775		103,179
Logistics	106,079		108,329
Net Lease	414,339		415,282
Real estate-related loans and securities	120,818		240,108
Other (Corporate)	43,116		61,068
Total assets	$	1,991,069	$	1,989,907

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The following table sets forth the financial results by segment for the three months ended June 30, 2024 ($ in thousands):

	Rental Housing		Office		Logistics		Net Lease		Real estate-related loans and securities		Total
Revenues:
Rental revenues	$	22,079	$	2,944	$	1,992	$	5,178	$	—	$	32,193
Other revenues	3,141		181		—		11		—		3,333
Total revenues	25,220		3,125		1,992		5,189		—		35,526
Expenses:
Rental property operating	10,414		1,397		511		940		—		13,262
Total expenses	10,414		1,397		511		940		—		13,262
Income from real estate-related loans and securities	—		—		—		—		3,311		3,311
Segment net operating income	$	14,806	$	1,728	$	1,481	$	4,249	$	3,311	$	25,575
Gain from unconsolidated entities											2,991
Other income, net											30
Depreciation and amortization											(14,337)
General and administrative expenses											(1,570)
Management fee											(2,833)
Interest expense											(17,001)
Net loss											$	(7,145)
Net loss attributable to non-controlling interests in third party joint ventures											230
Net income attributable to non-controlling interests - preferred stockholders											(65)
Net loss attributable to stockholders											$	(6,973)

The following table sets forth the financial results by segment for the three months ended June 30, 2023 ($ in thousands):

	Rental Housing		Office		Logistics		Net Lease		Real estate-related loans and securities		Total
Revenues:
Rental revenues	$	21,034	$	3,248	$	1,705	$	7,515	$	—	$	33,502
Other revenues	3,351		243		—		52		—		3,646
Total revenues	24,385		3,491		1,705		7,567		—		37,148
Expenses:
Rental property operating	9,625		1,450		523		3,282		—		14,880
Total expenses	9,625		1,450		523		3,282		—		14,880
Income from real estate-related loans and securities	—		—		—		—		3,841		3,841
Segment net operating income	$	14,760	$	2,041	$	1,182	$	4,285	$	3,841	$	26,109
Gain from unconsolidated entities											1,649
Other income, net											6,512
Depreciation and amortization											(12,765)
General and administrative expenses											(2,229)
Management fee											(3,579)
Interest expense											(14,498)
Net income											$	1,199
Net income attributable to non-controlling interests in third party joint ventures											(67)
Net income attributable to non-controlling interests - preferred stockholders											(45)
Net income attributable to redeemable non-controlling interests											(2)
Net income attributable to stockholders											$	1,085

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The following table sets forth the financial results by segment for the six months ended June 30, 2024 ($ in thousands):

	Rental Housing		Office		Logistics		Net Lease		Real estate-related loans and securities		Total
Revenues:
Rental revenues	$	43,177	$	5,495	$	4,021	$	10,356	$	—	$	63,049
Other revenues	5,353		316		—		21		—		5,690
Total revenues	48,530		5,811		4,021		10,377		—		68,739
Expenses:
Rental property operating	19,813		2,842		1,063		1,917		—		25,636
Total expenses	19,813		2,842		1,063		1,917		—		25,636
Income from real estate-related loans and securities	—		—		—		—		10,369		10,369
Segment net operating income	$	28,717	$	2,969	$	2,958	$	8,460	$	10,369	$	53,472
Gain from unconsolidated entities											3,724
Other income, net											2,184
Depreciation and amortization											(27,098)
General and administrative expenses											(3,783)
Management fee											(5,828)
Interest expense											(33,327)
Net loss											$	(10,656)
Net loss attributable to non-controlling interests in third party joint ventures											433
Net income attributable to non-controlling interests - preferred stockholders											(65)
Net loss attributable to redeemable non-controlling interests											10
Net loss attributable to stockholders											$	(10,278)

The following table sets forth the financial results by segment for the six months ended June 30, 2023 ($ in thousands):

	Rental Housing		Office		Logistics		Net Lease		Real estate-related loans and securities		Total
Revenues:
Rental revenues	$	41,709	$	6,239	$	3,680	$	12,347	$	—	$	63,975
Other revenues	5,734		419		—		52		—		6,205
Total revenues	47,443		6,658		3,680		12,399		—		70,180
Expenses:
Rental property operating	18,506		2,949		1,283		3,870		—		26,608
Total expenses	18,506		2,949		1,283		3,870		—		26,608
Income from real estate-related loans and securities	—		—		—		—		10,844		10,844
Segment net operating income	$	28,937	$	3,709	$	2,397	$	8,529	$	10,844	$	54,416
Loss from unconsolidated entities											(2,404)
Other income, net											5,248
Depreciation and amortization											(25,569)
General and administrative expenses											(4,545)
Management fee											(7,257)
Interest expense											(28,430)
Net loss											$	(8,541)
Net loss attributable to non-controlling interests in third party joint ventures											42
Net income attributable to non-controlling interests - preferred stockholders											(45)
Net loss attributable to redeemable non-controlling interests											6
Net loss attributable to stockholders											$	(8,538)

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15. Subsequent Events

On August 1, 2024, BPG Manager Holdings L.P., an affiliate of Brookfield, was issued 633,194 Class I shares for consideration of $7.1 million.

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

References herein to the “Company,” “we,” “us,” or “our” refer to Brookfield Real Estate Income Trust Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Terms used and not defined herein have the meanings set forth elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts, particularly those in the section entitled “Recent Developments – Business Outlook” and “Liquidity and Capital Resources”, are based on our current expectations, estimates, projections, opinions, and/or beliefs. Such statements are not facts and involve known and unknown risks, uncertainties, and other factors. Investors should not rely on these statements as if they were fact. Certain information contained in this Quarterly Report on Form 10-Q constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue,” “forecast,” or “believe” or the negatives thereof or other variations thereon or other comparable terminology. Due to various risks and uncertainties, including those described under Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and under Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q and elsewhere in this Quarterly Report on Form 10-Q, actual events or results or our actual performance may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to future performance or such forward-looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. We do not undertake to revise or update any forward-looking statements.

Overview

We are a Maryland corporation formed on July 27, 2017 to invest in commercial real estate assets. We seek to invest in well- located, high quality real estate properties that generate strong current cash flow and could further appreciate in value through our proactive, best-in-class asset management strategies. Our real estate-related debt strategy seeks to achieve high current income and superior risk-adjusted returns, as well as provide a source of liquidity.

We are externally managed by Brookfield REIT Adviser LLC (the “Adviser”), an affiliate of Brookfield Asset Management Ltd. (together with its affiliates, “Brookfield”). We are structured as an umbrella partnership real estate investment trust (“UPREIT”), which means that we own substantially all of our assets through our operating partnership, Brookfield REIT Operating Partnership L.P. (the “Operating Partnership”), a Delaware limited partnership, of which we are the sole general partner.

On April 30, 2018, the Securities and Exchange Commission (the “SEC”), declared effective our registration statement on Form S-11 (File No. 333-223022) for our initial public offering of up to $2.0 billion in shares of our common stock (the “Initial Public Offering”). On November 2, 2021, the SEC declared effective our registration statement on Form S-11 (File No. 333-255557) for our follow-on public offering of up to $7.5 billion in shares of our common stock in any combination of purchases of Class S, Class T, Class D and Class I shares of our common stock (the “Current Offering”). The share classes have different upfront selling commissions and ongoing stockholder servicing fees. The Initial Public Offering terminated upon the commencement of the Current Offering.

In addition to the Current Offering, we are conducting private offerings of Class I and Class C shares to feeder vehicles that offer interests in such vehicles to non-U.S. persons. The offer and sale of Class I and Class C shares to the feeder vehicles is exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) and Regulation S promulgated thereunder. We are also offering Class E shares to Brookfield, Oaktree and certain of their affiliates, employees and our independent directors in one or more private offerings. The offer and sale of Class E shares is exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) and Regulation D promulgated thereunder.

We qualified as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2019, and 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 stockholders and maintain our qualification as a REIT.

As of June 30, 2024, we owned and operated 20 investments in real estate and held investments in two unconsolidated real estate interests, three real estate-related loans, 48 short-term real estate-related debt securities and three interest rate derivatives related to its investments in real estate-related securities. We are not aware of any material trends or uncertainties, favorable or

36

unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from owning properties or real estate-related loans.

Recent Developments

Business Outlook

Our portfolio has continued to display strong real estate fundamentals, with consistently high occupancy (97%), and this quarter marked a positive shift in momentum driven by new property acquisitions. Our real estate credit portfolio, which we built up significantly in 2022 and 2023, has not only contributed to strong returns but has been an important source of liquidity to take advantage of the current market opportunity. During the quarter, we acquired two portfolios of single-family rental homes totaling 181 homes and a newly-built, 741-bed student housing property for an aggregate purchase price of $166.0 million, excluding closing costs.

Inflation in the United States slowed significantly in the second quarter of 2024 and policy makers are now predicting interest rate cuts in the second half of the year. However, even without base rates coming down, financing spreads (the premium borrowers are required to pay over the risk-free rate) have narrowed dramatically over the past six months, reducing the cost of borrowing. This has led to a reopening of the capital markets and increased transaction activity. We believe we are well-positioned to capitalize on these opportunities going forward, with no unsatisfied repurchase requests and over $400 million of total liquidity as of June 30, 2024. This includes $140.1 million, or 15% of the net asset value (“NAV”) of our investments, that is invested in our portfolio of real estate-related debt investments and trading securities. Through our partnership with Oaktree and their extensive credit expertise, we also expect to continue to capitalize on attractive opportunities to invest in real estate debt.

The stabilization of interest rates and increased transaction activity are good signs for private real estate, including property valuations. However, the timing and magnitude of interest rates cuts remains unknown, and geopolitical instability and other macroeconomic factors in the United States and globally could affect our business and operating results.

Please refer to Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, and elsewhere in this Quarterly Report on Form 10-Q for additional disclosure relating to material trends or uncertainties that may impact our business.

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Q2 2024 Highlights

Operating and Capital Raising Results:

•Year-to-date total returns through June 30, 2024, excluding upfront selling commissions, were -2.21% for Class S shares, -1.72% for Class I shares and -1.61% for Class D shares. Negative year-to-date performance is primarily attributable to increasing discount and exit cap rates assumptions used in the valuations of certain of our properties. Total return is calculated as the percent change in the NAV per share from the beginning of the applicable period, plus the amount of any net distributions per share declared in the period. Management believes total return is a useful measure of the overall performance of our shares. As of June 30, 2024, no Class T shares of common stock had been issued.

•Annualized total returns from inception through June 30, 2024, excluding upfront selling commissions, were 6.81% for Class S, 7.87% for Class I, and -3.65% for Class D shares. Since inception returns for Class D shares are calculated from June 1, 2022, the date the first Class D shares were issued.

•Raised $14.2 million of gross proceeds from the sale of our common stock through public and private offerings during the three months ended June 30, 2024.

•Declared monthly net distributions totaling $14.7 million during the three months ended June 30, 2024. As of June 30, 2024, the annualized net distribution rate was 5.60% for Class S shares, 6.37% for Class I shares and 6.06% for Class D shares.

•Reinvested distributions of $8.7 million during the three months ended June 30, 2024.

Investing and Financing Activity:

•Closed on property acquisitions with an aggregate purchase price of $166.0 million, excluding closing costs, during the three months ended June 30, 2024, including 181 single-family rental homes for $50.0 million and Reflection, a 741-bed student housing property for $116.0 million.

•In June 2024, we closed on a $65.0 million mortgage loan secured by Reflection. The mortgage loan has a fully extended term of four years and one months and incurs interest at a fixed rate of 6.75%.

•During the three months ended June 30, 2024, we borrowed $25.5 million on the Secured Credit Facility related to the acquisitions of single-family rental homes.

•As of June 30, 2024, our leverage ratio was 51.4%. Our leverage ratio is calculated by dividing (i) the consolidated property-level and entity-level debt, excluding any third-party interests in such debt, net of cash, loan-related restricted cash, and trading securities by (ii) the gross asset value of real estate equity investments (calculated using the greater of fair value and cost of gross real estate assets), excluding any third-party interests in such investments, plus our equity in real estate-related debt investments. There is no indebtedness on our real estate-related debt investments. The leverage ratio would be higher if our pro rata share of debt within our unconsolidated investment was included in the calculation.

Current Portfolio:

•As of June 30, 2024, our investment portfolio, based on the NAV of our investments, consisted of 85% real estate properties and 15% real estate-related loans and securities. NAV is measured as the fair value of our investments less any mortgages or debt obligations related to such investments. There is no indebtedness on our real estate-related debt investments.

•Our real estate properties as of June 30, 2024, based on fair value, consisted of rental housing (68%), net lease (23%), logistics (5%) and office (4%).

•As of June 30, 2024, our real estate-related loans and securities consisted of 54 investments with an aggregate fair value of $121.1 million.

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Portfolio

Investments in Real Estate

The following table provides information regarding our portfolio of real estate properties as of June 30, 2024:

Investment(1)	Location	Property Type	Acquisition Date	Ownership Percentage(2)	Purchase Price(3)		Square Feet/ Number of Units	Occupancy Rate(4)
Anzio Apartments	Atlanta, GA	Rental Housing	April 2019	90%	$	59.2	448	94%
Arbors of Las Colinas	Dallas, TX	Rental Housing	December 2020	90%	63.5		408	90%
1110 Key Federal Hill	Baltimore, MD	Rental Housing	September 2021	100%	73.6		224	97%
Domain	Orlando, FL	Rental Housing	November 2021	100%	74.1		324	98%
The Burnham	Nashville, TN	Rental Housing	November 2021	100%	129.0		328	95%
Flats on Front	Wilmington, NC	Rental Housing	December 2021	100%	97.5		273	97%
Verso	Beaverton, OR	Rental Housing	December 2021	100%	74.0		172	96%
2626 South Side Flats	Pittsburgh, PA	Rental Housing	January 2022	100%	90.0		264	98%
The Parker at Huntington Metro	Alexandria, VA	Rental Housing	March 2022	100%	136.0		360	97%
Briggs + Union	Mount Laurel, NJ	Rental Housing	April 2022	100%	158.0		490	96%
Single-Family Rentals	Various	Rental Housing	Various	100%	178.5		667	93%
Reflection	Atlanta, GA	Rental Housing	June 2024	97%	116.0		741	77%
Principal Place(5)	London, UK	Net Lease	November 2021	20%	99.8		644,000	100%
DreamWorks Animation Studios	Glendale, CA	Net Lease	December 2021	100%	326.5		497,000	100%
Two Liberty Center	Arlington, VA	Office	August 2019	97%	91.2		179,000	63%
Lakes at West Covina	Los Angeles, CA	Office	February 2020	95%	41.0		177,000	94%
6123-6227 Monroe Ct	Morton Grove, IL	Logistics	November 2021	100%	17.2		208,000	100%
8400 Westphalia Road	Upper Marlboro, MD	Logistics	November 2021	100%	27.0		100,000	100%
McLane Distribution Center	Lakeland, FL	Logistics	November 2021	100%	26.7		211,000	100%
2003 Beaver Road	Landover, MD	Logistics	February 2022	100%	9.4		38,000	100%
187 Bartram Parkway	Franklin, IN	Logistics	February 2022	100%	28.8		300,000	100%
Total					$	1,917.0

(1)	Investments in real estate properties includes our consolidated property investments and our unconsolidated investment in Principal Place.
(2)	The joint venture agreements entered into by us (other than the Principal Place joint venture) provide the other partner a profits interest based on achieving certain internal rate of return hurdles. Such investments are consolidated by us and any profits interest due to the other partners is reported within non-controlling interests.
(3)	Purchase price is presented in millions and excludes acquisition costs.
(4)	For rental housing investments, except single-family rentals, occupancy represents the percentage of all leased units divided by the total available units as of June 30, 2024. Single-family rentals occupancy represents all occupied homes divided by the total stabilized homes as of the date indicated. For office, net lease and logistics investments, occupancy represents the percentage of all leased square footage divided by the total available square footage as of June 30, 2024.
(5)	Purchase price represents our initial equity investment in the joint venture of £73.3 million GBP converted to USD using the spot rate on the acquisition date.

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Investments in Real Estate-Related Loans and Securities

The following table details our investments in real estate-related loans as of June 30, 2024 ($ in thousands):

Investment	Collateral	Interest Rate(1)	Maturity Date	Payment Terms	Face Amount		Allowance Adjustment		Carrying Amount
IMC/AMC Bond Investment	International Markets Center AmericasMart Atlanta	SOFR+8.15%	June 2026	Principal due at maturity	$	10,000	$	—	$	10,000
The Avery Senior Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	7,221		(1,482)		5,739
The Avery Mezzanine Loan(2)	The Avery Condominium San Francisco, California	10.00%	December 2024	Principal due at maturity(3)	1,749		(332)		1,416
Total					$	18,970	$	(1,814)	$	17,155

(1)	As of June 30, 2024, SOFR was 5.34%.
(2)	Our investment is held through our membership interest in an entity that aggregates our interest with interests held by other funds managed by the Sub-Adviser. We have been allocated our proportionate share of the loan based on our membership interest in the aggregating entity. In December 2023, the loan agreements were amended to change the interest rate to 10.00% and extend the maturity date to December 2024.
(3)	The maturity date may be extended for additional one-year periods, but no later than February 16, 2028, subject to the borrower meeting minimum annual repayment requirements. Generally, loan repayments are made simultaneous with the closing of the sale of any condominium unit.

The following table details our investments in real estate-related securities as of June 30, 2024 ($ in thousands):

	June 30, 2024
Type of Security	Number of Positions	Weighted Average Coupon(1)	Weighted Average Maturity Date(2)	Face Amount		Cost Basis		Fair Value
CMBS - floating	13	SOFR+3.79%	March 2026	$	47,945	$	44,182	$	44,123
CMBS - fixed	7	4.62%	November 2026	36,413		32,384		22,638
RMBS - fixed	28	5.37%	August 2026	38,059		37,091		37,082
Interest rate swaps	3	4.46%	July 2026	—		—		$	(180)
Total	51	6.62%(3)	July 2026	$	122,417	$	113,657	$	103,663

(1)	As of June 30, 2024, SOFR was 5.34%.
(2)	Weighted average maturity date is based on the fully extended maturity date of the investments.
(3)	Total weighted average coupon is calculated on CMBS and RMBS and excludes interest rate swaps.

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Lease Expirations

The following table details the expiring leases at our consolidated office, logistics, and net lease properties by annualized base rent and square footage as of June 30, 2024 ($ and square feet data in thousands). The table below excludes our rental housing properties as substantially all leases at such properties expire within 12 months.

Year	Number of Expiring Leases	Annualized Base Rent(1)		% of Total Annualized Base Rent Expiring		Square Feet	% of Total Square Feet Expiring
2024 (remaining)	3	$	1,172	4	%	24	2	%
2025	17	3,180		10	%	108	7	%
2026	7	1,577		5	%	67	4	%
2027	5	706		2	%	45	3	%
2028	10	1,979		6	%	83	5	%
2029	10	3,370		10	%	211	13	%
2030	6	1,421		4	%	77	5	%
2031	1	83		—	%	3	—	%
2032	1	1,366		4	%	211	13	%
2033	3	270		1	%	7	—	%
Thereafter	4	16,994		54	%	771	48	%
Total	67	$	32,118	100	%	1,607	100	%

(1) Annualized base rent is determined from the annualized base rent per leased square foot of the applicable year and excludes tenant recoveries, straight-line rent, and above-market and below-market lease amortization.

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Results of Operations

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

	Three Months Ended June 30,				Change		Six Months Ended June 30,				Change
	2024		2023		$		2024		2023		$
Revenues
Rental revenues	$	32,193	$	33,502	$	(1,309)	$	63,049	$	63,975	$	(926)
Other revenues	3,333		3,646		(313)		5,690		6,205		(515)
Total revenues	35,526		37,148		(1,622)		68,739		70,180		(1,441)
Expenses
Rental property operating	13,262		14,880		(1,618)		25,636		26,608		(972)
General and administrative	1,570		2,229		(659)		3,783		4,545		(762)
Management fee	2,833		3,579		(746)		5,828		7,257		(1,429)
Depreciation and amortization	14,337		12,765		1,572		27,098		25,569		1,529
Total expenses	32,002		33,453		(1,451)		62,345		63,979		(1,634)
Other income (expense)
Income from real estate-related loans and securities	3,311		3,841		(530)		10,369		10,844		(475)
Interest expense	(17,001)		(14,498)		(2,503)		(33,327)		(28,430)		(4,897)
Gain (loss) from unconsolidated entities	2,991		1,649		1,342		3,724		(2,404)		6,128
Other income, net	30		6,512		(6,482)		2,184		5,248		(3,064)
Total other income (expense)	(10,669)		(2,496)		(8,173)		(17,050)		(14,742)		(2,308)
Net (loss) income	$	(7,145)	$	1,199	$	(8,344)	$	(10,656)	$	(8,541)	$	(2,115)
Net loss (income) attributable to non-controlling interests in third party joint ventures	230		(67)		297		433		42		391
Net income attributable to non-controlling interests - preferred stockholders	(65)		(45)		(20)		(65)		(45)		(20)
Net loss (income) attributable to redeemable non-controlling interests	7		(2)		9		10		6		4
Net (loss) income attributable to stockholders	$	(6,973)	$	1,085	$	(8,058)	$	(10,278)	$	(8,538)	$	(1,740)
Per common share data:
Net (loss) income per share of common stock - basic and diluted	$	(0.08)	$	0.01	$	(0.09)	$	(0.12)	$	(0.09)	$	(0.03)
Weighted average number of shares outstanding - basic and diluted	85,462		94,231		(8,769)		86,806		94,120		(7,314)

Revenues

Revenues primarily consist of base rent arising from tenant leases at our rental housing, net lease, office and logistics properties. During the three and six months ended June 30, 2024, revenues decreased $1.6 million to $35.5 million and decreased $1.4 million to $68.7 million compared to the three and six months ended June 30, 2023, respectively. The decrease was primarily due to a decrease in tenant reimbursements for real estate taxes at a net lease property, which is offset by a corresponding decrease in real estate tax expense at the property. Rental revenues also increased during the current period due to property acquisitions, which was partially offset by decreased rental revenues at our office properties.

The components of revenue during these periods are as follows ($ in thousands):

	Three Months Ended June 30,				Change		Six Months Ended June 30,				Change
	2024		2023		$		2024		2023		$
Rental revenue	$	29,819	$	28,909	$	910	$	58,427	$	57,427	$	1,000
Tenant reimbursements	2,374		4,593		(2,219)		4,622		6,548		(1,926)
Ancillary income and fees	3,333		3,646		(313)		5,690		6,205		(515)
Total revenue	$	35,526	$	37,148	$	(1,622)	$	68,739	$	70,180	$	(1,441)

Rental Property Operating Expenses

Rental property operating expenses consist of the costs of ownership and operation of our real estate properties, including real estate taxes, repairs and maintenance expenses, utilities, property management fees, and insurance expenses. During the three and six months ended June 30, 2024, rental property operating expenses decreased $1.6 million to $13.3 million and decreased $1.0 million to $25.6 million compared to the three and six months ended June 30, 2023, respectively. The decrease was primarily driven by a decrease in real estate taxes at a net lease property, which are reimbursed to us by the tenant.

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General and Administrative Expenses

General and administrative expenses are corporate-level expenses that relate mainly to our compliance and administration costs, including legal fees, audit fees, professional tax fees, valuation fees, board of director fees and other professional fees. During the three and six months ended June 30, 2024, general and administrative expenses decreased $0.7 million to $1.6 million and decreased $0.8 million to $3.8 million compared to the three and six months ended June 30, 2023, respectively.

Management Fee

Management fees are earned by our Adviser for providing services pursuant to the Advisory Agreement. During the three and six months ended June 30, 2024, management fees decreased $0.7 million to $2.8 million and decreased $1.4 million to $5.8 million compared to the three and six months ended June 30, 2023, respectively. Management fees are calculated based on our aggregate NAV of Class S, Class I, Class T, Class D, and Class C shares (no management fees are paid on Class E shares) and are paid monthly. The decrease in management fees for three and six months ended June 30, 2024, compared to the corresponding periods in the prior year was due to a lower average NAV during the current periods.

Depreciation and Amortization

During the three and six months ended June 30, 2024, depreciation and amortization increased $1.6 million to $14.3 million and increased $1.5 million to $27.1 million compared to the three and six months ended June 30, 2023, respectively.

Income from Real Estate-Related Loans and Securities

During the three and six months ended June 30, 2024, interest income from real estate-related loans and securities decreased $0.5 million to $3.3 million and decreased $0.5 million to $10.4 million compared to the three and six months ended June 30, 2023, respectively, due to sales of real estate-related securities over the course of the last six months.

Interest Expense

Interest expense is primarily related to interest incurred on our mortgage loans, Secured Credit Facility and Affiliate Line of Credit. Interest expense increased $2.5 million to $17.0 million and increased $4.9 million to $33.3 million during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, respectively. The increase was primarily due to the termination of interest rate derivatives. As of June 30, 2024, our weighted average cost of leverage, including the impact of our interest rate derivatives, was 5.86%, compared to 4.99% as of June 30, 2023.

Gain (Loss) from Unconsolidated Entities

Gain (loss) from unconsolidated entities consists of changes in the fair value of our investments in unconsolidated entities that are held at fair value, as well as realized and unrealized gains and losses on our foreign currency swap contracts related to our unconsolidated non-U.S. investment in Principal Place. During the three and six months ended June 30, 2024 there were gains of $3.0 million and $3.7 million, respectively, from unconsolidated entities. During the three and six months ended June 30, 2023 there were gains of $1.6 million and losses of $2.4 million, respectively, from unconsolidated entities. The gains and losses were primarily due to changes in the fair value of our unconsolidated interest in Principal Place.

Other Income, Net

Other income, net consists of realized and unrealized gains and losses on our interest rate derivatives and income from our trading securities. During the three and six months ended June 30, 2024 other income decreased $6.5 million to $0.0 million and decreased $3.1 million to $2.2 million compared to the three and six months ended June 30, 2023, respectively. The decrease was primarily due to a realized gain on the settlement of an interest rate derivative contracts in the current period offset by net losses on the remaining derivative contracts.

Net Loss Attributable to Redeemable Non-Controlling Interests

Net loss attributable to redeemable non-controlling interests was less than $0.1 million for the six months ended June 30, 2024 and 2023. The income or loss allocable to redeemable non-controlling interests is related to interests held in the Operating Partnership by parties other than us.

Reimbursement by the Adviser

Pursuant to the Advisory Agreement, the Adviser will reimburse us for any expenses that cause our Total Operating Expenses (as defined in our charter) in any four consecutive fiscal quarters to exceed the greater of: (i) 2% of our Average Invested Assets or (ii) 25% of our Net Income (each as defined in our charter) (the “2%/25% Limitation”). For the four consecutive quarters ended June 30, 2024, our Total Operating Expenses did not exceed the 2%/25% Limitation.

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Liquidity and Capital Resources

Our primary needs for liquidity are to fund investments, to make distributions to our stockholders, to repurchase shares of our common stock pursuant to our share repurchase plan, to pay our offering and operating expenses, to fund capital expenditures at our properties and to pay debt service on our outstanding indebtedness. Our operating expenses include, among other things, fees and expenses related to managing our properties and other investments, the management and performance fees we pay to the Adviser (to the extent the Adviser elects to receive such fees in cash) and general corporate expenses.

We believe that our current liquidity position is sufficient to meet the operating needs of our business, with $312.5 million of liquidity as of June 30, 2024, consisting of $13.1 million of unrestricted cash and cash equivalents, $19.0 million of short-term U.S. Treasury Bonds, $155.5 million of undrawn available capacity on our Secured Credit Facility and $125.0 million of undrawn available capacity on our Affiliate Line of Credit. We may also generate additional liquidity through the sale of our real estate-related securities, which totaled $103.8 million as of June 30, 2024.

Our portfolio remains conservatively leveraged at 51.4% as of June 30, 2024, and we can generate additional liquidity by incurring indebtedness secured by our investments. Our leverage ratio is calculated by dividing (i) the consolidated property-level and entity-level debt, excluding any third-party interests in such debt, net of cash, loan-related restricted cash, and trading securities by (ii) the gross asset value of real estate equity investments (calculated using the greater of fair value and cost of gross real estate assets), excluding any third-party interests in such investments, plus our equity in real estate-related debt investments. Additionally, there is no indebtedness on our real estate-related debt investments.

Our cash needs for acquisitions and other investments will be funded primarily from the sale of shares of our common stock and through the assumption or incurrence of debt. During the three months ended June 30, 2024, we received $14.2 million of proceeds from the sale of shares of our common stock, including proceeds from our private offerings. In addition, during the three and six months ended June 30, 2024, we repurchased $54.0 million and $105.0 million, respectively, in shares of our common stock under our share repurchase plan. Since inception, we have satisfied 100% of repurchase requests.

The following table is a summary of our indebtedness as of June 30, 2024 ($ in thousands):

				Principal Balance Outstanding
Indebtedness	Weighted Average Interest Rate(1)	Weighted Average Maturity Date(2)	Maximum Facility Size	June 30, 2024
Fixed rate loans:
Fixed rate mortgages	3.77%	December 2028	N/A	$	328,720
Total fixed rate loans				328,720
Variable rate loans:
Floating rate mortgages	SOFR+1.71%	May 2027	N/A	680,383
Secured credit facility(3)	SOFR+2.00%	January 2025	$300,000	144,485
Affiliate line of credit(4)	SOFR+2.25%	November 2024	$125,000	—
Total variable rate loans				824,868
Total indebtedness				1,153,588
Deferred financing costs, net				(4,230)
Total indebtedness, net				$	1,149,358

(1)	As of June 30, 2024 and December 31, 2023, SOFR was 5.34% and 5.38%, respectively.
(2)	Includes the fully extended maturity date for loans with extension options that are at our discretion and we currently expect to be able to exercise.
(3)	As of June 30, 2024, borrowings on the Secured Credit Facility were secured by the following properties: 6123-6227 Monroe Court, 2003 Beaver Road, 187 Bartram Parkway, Cannondale Court, Timber Leaf and certain single-family rentals.
(4)	Borrowings under the Affiliate Line of Credit bear interest at a rate of the lowest then-current interest rate for any similar credit product offered by a third-party lender to us or our subsidiaries or, if not available, SOFR plus a 0.10% credit adjustment and a 2.25% margin.

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Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash ($ in thousands):

	Six months ended
	June 30, 2024		June 30, 2023
Cash flows provided by operating activities	$	28,010	$	17,102
Cash flows (used in) provided by investing activities	(22,724)		3,036
Cash used in financing activities	(377)		(34,207)
Net change in cash and cash equivalents and restricted cash	$	4,909	$	(14,069)

Cash flows provided by operating activities increased $10.9 million during the six months ended June 30, 2024, compared to the corresponding period in 2023. The increase is primarily due to $10.4 million of proceeds received in the current period from the termination of an interest rate swap contract.

Cash flows (used in) provided by investing activities increased $25.8 million for the six months ended June 30, 2024, compared to the corresponding period in 2023. The increase is primarily due to a $161.1 million increase in cash used in the acquisition of real estate, partially offset by a $101.3 million increase in cash from the sale of real estate-related securities (net of purchases of real estate-related securities) and a $34.2 million increase in cash from the sale of trading securities (net of purchases of trading securities).

Cash flows used in financing activities decreased $33.8 million for the six months ended June 30, 2024, compared to the corresponding period in 2023. The decrease is primarily due to $90.5 million of proceeds received in the current period from mortgage loan and Secured Credit Facility borrowings, as well as a $13.7 million increase in subscriptions received in advance. The decrease is offset by a $53.6 million decrease in proceeds from the issuance of common stock and a $19.4 million increase in repurchases of common stock.

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Net Asset Value

Our board of directors, including a majority of our independent directors, has adopted valuation guidelines that contain a comprehensive set of methodologies to be used by the Adviser and our independent valuation advisor in connection with estimating the values of our assets and liabilities for purposes of our NAV calculation. The calculation of our NAV is intended to be a calculation of the fair value of our assets less our outstanding liabilities and will likely differ from the book value of our equity reflected in our financial statements. The purchase and repurchase price per share for each class of our common stock is the then-current transaction price, which generally equals our prior month’s NAV per share, as determined monthly, plus, for purchases only, applicable selling commissions and dealer manager fees.

For more information on the calculation of our NAV and the valuation method used, please refer to Item 5 of our Annual Report on Form 10-K for the year ended December 31, 2023.

Our total NAV presented in the following tables includes the NAV of our Class S, Class I, Class T, Class D, Class C and Class E shares of common stock, as well as partnership interests in the Operating Partnership held by parties other than us. The following table provides a breakdown of the major components of our NAV as of June 30, 2024 ($ and shares/units in thousands):

Components of NAV	June 30, 2024
Investments in real estate	$	1,845,161
Investments in real estate-related loans and securities	121,089
Investments in unconsolidated entities	81,034
Cash and cash equivalents	13,053
Restricted cash	32,557
Other assets	31,071
Debt obligations	(1,113,840)
Accrued stockholder servicing fees(1)	(243)
Management fee payable	(928)
Dividend payable	(4,847)
Subscriptions received in advance	(17,531)
Other liabilities	(46,322)
Non-controlling interests in joint ventures	(16,217)
Net asset value	$	924,037
Number of shares/units outstanding	82,879

(1) Stockholder servicing fees only apply to Class S, Class T and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. Under GAAP, we accrue the full cost of the stockholder servicing fee as an offering cost at the time we sell Class S, Class T and Class D shares of our common stock. As of June 30, 2024, we have accrued under GAAP approximately $20.8 million of stockholder servicing fees.

The following table provides a breakdown of our total NAV and NAV per share/unit by class as of June 30, 2024 ($ and shares/units in thousands, except per share/unit data):

NAV Per Share/Unit	Class S Shares		Class I Shares		Class D Shares		Class T Shares		Class C Shares(1)		Class E Shares(1)		Third-party OP Units(2)		Total
Net asset value	$	333,940	$	456,461	$	1,812	$	—	$	92,692	$	38,210	$	922	$	924,037
Number of shares/units outstanding	30,042		40,708		160		—		8,476		3,411		82		82,879
NAV Per Share/Unit as of June 30, 2024	$	11.1158	$	11.2130	$	11.3137	$	—	$	10.9360	$	11.2012	$	11.2012

(1)	Class C and Class E shares of our common stock are offered to investors pursuant to private offerings.
(2)	Includes the OP Units held by parties other than us.

As of June 30, 2024, no Class T shares had been issued.

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Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used in the June 30, 2024 valuations, based on property types.

Property Type	Discount Rate	Exit Capitalization Rate
Rental Housing	7.2%	5.8%
Net Lease	7.0%	6.1%
Office	9.2%	7.8%
Logistics	7.0%	6.0%

These assumptions are determined by our independent valuation advisor and our independent third-party appraisal firms (other than international properties, which 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	Rental Housing Investment Values	Net Lease Investment Values	Office Investment Values	Logistics Investment Values
Discount Rate	.25% Decrease	1.8%	2.2%	1.7%	2.0%
(weighted average)	.25% Increase	(1.7)%	(2.1)%	(2.0)%	(1.9)%
Exit Capitalization Rate	.25% Decrease	2.8%	2.8%	1.8%	2.9%
(weighted average)	.25% Increase	(2.6)%	(2.5)%	(2.0)%	(2.7)%

The preceding tables do not include recently acquired properties, which are held at cost in accordance with our valuation guidelines.

The following table reconciles Stockholders’ Equity per our Consolidated Balance Sheets to our NAV ($ in thousands):

Reconciliation of Stockholders’ Equity to NAV	June 30, 2024
Stockholders’ equity under U.S. GAAP	$	712,013
Redeemable non-controlling interest	923
Total partners’ capital of Operating Partnership under GAAP	712,936
Adjustments:
Accrued stockholder servicing fee	20,549
Deferred rent	(6,685)
Advanced organizational and offering costs	8,390
Unrealized net real estate appreciation	83,691
Accumulated depreciation and amortization	105,156
NAV	$	924,037

The following details the adjustments to reconcile stockholders’ equity under GAAP to our NAV:

•Accrued stockholder servicing fee represents the accrual for the full cost of the stockholder servicing fee for Class S and Class D shares. Under GAAP, we accrued the full cost of the stockholder servicing fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum stockholder servicing fee) as an offering cost at the time we sold such share. Refer to Note 2 — “Summary of Significant Accounting Policies” to our consolidated financial statements for further details of the GAAP treatment regarding the stockholder servicing fee. For purposes of calculating NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis when such fee is paid.

•Deferred rent represents straight line rental revenue recorded under GAAP. For purposes of calculating NAV, deferred rental revenues are excluded.

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•The Adviser and its affiliates advanced organization and offering expenses on our behalf (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) through July 5, 2023, subject to the following reimbursement terms: (1) all such advanced expenses paid through July 5, 2022 are reimbursed ratably over the 60 months following July 6, 2022; and (2) all such advanced expenses paid from July 6, 2022 through July 5, 2023 are reimbursed ratably over the 60 months following July 6, 2023. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For purposes of calculating NAV, such costs are recognized as a reduction to NAV as they are reimbursed to the Adviser.

•Our investments in real estate are presented at their depreciated historical cost basis in our GAAP consolidated financial statements. Our investments in real estate-related loans are presented at their amortized cost basis in our GAAP consolidated financial statements. Additionally, our mortgage loans, term loans, and credit facilities (“Debt”) are presented at their carrying value in our GAAP consolidated financial statements. As such, any changes in the fair market value of our investments in real estate, investments in real estate-related loans or Debt are not included in our GAAP results. For purposes of calculating NAV, our investments in real estate, investments in real estate-related loans, and our Debt are recorded at fair value and any changes in fair value are recognized as unrealized net real estate appreciation.

•We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. For the purposes of calculating NAV, such depreciation and amortization is excluded.

Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution

We believe funds from operations (“FFO”) is a meaningful non-GAAP supplemental measure of our operating results. Our Consolidated Financial Statements are presented under 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 will decrease evenly over a set time period. However, we believe that the value of real estate investments will fluctuate over time based on market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding (i) gains or losses from sales of depreciable real property, (ii) impairment write-downs on depreciable real property, plus (iii) real estate-related depreciation and amortization, and (iv) after adjustments for our share of consolidated and unconsolidated joint ventures.

We also believe that adjusted FFO (“AFFO”) is a meaningful non-GAAP supplemental disclosure of our operating results. AFFO further adjusts FFO in order for our operating results to reflect the specific characteristics of our business by adjusting for items we believe are not related to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income, (ii) amortization of above- and below-market lease intangibles, (iii) amortization of mortgage premium/discount, (iv) organization costs, (v) amortization of restricted stock awards, (vi) unrealized gains and losses from changes in fair value of real estate-related loans and securities, (vii) non-cash performance fee or other non-cash incentive compensation, and (viii) similar adjustments for unconsolidated joint ventures.

We also believe funds available for distribution (“FAD”) is an additional meaningful non-GAAP supplemental disclosure that provides useful information for considering our operating results and certain other items relative to the amount of our distributions. FAD is calculated as AFFO adjusted for (i) management fees paid in shares or operating partnership units, even if subsequently repurchased by us, (ii) realized gains and losses on investments in real estate-related loans and securities, (iii) realized gains and losses on financial instruments, (iv) stockholder servicing fees paid during the period, and (v) similar adjustments for unconsolidated joint ventures. FAD is not indicative of cash available to fund our cash needs and does not represent cash flows from operating activities in accordance with GAAP, as it excludes adjustments for working capital items and actual cash receipts from interest income recognized on real estate related securities. Cash flows from operating activities in accordance with GAAP would generally be adjusted for such items. Furthermore, FAD is adjusted for stockholder servicing fees and recurring tenant improvements, leasing commissions, and other capital expenditures, which are not considered when determining cash flows from operating activities in accordance with GAAP.

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The following table presents a reconciliation of FFO, AFFO and FAD to net loss attributable to our stockholders and redeemable non-controlling interests. We believe it is meaningful to include redeemable non-controlling interests since it is a component of our NAV ($ in thousands):

	For the three months ended				For the six months ended
	June 30, 2024		June 30, 2023		June 30, 2024			June 30, 2023
Net loss attributable to REIT shareholders including Redeemable non-controlling interest	$	(6,980)	$	1,087	$	(10,288)		$	(8,544)
Adjustments to arrive at FFO:
Depreciation and amortization	14,337		12,765		27,098			25,569
Amount attributed to non-controlling interests of third party joint ventures for above adjustments	(226)		(197)		(435)			(396)
FFO attributable to stockholders and redeemable non-controlling interests	7,131		13,655		16,375			16,629
Adjustments to arrive at AFFO:
Straight-line rental income	(792)		(395)		(1,627)			$	(814)
Amortization of above and below market lease intangibles, net	(238)		(269)		(377)			(538)
Amortization of deferred financing costs	806		724		1,591			1,590
Amortization of upfront derivative acquisition costs	431		571		1,004		—	911
Amortization of origination fees and discount	—		(22)		—			(49)
Amortization of restricted stock awards	81		96		161			177
Unrealized loss (gain) on investments, net(1)	622		(6,210)		681			(1,567)
Provision for current expected credit losses	—		1,300		(230)			1,300
Amount attributed to non-controlling interests of third party joint ventures for above adjustments	(39)		161		(69)			204
AFFO attributable to stockholders and redeemable non-controlling interests	8,002		9,611		17,509			17,843
Adjustments to arrive at FAD:
Non-cash management fee	2,833		3,579		5,828			7,257
Realized gain on sale of real estate-related loans and securities	(3,157)		(639)		(4,255)			(504)
Realized gain on financial instruments(2)	—		(105)		(3,615)			(105)
Stockholder servicing fees	(749)		(982)		(1,579)			(2,038)
FAD attributable to stockholders and redeemable non-controlling interests	$	6,929	$	11,464	$	13,888		$	22,453

(1)

Unrealized loss (gain) on investments, net relates to provisions for current estimated credit losses and mark-to-market changes on our investments in real estate-related securities, derivative contracts, and investments in unconsolidated entities reported at fair value. For the three and six months ended 2024 unrealized loss (gain) on investments, net includes $1.3 million and $2.6 million, respectively, of net operating income less interest expense attributable to our unconsolidated investment in Principal Place. For the three and six months ended 2023 unrealized loss (gain) on investments, net includes $1.0 million and $2.1 million, respectively, of net operating income less interest expense attributable to our unconsolidated investment in Principal Place.

(2)

Realized gain on financial instruments relates to settlements on our derivatives contracts.

FFO, AFFO, and FAD should not be considered more relevant or accurate than the GAAP methodology in calculating net income (loss) or in evaluating our operating performance. In addition, FFO, AFFO, and FAD 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, AFFO, and FAD 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 stockholders.

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Distributions

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to satisfy the requirements for qualification as a REIT under the Code.

In December 2019, we began declaring monthly distributions for each class of our common stock, which are generally paid 20 days after month-end. Each class of our common stock receives the same aggregate gross distribution per share. The net distribution varies for each class based on the applicable stockholder servicing fees, management fees and performance fees, which are deducted from the monthly distribution per share.

The following table details the aggregate net distributions declared for each applicable class of common stock for the three months ended June 30, 2024:

	Three Months Ended June 30, 2024
	Class S		Class I		Class D		Class T(1)		Class C		Class E
Aggregate gross distributions declared per share of common stock	$	0.2147	$	0.2147	$	0.2147	$	—	$	0.2147	$	0.2147
Stockholder servicing fee per share of common stock	(0.0237)		—		(0.0070)		—		—		—
Management fee per share of common stock	(0.0350)		(0.0353)		(0.0356)		—		(0.0345)		—
Net distributions declared per share of common stock	$	0.1560	$	0.1794	$	0.1721	$	—	$	0.1802	$	0.2147

	Six Months Ended June 30, 2024
	Class S		Class I		Class D		Class T(1)		Class C		Class E
Aggregate gross distributions declared per share of common stock	$	0.4305	$	0.4305	$	0.4305	$	—	$	0.4305	$	0.4305
Stockholder servicing fee per share of common stock	(0.0482)		—		(0.0143)		—		—		—
Management fee per share of common stock	(0.0711)		(0.0717)		(0.0722)		—		(0.0701)		—
Net distributions declared per share of common stock	$	0.3112	$	0.3588	$	0.3440	$	—	$	0.3604	$	0.4305

(1) We did not have any Class T shares of common stock issued or outstanding, thus no distributions were declared for Class T during the six months ended June 30, 2024.

The following tables summarize our distributions declared during the three and six months ended June 30, 2024 and 2023 ($ in thousands):

	Three months ended June 30, 2024				Three months ended June 30, 2023
	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	5,936	41	%	$	6,686	42	%
Reinvested in shares	8,716		59	%	9,390		58	%
Total distributions	$	14,652	100	%	$	16,076	100	%
Sources of Distributions
Cash flows from operating activities	$	12,883	88	%	$	16,076	100	%
Cash flow from other sources(2)	$	1,769	12	%	—		—	%
Total sources of distributions	$	14,652	100	%	$	16,076	100	%
Cash flows from operating activities	$	11,904			$	15,378
Funds from Operations(1)	$	7,131			$	13,655
Adjusted Funds from Operations(1)	$	8,002			$	7,577
Funds Available for Distribution(1)	$	6,929			$	9,534

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	Six Months Ended June 30, 2024				Six Months Ended June 30, 2023
	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	12,151	41	%	$	13,501	41	%
Reinvested in shares	17,628		59	%	19,647		59	%
Total distributions	$	29,779	100	%	$	33,148	100	%
Sources of Distributions
Cash flows from operating activities	$	28,010	94	%	$	33,148	100	%
Cash flow from other sources(2)	$	1,769	6	%	—		—	%
Total sources of distributions	$	29,779	100	%	$	33,148	100	%
Cash flows from operating activities	$	28,010			$	17,102
Funds from Operations(1)	$	16,375			$	16,629
Adjusted Funds from Operations(1)	$	17,509			$	15,422
Funds Available for Distribution(1)	$	13,888			$	20,137

(1)

See “Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution” below for descriptions of Funds from Operations (FFO), Adjusted Funds from Operations (AFFO), and Funds Available for Distribution (FAD), for reconciliations of these metrics to GAAP Net loss attributable to stockholders and redeemable non-controlling interests, and for considerations on how to review these metrics.

(2)

Includes cash flows from investing activities, such as proceeds from sales of trading securities and real estate-related securities.

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Distribution Policy

We intend to distribute sufficient income so that we satisfy the requirements for qualification as a REIT. In order to qualify as a REIT, we are required to distribute 90% of our annual REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains, to our stockholders. Generally, income distributed to stockholders will not be taxable to us under the Code if we distribute at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains.

Distribution Reinvestment Plan

We have adopted a distribution reinvestment plan whereby stockholders will have their cash distributions attributable to the shares they own automatically reinvested in additional shares of common stock; provided, however, that clients of certain participating broker-dealers that do not permit automatic enrollment in the distribution reinvestment plan and stockholders that are residents of certain states that do not permit automatic enrollment in the distribution reinvestment plan will automatically receive their distributions in cash unless they elect to participate in the distribution reinvestment plan. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the offering price before upfront selling commissions and dealer manager fees (the “transaction price”) at the time the distribution is payable, which will generally be equal to our prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees with respect to our Class T, Class S and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan.

Critical Accounting Estimates

The preparation of these financial statements in accordance with GAAP involve significant judgement 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 financial statements. The following is a summary of our significant accounting policies that we believe are the most affected by our judgements, estimates, and assumptions.

Refer to Note 2 — “Summary of Significant Accounting Policies” to our financial statements in this Quarterly Report on Form 10-Q for a summary of our critical accounting policies.

Principles of Consolidation and Variable Interest Entities

We consolidate entities in which we retain a controlling financial interest or entities that meet the definition of a variable interest entity (“VIE”) for which we are deemed to be the primary beneficiary. In performing our analysis of whether we are the primary beneficiary, at initial investment and at each quarterly reporting period, we consider whether we individually have the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and also have the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE, and whether we are the primary beneficiary, involves significant judgments, including the determination of which activities most significantly affect the entity’s performance, estimates about the current and future fair values and performance of assets held by the entity and/or general market conditions.

Investments in Real Estate

In accordance with the guidance for business combinations, we determine whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, we account for the transaction as an asset acquisition. We evaluate each real estate acquisition to determine whether the integrated set of acquired assets and activities meets the definition of a business.

Upon 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. The most significant portion of the allocation is to building and land and requires the use of market based estimates and assumptions. We assess and consider fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that we deem appropriate, 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.

We also consider an allocation of the 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. For acquired in-place leases, above- and below-market lease values are recorded at their fair values (using a discount rate that reflects the risks associated with the lease

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acquired) equal to the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates for the corresponding in-place leases, 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 Long-Lived Assets

We review our real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates the carrying amount of an asset may not be recoverable. 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.

Recent Accounting Pronouncements

See Note 2 — “Summary of Significant Accounting Policies” to our financial statements in this Quarterly Report on Form 10-Q for a discussion concerning recent accounting pronouncements.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to interest rate risk with respect to our variable-rate indebtedness, where an increase in interest rates would directly result in higher interest expense costs. We seek to manage our exposure to interest rate risk by utilizing a mix of fixed and floating rate financings with staggered maturities and through interest rate protection agreements to fix or cap a portion of our variable rate debt. As of June 30, 2024, the outstanding principal balance of our variable rate indebtedness was $824.9 million.

Certain of our mortgage loans and other indebtedness are variable rate and indexed to the U.S. Dollar denominated Secured Overnight Financing Rate (“SOFR”). For the six months ended June 30, 2024, a 10% increase in SOFR would have resulted in increased interest expense of $1.8 million. We have executed interest rate swaps and caps with an aggregate notional amount of $625.6 million as of June 30, 2024, to hedge the risk of increasing interest rates.

Investments in Real Estate-Related Loans and Securities

As of June 30, 2024, we held $120.8 million of investments in real estate-related loans and securities. Certain of our investments are floating rate and indexed to the SOFR. As such, we are exposed to interest rate risk and our net income will increase or decrease depending on interest rate movements. While we cannot predict factors which may or may not affect interest rates, for the six months ended June 30, 2024, a 10% increase or decrease in SOFR would have resulted in an increase or decrease to income from our real estate-related loans and securities of $0.4 million. We have executed interest rate swaps with an aggregate notional amount of $72.0 million as of June 30, 2024 to hedge the risk of decreasing interest rates.

We may also be exposed to market risk with respect to our investments in real estate-related securities 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-related securities by making investments in securities backed by different types of collateral and varying credit ratings. The fair value of our investments may fluctuate, thus the amount we will realize upon any sale of our investments is unknown. As of June 30, 2024, the fair value at which we may sell our investments in real estate-related securities is not known, but a 10% change in the fair value of our investments in real estate-related securities may result in an unrealized gain or loss of $10.4 million.

Foreign Currency Risk

We may be exposed to currency risks related to our non-U.S. investments that are denominated in currencies other than the U.S. Dollar (“USD”). We seek to manage or mitigate our exposure to the effects of currency changes by entering into derivative financial instruments to the extent it is cost effective to do so. However, our currency hedging strategies may not eliminate all of our currency risk due to, among other things, changes in the timing or amount of foreign currency denominated cash flows from our non-U.S. investments. As of June 30, 2024, we have one foreign currency derivative with a notional hedged amount of £62.1 million GBP.

Credit Risk

Credit risk includes the failure of the counterparty to perform under the terms of a derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of 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, as of the end of the period covered by this report, our disclosure controls and procedures (a) were 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) included, 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.

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Changes in Internal Controls over Financial Reporting

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2024, we were not subject to any material litigation nor were we aware of any material litigation threatened against us.

ITEM 1A.    RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors previously disclosed under Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2023 and Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2024.

The Adviser has engaged the Sub-Adviser to select and manage certain of our liquid investments. The Adviser relies on the performance of the Sub-Adviser in implementing and managing the liquid investments portion of our investment strategy.

The Adviser has engaged the Sub-Adviser to select and manage certain of our investments pursuant to the Sub-Advisory Agreement, including certain of our liquid investments. The Sub-Adviser has and will continue to have substantial discretion, within our investment guidelines, to make decisions related to the acquisition, management and disposition of our liquid assets in the Investment Sleeve. If the Sub-Adviser does not succeed in managing the liquid investments portion of our investment strategy, our performance will suffer. In addition, even though the Adviser has the ability to terminate the Sub-Adviser at any time, it may be difficult and costly to terminate and replace the Sub-Adviser.

The fees we pay in connection with this offering and the agreements entered into with Brookfield, Oaktree and their respective affiliates were not determined on an arm’s-length basis and therefore may not be on the same terms we could achieve from a third party.

The compensation paid to the Adviser, the Sub-Adviser and other affiliates of Brookfield and Oaktree for services they provide us was not determined on an arm’s-length basis. All service agreements, contracts or arrangements between or among Brookfield, Oaktree and their respective affiliates, including the Adviser and the Sub-Adviser, were not negotiated at arm’s length. Such agreements include the Advisory Agreement, the Sub-Advisory Agreement, the Dealer Manager Agreement and any property management and other agreements we may enter into with affiliates of the Adviser and the Sub-Adviser from time to time. any property management and other agreements we may enter into with affiliates of the Adviser and the Sub-Adviser from time to time.

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

Unregistered Sales of Equity Securities

For the three months ended June 30, 2024, all equity securities that were sold and not registered under the Securities Act were previously reported on Current Reports on Form 8-K.

Share Repurchases 

We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares. We may choose to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any particular month, in our discretion, subject to any limitations in the share repurchase plan.

Under our share repurchase plan, to the extent we choose to repurchase shares in any particular month, we will only repurchase shares as of the opening of the last calendar day of that month (each such date, a “Repurchase Date”). Repurchases will be made at the transaction price in effect on the Repurchase Date (which will generally be equal to our prior month’s NAV per share), except that shares that have not been outstanding for at least one year will be repurchased at 98% of the transaction price (an “Early Repurchase Deduction”) subject to certain limited exceptions. Settlements of share repurchases will be made within three business days of the Repurchase Date. The Early Repurchase Deduction will not apply to shares acquired through our distribution reinvestment plan, to shares the Adviser elects to receive instead of cash in respect of its management or

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performance fees, or to shares issued to an affiliate of Brookfield in exchange for Class E OP Units that were issued to such entity in connection with its contribution of certain assets to the Operating Partnership. In addition, shares of our common stock are sold to certain feeder vehicles primarily created to hold our shares that in turn offer interests in such feeder vehicles to non-U.S. persons. For such feeder vehicles and similar arrangements in certain markets, we may not apply the Early Repurchase Deduction to the feeder vehicles or underlying investors, often because of administrative or systems limitations.

The total amount of aggregate repurchases of our common stock (excluding any Early Repurchase Deduction) is limited to no more than 2% of our aggregate NAV attributable to our stockholders per month (measured using the aggregate NAV as of the end of the immediately preceding month) and no more than 5% of our aggregate NAV attributable to our stockholders per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding quarter). The monthly and quarterly repurchase limits exclude shares repurchased from the Adviser that were issued as payment of management or performance fees.

Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the company as a whole, or should we otherwise determine that investing our liquid assets in real estate properties or other illiquid investments rather than repurchasing our shares is in the best interests of the Company as a whole, then we may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, our board of directors may modify or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders. In the event that we determine 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.

Subsequent to the quarter ended June 30, 2024, our board of directors approved an amendment and restatement of our share repurchase plan to go into effect commencing with the quarter ending September 30, 2024. For further details, see Part II, Item 5. Other Information of this Quarterly Report on Form 10-Q.

Pursuant to the Brookfield Repurchase Arrangement, we and the Operating Partnership will offer to repurchase shares of common stock or Class E OP Units, as applicable, from the Brookfield Investor at a price per share or unit equal to the most recently determined NAV per share or unit immediately prior to each repurchase. The Brookfield Investor has agreed to not seek repurchase of the shares of common stock and Class E OP Units that it owns if doing so would bring the value of its equity holdings in us and the Operating Partnership below $50.0 million. In addition, the Brookfield Investor has agreed to hold all of the shares of common stock and Class E OP units that it received in consideration for the contribution of the Brookfield Portfolio until the earlier of (i) the first date that our NAV reaches $1.5 billion and (ii) the date that is the third anniversary of November 2, 2021. Following such date, the Brookfield Investor may cause us to repurchase its shares and Class E OP Units (above the $50.0 million minimum), in an amount equal to the sum of (a) the amount available under our share repurchase plan’s 2% monthly and 5% quarterly caps (after accounting for third-party investor repurchases) and (b) 25% of the amount by which net proceeds from the Offering and our private offerings of common stock for a given month exceed the amount of repurchases for such month pursuant to our share repurchase plan. We will not effect any such repurchase during any month in which the full amount of all shares requested to be repurchased by third-party investors under our share repurchase plan is not repurchased. The Brookfield Repurchase Arrangement does not apply to shares of our common stock or OP Units held by affiliates of Brookfield that are feeder vehicles primarily created to offer interests in such feeder vehicles to non-U.S. persons. Shares of our common stock or Class E OP Units held by the Brookfield Investor that were not issued as consideration for the contribution of the Brookfield Portfolio are not subject to the Brookfield Repurchase Arrangement, but may be redeemed, in whole or in part, for cash upon the request of the Brookfield Investor, subject to the limitations of our share purchase plan. For the six months ended June 30, 2024, we and the Operating Partnership did not repurchase any shares or OP Units as part of the Brookfield Repurchase Arrangement.

During the three months ended June 30, 2024, we repurchased shares of our common stock in the following amounts, which represented all of the share repurchase requests received for the same period.

Month of:	Total Number of Shares Repurchased(1)	Repurchases as a Percentage of Shares Outstanding(2)		Average Price Paid Per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs(3)
April 2024	1,966,453	2.3	%	$	11.2482	1,966,453	—
May 2024	1,718,560	2.0	%	$	10.5629	1,718,560	—
June 2024(4)	1,384,246	1.6	%	$	12.6709	1,121,806	—
Total	5,069,259					4,806,819

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(1)	Repurchases are limited under the share repurchase plan as described above.
(2)	Includes shares repurchased outside of the share repurchase plan. For purposes of calculating the monthly and quarterly limits under our share repurchase plan, repurchases as a percentage of aggregate NAV were 2.3%, 2.0% and 1.3% for the months of April 2024, May 2024 and June 2024, respectively, and 5.6% for the calendar quarter ended June 30, 2024. Our board of directors, including all of our independent directors, unanimously authorized repurchases for April 2024 in excess of our 2% monthly repurchase limitation and repurchases during the quarter ended June 30, 2024 in excess of our 5% quarterly limitation, such that 100% of share repurchase requests received during the calendar quarter ended June 30, 2024 were satisfied.
(3)	All repurchase requests under our share repurchase plan were satisfied during the period.
(4)	Includes 262,441 Class I shares repurchased from the Adviser outside of the share repurchase plan related to shares that were previously issued to the Adviser as payment of management fees.

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ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

Subsequent to quarter end, our board of directors approved an amendment and restatement of our share repurchase plan to (i) add, at our board of director’s election, the ability to calculate the share repurchase limits on a “net” basis (taking into account subscriptions of common stock during the month or quarter, as applicable) or “gross” basis, and (ii) allow intra-quarter carry-over of unused repurchase capacity from month-to-month. The amended and restated share repurchase plan is effective commencing with the quarter ending September 30, 2024.

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ITEM 6.    EXHIBITS

Exhibit Number	Description
4.1*	Share Repurchase Plan
31.1*	Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification of Chief 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 Chief 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
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.SCH	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+	This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act.
*	Filed herewith.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

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

	Brookfield Real Estate Income Trust Inc.
August 13, 2024	/s/ Brian W. Kingston
Date	Brian W. Kingston
	Chief Executive Officer and Chairman of the Board
	(Principal Executive Officer)
August 13, 2024	/s/ Dana E. Petitto
Date	Dana E. Petitto
	Chief Operating Officer
August 13, 2024	/s/ Theodore C. Hanno
Date	Theodore C. Hanno
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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