As filed with the Securities and Exchange Commission on April 10, 2026
Registration No. 333-282789
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 4 to
Form S-11
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
Brookfield Real Estate Income Trust Inc.
(Exact Name of Registrant as Specified in Governing Instruments)
225 Liberty Street, 8th Floor
New York, NY 10281
(212) 417-7000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Brookfield REIT Adviser LLC
Michelle L. Campbell
225 Liberty Street, 8th Floor
New York, NY 10281
(212) 417-7000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
With copies to:
Jason W. Goode
Lindsey L. G. Magaro
Alston & Bird LLP
1201 W. Peachtree Street
Atlanta, Georgia 30309
(404) 881-7000
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ☐
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Brookfield Real Estate Income Trust Inc.
Maximum Offering of $7,500,000,000
Brookfield Real Estate Income Trust Inc. 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. We are externally managed
by our adviser, Brookfield REIT Adviser LLC (the “Adviser”). The Adviser is an affiliate of our sponsor, Brookfield Asset
Management Ltd. (together with its affiliates, “Brookfield”), a leading global alternative asset manager. We conduct our operations as
a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We are not a mutual fund and do not intend to register as
an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
We are offering on a continuous basis up to $7,500,000,000 in shares of common stock, consisting of up to $6,000,000,000 in shares
in our primary offering and up to $1,500,000,000 in shares pursuant to our distribution reinvestment plan. We are offering to sell any
combination of four classes of shares of our 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 share classes have different upfront selling commissions and dealer manager
fees, and different ongoing stockholder servicing fees. The purchase price per share for each class of common stock will vary and will
generally equal our prior month’s net asset value (“NAV”) per share, as determined monthly, plus applicable upfront selling
commissions and dealer manager fees. We may, but are not obligated to, offer shares at a price that we believe reflects the NAV per
share of such stock more appropriately than the prior month’s NAV per share in cases where we believe there has been a material
change (positive or negative) to our NAV per share since the end of the prior month. See “Net Asset Value Calculation and Valuation
Guidelines—Valuation of Investments” for examples of valuation adjustment events that may cause a material change to our NAV per
share. This is a “best efforts” offering, which means that Brookfield Private Wealth LLC (formerly, Brookfield Oaktree Wealth
Solutions LLC), the dealer manager for this offering (the “Dealer Manager”), will use its best efforts to sell shares, but is not obligated
to purchase or sell any specific amount of shares in this offering.
This investment involves a high degree of risk. You should purchase these securities only if you can afford the complete loss of
your investment. See “Risk Factors” beginning on page 35 for risks to consider before buying our shares, including:
•You will not have the opportunity to evaluate our future
investments before we make them, which makes an
investment in our common stock more speculative.
•Since there is no public trading market for shares of our
common stock, repurchase of shares by us will likely be
the only way to dispose of your shares. Our share
repurchase plan provides stockholders with the
opportunity to request that we repurchase their shares on a
monthly basis, but we are not obligated to repurchase any
shares and may choose to repurchase only some, or even
none, of the shares that have been requested to be
repurchased in any particular month in our discretion. In
addition, repurchases will be subject to available liquidity
and other significant restrictions. Further, our board of
directors may modify or suspend our share repurchase
plan if it deems such action to be in our best interest and
the best interest of our stockholders. As a result, our
shares should be considered as having only limited
liquidity and at times may be illiquid.
•We cannot guarantee that we will make distributions, and
if we do, we may fund such distributions from sources
other than cash flows from operations, and we have no
limits on the amounts we may pay from such sources.
•The purchase and repurchase price for shares of our
common stock will generally be based on our prior
month’s NAV (subject to material changes as described
above) and will not be based on any public trading
market. While there will be independent annual appraisals
of our properties, the appraisal of properties is inherently
subjective, and our NAV may not accurately reflect the
actual price at which our assets could be liquidated on any
given day.
•We have no employees and are dependent on the Adviser
to conduct our operations. The Adviser will face conflicts
of interest as a result of, among other things, the
allocation of investment opportunities among us and
Other Brookfield Accounts (as defined herein), the
allocation of time of its investment professionals and the
substantial fees that we pay to the Adviser.
•This is a “best efforts” offering. If we are not able to raise
a substantial amount of capital in the near term, our ability
to achieve our investment objectives could be adversely
affected.
•Principal and interest payments on any borrowings will
reduce the amount of funds available for distribution or
investment in additional real estate assets.
•There are limits on the ownership and transferability of
our shares.
•If we fail to qualify as a REIT and no relief provisions
apply, our NAV and cash available for distribution to our
stockholders could materially decrease as a result of being
subject to corporate income tax.
Neither the Securities and Exchange Commission nor any other state securities regulator has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. The Attorney General of the State of New York has
not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful. Securities regulators
have also not passed upon whether this offering can be sold in compliance with existing or future suitability or conduct
standards including the “Regulation Best Interest” standard to any or all purchasers. The use of forecasts in this offering is
prohibited. Any oral or written predictions about the amount or certainty of any cash benefits or tax consequences that may
result from an investment in our common stock is prohibited. No one is authorized to make any statements about this offering
different from those that appear in this prospectus.
Price to the Public(1) | Upfront Selling Commissions(2) | Dealer Manager Fees(2) | Proceeds to Us, Before Expenses(3) | ||||
Maximum Offering(4) ................................................................ | $6,000,000,000 | $134,868,280 | $1,449,275 | $5,863,682,444 | |||
Class T shares, per share ........................................................... | $10.8225 | $0.3137 | $0.0523 | $10.4565 | |||
Class S shares, per share ........................................................... | $10.6181 | $0.3591 | — | $10.2590 | |||
Class D shares, per share .......................................................... | $10.6251 | $0.1570 | — | $10.4681 | |||
Class I shares, per share ............................................................ | $10.3726 | — | — | $10.3726 | |||
Maximum Distribution Reinvestment Plan .............................. | $1,500,000,000 | — | — | $1,500,000,000 |
__________________
(1)The price per share shown for each of our classes of shares is the April 1, 2026 transaction price, which is equal to such class’s NAV as of February 28, 2026,
plus applicable upfront selling commissions and dealer manager fees. Shares of each class will be issued on a monthly basis at a price per share generally equal to
the prior month’s NAV per share for such class, plus applicable upfront selling commissions and dealer manager fees. The transaction price is the then-current
offering price per share before applicable selling commissions and dealer manager fees and is generally the prior month’s NAV per share for such class.
(2)The table assumes that all shares are sold in the primary offering, with 5% of the gross offering proceeds from the sale of Class T shares, 60% of the gross offering
proceeds from the sale of Class S shares, 5% of the gross offering proceeds from the sale of Class D shares and 30% of the gross offering proceeds from the sale
of Class I shares, which are estimated based on the proportion of shares per class issued in our prior public offering. The number of shares of each class sold and
the relative proportions in which the classes of shares are sold are uncertain and may differ significantly from this assumption. For Class T shares sold in the
primary offering, investors will pay upfront selling commissions of up to 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction
price; provided, however, that such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price.
For Class S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3.5% of the transaction price. For Class D shares sold in
the primary offering, investors will pay upfront selling commissions of up to 1.5% of the transaction price. We will also pay the following selling commissions
over time as stockholder servicing fees to the dealer manager, subject to Financial Industry Regulatory Authority, Inc. (“FINRA”) limitations on underwriting
compensation: (a) for Class T shares only, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum,
of the aggregate NAV for the Class T shares; provided, however, with respect to Class T shares sold through certain participating broker-dealers, the advisor
stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of
the NAV of such shares, (b) for Class S shares only, a stockholder servicing fee equal to 0.85% per annum of the aggregate NAV for the Class S shares and (c) for
Class D shares only, a stockholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares, in each case, payable monthly. No
stockholder servicing fees will be paid with respect to the Class I shares. The total amount that will be paid over time for other underwriting compensation
depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our
investments. We will also pay or reimburse certain organization and offering expenses, including, subject to FINRA limitations on underwriting compensation,
certain wholesaling expenses. See “Plan of Distribution,” “Estimated Use of Proceeds” and “Compensation.”
(3)Proceeds are calculated before deducting stockholder servicing fees or organization and offering expenses payable by us, which are paid over time.
(4)We reserve the right to reallocate shares of common stock between our distribution reinvestment plan and our primary offering.
The date of this prospectus is April 10, 2026
i
SUITABILITY STANDARDS
Shares of our common stock are suitable only as a long-term investment for persons of adequate financial
means who do not need near-term liquidity from their investment. We do not expect there to be a public market for
our shares and thus it may be difficult for you to sell your shares. On a limited basis, you may be able to have your
shares repurchased through our share repurchase plan, although we are not obligated to repurchase any shares and
may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any
particular month in our discretion. You should not buy shares of our common stock if you need to sell them in the
near future. The minimum initial investment in shares of our Class T, Class S and Class D common stock that we
will accept is $2,500. The minimum initial investment in shares of our Class I common stock that we will accept is
$1,000,000, unless waived by the dealer manager.
In consideration of these factors, we require that a purchaser of shares of our common stock have either:
•a net worth of at least $350,000; or
•a gross annual income of at least $100,000 and a net worth of at least $100,000.
Certain states have established suitability standards in addition to the minimum income and net worth standards
described above. Shares will be sold to investors in these states only if they meet the additional suitability standards
set forth below. Certain broker-dealers selling shares in this offering may impose greater suitability standards than
the minimum income and net worth standards described above and the state-specific suitability standards described
below.
For purposes of determining whether you satisfy the suitability standards, (i) “net worth” is calculated excluding
the value of your home, home furnishings and automobiles; (ii) unless otherwise indicated, “liquid net worth” means
that portion of net worth that consists of cash, cash equivalents and readily marketable investments; and (iii) “direct
participation programs” means REITs, business development companies, oil and gas programs, equipment leasing
programs, and commodity pools, but excludes federal and state exempt private offerings and any investment
company registered pursuant to the Investment Company Act of 1940, as amended.
Alabama Investors. An Alabama investor’s aggregate investment in our company and other non-traded direct
participation programs shall not exceed 10% of such investor’s liquid net worth at the time of investment in us. This
concentration limit does not apply to investments made through the distribution reinvestment plan nor to an investor
who is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”).
Arkansas Investors. An Arkansas investor’s aggregate investment in our company and other non-traded direct
participation programs shall not exceed 10% of such investor’s liquid net worth at the time of investment in us. This
concentration limit does not apply to investments made through the distribution reinvestment plan nor to an investor
who is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act.
Iowa Investors. An Iowa investor’s aggregate investment in our company and other non-traded direct
participation programs shall not exceed 10% of such investor’s liquid net worth at the time of investment in us. This
concentration limit does not apply to investments made through the distribution reinvestment plan nor to an investor
who is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act.
Kansas Investors. The Securities Commissioner of Kansas recommends that Kansas investors limit their
aggregate investment in our securities and other similar investments to not more than 10% of their liquid net worth.
Kentucky Investors. A Kentucky investor’s aggregate investment in our company and other non-traded direct
participation programs shall not exceed 10% of such investor’s liquid net worth at the time of investment in us. This
concentration limit does not apply to investments made through the distribution reinvestment plan nor to an investor
who is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act.
Maine Investors. The Maine Office of Securities recommends that an investor’s aggregate investment in this
offering and other similar direct participation investments not exceed 10% of the investor’s liquid net worth.
ii
Massachusetts Investors. Massachusetts investors must have either (a) a minimum liquid net worth of at least
$100,000 and a minimum annual gross income of not less than $85,000; or (b) a minimum liquid net worth of
$350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of
home furnishings, and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily
marketable securities. In addition, a Massachusetts investor’s investment in us, our affiliates, and other non-publicly
traded direct investment programs (including real estate investment trusts, business development companies, oil and
gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state
exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth.
Missouri Investors. No more than ten percent (10%) of any one (1) Missouri investor’s liquid net worth shall be
invested in the securities being registered in this offering.
Nebraska Investors. Purchasers residing in Nebraska who do not meet the definition of “accredited investor” as
defined in Regulation D under the Securities Act of 1933, as amended, must limit their aggregate investment in this
offering and in the securities of other non-publicly traded REITs to 10% of such investor’s net worth.
New Jersey Investors. New Jersey investors must have either (a) a minimum liquid net worth of at least
$100,000 and a minimum annual gross income of not less than $85,000; or (b) a minimum liquid net worth of
$350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of
home furnishings, and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily
marketable securities. In addition, a New Jersey investor’s investment in us, our affiliates, and other non-publicly
traded direct investment programs (including real estate investment trusts, business development companies, oil and
gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state
exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth.
New Mexico Investors. Purchasers residing in New Mexico may not invest more than 10% of their liquid net
worth in our shares, shares of our affiliates and other non-traded real estate investment trusts. Investors who are
accredited investors, as defined by Rule 501(a) of Regulation D under the Securities Act, are not subject to the
foregoing investment concentration limit.
North Dakota Investors. Purchasers residing in North Dakota must have a net worth of at least ten times their
investment in us.
Ohio Investors. Purchasers residing in Ohio may not invest more than 10% of their liquid net worth in us and
other non-traded real estate investment programs. For these purposes, “liquid net worth” is defined as that portion of
net worth (total assets exclusive of home, home furnishings, and automobiles minus total liabilities) that comprises
cash, cash equivalents, and readily marketable securities. This condition does not apply, directly or indirectly, to
federally covered securities. This condition also does not apply to purchasers who meet the definition of an
accredited investor as defined in Rule 501(a) of Regulation D under the Securities Act.
Oregon Investors. Purchasers residing in Oregon may not invest more than 10% of their liquid net worth in us
and our affiliates. Investors who are accredited investors, as defined by Rule 501(a) of Regulation D under the
Securities Act, are not subject to the foregoing investment concentration limit. For purposes of Oregon’s suitability
standard, “liquid net worth” is defined as an investor’s total assets (excluding home, home furnishings, and
automobiles) minus total liabilities.
Pennsylvania Investors. Purchasers residing in Pennsylvania may not invest more than 10% of their net worth in
us.
Puerto Rico Investors. Purchasers residing in Puerto Rico may not invest more than 10% of their liquid net
worth in us, our affiliates and other non-traded real estate investment programs. For these purposes, “liquid net
worth” is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and
automobiles minus total liabilities) consisting of cash, cash equivalents, and readily marketable securities.
Tennessee Investors. Purchasers residing in Tennessee who are not ‘accredited investors’ as defined in 17
C.F.R. § 230.501 may not invest more than 10% of their net worth in us.
iii
Vermont Investors. In addition to meeting the applicable suitability standards set forth above, each investor who
is not an “accredited investor” as defined in 17 C.F.R. § 230.501 may not purchase an amount of shares in this
offering that exceeds 10% of the investor’s liquid net worth. Vermont residents who are “accredited investors” as
defined in 17 C.F.R. § 230.501 are not subject to the limitation described in this paragraph. For purposes of
Vermont’s suitability standard, “liquid net worth” is defined as an investor’s total assets (not including home, home
furnishings, or automobiles) minus total liabilities.
Washington Investors. A Washington investor’s aggregate investment in our company and other non-traded
direct participation programs shall not exceed 10% of such investor’s liquid net worth at the time of investment in
us. This concentration limit does not apply to investments made through the distribution reinvestment plan nor to an
investor who is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933,
as amended.
Our sponsor and each person selling shares on our behalf must make every reasonable effort to determine that
the purchase of shares of our common stock is a suitable and appropriate investment for each investor. In making
this determination, our sponsor and the Dealer Manager will rely upon information provided by the investor to the
participating broker-dealer as well as the suitability assessment made by each participating broker-dealer. Before
you purchase shares of our common stock, your participating broker-dealer, authorized representative or other
person placing shares on your behalf will rely on relevant information provided by you to determine that you:
•meet the minimum income and net worth standards established in your state;
•are or will be in a financial position appropriate to enable you to realize the potential benefits described in
the prospectus; and
•are able to bear the economic risk of the investment based on your overall financial situation.
Broker-dealers must comply with Regulation Best Interest, which, among other requirements, establishes a
“best interest” obligation for broker-dealers and their associated persons when making recommendations of any
securities transaction or investment strategy involving securities to a retail customer. The obligations of Regulation
Best Interest are in addition to, and may be more restrictive than, the suitability requirements listed above. This
general obligation under Regulation Best Interest can be satisfied by a broker-dealer’s compliance with four
specified component obligations: (i) providing certain required disclosure before or at the time of the
recommendation, about the recommendation and the relationship between the broker-dealer and the retail customer
(including a customer relationship summary on Form CRS); (ii) exercising reasonable diligence, care, and skill in
making the recommendation; (iii) establishing, maintaining, and enforcing written policies and procedures
reasonably designed to address conflicts of interest; and (iv) establishing, maintaining, and enforcing written policies
and procedures reasonably designed to achieve compliance with Regulation Best Interest. In addition to Regulation
Best Interest, certain states may adopt state-level standards that seek to further enhance the broker-dealer standard of
conduct to a fiduciary standard for all broker-dealer recommendations made to retail customers in their states.
Regulation Best Interest also requires registered investment advisers and registered broker-dealers to provide a brief
relationship summary to retail investors. This relationship summary, referred to as Form CRS, is not a prospectus.
Investors should refer to this prospectus for detailed information about this offering before deciding to purchase
shares of our common stock. Currently, there is little administrative or case law interpreting Regulation Best
Interest, and the full scope of its applicability on broker-dealers participating in our offering cannot be determined at
this time.
Participating broker-dealers are required to maintain for six years records of the information used to determine
that an investment in shares of our common stock is suitable and appropriate for a stockholder.
By signing the subscription agreement required for purchases of our common stock, you represent and warrant
to us that you have received a copy of this prospectus and that you meet the net worth and annual gross income
requirements described above. These representations and warranties help us to ensure that all investors meet our
suitability standards. In the event you, another stockholder or a regulatory authority attempt to hold us liable because
stockholders did not receive copies of this prospectus or because we failed to adhere to each state’s suitability
requirements, we will assert these representations and warranties made by you in any proceeding in which such
iv
potential liability is disputed in an attempt to avoid any such liability. By making these representations, you do not
waive any rights that you may have under federal or state securities laws.
v
ABOUT THIS PROSPECTUS
Please carefully read the information in this prospectus and any accompanying prospectus supplements, which
we refer to collectively as the “prospectus.” You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with different information. This prospectus may only be used where
it is legal to sell these securities. You should not assume that the information contained in this prospectus is accurate
as of any date later than the date hereof or such other dates as are stated herein or as of the respective dates of any
documents or other information incorporated herein by reference.
In this prospectus, unless the context requires otherwise, the words “we,” “us,” “our,” the “Company” and
“Brookfield REIT” refer to Brookfield Real Estate Income Trust Inc., together with its consolidated subsidiaries,
including Brookfield REIT Operating Partnership L.P., which we refer to as the “Operating Partnership.” The words
“each class of common stock” or “each class of shares” refer to each class of our common stock unless the context
requires otherwise.
Unless otherwise noted, numerical information relating to Brookfield is approximate and is as of December 31,
2025.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this prospectus that are not historical facts are based on our current expectations,
estimates, projections, opinions or beliefs. Such statements are not facts and involve known and unknown risks,
uncertainties, and other factors. Prospective investors should not rely on these statements as if they were fact.
Certain information contained in this prospectus 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. These forward-looking statements may discuss our financial estimates and
their underlying assumptions, statements about plans, objectives, intentions, and expectations with respect to
positioning, including the impact of macroeconomic trends and market forces, future operations, repurchases of
common stock, acquisitions, future performance and statements regarding identified but not yet closed acquisitions.
Due to various risks and uncertainties, including those described in this prospectus, 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.
You should carefully review the “Risk Factors” section of this prospectus for a discussion of the risks and
uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except
as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise.
vi
TABLE OF CONTENTS
Suitability Standards ......................................................................................................................................... | |
About This Prospectus ...................................................................................................................................... | |
Cautionary Note Regarding Forward-Looking Statements .............................................................................. | |
Questions and Answers About this Offering .................................................................................................... | |
Prospectus Summary ......................................................................................................................................... | |
Risk Factors ...................................................................................................................................................... | |
Estimated Use of Proceeds ................................................................................................................................ | |
Investment Objectives and Strategies ............................................................................................................... | |
Investments in Real Estate and Real Estate Debt ............................................................................................. | |
Selected Information Regarding Our Operations ............................................................................................. | |
Management ...................................................................................................................................................... | |
Compensation ................................................................................................................................................... | |
Conflicts of Interest ........................................................................................................................................... | |
Net Asset Value Calculation and Valuation Guidelines ................................................................................... | |
Stock Ownership of Certain Beneficial Owners and Management .................................................................. | |
Description of Capital Stock ............................................................................................................................. | |
Certain Provisions of Maryland Law and Our Charter and Bylaws ................................................................. | |
Summary of the Operating Partnership Agreement .......................................................................................... | |
Material U.S. Federal Income Tax Considerations ........................................................................................... | |
Certain ERISA Considerations ......................................................................................................................... | |
Plan of Distribution ........................................................................................................................................... | |
How to Subscribe .............................................................................................................................................. | |
Share Repurchases ............................................................................................................................................ | |
Supplemental Sales Material ............................................................................................................................. | |
Reports to Stockholders .................................................................................................................................... | |
Legal Matters .................................................................................................................................................... | |
Experts .............................................................................................................................................................. | |
Privacy Policy Notice ....................................................................................................................................... | |
Where You Can Find More Information; Incorporation by Reference ............................................................ | |
Appendix A: Distribution Reinvestment Plan .................................................................................................. | |
Appendix B: Form of Subscription Agreement ................................................................................................ | |
Appendix C: Privacy Notice ............................................................................................................................. |
1
QUESTIONS AND ANSWERS ABOUT THIS OFFERING
Set forth below are some of the more frequently asked questions and accompanying answers related to our
structure, our management, our business and an offering of this type. They are not a substitute for disclosures
elsewhere in this prospectus. You are encouraged to read “Prospectus Summary,” “Risk Factors” and the
remainder of this prospectus in their entirety for more detailed information about this offering before deciding to
purchase shares of our common stock.
Q:What is Brookfield Real Estate Income Trust Inc.?
A:We are a Maryland corporation formed on July 27, 2017. We are externally managed by our adviser, Brookfield
REIT Adviser LLC (the “Adviser”). The Adviser is 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 the Operating Partnership.
Brookfield REIT OP GP LLC, our wholly owned subsidiary, is the sole general partner of the Operating
Partnership. We own, and plan to continue to own, substantially all of our assets through the Operating
Partnership and its subsidiaries.
Q:Who is Brookfield?
A:Brookfield is a leading global alternative asset manager with over $1 trillion of assets under management as of
December 31, 2025 across renewable power and transition, infrastructure, private equity, real estate and credit.
Brookfield invests client capital for the long-term with a focus on real assets and essential service businesses
that form the backbone of the global economy. Brookfield offers a range of alternative investment products to
investors around the world — including public and private pension plans, endowments and foundations,
sovereign wealth funds, financial institutions, insurance companies and private wealth investors. Brookfield
draws on its heritage as an owner and operator to invest for value and generate strong returns for its clients,
across economic cycles.
Q:What are Brookfield’s real estate capabilities?
A:Brookfield’s real estate business is one of the world’s largest investors in real estate, with approximately $273
billion of assets under management across office, rental housing, logistics, retail, hospitality, mixed-use and
alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments).
Through its deep global sourcing network of 278 real estate investment professionals and approximately 24,000
real estate operating employees around the world, Brookfield seeks to acquire high-quality assets in supply-
constrained markets and execute operational enhancements to deliver consistent cash flows. Building on
Brookfield’s history of successfully operating properties through multiple market cycles, Brookfield’s long-
term goal is to generate strong risk-adjusted returns while mitigating downside risk.
Q:Who is Oaktree and the Sub-Adviser?
A:Oaktree Capital Management, L.P. (together with its affiliates, “Oaktree”) is a leader among global investment
managers specializing in alternative investments, with approximately $223 billion of assets under management
as of December 31, 2025. Oaktree Fund Advisors, LLC (the “Sub-Adviser”), an affiliate of Oaktree, serves as
our sub-adviser. Brookfield holds a majority stake in Oaktree. Oaktree’s mission is to deliver superior
investment results with risk under control and to conduct its business with the highest integrity. Oaktree
emphasizes an opportunistic, value-oriented and risk-controlled approach to investing across real assets
(including real estate), credit strategies, private equity and listed equities. Over more than two decades, Oaktree
has developed a large and growing client base through its ability to identify and capitalize on opportunities for
attractive investment returns in less efficient markets.
We and the Adviser have engaged the Sub-Adviser to (i) select and manage certain of our liquid assets (cash,
cash equivalents, other short-term investments, U.S. government securities, agency securities, corporate debt,
liquid real estate-related, equity or debt securities, private debt investments and other investments for which
there is reasonable liquidity) (the “Investment Sleeve”) and (ii) provide certain services with respect to certain
2
commercial mortgage-backed securities (“CMBS”) identified by the Adviser (“Adviser CMBS”) pursuant to a
sub-advisory agreement (the “Sub-Advisory Agreement”).
Q:What is Brookfield’s and Oaktree’s shared investment philosophy?
A:Together, Brookfield and Oaktree share a long-term, value-driven, contrarian investment style, focusing on
sectors in which they believe their in-depth operating experience and market knowledge give the firms a
competitive advantage.
Both Brookfield and Oaktree share a commitment to focus on the downside protection of capital and the
delivery of superior investment results for their clients based on the following fundamental investment
principles:
•Downside Protection: Superior investment performance is not the only goal—but superior performance
with less-than-commensurate risk. Above-average gains in good times are not necessarily proof of a
manager’s skill. It takes outstanding performance in bad times to prove that good time gains are earned
through skill, rather than the acceptance of above-average risk.
•Consistent Returns: Building a superior track record requires consistently good performance, rather than a
mix of brilliant successes and dismal failures. Although striving for strong returns, their first priority is to
produce consistency, protection of capital, and outstanding performance in bad times.
•Client Focus: Satisfaction is derived from delivering investment performance for clients while taking the
high road. Clients’ interests are placed ahead of their own, with a commitment that every client should be
treated equally well, and that investors should receive candid communications of market impressions.
Q:What are your primary investment objectives?
A:Our primary investment objectives are to invest in assets that will enable us to:
•provide sustainable, stable income in the form of regular cash distributions to our stockholders;
•protect and preserve stockholders’ invested capital;
•generate appreciation from asset and market selection and hands-on proactive asset management to grow
property cash flows; and
•provide an investment alternative for stockholders seeking to allocate a portion of their long-term
investment portfolios to high-quality commercial and residential real estate with lower volatility than
publicly traded real estate companies.
We cannot assure you that we will achieve our investment objectives. In particular, we note that our net asset
value (“NAV”) may be subject to volatility related to changes in the values of our assets and liabilities. See
“Risk Factors.”
Q:What is your investment strategy?
A:Our investment strategy is to invest in a diversified portfolio of:
•Income-producing real estate: High-quality properties in desirable locations – primarily income-producing
U.S. commercial real estate with upside potential through active asset management;
•Real estate-related debt: Performing real estate debt, primarily commercial first mortgages and mezzanine
loans; and
•Real estate-related securities: Real estate-related securities, structured products and cash equivalents for
purposes of liquidity management.
3
We anticipate approximately 80% of our portfolio (potentially ranging between 60% and 90%) will be
comprised of income-producing real estate, and approximately 20% of our portfolio (potentially ranging
between 10% and 40%) will be comprised of real estate-related debt and securities.
We seek to achieve attractive risk-adjusted returns through investments in real estate assets with an emphasis on
stable current income and long-term growth potential. We seek to achieve attractive returns and mitigate
downside risk by identifying price discounts relative to intrinsic value and replacement cost.
Our real estate-related debt and securities strategy seeks to achieve high current income and superior risk-
adjusted returns. Our real estate-related debt investments focus on performing real estate-related debt, primarily
commercial first mortgages and mezzanine loans, where the investment strategy is not intended to result in real
estate ownership. Our investments in real estate-related securities include CMBS, residential mortgage-backed
securities (“RMBS”), and real estate-related corporate debt. In addition to serving our investment purposes, our
investments in real estate-related securities will also provide a source of liquidity for our share repurchase plan
and cash management.
Q:What potential competitive strengths do you offer?
A:We believe that investing in our common stock may offer investors five primary benefits:
•Access to a leading global real estate business with experience over multiple market cycles. Brookfield’s
real estate business is one of the world’s largest investors in real estate, with approximately $273 billion of
assets under management across office, rental housing, logistics, retail, hospitality, mixed-use and
alternative real estate (such as life sciences, manufactured housing, student housing and serviced
apartments). Through its deep global sourcing network, Brookfield seeks to acquire high-quality assets in
supply-constrained markets and execute operational enhancements to deliver consistent cash flows.
•Brookfield’s operational expertise. Building on Brookfield’s history of successfully operating properties
through multiple market cycles, the Adviser employs an operations-oriented approach to create value
through intensive asset management, proactive leasing and capital initiatives. With access to approximately
24,000 real estate operating employees around the world in various sectors, the Adviser leverages
Brookfield’s in-house expertise and operating capabilities to enhance value and execute business plans with
certainty.
•An investment team with the ability to access deal flow that is proprietary and less competitive.
Brookfield believes its deal sourcing networks provide a distinct advantage in identifying opportunities,
allowing it to transact often on a proprietary or direct basis with fewer competitors. The Adviser leverages
Brookfield’s regionally-focused network of acquisitions, asset management, leasing and operations
professionals, which consists of 278 real estate investment professionals , as an ongoing source of inbound
deal flow for us. Furthermore, Brookfield has a substantial presence in several large global cities which
leads to selective investment opportunities for us. We also utilize Brookfield’s sophisticated mergers and
acquisitions expertise as well as its extensive network of long-standing industry relationships to execute a
large number of transactions across the full spectrum of complexity (e.g., individual asset acquisitions,
large portfolio deals, privatizations and carve-outs) where not all firms can compete.
•Deep market knowledge and sector expertise. Over more than 30 years, Brookfield has deployed a
significant amount of capital into real estate investments globally, developing significant ownership and
management expertise across a variety of markets and real estate sectors. The large scale of Brookfield’s
portfolio provides access to propriety real-time market data, allowing the Adviser to identify trends and
attractive market conditions impacting our portfolio and investment strategy more quickly than our
competitors, which is used to inform both investment and portfolio management decisions. We believe this
advantage is unique to Brookfield and will enable us to construct a superior portfolio of high-quality, long-
term assets.
•Access to Oaktree’s credit investing expertise. Oaktree manages $223 billion in assets as of December 31,
2025 and has a long history of making opportunistic, value-oriented and risk-managed debt investments
4
that complement Brookfield’s long-term, contrarian investment style and focus on the protection of capital.
We believe that access to Oaktree’s broad and deep credit experience through Brookfield’s ownership
interest in Oaktree and the Adviser’s sub-advisory relationship with the Sub-Adviser allows us to
opportunistically pivot our debt investments across property types and throughout the capital structure to
optimize investments and ensure adequate liquidity for our share repurchase plan and facilitating large
acquisitions.
Q:What are Brookfield’s real estate operating capabilities?
A:Brookfield Properties is a fully-integrated affiliate of Brookfield that manages real estate investments, working
across sectors to bring high-quality, sustainable real estate to life around the globe every day. Brookfield
Properties raises the industry standard for quality and sustainability with its approach to operating and
developing real estate across the rental housing, logistics, office, retail and hospitality sectors. Brookfield
Properties provides Brookfield with on-the-ground expertise that lends significant scale and depth beyond
traditional real estate sourcing and execution capabilities (e.g., acquisitions and diligence, risk management,
finance and capital sourcing and asset disposition). Given its substantial functional expertise in managing and
optimizing property-level performance, we utilize Brookfield Properties for certain sector-specific operating
capabilities, including:
•Property management: overseeing the day-to-day operations of individual properties and managing the
ongoing needs and relationships with tenants;
•Sales and leasing: marketing and negotiating leases as well as overseeing brokered mandates, drawing on
direct relationships with tenants as well as through the commercial real estate brokerage community; and
•Renovation and capital projects: planning, designing and overseeing capital projects, tenant improvements
and renovation.
Q:Who directs your investment program?
A:The Adviser has the authority to implement our investment strategy, as determined by, and subject to the
direction of, our board of directors. We and the Adviser have engaged the Sub-Adviser, an affiliate of Oaktree,
to select and manage the Investment Sleeve and to perform certain services with respect to Adviser CMBS
pursuant to the Sub-Advisory Agreement. The Sub-Adviser has substantial discretion, within our investment
guidelines, to make decisions related to the acquisition, management and disposition of the Investment Sleeve.
Q:Do you currently own any investments?
A:Yes, see “Investments in Real Estate and Real Estate Debt” for information about our investments.
Q:What is a real estate investment trust, or REIT?
A:We elected to be taxed as a REIT beginning with our taxable year ended December 31, 2019 and intend to
continue to qualify as a REIT. In general, a REIT is a company that:
•combines the capital of many investors to acquire or provide financing for real estate assets;
•offers the benefits of a real estate portfolio under professional management;
•satisfies the various requirements of the Internal Revenue Code of 1986, as amended (the “Code”),
including a requirement to distribute to stockholders each year at least 90% of its REIT taxable income
(determined without regard to the dividends-paid deduction and excluding net capital gain); and
•is generally not subject to U.S. federal corporate income taxes on its net taxable income that it currently
distributes to its stockholders, which substantially eliminates the “double taxation” (i.e., taxation at both the
corporate and stockholder levels) that generally results from investments in a C corporation.
5
Q:What is a non-exchange traded, perpetual-life REIT?
A:A non-exchange traded REIT is a REIT whose shares are not listed for trading on a stock exchange or other
securities market. We use the term “perpetual-life REIT” to describe an investment vehicle of indefinite
duration, whose shares of common stock are intended to be sold by the REIT monthly on a continuous basis at a
price generally equal to the REIT’s prior month’s NAV per share. In our perpetual-life structure, the investor
may request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any
shares and may choose to repurchase only some, or even none, of the shares that have been requested to be
repurchased in any particular month in our discretion. While we may consider a liquidity event at any time in
the future, we currently do not intend to undertake such consideration, and we are not obligated by our charter
or otherwise to effect a liquidity event at any time.
Q:How is an investment in shares of your common stock different from listed REITs?
A:An investment in shares of our common stock generally differs from an investment in listed REITs in a number
of ways, including:
•Shares of listed REITs are priced by the trading market, which is influenced generally by numerous factors,
not all of which are related to the underlying value of the entity’s real estate assets and liabilities. The
estimated value of our real estate assets and liabilities will be used to determine our NAV rather than the
trading market. The purchase price per share for each class of our common stock varies and generally
equals our prior month’s NAV per share plus applicable upfront selling commissions and dealer manager
fees, whereas investments in listed REITs often involve nominal to no upfront commissions.
•An investment in our shares has limited or no liquidity and our share repurchase plan may be modified or
suspended. In contrast, an investment in a listed REIT is a liquid investment, as shares can be sold on an
exchange at any time.
•Listed REITs are often self-managed, whereas our investment operations are managed by the Adviser,
which is an affiliate of Brookfield.
•Unlike the offering of a listed REIT, this offering has been registered in every state in which we are
offering and selling shares. As a result, we include certain limits in our governing documents that are not
typically provided for in the charter of a listed REIT. For example, our charter limits the fees we may pay
to the Adviser and its affiliates, limits our ability to make certain investments, limits the aggregate amount
we may borrow, requires our independent directors to approve certain actions and restricts our ability to
indemnify our directors, the Adviser and its affiliates. A listed REIT does not typically provide for these
restrictions within its charter. A listed REIT is, however, subject to the governance requirements of the
exchange on which its stock is traded, including requirements relating to its board of directors, audit
committee, independent director oversight of executive compensation and the director nomination process,
code of conduct, stockholder meetings, related party transactions, stockholder approvals, and voting rights.
Although we follow many of these same governance guidelines, there is no requirement that we do so.
•Additionally, listed REITs are often self-managed, whereas our investment operations are managed by the
Adviser and Sub-Adviser. We pay a management fee as described herein to the Adviser, unlike many listed
REITs.
Q:What type of person might benefit from an investment in your shares?
A:An investment in our shares may be appropriate for you if you:
•meet the minimum suitability standards described above in “Suitability Standards”;
•seek to allocate a portion of your investment portfolio to a direct investment vehicle with a portfolio of real
estate and real estate-related investments primarily located in the United States capable of delivering a
regular income stream with the potential for appreciation;
6
•seek to receive current income through regular distribution payments; and
•are able to hold your shares as a long-term investment and do not need liquidity from your investment
quickly in the near future.
We cannot assure you that an investment in our shares will allow you to realize any of these objectives. An
investment in our shares is only intended for investors who do not need the ability to sell their shares quickly in
the future since we are not obligated to repurchase any shares of our common stock and may choose to
repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular
month in our discretion, and the opportunity to have your shares repurchased under our share repurchase plan
may not always be available. See “Share Repurchases—Repurchase Limitations.”
Q:What is the difference between the classes of shares of common stock being offered?
A:We are offering to the public four classes of shares of our common stock: Class T shares, Class S shares,
Class D shares and Class I shares. The differences among the share classes relate to upfront selling
commissions, dealer manager fees and ongoing stockholder servicing fees. No upfront selling commissions,
dealer manager fees or stockholder servicing fees are paid with respect to Class I shares. Upon the occurrence of
certain events (including the listing of Class I shares, which does not require prior stockholder approval), Class
T shares, Class S shares and Class D shares will automatically convert to Class I shares. See “Description of
Capital Stock” and “Plan of Distribution” for a discussion of the differences among the classes of shares of our
common stock, including Class C and Class E shares of our common stock that are not being offering pursuant
to this prospectus, and the various events that would cause a conversion of certain classes of common stock into
Class I shares.
Before making your investment decision, consult with your investment adviser regarding your account type and
the classes of common stock you may be eligible to purchase.
Q:What is the per share purchase price?
A:Each class of shares will be sold at the then-current transaction price, which will generally be the prior month’s
NAV per share for such class, plus any applicable upfront selling commissions and dealer manager fees.
Although the offering price for shares of our common stock will generally be based on the prior month’s NAV
per share, the NAV per share of such stock as of the date on which your purchase is settled may be significantly
different. We may, but are not obligated to, offer shares at a price that we believe reflects the NAV per share of
such stock more appropriately than the prior month’s NAV per share, including by updating a previously
disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our
NAV per share since the end of the prior month. Each class of shares may have a different NAV per share. See
“Net Asset Value Calculation and Valuation Guidelines— Valuation of Investments” for examples of valuation
adjustment events that may cause a material change to our NAV per share.
Q:Will I be charged selling commissions?
A:Investors in Class T shares will pay upfront selling commissions of up to 3.0%, and upfront dealer manager fees
of 0.5%, of the transaction price of each Class T share sold in the primary offering. Investors in Class S shares
will pay upfront selling commissions of up to 3.5% of the transaction price of each Class S share. Investors in
Class D shares will pay upfront selling commissions of up to 1.5% of the transaction price of each Class D
share. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will
be retained by, or reallowed (paid) to, participating broker-dealers. Stockholders will not pay selling
commissions on Class I shares, or when purchasing shares under our distribution reinvestment plan. See “Plan
of Distribution.”
Q:What is the expected term or expected life of this offering?
A:We have registered $6,000,000,000 in shares of our common stock, in any combination of our share classes, to
be sold in our primary offering and up to $1,500,000,000 in shares to be sold pursuant to our distribution
reinvestment plan. We may reallocate the shares of our common stock we are offering between the primary
7
offering and our distribution reinvestment plan. It is our intent, however, to conduct a continuous offering for an
indefinite period of time, by filing for additional offerings of our shares, subject to regulatory approval and
continued compliance with the rules and regulations of the Securities and Exchange Commission (the “SEC”)
and applicable state laws. This offering will terminate no later than July 2, 2028 unless extended in accordance
with applicable SEC rules. We reserve the right to terminate our public offering at any time and to extend our
offering term to the extent permissible under applicable law.
We will endeavor to take all reasonable actions to avoid interruptions in the continuous offering of our shares of
common stock. There can be no assurance, however, that we will not need to suspend our continuous offering
while the SEC and, where required, state securities regulators, review such filings for additional offerings of our
stock until such filings are declared effective, if at all.
Q:What are the risks involved with buying your shares?
A:Investing in our common stock involves a high degree of risk. These risks include, among others, that (1) you
will not have the opportunity to evaluate our future investments before we make them, which makes an
investment in our common stock more speculative; (2) there is no public trading market for shares of our
common stock, repurchase of shares by us will likely be the only way to dispose of your shares; (3) the amount
and frequency of distributions we make is uncertain, and we may pay distributions from sources other than cash
flows from operations, which means we would have less cash available for investments and your overall returns
may be reduced; and (4) we have no employees and are dependent on the Adviser to conduct our operations.
The Adviser will face conflicts of interest as a result of, among other things, the allocation of investment
opportunities, the allocation of time of its investment professionals and the substantial fees that we pay to the
Adviser. See “Risk Factors.”
Q:Is there any minimum investment required?
A:The minimum initial investment in Class T, Class S or Class D shares is $2,500. The minimum initial
investment in Class I shares is $1,000,000, unless such minimum is waived by the Dealer Manager. The
minimum subsequent investment for each class of our common stock is $500 per transaction and this minimum
does not apply to purchases made under our distribution reinvestment plan. In addition, our board of directors
may elect to accept smaller investments in its discretion.
Q:What is a “best efforts” offering?
A:A “best efforts” offering means that the Dealer Manager and the participating brokers are only required to use
their best efforts to sell the shares in this offering. When shares are offered to the public on a “best efforts”
basis, no underwriter, broker-dealer or other person has a firm commitment or obligation to purchase any of the
shares. Therefore, we cannot guarantee that any minimum number of shares will be sold.
Q:How will your NAV per share be calculated?
A:Our NAV is calculated monthly based on the net asset values of our investments (including real estate-related
investments), the addition of any other assets (such as cash on hand) and the deduction of any other liabilities.
The calculation of our monthly NAV will be determined by the Adviser and our NAV per share is calculated by
State Street Bank and Trust Company (“State Street”), a third-party firm that provides us with certain
administrative and accounting services, and such calculation will be reviewed and confirmed by the Adviser.
The Adviser is ultimately responsible for the determination of our NAV. Altus Group U.S. Inc., a valuation
firm, was selected by the Adviser and approved by our board of directors, including a majority of our
independent directors, to serve as our independent valuation advisor. Our independent valuation advisor is not
responsible for, and does not calculate, our NAV.
For the purposes of calculating our monthly NAV, our properties will initially be valued at cost, which we
expect to represent fair value at that time. Thereafter, our independent valuation advisor will prepare monthly
appraisals of our properties (except for single-family rentals and non-US investments) in accordance with the
valuation guidelines approved by our board of directors. At least once annually, we obtain an appraisal prepared
by another independent third-party appraisal firm. Such annual appraisal report will provide an estimated range
8
of value for the property, which our independent valuation advisor will take into consideration when
determining the value of the property during such month. Our investments in real estate securities will be valued
monthly by the Sub-Adviser using quotations from third-party pricing vendors.
NAV is not a measure used under generally accepted accounting principles in the United States (“GAAP”) and
the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV
will differ from GAAP. You should not consider NAV to be equivalent to stockholders’ equity or any other
GAAP measure. See “Net Asset Value Calculation and Valuation Guidelines” for more information regarding
the calculation of our NAV per share of each class and how our properties and real estate-related investments
are valued.
Q:When may I make purchases of shares?
A:Subscriptions to purchase our common stock may be made on an ongoing basis, but investors may only
purchase our common stock pursuant to accepted subscription orders as of the first calendar day of each month,
and to be accepted, a subscription request must be received in good order at least five business days prior to the
first calendar day of the month (unless waived by the Dealer Manager). For example, if you wish to subscribe
for shares of our common stock in October, your subscription request must be received in good order at least
five business days before November 1. If accepted, your subscription will be effective on November 1.
Q:When will the transaction price be available?
A:Generally, within 15 days after the last calendar day of each month, we will determine our NAV per share for
each share class as of the last calendar day of the prior month, which will generally be the transaction price for
the then-current month for such share class. However, in certain circumstances, the transaction price will not be
made available until a later time. We disclose the transaction price for each month when available on our
website at www.brookfieldREIT.com and in prospectus supplements filed with the SEC.
Generally, you will not be provided with direct notice of the transaction price when it becomes available.
Therefore, if you wish to know the transaction price prior to your subscription being accepted you must check
our website or our filings with the SEC prior to the time your subscription is accepted.
However, if the transaction price is not made available on or before the eighth business day before the first
calendar day of the month (which is six business days before the earliest date we may accept subscriptions), or a
previously disclosed transaction price for that month is changed, then we will provide notice of such transaction
price (and the first day on which we may accept subscriptions) directly to subscribing investors when such
transaction price is made available. In such cases, you will have at least three business days from delivery of
such notice before your subscription is accepted. See “How to Subscribe.”
Q:May I withdraw my subscription request once I have made it?
A:Yes. Subscribers are not committed to purchase shares at the time their subscription orders are submitted and
any subscription may be canceled at any time before the time it has been accepted. You may withdraw your
purchase request by notifying the transfer agent, through your financial intermediary or directly on our toll-free,
automated telephone line, (833) 625-7348.
Q:When will my subscription be accepted?
A:Completed subscription requests will not be accepted by us before the later of (i) two business days before the
first calendar day of each month and (ii) three business days after we make the transaction price (including any
subsequent revised transaction price) publicly available by posting it on our website at
www.brookfieldREIT.com and filing a prospectus supplement with the SEC (or in certain cases after we have
delivered notice of such price directly to you as discussed above). As a result, you will have a minimum of three
business days after the transaction price for that month has been disclosed to withdraw your request before you
are committed to purchase the shares.
9
Q:Will I receive distributions and how often?
A:We have declared, and intend to continue to declare, monthly distributions as authorized by our board of
directors (or a duly authorized committee of the board of directors) and have paid, and intend to continue to pay,
such distributions to stockholders of record on a monthly basis. We commenced paying distributions in
December 2019 and have paid distributions each month since such date. Any distributions we make are at the
discretion of our board of directors, considering factors such as our earnings, cash flow, capital needs and
general financial condition and the requirements of Maryland law. As a result, our distribution rates and
payment frequency may vary from time to time. You will not be entitled to receive a distribution if your shares
are repurchased prior to the applicable time of the record date.
Our board of directors’ discretion as to the payment of distributions will be directed, in substantial part, by its
determination to cause us to comply with the REIT requirements. To maintain our qualification as a REIT, we
generally are required to make aggregate annual distributions to our stockholders of at least 90% of our REIT
taxable income determined without regard to the dividends-paid deduction and excluding net capital gain. See
“Prospectus Summary—Distributions,” “Description of Capital Stock—Distribution Policy” and “Material U.S.
Federal Income Tax Considerations.”
The per share amount of distributions on our various classes of common stock sold in this offering will likely
differ because of different allocations of class-specific stockholder servicing fees and management and
performance fees. Specifically, distributions on Class T and Class S shares will be lower than Class D shares,
and Class D shares will be lower than Class I shares because we are required to pay higher ongoing stockholder
servicing fees with respect to the Class T and Class S shares (compared to Class D shares and Class I shares)
and we are required to pay higher ongoing stockholder servicing fees with respect to Class D shares (compared
to Class I shares).
There is no assurance we will pay distributions in any particular amount, if at all. We may fund any
distributions from sources other than cash flows from operations, and we have no limits on the amounts we may
pay from such sources. The extent to which we pay distributions from sources other than cash flows from
operations depends on various factors, including the level of participation in our distribution reinvestment plan,
the extent to which the Adviser elects to receive its management fee or performance fee in Class E shares or
Class I shares or Class E units or Class I-1 units of the Operating Partnership, how quickly we invest the
proceeds from this offering and the performance of our investments. Funding distributions from the sales of
assets, borrowings, return of capital or proceeds of this offering will result in us having less funds available to
acquire properties or other real estate-related investments. As a result, the return you realize on your investment
may be reduced. Doing so may also negatively impact our ability to generate cash flows. Likewise, funding
distributions from the sale of additional securities will dilute your interest in us on a percentage basis and may
impact the value of your investment especially if we sell these securities at prices less than the price you paid
for your shares.
Q:Will the distributions I receive be taxable as ordinary income?
A:Generally, distributions that you receive, including cash distributions that are reinvested pursuant to our
distribution reinvestment plan, will be taxed as ordinary income to the extent they are paid from our current or
accumulated earnings and profits. Ordinary dividends received from REITs are generally not eligible to be taxed
at the lower U.S. federal income tax rates applicable to individuals for “qualified dividends” from C
corporations (i.e., corporations generally subject to U.S. federal corporate income tax). Non-corporate U.S.
taxpayers may be able to claim a deduction in determining their ordinary taxable income up to 20.0% of
“qualified REIT dividends” (i.e., REIT dividends that are not designated by the REIT as qualified dividend
income or capital gain dividends) received by them which temporarily reduce the effective tax rate on such
dividends.
We may designate a portion of distributions as capital gain dividends taxable at capital gain rates to the extent
we recognize net capital gains from sales of assets. In addition, a portion of your distributions may be
considered a return of capital for U.S. federal income tax purposes. Amounts considered a return of capital
10
generally will not be subject to tax, but will instead reduce the tax basis of your investment. This, in effect,
defers a portion of your tax until your shares are repurchased, you sell your shares or we are liquidated, at which
time you generally will be taxed at capital gains rates. Because each investor’s tax position is different, you
should consult with your tax advisor. In particular, non-U.S. investors should consult their tax advisors
regarding potential withholding taxes on distributions that they receive. See “Material U.S. Federal Income Tax
Considerations.”
Q:May I reinvest my cash distributions in additional shares?
A:Yes. We have adopted a distribution reinvestment plan whereby stockholders (other than Alabama, California,
Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio,
Oregon, Tennessee, Texas, Vermont and Washington investors and clients of certain participating broker-
dealers that do not permit automatic enrollment in our distribution reinvestment plan) will have their cash
distributions automatically reinvested in additional shares of our common stock unless they elect to receive their
distributions in cash. Alabama, California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts,
Nebraska, New Jersey, North Carolina, Ohio, Oregon, Tennessee, Texas, Vermont and Washington investors
and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution
reinvestment plan will automatically receive their distributions in cash unless they elect to have their cash
distributions reinvested in additional shares of our common stock. See “Prospectus Summary—Distribution
Reinvestment Plan” and “Description of Capital Stock—Distribution Reinvestment Plan” for more information
regarding the reinvestment of distributions you may receive from us. For the complete terms of the distribution
reinvestment plan, see Appendix A to this prospectus.
Q:Can I request that my shares be repurchased?
A:Yes. However, while stockholders may request on a monthly basis that we repurchase all or any portion of their
shares pursuant to our share repurchase plan, we are not obligated to repurchase any shares and may choose to
repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular
month in our discretion. In addition, our ability to fulfill repurchase requests is subject to a number of
limitations. As a result, share repurchases may not be available each month. Under our share repurchase plan, to
the extent we choose to repurchase shares in any particular month, we will only repurchase shares as of the
opening of the last calendar day of that month (each such date, a “Repurchase Date”). Repurchases will be made
at the transaction price in effect on the Repurchase Date, except that shares that have not been outstanding for at
least one year will be repurchased at 98% of the transaction price (an “Early Repurchase Deduction”). The Early
Repurchase Deduction may be waived in the case of repurchase requests arising from the death, qualified
disability or divorce of the holder. To have your shares repurchased, your repurchase request and required
documentation must be received in good order by 4:00 p.m. (Eastern time) on the second to last business day of
the applicable month. Settlements of share repurchases will be made within three business days of the
Repurchase Date; provided that settlements for non-U.S. accounts may take up to five business days. The Early
Repurchase Deduction will not apply to shares acquired through our distribution investment plan. An investor
may withdraw its repurchase request by notifying the transfer agent before 4:00 p.m. (Eastern time) on the last
business day of the applicable month.
The total amount of aggregate repurchases of shares of our common stock will be limited to no more than 2% of
our aggregate NAV attributable to our stockholders per month and no more than 5% of our aggregate NAV
attributable to our stockholders per calendar quarter.
With respect to the 2% and 5% limits described above, (i) provided that the share repurchase plan has been
operating and not suspended for the first month of a given quarter and that all properly submitted repurchase
requests were satisfied, any unused capacity for that month will carry over to the second month, and (ii)
provided that the share repurchase plan has been operating and not suspended for the first two months of a given
quarter and that all properly submitted repurchase requests were satisfied, any unused capacity for those two
months will carry over to the third month. In no event will such carry-over capacity permit the repurchase of
shares with aggregate value (based on the repurchase price per share for the month the repurchase is effected) in
excess of 5% of the aggregate NAV attributable to our stockholders as of the last calendar day of the previous
11
calendar quarter (provided that for these purposes repurchases may be measured on a net basis as described in
the paragraph below).
We measure the foregoing repurchase limitations based on net repurchases during a month or quarter, as
applicable, and as described below. The term “net repurchases” means, during the applicable period, the excess
of our capital outflows over our capital inflows. The term “capital outflows” means share repurchases under our
share repurchase plan in a given period. The term “capital inflows” means proceeds from share subscriptions
received in a given period that are accepted as of the first calendar day of the next month, plus purchases
pursuant to our distribution reinvestment plan. Thus, for any given calendar quarter, the maximum amount of
repurchases during that quarter will be equal to (1) 5% of the aggregate NAV attributable to our stockholders as
of the last calendar day of the previous calendar quarter, plus (2) capital inflows during such calendar quarter.
The same would apply for a given month, except that repurchases in a month would be subject to the 2% limit
described above (subject to potential carry-over capacity), and netting would be measured on a monthly basis.
With respect to future periods, our board of directors may choose whether the limitations will be applied to
“gross repurchases” rather than to net repurchases. If repurchases for a given month or quarter are measured on
a gross basis rather than on a net basis, the repurchase limitations would limit the amount of shares repurchased
in a given month or quarter without regard to any capital inflows for that month or quarter. In order for our
board of directors to change the application of the limitations from net repurchases to gross repurchases or vice
versa, we will provide notice to stockholders in a prospectus supplement or special or periodic report filed by
us, as well as in a press release or on our website, at least 10 days before the first business day of the quarter for
which the new test will apply. The determination to measure repurchases on a gross basis or net basis will only
be made for an entire quarter, and not particular months within a quarter.
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 based on the number
of shares requested to be repurchased in such month after we have repurchased all shares for which repurchase
has been requested due to death, disability or divorce and other limited exceptions. 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.
The vast majority of our assets will consist of properties that cannot generally be readily liquidated without
impacting our ability to realize full value upon their disposition. Therefore, we may not always have sufficient
liquid resources to satisfy repurchase requests. In order to provide liquidity for share repurchases, we intend to,
subject to any limitations and requirements relating to our intention to qualify as a REIT, generally maintain
under normal circumstances an allocation to the Investment Sleeve of approximately 5% to 10% of our overall
NAV. We may fund repurchase requests from sources other than cash flows from operations, and we have no
limits on the amounts we may pay from such sources. Should repurchase requests, in our judgment, place an
undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a
whole, or should we otherwise determine that investing our liquid assets in real properties or other illiquid
investments rather than repurchasing our shares is in the best interests of us as a whole, then we may choose to
repurchase fewer shares than have been requested to be repurchased, or none at all. Furthermore, our board of
directors may agree for the benefit of one or more of our stockholders to restrict repurchases in a manner that is
intended to permit us to be treated as a “domestically controlled” REIT within the meaning of Section
897(h)(4)(B) of the Code. In addition, 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. If the transaction price
for the applicable month is not made available by the tenth business day prior to the last business day of the
month (or is changed after such date), then no repurchase requests will be accepted for such month and
stockholders who wish to have their shares repurchased the following month must resubmit their repurchase
requests. See “Share Repurchases—Repurchase Limitations.”
12
Q:Will I be notified of how my investment is doing?
A:Yes. We will provide you with periodic updates on the performance of your investment with us, including:
•three quarterly financial reports;
•monthly investor statements;
•an annual report;
•in the case of certain U.S. stockholders, an annual Internal Revenue Service (“IRS”) Form 1099-DIV or
IRS Form 1099-B, if required, and, in the case of non-U.S. stockholders, an annual IRS Form 1042-S;
•confirmation statements (after transactions affecting your balance, except reinvestment of distributions in
us and certain transactions through minimum account investment or withdrawal programs); and
•a quarterly statement providing material information regarding your participation in the distribution
reinvestment plan and an annual statement providing tax information with respect to income earned on
shares under the distribution reinvestment plan for the calendar year.
Depending on legal requirements, we may post this information on our website, www.brookfieldREIT.com, or
provide this information to you via U.S. mail or other courier, electronic delivery, or some combination of the
foregoing. Information about us will also be available on the SEC’s website at www.sec.gov.
In addition, our monthly NAV per share for each class will be posted on our website promptly after it has
become available.
Q:When will I get my detailed tax information?
A:In the case of certain U.S. stockholders, we expect your IRS Form 1099-DIV tax information, if required, to be
mailed by January 31 of each year.
Q:Where can I find updated information regarding the Company?
A:You may find updated information on our website, www.brookfieldREIT.com. Information contained on our
website is not incorporated by reference in or otherwise a part of this prospectus. In addition, we will file
annual, quarterly and special reports, proxy statements and other information with the SEC. See “Where You
Can Find More Information; Incorporation by Reference” for a description of how you may read and copy the
registration statement, the related exhibits and the reports, proxy statements and other information we file with
the SEC.
Q:Who can help answer my questions?
A:If you have more questions about this offering or if you would like additional copies of this prospectus, you
should contact your financial adviser or our transfer agent:
SS&C GIDS, Inc.
P.O. Box 219663
Kansas City, MO 64121
Overnight Address:
SS&C GIDS, Inc.
801 Pennsylvania Ave
Suite 219663
Kansas City, MO 64105-1407
Toll Free Number: (833) 625-7348
13
PROSPECTUS SUMMARY
This section summarizes the material information contained elsewhere in this prospectus. Before deciding to
invest in this offering, you should carefully read this entire prospectus, including the “Risk Factors” section.
Brookfield Real Estate Income Trust Inc.
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 proactive, best-in-class asset management. 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
anticipate approximately 80% of our portfolio (potentially ranging between 60% and 90%) will be comprised of
income-producing real estate, and approximately 20% of our portfolio (potentially ranging between 10% and 40%)
will be comprised of real estate-related debt and securities.
Our office is located at Brookfield Place, 225 Liberty Street, 8th Floor, New York, New York 10281 and our
telephone number is (212) 417-7000. You may find additional information about us at our website,
www.brookfieldREIT.com. The contents of our website are not incorporated by reference in or otherwise a part of
this prospectus.
Investments in Real Estate
We invest 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. The majority of our
portfolio is concentrated in the United States, but we may selectively invest in large global cities where our sponsor,
Brookfield, has comprehensive capabilities, such as Toronto, London, Sydney and Seoul. We do not designate
specific geography or sector allocations for the portfolio; rather we invest in regions or asset classes where we see
the best opportunities that support our investment objectives. As of December 31, 2025, we owned a diversified
portfolio of 18 properties, 787 single-family rental homes and four unconsolidated interests in real estate joint
ventures. Our real estate properties consisted of multifamily (47%), net lease (21%), logistics (15%), single-family
rental (10%), student housing (5%), and office (2%) based on the asset value of our real estate investments as of
December 31, 2025.
Investments in Real Estate-Related Debt and Securities
Our real estate-related debt and securities strategy seeks to achieve high current income and superior risk-
adjusted returns. Our real estate-related debt investments focus on performing real estate-related debt, primarily
commercial first mortgages and mezzanine loans, where the investment strategy is not intended to result in real
estate ownership. Our investments in real estate-related securities include CMBS, RMBS and real estate-related
corporate debt. In addition to serving our investment purposes, our investments in real estate-related securities will
also provide a source of liquidity for our share repurchase plan and cash management. As of December 31, 2025, our
investments in real estate-related loans and securities consisted of 26 investments with an aggregate fair value of
approximately $101 million.
Leverage
We use financial leverage to provide additional funds to support our investment activities. This allows us to
make more investments than would otherwise be possible, resulting in a broader portfolio of investments. Subject to
the limitation on indebtedness for money borrowed in our charter, our target leverage ratio is 50% to 60%. Our
leverage ratio is measured 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. For
purposes of determining our gross real estate assets (but not necessarily for federal income tax purposes), we include
the asset values of the DST Properties (defined below) due to the master lease structure, including the Operating
Partnership’s FMV Option (defined below). Our leverage ratio calculation does not include (i) indebtedness incurred
14
in connection with funding a deposit in advance of the closing of an investment, (ii) indebtedness incurred as other
working capital advances or (iii) any financing liability resulting from the sale of the DST Properties included in our
NAV calculation. Furthermore, the refinancing of any amount of existing indebtedness will not be deemed to
constitute incurrence of new indebtedness so long as no additional amount of net indebtedness is incurred in
connection therewith (excluding the amount of transaction expenses associated with such refinancing). See
“Selected Information Regarding Our Operations–Our Indebtedness” for more information about our indebtedness.
We have limits in our charter prohibiting us from borrowing more than 300% of our net assets, which
approximates borrowing 75% of the cost of our investments. We may exceed this limit if a majority of our
independent directors approves each borrowing in excess of the limit and we disclose the justification for doing so to
our stockholders.
Financing a portion of the purchase price of our assets will allow us to broaden our portfolio by increasing the
funds available for investment. Financing a portion of the purchase price is not free from risk, however, as using
debt requires us to pay interest and principal, referred to as “debt service,” all of which decrease the amount of cash
available for distribution to our stockholders or other purposes. We may also be unable to refinance the debt at
maturity on favorable or equivalent terms, if at all, exposing us to the potential risk of loss with respect to assets
pledged as collateral for loans. Certain of our debt is floating rate and the effective interest rates on such debt will
increase when the relevant interest benchmark increases.
DST Program
We, through the Operating Partnership, have a program (the “DST Program”) to issue and sell up to a maximum
aggregate offering amount of $1.0 billion of beneficial interests (“DST Interests”) in specific Delaware statutory
trusts (“DSTs”) holding one or more real properties (each, a “DST Property” and, collectively, the “DST
Properties”). These DST Interests will be issued and sold to “accredited investors,” as that term is defined under
Regulation D promulgated by the SEC under the Securities Act of 1933, as amended (the “Securities Act”), in one
or more offerings (the “DST Offerings”). Under the DST Program, each DST Property will be sourced from our real
properties or from third parties, which will be held in a DST and subsequently leased by one of our wholly owned
subsidiaries in accordance with a certain master lease agreement. Each master lease agreement will be guaranteed by
the Operating Partnership, which will hold a fair market value option (the “FMV Option”), giving it the right, but
not the obligation, to acquire the DST Interests in the applicable DST from the investors in exchange for Operating
Partnership units or cash, at the Operating Partnership’s discretion. Such FMV Option shall be exercisable during a
one-year option period, beginning two years following the sale of the last DST Interest in any such DST Offering.
The Operating Partnership, in its sole and absolute discretion, may assign its rights in the FMV Option to a
subsidiary, an affiliate, a successor entity to the Operating Partnership or the acquiror of a majority of the Operating
Partnership’s assets. After a one-year holding period, investors who acquire Operating Partnership units pursuant to
the FMV Option generally have the right to request that the Operating Partnership redeem all or a portion of their
Operating Partnership units for, at the sole discretion of the general partner of the Operating Partnership, shares of
our common stock, cash, or a combination of both.
We expect that the DST Program will give us the opportunity to expand and diversify our capital-raising
strategies by offering what we believe to be an attractive investment product for investors that may be seeking like-
kind replacement properties to complete tax-deferred exchange transactions under Section 1031 of the Code.
Affiliates of the Adviser may provide mortgage financing with respect to certain DST Properties and are expected to
receive fees in connection with the sale of the DST Interests and the management of the DSTs.
We intend to use the net offering proceeds from the DST Program to make investments in accordance with our
investment strategy and policies, reduce our borrowings, repay indebtedness, fund the repurchase of shares of all
classes of our common stock under our share repurchase plan and for other corporate purposes. We have not
allocated specific amounts of the net proceeds from the DST Program for any specific purpose.
15
Our REIT Status
We elected to qualify and be taxed as a REIT beginning with our taxable year ended December 31, 2019 and
intend to continue to maintain our qualification as a REIT. For additional discussion regarding REITs and REIT
qualification, see “Material U.S. Federal Income Tax Considerations.”
Offered Classes of Common Stock
We are offering to the public four classes of shares of our common stock: Class T shares, Class S shares,
Class D shares and Class I shares. The differences among the share classes relate to upfront selling commissions,
dealer manager fees and ongoing stockholder servicing fees. No upfront selling commissions, dealer manager fees or
stockholder servicing fees are paid with respect to Class I shares. Upon the occurrence of certain events (including,
the listing of Class I shares, which does not require prior stockholder approval), Class T shares, Class S shares and
Class D shares will automatically convert to Class I shares. See “Description of Capital Stock” and “Plan of
Distribution” for a discussion of the differences among the classes of shares of our common stock, including Class C
and Class E shares of our common stock that are not being offered pursuant to this prospectus, and the various
events that would cause a conversion of certain classes of common stock into Class I shares.
Assuming a constant NAV per share of $10.00 and assuming applicable stockholder servicing fees are paid until
the 8.75% of gross proceeds limit described in “Compensation—Stockholder Servicing Fee” is reached, we expect
that a one-time investment in 1,000 shares of each class of our shares offered pursuant to this prospectus
(representing an aggregate NAV of $10,000 for each class) would be subject to the following upfront selling
commissions, dealer manager fees and stockholder servicing fees:
Upfront Selling Commissions | Dealer Manager Fees | Annual Stockholder Servicing Fees | Maximum Stockholder Servicing Fees Over Life of Investment (Length of Time) | Total (Length of Time) | |||||
Class T .......................................................... | $300 | $50 | $85 | 556 (7 years) | 906 (6.5 years) | ||||
Class S .......................................................... | $350 | — | $85 | 556 (7 years) | 906 (6.5 years) | ||||
Class D ......................................................... | $150 | — | $25 | 738 (29.5 years) | 888 (29.5 years) | ||||
Class I ........................................................... | — | — | — | — | — |
Class T and Class S shares are available through brokerage and transactional-based accounts. Class D shares are
generally available for purchase in this offering only (1) through fee-based programs, also known as wrap accounts,
that provide access to Class D shares, (2) through participating broker-dealers that have alternative fee arrangements
with their clients to provide access to Class D shares, (3) through certain registered investment advisers, (4) through
bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or
customers or (5) by other categories of investors that we name in an amendment or supplement to this prospectus.
Class I shares are generally available for purchase in this offering only (1) through fee-based programs, also known
as wrap accounts, that provide access to Class I shares, (2) by endowments, foundations, pension funds and other
institutional investors, (3) through participating broker-dealers that have alternative fee arrangements with their
clients to provide access to Class I shares, (4) by our executive officers and directors and their immediate family
members, as well as officers and employees of the Adviser, Brookfield or other affiliates and their immediate family
members, and, if approved by our board of directors, joint venture partners, consultants and other service providers
or (5) by other categories of investors that we name in an amendment or supplement to this prospectus.
Certain participating broker-dealers may offer volume discounts, which would reduce upfront selling
commissions and would therefore increase the length of time required for selling commissions, dealer manager fees
and stockholder servicing fee to reach 8.75% of gross proceeds. In the case of Class T shares sold through certain
participating broker-dealers, a lower limit than 8.75% of gross proceeds may be used, as set forth in any applicable
agreement between the Dealer Manager and a participating broker-dealer at the time such shares were issued.
16
If you are eligible to purchase multiple classes of shares, you should consider, among other things, the amount
of your investment, the length of time you intend to hold the shares and the upfront selling commissions and dealer
manager fees and ongoing stockholder servicing fees, if any, attributable to the applicable share classes. If you are
eligible to purchase all four classes of shares offered pursuant to this prospectus, then you should consider that
Class I shares have no upfront selling commissions, dealer manager fees or stockholder servicing fees, which will
reduce the NAV or distributions of the other share classes. However, you should also consider that Class I shares
will not receive stockholder services. If you are eligible to purchase Class T, Class S and Class D shares but not
Class I shares, then you should consider that Class D shares have lower upfront selling commissions and lower
annual stockholder servicing fees. Please also consider that your financial adviser may charge you separate wrap
account or similar fees with respect to investments in Class I shares or Class D shares. Before making your
investment decision, please consult with your financial advisor regarding your account type and the classes of
common stock you may be eligible to purchase and all costs and expenses associated with your potential investment.
Our Board of Directors
We operate under the direction of our board of directors, the members of which are accountable to us and our
stockholders as fiduciaries. We have six directors, five of whom have been determined to be independent of us, the
Adviser, the Sub-Adviser, Brookfield and their respective affiliates. Our independent directors are responsible for
reviewing the performance of the Adviser and approving the compensation paid to the Adviser and its affiliates. Our
directors are elected annually by our stockholders. See “Management—Directors and Executive Officers” for the
names and biographical information of our directors.
Our Structure
The following chart shows our current ownership structure and our relationship with Brookfield, the Adviser,
Oaktree, the Sub-Adviser, the Dealer Manager and their respective affiliates as of the date of this prospectus. See
“Stock Ownership of Certain Beneficial Owners and Management” for information on shares of our common stock
held by affiliates of Brookfield and Oaktree.
Brookfield
Brookfield is a leading global alternative asset manager with over $1 trillion of assets under management as of
December 31, 2025 across renewable power and transition, infrastructure, private equity, real estate and credit.
17
Brookfield invests client capital for the long-term with a focus on real assets and essential service businesses that
form the backbone of the global economy. Brookfield offers a range of alternative investment products to investors
around the world, including public and private pension plans, endowments and foundations, sovereign wealth funds,
financial institutions, insurance companies and private wealth investors. Brookfield draws on its heritage as an
owner and operator to invest for value and generate strong returns for clients, across economic cycles.
See “Questions and Answers About This Offering—Who is Brookfield?” and “Questions and Answers About
This Offering—What are Brookfield’s real estate capabilities?” above for more information about Brookfield and its
real estate business.
The Adviser
We are externally managed by our adviser, Brookfield REIT Adviser LLC, a Delaware limited liability
company. The Adviser is an affiliate of Brookfield. Pursuant to an advisory agreement among us, the Operating
Partnership and the Adviser (the “Advisory Agreement”), the Adviser is responsible for implementing our
investment strategy, which includes making investment decisions in constructing our portfolio and providing related
portfolio management services, in accordance with our investment guidelines, policies and objectives and
limitations, subject to oversight by our board of directors. The Adviser is also responsible for oversight over our
other service providers. For so long as the Advisory Agreement is in effect, the Adviser has the right to nominate,
subject to the approval of such nomination by our board of directors, up to four affiliated directors to the slate of
directors to be voted on by the stockholders at our annual meeting of stockholders; provided, however, that such
number of director nominees shall be reduced as necessary by a number that will result in a majority of directors
being independent directors. Our board of directors must also consult with the Adviser in connection with (i) its
selection of each independent director for nomination to the slate of directors to be voted on at the annual meeting of
stockholders, and (ii) filling any vacancies created by the removal, resignation, retirement or death of any director.
The Adviser performs its duties and will serve as a fiduciary under the Advisory Agreement. See “Management.”
The Sub-Adviser
The Adviser has engaged Oaktree Fund Advisors, LLC as our sub-adviser. Pursuant to the Sub-Advisory
Agreement, the Sub-Adviser (i) provides services related to the acquisition, management and disposition of the
Investment Sleeve in accordance with, and subject to, our investment objectives, strategy, guidelines, policies and
limitations; and (ii) provides certain services with respect to Adviser CMBS subject to specified guidelines and
limitations.
The fees paid to the Sub-Adviser pursuant to the Sub-Advisory Agreement will not be paid by us, but will
instead be paid by the Adviser out of the management and performance fees that we pay to the Adviser. The Sub-
Adviser performs its duties and will serve as a fiduciary under the Sub-Advisory Agreement.
The Dealer Manager
Brookfield Private Wealth LLC, our dealer manager, is distributing shares of our common stock in this offering
on a “best efforts” basis. The Dealer Manager was formed in 2021 and is a member of FINRA and an affiliate of the
Adviser. The Dealer Manager manages our relationships with participating broker-dealers and financial advisors,
and coordinates marketing and distribution efforts with participating broker-dealers and their registered
representatives with respect to communications related to the terms of the offering, our investment strategies,
material aspects of our operations and subscription procedures.
Dealer Manager for the DST Program
In connection with the launch of the DST Program, Brookfield Real Estate Exchange LLC (the “DST
Sponsor”), the Dealer Manager and, solely with respect to its obligations with respect to the investor servicing fee,
the Operating Partnership, entered into that certain DST Dealer Manager Agreement (the “DST Dealer Manager
Agreement”), pursuant to which the Dealer Manager will serve as the dealer manager for the DST Offerings on a
“best efforts” basis.
18
The Operating Partnership
We own substantially all of our interests in our investments through Brookfield REIT Operating Partnership LP
or its subsidiaries. Brookfield REIT OP GP LLC, our wholly owned subsidiary, is the sole general partner of the
Operating Partnership. We contribute substantially all the proceeds received from our public and private offerings of
common stock to the Operating Partnership in exchange for partnership units of the Operating Partnership
(“Operating Partnership units”) representing our interest as a limited partner of the Operating Partnership. The use of
our Operating Partnership to hold all of our assets is referred to as an UPREIT. Using an UPREIT structure may
give us an advantage in acquiring properties from persons who want to defer recognizing a gain for U.S. federal
income tax purposes.
Summary Risk Factors
An investment in shares of our common stock involves significant risks and is intended only for investors with a
long-term investment horizon and who do not require immediate liquidity or guaranteed income. If we are unable to
effectively manage the impact of these risks, we may not meet our investment objectives and, therefore, you should
purchase our shares only if you can afford a complete loss of your investment. Some of the more significant risks
relating to an investment in shares of our common stock include:
•You will not have the opportunity to evaluate our future investments before we make them, which makes
an investment in our common stock more speculative.
•Since there is no public trading market for shares of our common stock, repurchase of shares by us will
likely be the only way to dispose of your shares. Our share repurchase plan will provide stockholders with
the opportunity to request that we repurchase their shares on a monthly basis, but we are not obligated to
repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been
requested to be repurchased in any particular month in our discretion. In addition, repurchases will be
subject to available liquidity and other significant restrictions. Further, our board of directors may modify
or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest
of our stockholders. As a result, our shares should be considered as having only limited liquidity and at
times may be illiquid.
•We cannot guarantee that we will make distributions, and if we do, we may fund such distributions from
sources other than cash flows from operations, and we have no limits on the amounts we may pay from
such sources.
•The purchase and repurchase price for shares of our common stock will generally be based on our prior
month’s NAV (subject to material changes as described herein) and will not be based on any public trading
market. While there will be independent annual appraisals of our properties, the appraisal of properties is
inherently subjective, and our NAV may not accurately reflect the actual price at which our assets could be
liquidated on any given day.
•We have no employees and are dependent on the Adviser to conduct our operations. The Adviser will face
conflicts of interest as a result of, among other things, the allocation of investment opportunities among us
and Other Brookfield Accounts, the allocation of time of its investment professionals and the substantial
fees that we will pay to the Adviser.
•This is a “best efforts” offering. If we are not able to raise a substantial amount of capital in the near term,
our ability to achieve our investment objectives could be adversely affected.
•Principal and interest payments on any borrowings will reduce the amount of funds available for
distribution or investment in additional real estate assets. Borrowing also increases our risk of loss and
exposure to negative economic effects.
•There are limits on the ownership and transferability of our shares. See “Description of Capital Stock—
Restrictions on Ownership and Transfer.”
19
•Investing in commercial real estate assets involves certain risks, including but not limited to: tenants’
inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and
vacancies; and changes in supply of or demand for similar properties in a given market.
•Our operating results will be affected by global and national economic and market conditions generally and
by the local economic conditions where our properties are located, including changes with respect to rising
interest rates, inflation, rising vacancy rates or decreasing market rental rates; fluctuations in the average
occupancy; inability to lease space on favorable terms; bankruptcies, financial difficulties or lease defaults
by our tenants; and changes in government rules, regulations and fiscal policies, such as property taxes,
zoning laws, limitations on rental rates, and compliance costs with respect to environmental and other laws.
•If we fail to maintain our qualification as a REIT and no relief provisions apply, our NAV and cash
available for distribution to our stockholders could materially decrease as a result of being subject to
corporate income tax.
See “Risk Factors.”
Conflicts of Interest
Brookfield, the Adviser, Oaktree, the Sub-Adviser and their respective affiliates, officers and directors will
experience conflicts of interest in connection with the management of our business, including: fees of the Adviser
and the Sub-Adviser; allocation of investment opportunities; investments where Other Brookfield Accounts or Other
Oaktree Accounts (as defined below) hold related investments; the engagement of affiliated service providers;
allocation of personnel; and other conflicts.
Our charter contains provisions, and the Adviser and the Sub-Adviser have adopted policies and procedures,
that are designed to mitigate many of the various conflicts of interest that exist or may arise, including the
requirement that a majority of our board of directors (including a majority of our independent directors) not
otherwise interested in the transaction approve any transactions with Brookfield, the Adviser, Oaktree, the Sub-
Adviser or their respective affiliates. See “Conflicts of Interest.”
Allocation of Investment Opportunities
Investment opportunities identified by the Adviser and its affiliates that are within the scope of our investment
objectives and strategy generally are expected to be presented to us. Notwithstanding the foregoing, the other
investment funds, REITs, vehicles, accounts, products and other similar arrangements for which Brookfield
currently acts, or will act in the future, as sponsor, general partner or manager to, or otherwise participate in,
including proprietary accounts (“Other Brookfield Accounts”), in certain cases, will have overlapping investment
objectives with us or priority over us with respect to investment opportunities that meet both our and such Other
Brookfield Account’s investment objectives.
Where our investment objectives overlap with the investment objectives of one or more Other Brookfield
Accounts, investment opportunities will be allocated on a basis that Brookfield determines in good faith is fair and
equitable taking into account one or more principles (the “Allocation Principles”) as it deems relevant in its
discretion, including (among others) (i) the size, nature and type of the investment opportunity (including the risk
and return profiles of the opportunity, expected holding period and other attributes) as well as its fit within each
account’s investment focus; (ii) the nature of our company’s and the Other Brookfield Accounts’ investment
mandates (including their investment focus, objectives, strategies, guidelines, limitations, risk-return targets, client
instructions (if any) and risk tolerance, as each is determined and adjusted from time to time over the lives of our
company and the Other Brookfield Accounts; (iii) the geographic location of the investment opportunity, and
Brookfield’s determination of the appropriateness of the risks of investing in such location for our company and the
Other Brookfield Accounts; (iv) investment priorities of our company and the Other Brookfield Accounts, including
in connection with follow-on opportunities; (v) the relative amounts of capital available (or expected to be available)
for investment for the period in which such investment will be consummated; (vi) principles of diversification of
investments (including, among others, sector, geographic, risk, asset and/or other portfolio diversification and/or
concentration considerations); (vii) the expected future capacity of our company and the Other Brookfield
20
Accounts; (viii) our company’s and the Other Brookfield Accounts’ liquidity needs (including for pipeline, follow-
on, staged draw investments (including funding obligations with respect to such investments that are contingent
upon achievement of certain milestones) and other opportunities pursued by our company and the Other Brookfield
Accounts); (ix) the management (including mitigation) of any actual or potential conflict of interest considerations,
including in connection with investment in different parts of an issuer’s capital structure; (x) limitations imposed by
investors in our company and the Other Brookfield Accounts (pursuant to consent and/or approval rights or as
otherwise agreed to with such investors); (xi) statutory minimum capital, risk retention and surplus requirements
applicable to our company and/or the Other Brookfield Accounts; (xii) the capital efficiency of the investment
opportunity for insurance and/or other purposes; (xiii) expected or actual ratings or lack of ratings of the investment
opportunity; (xiv) the availability of other appropriate or similar investment opportunities; (xv) the extent to which
the investment professionals involved in our company or the Other Brookfield Accounts participated in the sourcing
and/or diligencing of the investment opportunity and as a result their knowledge and understanding of the
investment opportunity; (xvi) whether the allocation would result in our company receiving a de minimis amount or
an amount below the established minimum quantity; (xvii) related-party nature of the transaction and potential
conflicts considerations that could arise as a result; (xviii) whether our company is in liquidation; and/or (xix) other
considerations deemed relevant by Brookfield (including legal, regulatory, tax, structuring, compliance, investment
specific, timing and similar considerations). To the extent that Brookfield determines that an overlap situation is
likely to be recurring for particular types of investment opportunities, Brookfield could (but will not be required to)
determine to apply the Allocation Principles in accordance with a formulaic or other systematic approach for any
period of time, as it deems appropriate in its sole discretion. The factors considered by Brookfield in allocating
investments among our company and Other Brookfield Accounts are expected to change over time (including to
consider new, additional factors) and different factors are likely to be emphasized or be considered less relevant with
respect to different investments. In some cases this will result in certain transactions being shared among our
company and one or more Other Brookfield Accounts, while in other cases it will result in our company or one or
more Other Brookfield Accounts being excluded from an investment entirely. In particular, Other Brookfield
Accounts include an open-end private fund whose primary objective is to seek investments in high-quality properties
located primarily in major markets in the United States, and other open-end private funds with similar investment
strategies in other parts of the world, including Europe and Australia (collectively, the “Open-Ended Core Plus
Funds”). Investment opportunities that are appropriate for the Open-Ended Core Plus Funds often require asset
management or repositioning activities that are generally expected to result in greater appreciation potential than
investment opportunities that are allocated to us, but in many cases will not be expected to generate sufficient stable
current income to be consistent with our investment objectives and strategy. However, since the Open-Ended Core
Plus Funds’ investment objectives do overlap with ours, we expect that from time to time investment opportunities
that fit the investment criteria of both us and one of the Open-Ended Core Plus Funds will arise. Such opportunities
will be allocated in accordance with the Allocation Principles. In addition, Brookfield manages certain Other
Brookfield Accounts (including Brookfield proprietary, Brookfield-related and third-party accounts) that invest in
real estate debt (collectively, the “Credit Platform Accounts”). Investment opportunities in real estate debt are
generally expected to be allocated among such Credit Platform Accounts pursuant to: (a) a pro rata allocation
methodology based on each account’s respective target investment amounts for such category of investments, as
determined by Brookfield from time to time in its sole discretion, or (b) a rotational allocation methodology or
another non pro-rata basis where Brookfield determines, in its sole discretion, that such allocation methodology is
more appropriate. Further, Brookfield may act as general partner and/or manager to, and otherwise participate in,
sidecar funds, which will be considered Credit Platform Accounts and be allocated investment opportunities
pursuant to the same methodology as other Credit Platform Accounts. Under certain circumstances, where the
investment mandate of Credit Platform Accounts overlap with our investment mandate, investment opportunities
will be allocated between us and such Credit Platform Accounts on a basis that Brookfield believes is fair and
equitable taking into account one or more of the Allocation Principles, as it deems relevant in its discretion.
However, Brookfield generally expects to offer debt investment opportunities to its Credit Platform Accounts before
offering them to us because, while we expect to selectively invest in real estate debt, our investment strategy focuses
primarily on equity investments. Brookfield generally expects to offer debt investment opportunities to its real estate
debt funds before offering them to us because, while we expect to selectively invest in real estate debt, our
investment strategy focuses primarily on equity investments. Brookfield also manages Other Brookfield Accounts
that target “opportunistic” returns, Other Brookfield Accounts that focus on real estate secondary investments
(which include, among other things, investments in pooled investment vehicles managed by third parties or
21
recapitalization of third-party managed investment vehicles (in whole or in part)) and Other Brookfield Accounts
that focus on single-family rental properties, each of which is expected to receive allocations of investment
opportunities suitable for their investment mandates before such opportunities are offered to us.
Further, Brookfield may source a future investment opportunity related to, or arising from, an existing
investment, and such future investment opportunity may be allocated to an Other Brookfield Account instead of us
because of timing or other considerations, such as lack of required available funds. These subsequent investments
may dilute or otherwise adversely affect our interests or the interests of the previously invested Other Brookfield
Account. As a result of the foregoing, opportunities sourced by Brookfield that would otherwise be suitable for us
may not be available to us, or we may receive a smaller allocation of such opportunities than would otherwise have
been the case.
Fees and Expenses Paid to the Adviser and its Affiliates
We pay the Adviser, the Dealer Manager and their respective affiliates the fees and expense reimbursements
described below in connection with performing services for us. In addition, affiliates of the Adviser receive fees and
expense reimbursements in connection with our DST Program as described in “Investment Objectives and Strategies
—DST Program.” We do not intend to pay the Adviser or its affiliates any separate fees for property acquisitions,
dispositions or financings (except interest and other payments to the lender in cases where the lender is an affiliate
of the Adviser), although our charter permits us to do so, subject to certain limitations. We will, however, reimburse
the Adviser for out-of-pocket expenses related to the foregoing activities to the extent such expenses are paid by the
Adviser.
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Organization and Offering Activities | ||||
Upfront Selling Commissions and Dealer Manager Fees—The Dealer Manager ........................... | The Dealer Manager is entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5%, of the transaction price of each Class T share sold in the primary offering; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager is entitled to receive upfront selling commissions of up to 3.5% of the transaction price of each Class S share sold in the primary offering and up to 1.5% of the transaction price of each Class D share sold in the primary offering. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers. | The actual amount will depend on the number of Class T, Class S and Class D shares sold. Aggregate upfront selling commissions will equal approximately $134.9 million and dealer manager fees will equal approximately $1.4 million, in each case, assuming we sell the maximum amount in our primary offering, assuming payment of the full upfront selling commissions and dealer manager fees (with a split for Class T shares of 3.0% and 0.5%, respectively), and assuming that 5%, 60% and 5% of our offering proceeds are from the sale of each of Class T, Class S and Class D shares, respectively. | ||
No upfront or other selling commissions or dealer manager fees are paid with respect to Class I shares, or shares of any class sold pursuant to our distribution reinvestment plan. |
22
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Stockholder Servicing Fees— The Dealer Manager ................... | Subject to FINRA limitations on underwriting compensation, we pay the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker- dealers servicing investors’ accounts, referred to as servicing broker-dealers: •with respect to our outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of our outstanding Class T shares; provided, however, that with respect to Class T shares sold through certain participating broker- dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares; •with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares; and •with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of our outstanding Class D shares. | Actual amounts depend upon the per share NAVs of our Class T, Class S and Class D shares, the number of Class T, Class S and Class D shares purchased and when such shares are purchased. For Class T shares, the stockholder servicing fees will equal approximately $2.5 million per annum if we sell the maximum amount. For Class S shares, the stockholder servicing fees will equal approximately $29.6 million per annum if we sell the maximum amount. For Class D shares, the stockholder servicing fees will equal approximately $0.7 million per annum if we sell the maximum amount. In each case, we are assuming that, in our primary offering, 5% of our offering proceeds are from the sale of Class T shares, 60% of our offering proceeds are from the sale of Class S shares and 5% of our offering proceeds are from the sale of Class D shares, that the NAV per share of our Class T shares, Class S shares and Class D shares remains constant and none of our stockholders participate in our distribution reinvestment plan. | ||
We do not pay a stockholder servicing fee with respect to our outstanding Class I shares. The stockholder servicing fees are paid monthly in arrears. The Dealer Manager reallows (pays) the stockholder servicing fees to participating broker- dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers, and waives stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services. Stockholder servicing fees are paid on Class T, Class S and Class D shares issued under our distribution reinvestment plan. Because the stockholder servicing fees are calculated based on the NAV for our Class T, Class S and Class D shares, they will reduce the NAV or, alternatively, the distributions payable, with respect to the shares of each such class. | ||||
23
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the applicable dealer agreement between the Dealer Manager and a participating broker- dealer at the time such shares were issued) of the sum of the gross proceeds from the sale of such shares. | ||||
At the end of such month, any Class T share, Class S share or Class D share held in such stockholder’s account will convert into a number of Class I shares with an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with respect to a Class T share or Class S share over approximately 6.5 years from the date of purchase and with respect to a Class D share held in a stockholder’s account over approximately 29.5 years from the date of purchase, assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions and dealer manager fees (as applicable), opting out of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for these time periods, this fee with respect to a Class T share or Class S share would total approximately $0.56 and with respect to a Class D share would total approximately $0.74. |
24
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
In addition, we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class D shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof, or (iii) the end of the month following the completion of this offering in which, which we, with the assistance of the Dealer Manager, determine that, in the aggregate, underwriting compensation paid or incurred from all sources in connection with this offering, determined pursuant to the rules and guidance of FINRA, including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. If not already converted as described in the preceding paragraph, on the earliest of the foregoing, each Class T share, Class S share or Class D share held in a stockholder’s account will convert into a number of Class I shares with an equivalent aggregate NAV as such share. | ||||
For a description of the services required from the participating broker-dealer or servicing broker-dealer, see the “Plan of Distribution— Underwriting Compensation — Stockholder Servicing Fees—Class T, Class S and Class D Shares.” | ||||
25
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Organization and Offering Expense Reimbursement— The Adviser .................................. | The Adviser advanced all of our 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) we reimburse the Adviser for all such advanced expenses paid through July 5, 2022 ratably over the 60 months following July 6, 2022; and (2) we reimburse 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. Following July 6, 2023, we reimburse the Adviser for any organization and offering expenses that it incurs on our behalf and on behalf of feeder vehicles primarily created to hold our shares as and when incurred. Our organization and offering expenses include the organization and offering expenses and management and operating expenses of feeder vehicles primarily created to hold our shares. As of December 31, 2025, the reimbursement payable to the Adviser for advanced organization and offering costs was $4.3 million. | We estimate our organization and offering expenses to be approximately $9.2 million if we sell the maximum offering amount. | ||
After the termination of the primary offering and again after termination of the offering under our distribution reinvestment plan, the Adviser has agreed to reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of our gross proceeds from the applicable offering. | ||||
Investment Activities | ||||
Acquisition Expense Reimbursement—The Adviser ..... | We do not intend to pay the Adviser any acquisition or other similar fees in connection with making investments, though our charter authorizes us to do so. We will, however, reimburse the Adviser for out-of-pocket expenses in connection with the acquisition, origination and financing of properties and real estate- related investments, whether or not such investments are acquired, and make payments to third parties or certain of the Adviser’s affiliates in connection with making investments, as described in “— Fees from Other Services” below. | Actual amounts are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. | ||
26
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Operational Activities | ||||
Management Fee, Performance Fee and Expense Reimbursements—The Adviser ... | We pay the Adviser a management fee equal to 1.25% of our NAV of the Class C, Class D, Class I, Class S and Class T shares (collectively, the “Participating Shares”) per annum payable monthly, and the Operating Partnership pays the Adviser a management fee equal to 1.25% of the Operating Partnership’s NAV of the Class C, Class D, Class D-1, Class I, Class I-1, Class S, Class S-1, Class T and Class T-1 units of the Operating Partnership held by unitholders other than us (collectively, the “Participating Units”) per annum payable monthly. In addition, we and the Operating Partnership pay the Adviser a management fee equal to 1.25% of the aggregate DST Property consideration per annum payable monthly for all DST Properties subject to a FMV Option held by the Operating Partnership. For avoidance of doubt, the Adviser does not receive a duplicative management fee with respect to any DST Property. No management fee is paid with respect to Class E shares or Class E units and as a result, it is a class-specific expense. | Actual amounts of the management fee depend upon our aggregate NAV. The management fee will equal approximately $73.3 million per annum if we sell the maximum amount in our primary offering, assuming that the NAV per share of each class of our common stock remains constant and before giving effect to any shares issued under our distribution reinvestment plan. Actual amounts of the performance fee depend upon our total distributions plus the change in NAV per share or per unit, as applicable. Actual amounts of out-of-pocket expenses paid by the Adviser that we reimburse are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. | ||
The management fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares, or Class E or Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I shares obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. | ||||
27
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
In addition, we pay the Adviser a performance fee equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High-Water Mark, with a Catch-Up with respect to the Participating Shares payable annually. We do not pay the Adviser a performance fee with respect to the Class E shares and as a result, it is a class-specific expense. | ||||
The performance fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares, or Class E or Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I shares obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. If the Adviser elects to receive any portion of its performance fee in Class E or Class I-1 units, the Adviser may request the Operating Partnership to repurchase such units from the Adviser at a later date. Any such repurchase requests are not subject to the Early Repurchase Deduction or minimum holding period. The Operating Partnership will repurchase any such Operating Partnership units for cash unless our board of directors determines that any such repurchase for cash would be prohibited by applicable law or the partnership agreement, in which case such Operating Partnership units will be repurchased for Class E or Class I shares of our common stock with an equivalent aggregate NAV. | ||||
28
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
To the extent that the Operating Partnership issues Participating Units, the Operating Partnership will pay the Adviser both (i) a management fee of 1.25% of the Operating Partnership’s NAV of the Participating Units per annum payable monthly, and (ii) a performance fee with respect to such Participating Units paid annually in an amount equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High- Water Mark, with a Catch-Up (each term as defined herein). | ||||
For a detailed explanation of how the performance fee is calculated, see “Management—The Advisory Agreement —Management Fee, Performance Fee and Expense Reimbursements.” For a hypothetical example of the performance fee calculation, see “Compensation— Performance Fee Example.” | ||||
In addition to the organization and offering expense and acquisition expense reimbursements described above, we will reimburse the Adviser for costs and expenses it incurs in connection with the services it provides to us, including, but not limited to, (1) the actual cost of goods and services used by us and obtained from third parties, including fees paid to administrators, consultants, attorneys, technology providers and other service providers, and brokerage fees paid in connection with the purchase and sale of investments and securities, (2) expenses of managing and operating our properties, whether payable to an affiliate or a non- affiliated person and (3) administrative service expenses, including, but not limited to, personnel and related employment costs incurred by the Adviser or its affiliates in performing administrative services on our behalf (including legal, accounting, investor relations, tax, capital markets, financial operations services and other administrative services), provided that no reimbursement shall be made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our board of directors. The expense reimbursements that we will pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf. | ||||
See “Management—The Advisory Agreement—Management Fee, Performance Fee and Expense Reimbursements.” |
29
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Fees from Other Services— Affiliates of the Adviser ................ | We may retain third parties, including certain of the Adviser’s affiliates, for necessary services relating to our investments or our operations, including, but not limited to, lending and loan special servicing; investment banking, advisory, consulting, brokerage and managing foreclosures and workouts; the placement and provision of insurance policies and coverage, including risk retention or insurance captives; entitlement, development, construction and design (including oversight thereof); portfolio company, real estate operations and property management (and oversight thereof) and leasing; legal, financial, compliance, tax, back office, corporate secretarial, accounting, human resources, bank account and cash management; supply or procurement of power and energy; transaction support; accounting and reporting (including coordinating onboarding, due diligence, reporting and other administrative services) and other financial operations services; hedging, derivatives, financing and other treasury services and capital markets services; data generation, analysis, collection and management services; physical and digital security, life and physical safety, and other technical specialties; information technology services and innovation; appraisal and valuation services; market research; cash flow modeling and forecasting; client onboarding; and other services or products. Any fees paid to the Adviser’s affiliates for any such services will not reduce the management or performance fees. Any such arrangements will subject to approval by a majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transaction. | Actual amounts depend on whether affiliates of the Adviser are actually engaged to perform such services |
In calculating the management fee, we use our NAV and the Operating Partnership’s NAV before giving effect
to any accruals for the management fee, the performance fee, the stockholder servicing fee, the investor servicing fee
or distributions payable on our shares or the Operating Partnership’s units. In calculating our stockholder servicing
fee, we use our NAV before giving effect to accruals for the stockholder servicing fee or distributions payable on
our shares.
Our Total Operating Expenses are limited during any four fiscal quarters to the greater of (a) 2.0% of our
Average Invested Assets or (b) 25.0% of our Net Income. This limit may be exceeded only if our independent
directors have made a finding that, based on such unusual and non-recurring factors as they deem sufficient, a higher
level of expenses is justified, and such finding is recorded in the minutes of a meeting of the independent directors.
Within 60 days after the end of any fiscal quarter for which there is an excess amount that the independent directors
conclude was justified, a written disclosure of such fact, together with an explanation of the factors the independent
directors considered in determining that such excess amount was justified, must be sent to the holders of shares of
common stock (or disclosed in our next quarterly report on Form 10-Q or by filing a current report on Form 8-K
with the SEC). See “Management—The Advisory Agreement—Management Fee, Performance Fee and Expense
30
Reimbursements” for the definitions of “Total Operating Expenses,” “Average Invested Assets” and “Net Income”
and additional disclosures regarding this limit.
Share Repurchase Plan
There is no public trading market for shares of our common stock. While you should view your investment as
long term with limited liquidity, 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. Due to the illiquid nature of investments in real
estate, we may not have sufficient liquid resources to fund repurchase requests. 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. Our share repurchase plan has limitations as to the amount of shares that can be repurchased in
any given month and quarter. See “Questions and Answers—Can I request that my shares be repurchased?” and
“Share Repurchase Plan—Repurchase Limitations” for details on our share repurchase plan and its limitations.
Brookfield Investor Repurchase Arrangement
One or more affiliates of Brookfield (individually or collectively, as the context may require, the “Brookfield
Investor”) was issued shares of our common stock and Operating Partnership units in connection with its
contribution of certain properties on November 2, 2021. We and the Operating Partnership have entered into a
repurchase arrangement with the Brookfield Investor (the “Brookfield Repurchase Arrangement”) pursuant to which
we or the Operating Partnership will offer to repurchase shares of our common stock or Operating Partnership units,
as applicable, from the Brookfield Investor at a price per unit equal to the most recently determined NAV per
Operating Partnership unit immediately prior to each repurchase. The Brookfield Investor has agreed not to seek
repurchase of the Operating Partnership 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. The Brookfield Investor may cause us to repurchase its shares
and Operating Partnership 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 (subject to potential carry-over capacity and measured based on net repurchases during a
month or quarter, as applicable) 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 the share repurchase plan is not repurchased. The
Brookfield Repurchase Arrangement will not apply to shares of our common stock or units of the Operating
Partnership held by affiliates of Brookfield that are feeder vehicles primarily created to hold our Class I and Class C
shares of common stock that offer interests in such feeder vehicles to non-U.S. persons. For the year ended
December 31, 2025, we and the Operating Partnership did not repurchase any shares or Operating Partnership units
from the Brookfield Investor as part of the Brookfield Repurchase Arrangement.
Brookfield or one of its affiliates purchased $200,000 in Class I shares and may not sell those shares for so long
as the Adviser serves as our investment advisor. These shares are not subject to the Repurchase Arrangement
described above.
Distributions
We elected to qualify and be taxed as a REIT beginning with our taxable year ended December 31, 2019, and
intend to continue to qualify as a REIT. To maintain our qualification as a REIT, we generally are required to
distribute dividends to stockholders equal to at least 90% of our REIT taxable income each year, determined without
regard to the dividends-paid deduction and excluding net capital gain. See “Description of Capital Stock—
Distribution Policy” and “Material U.S. Federal Income Tax Considerations.”
We expect to continue paying regular monthly distributions. Any distributions we make will be at the discretion
of our board of directors, considering factors such as our earnings, cash flow, capital needs and general financial
condition and the requirements of Maryland law. As a result, our distribution rates and payment frequency may vary
from time to time. You will not be entitled to receive a distribution if your shares are repurchased prior to the
applicable record date.
31
Our board of directors’ discretion as to the payment of distributions will be directed, in substantial part, by its
determination to cause us to comply with the REIT requirements.
The per share amount of distributions on our various classes of common stock sold in this offering will likely
differ because of different allocations of class-specific stockholder servicing fees and management and performance
fees. Specifically, classes with higher stockholder servicing fees and management and performance fees will likely
receive lower distributions than classes with lower or no stockholder servicing fees or management and performance
fees.
There is no assurance we will pay distributions in any particular amount, if at all. We may fund any
distributions from sources other than cash flows from operations, and we have no limits on the amounts we may pay
from such sources.
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan whereby our stockholders (other than Alabama, California,
Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon,
Tennessee, Texas, Vermont and Washington investors and clients of certain participating broker-dealers that do not
permit automatic enrollment in our distribution reinvestment plan) will have their cash distributions automatically
reinvested in additional shares of our common stock unless they elect to receive their distributions in cash. Alabama,
California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina,
Ohio, Oregon, Tennessee, Texas, Vermont and Washington investors and clients of certain participating broker-
dealers that do not permit automatic enrollment in our distribution reinvestment plan will automatically receive their
distributions in cash unless they elect to have their cash distributions reinvested in additional shares of our common
stock. If you participate in our distribution reinvestment plan, the cash distributions attributable to the class of shares
that you own will be automatically invested in additional shares of the same class. The purchase price for shares
purchased under our distribution reinvestment plan will be equal to the transaction price for such shares at the time
the distribution is payable. Stockholders will not pay selling commissions when purchasing shares under our
distribution reinvestment plan. For the complete terms of the distribution reinvestment plan, see Appendix A to this
prospectus.
Certain ERISA Considerations
The section of this prospectus captioned “Certain ERISA Considerations” describes the effect that the purchase
of shares will have on individual retirement accounts and retirement plans that are subject to ERISA and the Code.
Investment Company Act of 1940 Considerations
We intend to engage primarily in the business of investing in real estate and to conduct our operations so that
neither we, nor the Operating Partnership, or any of our respective subsidiaries is required to register as an
investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). A
company is an “investment company” under the Investment Company Act:
•under Section 3(a)(1)(A), if it is, or holds itself out as being, engaged primarily, or proposes to engage
primarily, in the business of investing, reinvesting or trading in securities; or
•under Section 3(a)(1)(C), if it is engaged, or proposes to engage, in the business of investing, reinvesting,
owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” having a
value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on
an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally
includes all securities except U.S. government securities and securities of majority-owned subsidiaries that
are not themselves investment companies and are not relying on the exemption from the definition of
investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.
We intend to acquire real estate and real estate-related assets directly, primarily by acquiring fee interests in real
property. We may also invest in real property indirectly through investments in joint venture entities, including joint
32
venture entities in which we do not own a controlling interest and joint venture entities in which Other Brookfield
Accounts may invest. We plan to conduct our businesses primarily through direct or indirect majority-owned
subsidiaries to hold particular assets.
We intend to conduct our operations so that we, the Operating Partnership and most of our wholly and majority-
owned subsidiaries will comply with the 40% test. We will continuously monitor our holdings on an ongoing basis
to determine compliance with this test. We expect that most of our wholly owned and majority-owned subsidiaries
will not be relying on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
Consequently, interests in these subsidiaries (which are expected to constitute a substantial majority of our assets)
generally will not constitute “investment securities.” Accordingly, we believe that we, the Operating Partnership,
and most of our wholly and majority-owned subsidiaries will not be considered investment companies under Section
3(a)(1)(C) of the Investment Company Act.
In addition, we believe that neither we nor the Operating Partnership or most of our wholly or majority-owned
subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act
because neither we nor the Operating Partnership will engage primarily or hold themselves out as being engaged
primarily in the business of investing, reinvesting or trading in securities. Rather, we, the Operating Partnership, and
most of our subsidiaries will be primarily engaged in non-investment company businesses related to real estate. If,
however, any of our subsidiaries relies on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment
Company Act, we intend to limit the amount of assets held by such subsidiaries to the extent necessary to ensure that
our and our other subsidiaries’ status as non-investment companies exempt from the Investment Company Act
would not be adversely affected. This may require us to forego opportunities to acquire traded securities or certain
other assets that we would otherwise want to acquire or sell such assets when we would otherwise wish to retain
them.
We will determine whether an entity is a majority-owned subsidiary of our company. The Investment Company
Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities
of which are owned by such person, or by another company which is a majority-owned subsidiary of such person.
The Investment Company Act defines voting securities as any security presently entitling the owner or holder
thereof to vote for the election of directors of a company. We treat entities in which we own at least 50% of the
outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested
that the SEC or its staff approve our treatment of any entity as a majority-owned subsidiary, and neither has done so.
If the SEC or its staff was to disagree with our treatment of one or more subsidiary entities as majority-owned
subsidiaries, we may need to adjust our strategy and our assets in order to continue to pass the 40% test. Any
adjustment in our strategy could have a material adverse effect on us.
If we, the Operating Partnership, or any of our wholly or majority-owned subsidiaries would ever inadvertently
fall within the definitions of “investment company,” in Section 3(a)(1)(A) or 3(a)(1)(C) of the Investment Company
Act we may rely on the exemption provided by Section 3(c)(5)(C) or Section 3(c)(6) of the Investment Company
Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring
mortgages and other liens on and interests in real estate” or for holding companies primarily engaged in such
businesses through majority owned subsidiaries.
The SEC staff has taken the position that Section 3(c)(5)(C) in addition to prohibiting the issuance of certain
types of securities, generally requires that at least 55% of an entity’s assets must be comprised of mortgages and
other liens on and interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s
assets must be comprised of additional qualifying assets or a broader category of assets that we refer to as “real
estate-related assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be
comprised of miscellaneous assets).
We would classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by
the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are based on
specific factual situations that may be substantially different from the factual situations we may face, and a number
of these no-action positions were issued more than 20 years ago. No assurance can be given that the SEC or its staff
33
will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further
guidance that may require us to reclassify our assets for purposes of the Investment Company Act.
If we are required to reclassify our assets, we may no longer be in compliance with the exemption from the
definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.
For purposes of determining whether we satisfy the 55%/25% test, based on certain no-action letters issued by
the SEC staff, we intend to classify our fee interests in real property, held by us directly or through our wholly
owned or majority-owned subsidiaries, as qualifying assets. In addition, based on no-action letters issued by the SEC
staff, we will treat our investments in any joint ventures that in turn invest in qualifying assets such as real property
as qualifying assets, but only if we are active in the management and operation of the joint venture and have the
right to approve major decisions by the joint venture; otherwise, they will be classified as real estate-related assets.
We will not participate in joint ventures in which we do not have or share control to the extent that we believe such
participation would potentially threaten our status as a non-investment company exempt from the Investment
Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that
are suitable for both us and one or more Other Brookfield Accounts. We expect that no less than 55% of our assets
will consist of investments in real property, including any joint ventures that we control or in which we share
control.
We also intend to treat as qualifying assets senior mortgage loans, certain B-Notes and certain mezzanine loans
that satisfy various conditions as set forth in SEC staff no-action letters and other guidance, and other assets that the
SEC staff in various no-action letters and other guidance has determined are the functional equivalent of senior
mortgage loans for the purposes of the Investment Company Act. We will treat as real estate-related assets B-Notes
and mezzanine loans that do not satisfy the conditions set forth in the relevant SEC staff no-action letters and other
guidance, and debt and equity securities of companies primarily engaged in real estate businesses. Unless a relevant
SEC no-action letter or other guidance applies, we expect to treat preferred equity interests as real estate-related
assets.
We and certain of our subsidiaries may in addition to, or alternatively rely on the exclusion from the definition
of investment company provided by Section 3(c)(6) to the extent that they hold mortgage assets or other real-estate
assets through majority-owned subsidiaries that rely on Section 3(c)(5)(C). Little interpretive guidance has been
issued by the SEC, or its staff, with respect to Section 3(c)(6) and any guidance published by the SEC, or its staff,
could require us to adjust our strategy accordingly. Although little interpretive guidance has been issued with respect
to Section 3(c)(6), we believe that we or certain of our subsidiaries may rely on Section 3(c)(6) if, among other
things, 55% of the assets of such subsidiaries consist of, and at least 55% of the income of such subsidiaries are
derived from, qualifying real estate investment assets owned by wholly-owned or majority-owned subsidiaries of
such subsidiaries.
Maintaining status as a non-investment company or qualifying for an exemption from registration under the
Investment Company Act will limit our ability to make certain investments. For example, these restrictions may
limit our and our subsidiaries’ ability to invest directly in mortgage-backed securities that represent less than the
entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed
securities, non-controlling equity interests in real estate companies or in assets not related to real estate.
Although we intend to monitor our portfolio, there can be no assurance that we and our subsidiaries will be able
to maintain the exemptions from registration discussed above.
Our board of directors has made a finding pursuant to Rule 3a-2 under the Investment Company Act related to
our ability to operate as a transient investment company for a period not to exceed one year from the date on which
we would otherwise be required to register as an investment company under the Investment Company Act.
A change in the value of any of our assets could negatively affect our ability to maintain our, the Operating
Partnership’s and our subsidiaries’ exemptions from regulation under the Investment Company Act. To maintain
compliance with the applicable exemptions, we may be unable to sell assets we would otherwise want to sell and
may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that
34
we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise
want to acquire and would be important to our investment strategy.
To the extent that the SEC or its staff provides more specific guidance regarding any of the matters bearing
upon the definition of investment company and the exemptions to that definition, we may be required to adjust our
strategy accordingly. Any additional guidance from the SEC or its staff could provide additional flexibility to us, or
it could further inhibit our ability to pursue the strategies we have chosen.
If we are required to register as an investment company under the Investment Company Act, we would become
subject to substantial regulation with respect to our capital structure (including our ability to use borrowings),
management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and
portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry
concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our
ability to make certain investments and require us to significantly restructure our business plan. For additional
discussion of the risks that we would face if we were required to register as an investment company under the
Investment Company Act, see “Risk Factors—Risks Related to This Offering and Our Organizational Structure—
Our results of operations may be adversely affected if we are required to register as an investment company under
the Investment Company Act.”
35
RISK FACTORS
An investment in shares of our common stock involves risks. You should carefully consider the following
material risks in addition to the other information contained in this prospectus before you decide to purchase shares
of our common stock. The occurrence of any of the following risks might cause you to lose all or a significant part of
your investment. The risks discussed below are not the only ones we may face, but do represent those known,
material risks that we believe are most significant to our business.
Risks Related to This Offering and Our Organizational Structure
We have a history of net losses and an accumulated deficit.
For the year ended December 31, 2025, we had net losses attributable to stockholders under GAAP and an
accumulated deficit. It is possible that we will continue to experience net losses and to accumulate additional
deficits, which may negatively affect the value of our shares of common stock.
We have held several of our current investments for only a limited period of time and you will not have the
opportunity to evaluate our future investments before we make them, which makes your investment more
speculative.
We have not yet acquired or identified all of the investments we may make. We are not able to provide you with
any information relating to any future properties, real estate debt or real estate-related securities that we may acquire.
Because we have not held several of our current investments for a long period of time, it may be difficult for you to
evaluate our success in achieving our investment objectives. We will continue to seek to invest substantially all of
the future net offering proceeds from our offering, after the payment of fees and expenses, in the acquisition of or
investment in interests in properties, real estate debt and real estate-related securities. However, because you are
unable to evaluate the economic merit of our future investments before we make them, you have to rely entirely on
the ability of the Adviser to select suitable and successful investment opportunities. Furthermore, the Adviser has
broad discretion in selecting the types of properties we will invest in and the tenants of those properties, and you do
not have the opportunity to evaluate potential investments. These factors increase the risk that your investment in
our common stock may not generate returns comparable to other real estate investment alternatives.
The Adviser manages our portfolio pursuant to very broad investment guidelines and generally is not required to
seek the approval of our board of directors for each investment, financing or asset allocation decision made by it,
which may result in our making riskier investments and which could adversely affect our results of operations
and financial condition.
Our board of directors has approved very broad investment guidelines that delegate to the Adviser the authority
to execute acquisitions and dispositions of real estate properties and real estate-related investments on our behalf, in
each case so long as such investments are consistent with the investment guidelines and our charter. There can be no
assurance that the Adviser will be successful in applying any strategy or discretionary approach to our investment
activities. Our current investments may not be representative of our future investments. A change in our investment
strategy may, among other things, increase our exposure to real estate market fluctuations, default risk and interest
rate risk, all of which could materially affect our results of operations and financial condition. Our board of directors
(including our independent directors) will review our investment guidelines on an annual basis (or more often as it
deems appropriate) and our investment portfolio periodically. The prior approval of our board of directors or a
committee of independent directors will be required only as set forth in our charter (including for transactions with
affiliates of the Adviser) or for the acquisition or disposition of assets that are not in accordance with our investment
guidelines. In addition, in conducting periodic reviews, our directors will rely primarily on information provided to
them by the Adviser. Furthermore, transactions entered into on our behalf by the Adviser may be costly, difficult or
impossible to unwind when they are subsequently reviewed by our board of directors.
36
There is no public trading market for shares of our common stock; therefore, stockholders’ ability to dispose of
their shares will likely be limited to repurchase by us. If stockholders do sell their shares to us, they may receive
less than the price they paid.
There is no current public trading market for shares of our common stock, and we do not expect that such a
market will ever develop. Therefore, repurchase of shares by us will likely be the only way for stockholders to
dispose of their shares. We will repurchase shares at a price equal to the transaction price of the class of shares being
repurchased on the date of repurchase (which will generally be equal to our prior month’s NAV per share), and not
based on the price at which stockholders initially purchased their shares. Subject to limited exceptions, shares
repurchased within one year of the date of issuance will be repurchased at 98% of the transaction price. As a result,
stockholders may receive less than the price they paid for their shares when they sell them to us pursuant to our
share repurchase plan. See “Share Repurchases–Early Repurchase Deduction.”
Repurchases through our share repurchase plan are limited. We may choose to repurchase fewer shares than
have been requested to be repurchased, in our discretion at any time, and the amount of shares we may
repurchase is subject to caps. 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.
We may choose to repurchase fewer shares than have been requested to be repurchased in any particular month,
or none at all, in our discretion at any time. This may be due to lack of readily available funds because of adverse
market conditions beyond our control, the need to maintain liquidity for our operations or because we have
determined that investing in real property or other illiquid investments is a better use of our capital than repurchasing
our shares.
In addition, the total amount of shares that we will repurchase will be 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
our aggregate NAV attributable to 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 our aggregate NAV attributable to our
stockholders as of the last day of the previous calendar quarter. The 2% and 5% limits described above are subject to
potential carry-over capacity and measured based on net repurchases during a month or quarter, as applicable.
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. If the full amount of all shares of our common stock requested
to be repurchased in any given month is not repurchased, funds will be allocated pro rata based on the total number
of shares of common stock being repurchased without regard to class and subject to the volume limitation. 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.
Furthermore, our board of directors may agree for the benefit of one or more of our stockholders to restrict
repurchases in a manner that is intended to permit us to be treated as a “domestically controlled” REIT within the
meaning of Section 897(h)(4)(B) of the Code. Because we are not required to authorize the recommencement of the
share repurchase plan within any specified period of time, we may effectively terminate the plan by suspending it
indefinitely. As a result, stockholders’ ability to have their shares repurchased by us may be limited and at times
stockholders may not be able to liquidate their investment. See “Share Repurchases – Repurchase Limitations.”
Economic events that may cause our stockholders to request that we repurchase their shares may materially
adversely affect our cash flow and our results of operations and financial condition.
Economic events affecting the U.S. economy, such as the general negative performance of the real estate sector,
rising interest rates and inflation could cause our stockholders to seek to sell their shares to us pursuant to our share
repurchase plan at a time when such events are adversely affecting the performance of our assets. Even if we decide
to satisfy all resulting repurchase requests, our cash flow could be materially adversely affected. In addition, if we
determine to sell assets to satisfy repurchase requests, we may not be able to realize the return on such assets that we
may have been able to achieve had we sold at a more favorable time, and our results of operations and financial
condition, including, without limitation, the breadth of our portfolio by property type and location, could be
materially adversely affected.
37
The amount and source of distributions we may make to our stockholders is uncertain, and we may be unable to
generate sufficient cash flows from our operations to make distributions to our stockholders at any time in the
future.
We have not established a minimum distribution payment level, and our ability to make distributions to our
stockholders may be adversely affected by a number of factors, including the risk factors described in this report.
Our board of directors (or a duly authorized committee of our board of directors) will make determinations
regarding distributions based upon, among other factors, our financial performance, debt service obligations, debt
covenants, REIT qualification and other tax considerations, Investment Company Act exemptions, capital
expenditure requirements and applicable law. Among the factors that could impair our ability to make distributions
to our stockholders are:
•the size of our portfolio;
•our inability to invest the proceeds from sales of our shares on a timely basis;
•our inability to realize attractive risk-adjusted returns on our investments;
•high levels of expenses or reduced revenues that reduce our cash flow or non-cash earnings; and
•defaults in our investment portfolio or decreases in the value of our investments.
As a result, we may not be able to make distributions to our stockholders at any time in the future, and the level
of any distributions we do make to our stockholders may not increase or even be maintained over time, any of which
could materially and adversely affect the value of our shares. For the year ended December 31, 2025, 79% of our
distributions were funded by cash flows from operations and 21% of our distributions were funded from other
sources, including cash flows from investing activities, such as proceeds from sales of trading securities and real
estate-related securities.
We may pay distributions and fund share repurchases from sources other than our cash flows from operations
and we have no limits on the amounts we may pay from such sources.
We may not generate sufficient cash flows from operations to fully fund distributions to stockholders.
Therefore, we may fund distributions to our stockholders or share repurchases from sources other than cash flows
from operations. The extent to which we pay distributions and fund share repurchases from sources other than cash
flows from operations will depend on various factors, including the level of participation in our distribution
reinvestment plan, level of share repurchase requests, the extent to which the Adviser elects to receive its
management or performance fees in shares of our common stock or units of the Operating Partnership, how quickly
we invest the proceeds from this offering and any future offering and the performance of our investments along with
tax and Investment Company Act considerations relating thereto.
Funding distributions and share repurchases from the proceeds of the sale of properties and other real estate-
related assets that we acquire, the repayment of loans that we acquire or originate, borrowings, return of capital or
proceeds of this offering will result in a reduction of assets available to acquire properties or other real estate-related
investments. As a result, the return stockholders realize on their investment may be reduced. Doing so may also
negatively impact our ability to generate cash flows. Likewise, funding distributions from the sale of additional
securities will dilute existing stockholders’ interest in us on a percentage basis and may impact the value of
stockholders’ investments, especially if we sell these securities at prices less than the price they paid for their shares.
Funding share repurchases from the sale of additional securities will impact the value of stockholders’ investments if
we sell these securities at prices less than the price at which we repurchase shares. We may be required to continue
to fund our regular distributions and share repurchases from a combination of some of these sources if our
investments fail to perform, if expenses are greater than our revenues or due to numerous other factors. We have not
established a limit on the amount of our distributions or repurchases that may be paid from any of these sources.
To the extent we borrow funds to pay distributions or fund repurchases, we would incur borrowing costs and
these borrowings would require a future repayment. The use of these sources for distributions and the ultimate
38
repayment of any liabilities incurred could adversely impact our ability to pay distributions or fund repurchases in
future periods, decrease our NAV, decrease the amount of cash we have available for operations and new
investments and adversely impact the value of our shares.
In addition, as noted above, we may defer operating expenses or pay expenses (including the fees of the
Adviser) with shares of our common stock in order to preserve cash flow for the payment of distributions. The
ultimate repayment of these deferred expenses could adversely affect our operations and reduce the future return on
our shares. The payment of expenses in shares of our common stock will dilute stockholders’ ownership interest in
our portfolio of assets. There is no guarantee any of our operating expenses will be deferred and the Adviser is under
no obligation to receive fees in shares of our common stock or Operating Partnership units and may elect to receive
such amounts in cash.
Purchases and repurchases of shares of our common stock may not be made based on the current NAV per share
of our common stock.
Generally, our offering price per share and the price at which we make repurchases of our shares will equal the
NAV per share of the applicable class as of the last calendar day of the prior month, plus, in the case of our offering
price, applicable upfront selling commissions and dealer manager fees. The NAV per share as of the date on which
an investor makes a subscription request or repurchase request may be significantly different than the offering price
such investor pays or the repurchase price such investor receives. In addition, we may, but are not obligated to, offer
and repurchase shares at a price that we believe reflects the NAV per share of such stock more appropriately than the
prior month’s NAV per share, including by updating a previously disclosed offering price, in cases where we believe
there has been a material change (positive or negative) to our NAV per share since the end of the prior month. In
such cases, the offering price and repurchase price will not equal our NAV per share as of any time.
See “Net Asset Value Calculation and Valuation Guidelines—Valuation of Investments” for examples of
valuation adjustment events that may cause a material change to our NAV per share.
Valuations and appraisals of our properties and real estate-related investments are estimates of fair value and
may not necessarily correspond to realizable value.
For the purposes of calculating our monthly NAV, our properties will initially be valued at cost, which we
expect to represent fair value at that time. Thereafter, our independent valuation advisor will prepare monthly
appraisals of our properties (except for single-family rentals and international properties) in accordance with the
valuation guidelines approved by our board of directors. At least once annually, we obtain an appraisal prepared by
another independent third-party appraisal firm. Such annual appraisal report will provide an estimated range of value
for the property, which our independent valuation advisor will take into consideration when determining the value of
the property during such month. Our investments in real estate securities will be valued monthly by the Adviser
using quotations from third-party pricing vendors. See “Net Asset Value Calculation and Valuation Guidelines.”
Although monthly valuations of each of our real properties will be prepared by our independent valuation
advisor, such valuations are based on asset and portfolio level information provided by the Adviser, including
historical operating revenues and expenses of the properties, lease agreements on the properties, budgeted revenues
and expenses of the properties, information regarding recent or planned capital expenditures and any other
information relevant to valuing the real estate property, which information will be reviewed and professional
skepticism applied as to its reasonableness but will not be independently verified by our independent valuation
advisor.
Within the parameters of our valuation guidelines, the valuation methodologies used to value our properties will
involve subjective judgments and projections and may not be accurate. Valuation methodologies will also involve
assumptions and opinions about future events, which may or may not turn out to be correct. Valuations and
appraisals of our properties and real estate-related investments will be only estimates of fair value. Ultimate
realization of the value of an asset depends to a great extent on economic, market and other conditions beyond our
control and the control of the Adviser and our independent valuation advisor. Further, valuations do not necessarily
represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation
between a willing buyer and seller. As such, the carrying value of an asset may not reflect the price at which the
39
asset could be sold in the market, and the difference between carrying value and the ultimate sales price could be
material. In addition, accurate valuations are more difficult to obtain in times of low transaction volume because
there are fewer market transactions that can be considered in the context of the appraisal. There will be no
retroactive adjustment in the valuation of such assets, the offering price of our shares of common stock, the price we
paid to repurchase shares of our common stock or NAV-based fees we paid to the Adviser and the Dealer Manager
to the extent such valuations prove to not accurately reflect the realizable value of our assets. Because the price
stockholders will pay for shares of our common stock in our offering, and the price at which their shares may be
repurchased by us pursuant to our share repurchase plan are generally based on our prior month’s NAV per share,
investors may pay more than realizable value or receive less than realizable value for their investments.
Our NAV per share amounts may change materially if the appraised values of our properties materially change
from prior appraisals or the actual operating results for a particular month differ from what we originally
budgeted for that month.
We obtain annual appraisals from independent third parties for each of our properties, as well as have our
independent valuation advisor prepare update appraisals at the end of each month for each of our properties, other
than any single-family rental properties and international properties. When these appraisals are reflected in our NAV
calculations, there may be a material change in our NAV per share amounts for each class of our common stock
from those previously reported. In addition, actual operating results for a given month may differ from what we
originally anticipated for that month, which may cause a material increase or decrease in the NAV per share
amounts. We will not retroactively adjust the NAV per share of each class reported for the previous month.
Therefore, because a new monthly appraisal may differ materially from the prior appraisal or the actual results from
operations may be better or worse than what we previously budgeted for a particular month, the adjustment to reflect
the new appraisal or actual operating results may cause the NAV per share for each class of our common stock to
increase or decrease, and such increase or decrease will occur on the last day of the month when the Adviser
determines NAV.
It may be difficult to reflect, fully and accurately, material events that may impact our monthly NAV.
The Adviser’s determination of our monthly NAV per share will be based in part on annual appraisals of each
of our properties by independent third-party appraisal firms in individual appraisal reports reviewed by our
independent valuation advisor or appraisals provided directly by our independent valuation advisor in accordance
with valuation guidelines approved by our board of directors. As a result, our published NAV per share in any given
month may not fully reflect any or all changes in value that may have occurred since the most recent appraisal or
valuation. The Adviser will review appraisal reports and monitor our properties, and is responsible for notifying our
independent valuation advisor of the occurrence of any property-specific or market-driven event it believes may
cause a material change in the real estate valuation, but it may be difficult to reflect fully and accurately rapidly
changing market conditions or material events that may impact the value of our properties between valuations, or to
obtain quickly complete information regarding any such events. For example, an unexpected termination or renewal
of a material lease, a material increase or decrease in vacancies or an unanticipated structural or environmental event
at a property may cause the value of a property to change materially, yet obtaining sufficient relevant information
after the occurrence has come to light or analyzing fully the financial impact of such an event may be difficult to do
and may require some time. As a result, the NAV per share may not reflect a material event until such time as
sufficient information is available and analyzed, and the financial impact is fully evaluated, such that our NAV may
be appropriately adjusted in accordance with our valuation guidelines. Depending on the circumstance, the resulting
potential disparity in our NAV may be in favor of either stockholders who repurchase their shares, or stockholders
who buy new shares, or existing stockholders.
NAV calculations are not governed by governmental or independent securities, financial or accounting rules or
standards.
The methods used by the Adviser and State Street, as applicable, to calculate our NAV, including the
components used in calculating our NAV, are not prescribed by rules of the SEC or any other regulatory agency.
Further, there are no accounting rules or standards that prescribe which components should be used in calculating
NAV, and our NAV is not audited by our independent registered public accounting firm. We calculate and publish
40
NAV solely for purposes of establishing the price at which we sell and repurchase shares of our common stock, and
you should not view our NAV as a measure of our historical or future financial condition or performance. The
components and methodology used in calculating our NAV may differ from those used by other companies now or
in the future.
In addition, calculations of our NAV, to the extent that they incorporate valuations of our assets and liabilities,
are not prepared in accordance with GAAP. These valuations may differ from actual values that could be realized in
the event that we were forced to sell assets.
Additionally, errors may occur in calculating our NAV, which could impact the price at which we sell and
repurchase shares of our common stock and the amount of the Adviser’s management and performance fees. You
should carefully review the disclosure of our valuation policies and how NAV will be calculated under “Net Asset
Value Calculation and Valuation Guidelines.”
If we are unable to continue to raise substantial funds, we will be limited in the number and type of investments
we make, and the value of our shares of common stock will be more dependent on the performance of any of the
specific assets we acquire.
This offering is being made on a “best efforts” basis, meaning that the Dealer Manager is only required to use
its best efforts to sell our shares and has no firm commitment or obligation to purchase any shares. As a result, the
amount of proceeds we raise in this offering may be substantially less than the amount we would need to achieve a
broader portfolio of investments. If we are unable to raise substantially more than the minimum offering amount, we
will make fewer investments, resulting in less diversity in terms of the type, number, geography and size of
investments that we make. In that case, the likelihood that any single asset’s performance would adversely affect our
profitability will increase. There is a greater risk that our stockholders will lose money in their investment if we have
less diversity in our portfolio. Further, we will have certain fixed operating expenses, including expenses of being a
public reporting company, regardless of whether we are able to raise substantial funds. Our inability to raise
substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net
income and limiting our ability to make distributions. Further, our board of directors has approved a share
repurchase arrangement whereby we will offer to repurchase shares or Operating Partnership units held by one or
more affiliates of Brookfield (individually or collectively, as the context may require, the “Brookfield Investor”),
provided that no such repurchase will be made during any month in which the full amount of all shares requested to
be repurchased under our share repurchase plan is not repurchased. As a result of this share repurchase arrangement,
our aggregate NAV may not grow as quickly as it otherwise might as a result of our continuous offering and we may
not have capital to make new investments until the shares and Operating Partnership units owned by the Brookfield
Investor that are subject to the Brookfield Repurchase Arrangement are fully repurchased, which will exacerbate the
risks described above.
We face risks associated with the deployment of our capital.
In light of the nature of our continuous offering and our investment strategy and the need to be able to deploy
capital quickly to capitalize on potential investment opportunities, we may from time to time hold cash pending
deployment into investments, which may at times be significant, particularly at times when we are receiving high
amounts of offering proceeds and/or times when there are few attractive investment opportunities. Such cash may be
held in an account for the benefit of our stockholders that may be invested in money market accounts or other
similar temporary investments. In the event we are unable to find suitable investments such cash may be maintained
for longer periods which would be dilutive to overall investment returns. It is not anticipated that the temporary
investment of such cash into money market accounts or other similar temporary investments pending deployment
into investments will generate significant interest, and investors should understand that such low interest payments
on the temporarily invested cash may adversely affect overall returns.
41
Our board of directors may, in the future, adopt certain measures under Maryland law without stockholder
approval that may have the effect of making it less likely that a stockholder would receive a “control premium”
for his or her shares.
Corporations organized under Maryland law with a class of registered securities under the Exchange Act and at
least three independent directors are permitted to elect to be subject, by a charter or bylaw provision or a resolution
of its board of directors and notwithstanding any contrary charter or bylaw provision, to any or all of five provisions:
•staggering the board of directors into three classes;
•requiring a two-thirds vote of stockholders to remove directors;
•providing that only the board of directors can fix the size of the board;
•providing that all vacancies on the board, regardless of how the vacancy was created, may be filled only by
the affirmative vote of a majority of the remaining directors in office and for the remainder of the full term
of the class of directors in which the vacancy occurred; and
•providing for a majority requirement for the calling by stockholders of a special meeting of stockholders.
These provisions may discourage an extraordinary transaction, such as a merger, tender offer or sale of all or
substantially all of our assets, all of which might provide a premium price for stockholders’ shares. In our charter,
we have elected that vacancies on our board of directors be filled only by the remaining directors and for the
remainder of the full term of the directorship in which the vacancy occurred. Through other provisions in our charter
and bylaws, we vest in our board of directors the exclusive power to fix the number of directorships, provided that
the number is not less than three. In addition, for so long as the Advisory Agreement is in effect, (i) the Adviser has
the right to designate for nomination, subject to the approval of such nomination by our board of directors, four
directors to the slate of directors to be voted on by the stockholders at our annual meeting of stockholders; provided,
however, that such number of director nominees shall be reduced as necessary by a number that will result in a
majority of directors being independent directors, (ii) our board of directors must consult with the Adviser before the
nomination of individuals for the remaining directorships and (iii) only individuals nominated in accordance with
clauses (i) and (ii) of this sentence or our bylaws will be eligible for election as directors. Our board of directors
must also consult with the Adviser in connection with filling any vacancies on the board of directors. See
“Management”. These and other provisions in our charter and bylaws could make it more difficult for stockholders
or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-
current board of directors, including a merger, tender offer or proxy contest involving our company. We have not
elected to be subject to any of the other provisions described above, but our charter does not prohibit our board of
directors from opting into any of these provisions in the future, provided that our board of directors will not amend
our charter without the affirmative vote of a majority of all votes entitled to be cast on the matter if the amendment
would adversely affect the rights, preferences, and privileges of stockholders.
Further, under the Maryland Business Combination Act, we may not engage in any merger or other business
combination with an “interested stockholder” (which is defined as (1) any person who beneficially owns, directly or
indirectly, 10% or more of the voting power of our outstanding voting stock and (2) an affiliate or associate of ours
who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of our then outstanding voting stock) or any affiliate of that
interested stockholder for a period of five years after the most recent date on which the interested stockholder
became an interested stockholder. A person is not an interested stockholder if our board of directors approved in
advance the transaction by which such person would otherwise have become an interested stockholder. In approving
a transaction, our board of directors may provide that its approval is subject to compliance, at or after the time of
approval, with any terms or conditions determined by our board of directors. After the five-year period ends, any
merger or other business combination with the interested stockholder or any affiliate of the interested stockholder
must be recommended by our board of directors and approved by the affirmative vote of at least:
•80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and
42
•two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other
than those shares owned or held by the interested stockholder with whom or with whose affiliate the
business combination is to be effected or held by an affiliate or associate of the interested stockholder.
These super-majority voting requirements do not apply if, among other things, our stockholders receive a
minimum price (as set forth in the Maryland General Corporation Law (the “MGCL”)) for their common stock and
the consideration is received in cash or in the same form as previously paid by the interested stockholder.
The statute permits various exemptions from its provisions, including business combinations that are exempted
by our board of directors prior to the time the interested stockholder becomes an interested stockholder. Our board
of directors has adopted resolutions exempting any business combination involving us and any person, including
Brookfield, the Adviser, Oaktree and the Sub-Adviser from the provisions of this law, provided that such business
combination is first approved by our board of directors.
Our charter permits our board of directors to authorize us to issue preferred stock on terms that may be senior to
the rights of the holders of our current common stock or discourage a third-party from acquiring us.
Our board of directors is permitted, subject to certain restrictions set forth in our charter, to authorize the
issuance of shares of preferred stock without stockholder approval. Further, our board of directors may classify or
reclassify any unissued shares of common or preferred stock into other classes or series of stock and establish the
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications, and terms or conditions of redemption of the stock and may amend our charter from
time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series
that we have authority to issue without stockholder approval. Thus, our board of directors could authorize us to issue
shares of preferred stock with terms and conditions that could be senior to the rights of the holders of our common
stock or have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary
transaction such as a merger, tender offer or sale of all or substantially all of our assets, that might provide a
premium price for holders of our common stock.
Maryland law limits, in some cases, the ability of a third-party to vote shares acquired in a “control share
acquisition.”
The Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation acquired
in a “control share acquisition” have no voting rights except to the extent approved by stockholders by a vote of two-
thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers or by
employees who are directors of the corporation, are excluded from shares entitled to vote on the matter. “Control
shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in
respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of
voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having
previously obtained stockholder approval or shares acquired directly from the corporation. A “control share
acquisition” means the acquisition of issued and outstanding control shares. The control share acquisition statute
does not apply: (1) to shares acquired in a merger, consolidation or share exchange if the Maryland corporation is a
party to the transaction; or (2) to acquisitions approved or exempted by the charter or bylaws of the Maryland
corporation. Our bylaws contain a provision exempting from the Control Share Acquisition Act any and all
acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or
eliminated at any time in the future. For a more detailed discussion on the Maryland laws governing control share
acquisitions, see “Certain Provisions of Maryland Corporate Law and Our Charter and Bylaws— Control Share
Acquisitions.”
Maryland law and our organizational documents limit our rights and the rights of our stockholders to recover
claims against our directors and officers, which could reduce stockholders’ and our recovery against them if they
cause us to incur losses.
Maryland law provides that a director will not have any liability as a director so long as he or she performs his
or her duties in accordance with the applicable standard of conduct. In addition, our charter generally limits the
43
personal liability of our directors and officers for monetary damages subject to the limitations of the North American
Securities Administrators Association’s Statement of Policy Regarding Real Estate Investment Trusts, as revised and
adopted on May 7, 2007 (the “NASAA REIT Guidelines”), and Maryland law. Moreover, our charter generally
requires us to indemnify and advance expenses to our directors and officers for losses they may incur by reason of
their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding
and was committed in bad faith or was the result of active and deliberate dishonesty, they actually received an
improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had
reasonable cause to believe the act or omission was unlawful. Further, we have entered into separate indemnification
agreements with each of our directors. As a result, our stockholders and we may have more limited rights against our
directors than might otherwise exist under common law, which could reduce our stockholders’ and our recovery
from these persons if they act in a manner that causes us to incur losses. In addition, we are obligated to fund the
defense costs incurred by our directors in some cases. However, our charter provides that we may not indemnify any
of our directors, the Adviser or any of our or the Adviser’s affiliates, for any liability or loss suffered by them or
hold any of our directors, the Adviser or any of our or the Adviser’s affiliates harmless for any liability or loss
suffered by us, unless they have determined, in good faith, that the course of conduct that caused the loss or liability
was in our best interests, they were acting on our behalf or performing services for us, the liability or loss was not
the result of negligence or misconduct by any of our non-independent directors, the Adviser or any of our or the
Adviser’s affiliates, or gross negligence or willful misconduct by any of our independent directors, and the
indemnification or agreement to hold harmless is recoverable only out of our net assets and not from the
stockholders. See “Management—Limited Liability and Indemnification of Directors, Officers, the Adviser and
Other Agents.”
Maryland law limits our stockholders’ ability to amend our charter or dissolve us without the approval of our
board of directors.
Although the NASAA REIT Guidelines indicate that stockholders are permitted to amend our charter or
terminate us without the necessity for concurrence by our board of directors, we are required to comply with the
MGCL, which provides that any amendment to our charter or any dissolution of our company must first be declared
advisable by our board of directors. Therefore, our stockholders may vote to authorize the amendment of our charter
or the dissolution of our company, but only after such action has been declared advisable by our board of directors.
Accordingly, the only proposals to amend our charter or to dissolve our company that will be presented to our
stockholders will be those that have been declared advisable by our board of directors and also require approval by
our stockholders.
Your interest in us will be diluted if we issue additional shares.
Holders of our common stock will not have preemptive rights to any shares we issue in the future. Our charter
authorizes us to issue up to 1,050,000,000 shares of capital stock, of which 1,000,000,000 shares are classified as
common stock and 50,000,000 shares are classified as preferred stock. In addition, our board of directors may
amend our charter from time to time to increase or decrease the aggregate number of authorized shares of capital
stock or the number of authorized shares of capital stock of any class or series without stockholder approval. Our
board of directors may elect, without stockholder approval, to: (1) sell additional shares in this offering or future
public offerings (including using prices based on our NAV as of a different time than the applicable NAV used in
this offering); (2) issue equity interests in private offerings (including using prices based on our NAV as of a
different time than the applicable NAV used in this offering); (3) issue shares upon the exercise of the options we
may grant to our independent directors or future employees; or (4) issue shares or our common stock or Operating
Partnership units to the Adviser, or its respective successors or assigns, in payment of an outstanding obligation to
pay fees for services rendered to us; or (5) issue shares to sellers of properties we acquire in connection with an
exchange of limited partnership interests of the Operating Partnership. To the extent we issue additional shares, your
percentage ownership interest in us will be diluted. Because we hold all of our assets through the Operating
Partnership, to the extent we issue additional units of the Operating Partnership, stockholders’ percentage ownership
interest in our assets will be diluted. Because certain classes of the units of the Operating Partnership may, in the
discretion of our board of directors, be exchanged for shares of our common stock, any merger, exchange or
conversion between the Operating Partnership and another entity ultimately could result in the issuance of a
substantial number of shares of our common stock, thereby diluting the percentage ownership interest of other
44
stockholders. Because of these and other reasons, you may experience substantial dilution in your percentage
ownership of shares of our common stock or your interests in the underlying assets held by the Operating
Partnership.
Payments to the Adviser in respect of any common stock or Operating Partnership units it elects to receive in lieu
of fees will dilute future cash available for distribution to our stockholders.
The Adviser may choose to receive our common stock or Operating Partnership units, respectively, in lieu of
certain fees. The holders of all Operating Partnership units are entitled to receive cash from operations pro rata with
the distributions being paid to us and such distributions to the holder of the Operating Partnership units will reduce
the cash available for distribution to us and to our stockholders. Furthermore, under certain circumstances the
Operating Partnership units held by the Adviser are required to be repurchased, and there may not be sufficient cash
to make such a repurchase payment; therefore, we may need to use cash from operations, borrowings, offering
proceeds or other sources to make the payment, which will reduce cash available for distribution to you or for
investment in our operations. Repurchases from the Adviser of our shares that were paid to the Adviser as
management or performance fees are not subject to the monthly and quarterly volume limitations or the Early
Repurchase Deduction, and such repurchases receive priority over other shares for which repurchase is requested
during such period.
Our UPREIT structure may result in potential conflicts of interest with the Operating Partnership or limited
partners in the Operating Partnership whose interests may not be aligned with those of our stockholders.
Conflicts of interest exist or could arise in the future as a result of the relationships between us and our
affiliates, on the one hand, and the Operating Partnership or any partner thereof, on the other. Our directors and
officers have duties to our company under applicable Maryland law in connection with their direction of the
management of our company. At the same time, we are the sole member of the general partner of the Operating
Partnership and have authority to make all decisions on behalf of such general partner. The general partner has
duties to the Operating Partnership and to the limited partners under Delaware law in connection with the
management of the Operating Partnership. Under Delaware law, the general partner of a Delaware limited
partnership has fiduciary duties of care and loyalty, and an obligation of good faith, to the partnership and its
partners. While these duties and obligations cannot be eliminated entirely in the limited partnership agreement,
Delaware law permits the parties to a limited partnership agreement to specify certain types or categories of
activities that do not violate the general partner’s duty of loyalty and to modify the duty of care and obligation of
good faith, so long as such modifications are not unreasonable. These duties as general partner of the Operating
Partnership to the partnership and its partners may come into conflict with the interests of our company. Under the
partnership agreement of the Operating Partnership, upon the admission of a person other than one of our
subsidiaries as a limited partner in the Operating Partnership, the limited partners of the Operating Partnership
expressly agree that the general partner of the Operating Partnership is acting for the benefit of the Operating
Partnership, our company and our stockholders, collectively. The general partner of the Operating Partnership is
under no obligation to give priority to the separate interests of the limited partners in deciding whether to cause the
Operating Partnership to take or decline to take any actions. If there is a conflict between our interests and the
interests of our stockholders, on the one hand, and the interests of the limited partners of the Operating Partnership
other than us or our subsidiaries, on the other, that cannot be resolved in a manner not adverse to either, the
partnership agreement provides that such conflict will be resolved in favor of our stockholders, and the general
partner of the Operating Partnership will not be liable for losses sustained by the limited partners in connection with
such decisions provided it acted in good faith.
Additionally, the partnership agreement of the Operating Partnership expressly limits the general partner’s
liability by providing that the general partner will not be liable to the Operating Partnership or its limited partners for
errors in judgment or other acts or omissions not amounting to willful misconduct or gross negligence since
provision has been made in the partnership agreement for exculpation of the general partner. In addition, the
Operating Partnership is required to indemnify the general partner for liabilities the general partner incurs in
dealings with third parties on behalf of the Operating Partnership. To the extent that the indemnification provisions
purport to include indemnification of liabilities arising under the Securities Act, in the opinion of the SEC, such
indemnification is contrary to public policy and therefore unenforceable.
45
The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a
partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel
covering the provisions set forth in the partnership agreement that purport to waive or restrict the general partner’s
fiduciary duties.
Tax protection agreements could limit our ability to sell or otherwise dispose of property contributed to the
Operating Partnership.
In connection with a contribution of property to the Operating Partnership, the Operating Partnership may enter
into a tax protection agreement with the contributor of such property that provides that if we dispose of any interest
in the contributed property in a taxable transaction within a certain time period, subject to certain exceptions, we
may be required to indemnify the contributor for its tax liabilities attributable to the built-in gain that exists with
respect to such property interests, and the tax liabilities incurred as a result of such tax protection payment.
Therefore, although it may be in our stockholders’ best interests that we sell the contributed property, it may be
economically prohibitive for us to do so because of these obligations.
Tax protection agreements may require the Operating Partnership to maintain certain debt levels that otherwise
would not be required to operate our business.
Under a tax protection agreement, the Operating Partnership may provide the contributor of property the
opportunity to guarantee debt or enter into a deficit restoration obligation. If we fail to make such opportunities
available, we may be required to deliver to such contributor a cash payment intended to approximate the
contributor’s tax liability resulting from our failure to make such opportunities available to that contributor and the
tax liabilities incurred as a result of such tax protection payment. These obligations may require the Operating
Partnership to maintain more or different indebtedness than we would otherwise require for our business.
Cash payments to redeem Operating Partnership interests will reduce cash available for distribution to our
stockholders or to honor their repurchase requests under our share repurchase program.
The Operating Partnership’s limited partnership agreement provides that following any applicable waiting
period, the holders of Operating Partnership units (other than us) generally have the right to cause the Operating
Partnership to redeem all or a portion of their Operating Partnership units for, at the general partner’s sole discretion,
shares of our common stock, cash, or a combination of both. An election to redeem Operating Partnership units for
cash may reduce funds available for distribution to our stockholders or to honor our stockholders’ repurchase
requests under our share repurchase program.
Our results of operations may be adversely affected if we are required to register as an investment company under
the Investment Company Act.
We intend to conduct our operations so that neither we, nor the Operating Partnership, or our respective
subsidiaries are required to register as an investment company under the Investment Company Act. However, there
can be no assurance that we will be able to successfully avoid operating as an investment company. See “Prospectus
Summary—Investment Company Act of 1940 Considerations.”
Under Section 3(a)(1)(A) of the Investment Company Act, a company is deemed to be an investment company
if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing,
reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed
to be an investment company if it is engaged, or proposes to engage, in the business of investing, reinvesting,
owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value
exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an
unconsolidated basis. “Investment securities” exclude (A) U.S. government securities, (B) securities issued by
employees’ securities companies and (C) securities issued by majority-owned subsidiaries which (i) are not
investment companies and (ii) are not relying on the exception from the definition of investment company under
Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
46
With respect to Section 3(a)(1)(A), we do not intend to engage primarily or hold ourself out as being engaged
primarily in the business of investing, reinvesting or trading in securities. Rather, we will be primarily engaged in
the non-investment company businesses of our subsidiaries. With respect to Section 3(a)(1)(C), we expect that most
of the entities through which we own assets will be wholly or majority-owned subsidiaries that are not themselves
investment companies and are not relying on the exceptions from the definition of investment company under
Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act and, thus, we do not expect to own a significant
amount of investment securities.
We expect that we and most of our subsidiaries can comply with the exemptions provided by Section 3(c)(5)(C)
or Section 3(c)(6) of the Investment Company Act. Section 3(c)(5)(C) is available for entities “primarily engaged in
the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” Section
3(c)(6) is available to holding companies primarily engaged in such business through majority-owned subsidiaries.
The SEC staff has taken the position that Section 3(c)(5)(C), in addition to prohibiting the issuance of certain types
of securities, generally requires that at least 55% of an entity’s assets must be comprised of mortgages and other
liens on and interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s assets
must be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-
related assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be comprised
of miscellaneous assets). As a result of the foregoing restrictions, we will be limited in our ability to make certain
investments.
We will classify our assets for purposes of our Section 3(c)(5)(C) exemption based upon no-action positions
taken by the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are
based on specific factual situations that may be substantially different from the factual situations we may face, and a
number of these no-action positions were issued more than 20 years ago. No assurance can be given that the SEC or
its staff will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue
further guidance that may require us to reclassify our assets for purposes of the Investment Company Act. If we are
required to reclassify our assets, we may no longer be in compliance with the exemption from the definition of an
investment company provided by Section 3(c)(5)(C) of the Investment Company Act.
We and certain of our subsidiaries may in addition to, or alternatively rely on the exclusion from the definition
of investment company provided by Section 3(c)(6) to the extent that they hold mortgage assets through majority-
owned subsidiaries that rely on Section 3(c)(5)(C). Little interpretive guidance has been issued by the SEC, or its
staff, with respect to Section 3(c)(6) and any guidance published by the SEC, or its staff, could require us to adjust
our strategy accordingly. Although little interpretive guidance has been issued with respect to Section 3(c)(6), we
believe that we or certain of our subsidiaries may rely on Section 3(c)(6) if, among other things, 55% of the assets of
such subsidiaries consist of, and at least 55% of the income of such subsidiaries are derived from, qualifying real
estate investment assets owned by wholly-owned subsidiaries of such subsidiaries.
A change in the value of any of our assets could negatively affect our ability to maintain our exemption from
regulation under the Investment Company Act. To maintain compliance with the applicable exemption under the
Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell
assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not
otherwise have acquired or may have to forgo opportunities to acquire assets that we would otherwise want to
acquire and would be important to our investment strategy. For example, these restrictions may limit our and our
subsidiaries’ ability to invest directly in mortgage-backed securities that represent less than the entire ownership in a
pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed securities, non-
controlling equity interests in real estate companies or in assets not related to real estate.
If we were required to register as an investment company but failed to do so, we would become subject to
substantial regulation with respect to our capital structure (including our ability to use borrowings), management,
operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio
composition, including disclosure requirements and restrictions with respect to diversification and industry
concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our
ability to make certain investments and require us to significantly restructure our business plan, which could
materially adversely affect our NAV and our ability to pay distributions to our stockholders.
47
Operational risks, including interruption of our information technology, communications systems or data
services could disrupt our business, result in losses or limit our growth.
We rely heavily on Brookfield’s financial, accounting, communications and other data processing systems. If
such systems do not operate properly, are disabled or are compromised, we could suffer financial loss, a disruption
of our business, liability, regulatory intervention or reputational damage. Such information technology and
communications systems are vulnerable to damage or disruption from fire, power loss, telecommunications failure,
system malfunctions, epidemics or pandemics, natural disasters such as hurricanes, earthquakes and floods, acts of
war or terrorism, employee errors or malfeasance, computer viruses, cyber-attacks, or other events which are beyond
our and Brookfield’s control.
In addition, we are highly dependent on information systems and technology. Brookfield’s information systems
and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems
may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such
information systems, could have a material adverse effect on us.
We depend on Brookfield’s New York office, where a substantial portion of Brookfield’s personnel are located,
for the continued operation of our business. A natural disaster or a disruption in the infrastructure that supports our
business, including a disruption involving electronic communications or other services used by us or third parties
with whom we conduct business, or directly affecting our headquarters, could have a material adverse impact on our
ability to continue to operate our business without interruption. Insurance and other safeguards might only partially
reimburse us for our losses, if at all.
In addition, we rely on third-party service providers for certain aspects of our business, including software
vendors for portfolio management and accounting software, outside financial institutions for back office processing,
custody of securities and third-party broker-dealers for the execution of trades. An interruption or deterioration in
the performance of these third parties or failures of their information systems and technology could cause system
interruption, delays, loss, corruption or exposure of critical data or intellectual property, and impair the quality of
our operations, which could impact our reputation and hence adversely affect our business.
Any such interruption or deterioration in Brookfield’s operations could result in substantial recovery and
remediation costs and liability. While Brookfield has implemented disaster recovery plans and backup systems to
lessen the risk of any material adverse impact, its disaster recovery planning may not be sufficient to mitigate the
harm and cannot account for all eventualities, and a catastrophic event that results in the destruction or disruption of
any data or critical business or information technology systems could severely affect our ability to conduct our
business operations, and as a result, our future operating results could be materially adversely affected.
Cybersecurity failures and data security incidents could materially adversely affect our business by causing a
disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive
information and/or damage to our business relationships or reputation, any of which could negatively impact our
business, financial condition and operating results.
Cybersecurity failures or other security incidents may result in disrupted operations, misstated or unreliable
financial data, fraudulent transfers or requests for transfers of money, fines or penalties, investigations, increased
cybersecurity protection and insurance costs, litigation, and damage to our business relationships and reputation,
causing our business and results of operations to suffer. Additionally, the risk of cybersecurity incidents may be
heightened by the increased prevalence and use of artificial intelligence and machine-learning technology. We rely
on the secure processing, storage and transmission of confidential and other information in our computer systems
and networks, and in the computer systems and networks of third parties with whom we do business or
communicate. Our information technology systems face ongoing cybersecurity threats and attacks, which could
result in the failure of such infrastructure. Our cybersecurity measures may not be effective against all future threats.
We may not be able to anticipate all types of security threats or implement preventive measures effective against all
such threats. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems
change frequently and may be difficult to detect for extended periods of time. Hardware, software or applications we
develop or procure from third parties may contain defects in design or manufacture or other problems that could
48
unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems
or facilities, or those of third parties with whom we do business, through fraud, trickery or other forms of deceiving
our employees, contractors and temporary staff. In addition, we may experience operational disruptions or
information security breaches at third-party vendors, counterparties, service providers or other entities that interact
with our systems or that could otherwise affect our business. Such disruptions or breaches could result in the
unauthorized acquisition, use, disclosure, modification or destruction of our confidential information or that of our
investors, portfolio companies, tenants or employees, litigation, regulatory investigations, remediation costs,
increased cybersecurity protection costs, reputational damage, loss of business or potential liability. Impacts from
any such incidents could have a material adverse impact on our business, financial condition, and results of
operations. Further, in the event that the Adviser or a third-party service provider fails to promptly notify us of a
technology breach, you may not receive prompt notification of such breach, if at all, and the delay or failure to
disclose a technology breach may have a material adverse effect on our business and results of operations.
We are subject to risks associated with artificial intelligence and machine learning technology.
Artificial intelligence, including machine learning and similar tools and technologies that collect, aggregate,
analyze or generate data or other materials (collectively, “AI’), and its current and potential future applications
including in the private investment and financial industries, as well as the legal and regulatory frameworks within
which AI operates, continue to rapidly evolve.
Recent technological advances in AI pose risks to our company, our Advisor and our investments. We could
also be exposed to the risks of AI if third-party service providers or any counterparties, whether or not known to us,
also use AI in their business activities. We may not be in a position to control the use of AI technology in third-party
products or services.
Use of AI could include the input of confidential information in contravention of applicable policies, contractual
or other obligations or restrictions, resulting in such confidential information becoming accessible by other third-
party AI applications and users. While the adviser does not currently use AI to make investment recommendations,
the use of AI could also exacerbate or create new and unpredictable risks to our business, the Adviser’s business and
our investments, including by potentially significantly disrupting the markets in which we operate or subjecting us to
increased competition and regulation, which could materially and adversely affect our business, financial condition
or results of operations. In addition, the use of AI by bad actors could heighten the sophistication and effectiveness
of cybersecurity and other security attacks experienced by us and our service providers.
Our collection and use of sensitive personal and confidential information subjects us to data privacy, regulatory,
litigation, and reputational risks.
The collection, storage and processing of sensitive personal and confidential information relating to tenants,
employees, investors, counterparties, and other third parties may result in additional risk of litigation, regulatory
action, and reputational damage. The information is subject to increasingly complex and evolving data privacy and
protection laws, regulations, and contractual obligations across multiple jurisdictions. The failure to adequately
protect such information, comply with applicable data privacy requirements, or respond effectively to a data breach,
cybersecurity incident, or unauthorized access could result in regulatory enforcement actions, litigation, financial
penalties, remediation costs, operational disruption, and reputational harm.
Compliance with the SEC’s Regulation Best Interest may negatively impact our ability to raise capital in this
offering, which would harm our ability to achieve our investment objectives.
Broker-dealers must comply with Regulation Best Interest, which, among other requirements, establishes a
standard of conduct for broker-dealers and their associated persons when making a recommendation of any
securities transaction or investment strategy involving securities to a retail customer. Regulation Best Interest
requires a broker-dealer or associated person, when making a recommendation of any securities transaction or
investment strategy involving securities to a retail customer, to act in the best interest of the retail customer at the
time the recommendation is made, without placing the financial or other interest of the broker-dealer or associated
person ahead of the interest of the retail customer. Regulation Best Interest imposes a duty of care for broker-dealers
to evaluate reasonably available alternatives in the best interests of their clients. There are likely alternatives to
49
investing in our shares that are reasonably available to you, through your broker or otherwise, and those alternatives
may be less costly or have a lower investment risk. Under Regulation Best Interest, broker-dealers participating in
this offering must consider such alternatives when evaluating the best interests of their clients. The impact of
Regulation Best Interest on participating dealers cannot be determined at this time, and it may negatively impact
whether participating dealers and their associated persons recommend this offering to certain retail customers. If
Regulation Best Interest reduces our ability to raise capital in this offering, it would harm our ability to create a
diversified portfolio of investments and ability to achieve our investment objectives.
The DST Program could subject us to liabilities from litigation or otherwise.
We, through the Operating Partnership, have initiated a DST Program to issue and sell up to a maximum
aggregate offering amount of $1.0 billion of DST Interests in specific DST Properties. These DST Interests will be
sold in private placements exempt from registration under the Securities Act to “accredited investors” in specific
DSTs holding one or more DST Properties. We expect that the DST Program will give us the opportunity to expand
and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for
investors that may be seeking like-kind replacement properties to complete tax-deferred exchange transactions under
Section 1031 of the Code. However, there is no guarantee that the DST Program will provide the tax benefits
expected by investors. Investors who acquire DST Interests through such private placements may be seeking certain
tax benefits that depend on the interpretation of, and compliance with, federal and state income tax laws and
regulations. As the sole member of the general partner of the Operating Partnership, we may become subject to
liability, from litigation or otherwise, as a result of the DST Program.
The DST Program will not shield us from risks related to the performance of the DST Properties held through
such structures.
Under the DST Program, certain of our existing real properties and real properties acquired from third parties
may be placed into DSTs, the DST Interests of which will be sold to investors. We, through a wholly owned
subsidiary, will hold long-term leasehold interests in each DST Property under a master lease, which will be
guaranteed by the Operating Partnership. Under each master lease, we, through such subsidiary or applicable master
tenant, will be responsible for subleasing the applicable DST Property to occupying tenants until the earlier of the
expiration of the master lease or the Operating Partnership’s exercise of the FMV Option (as defined in “Prospectus
Summary—DST Program”), which means that we bear the risk that the underlying cash flows from a DST Property
may be less than the master lease payments. Therefore, even though we will no longer own such applicable DST
Property, because of the fixed terms of the master lease guaranteed by the Operating Partnership, negative operating
performance by a DST Property could affect cash available for distributions to our stockholders and would likely
have an adverse effect on our results of operations. In addition, although the Operating Partnership will hold a FMV
Option to reacquire each DST Property, the purchase price will be based on the then-current fair market value of the
applicable DST Property subject to the master lease. Therefore, we may pay more for a DST Property upon the
FMV Option exercise if it appreciates while held by the applicable DST than if we had not placed such property in
the DST Program.
We may own DST Interests in DSTs owning DST Properties that will be subject to the agreements under our DST
Program, which may have an adverse effect on our results of operations, relative to if the DST Program
agreements did not exist.
In connection with the DST Program, we may own DST Interests in DSTs owning one or more DST Properties
that are subject to the terms of the agreements governing our DST Program. The DST Program agreements may
limit our ability to encumber, lease or dispose of our DST Interests. Such agreements could affect our ability to turn
our DST Interests into cash and could affect cash available for distributions to our stockholders. The DST Program
agreements, and in some cases the financing documents used in connection with the DST Program, could also
impair our ability to take actions that would otherwise be in the best interests of our stockholders and, therefore, may
have an adverse effect on our results of operations and NAV, relative to if the DST Program agreements did not
exist.
50
DST Properties may be less liquid than other assets, which could impair our ability to utilize cash proceeds from
sales of such DST Properties for other purposes such as paying down debt, distributions or additional
investments.
DST Properties may later be reacquired by the Operating Partnership through the exercise of the FMV Option.
In such cases, the investors who become limited partners in the Operating Partnership will generally still be tied to
the applicable DST Property in terms of basis and built-in-gain. As a result, if a DST Property is subsequently sold,
unless we effectuate a like-kind exchange under Section 1031 of the Code, then tax will be triggered on the
investors’ built-in-gain. Any replacement property acquired in connection with a 1031 exchange will similarly be
tied to such investors with similar considerations if such replacement property ever is sold. As a result of these
factors, placing real properties into the DST Program may limit our ability to access liquidity from such real
properties or replacement properties through sale without triggering taxes due to the built-in-gain tied to investors in
the DST Program. Such reduced liquidity could impair our ability to utilize cash proceeds from sales for other
purposes such as paying down debt, paying distributions, funding repurchases or making additional investments.
General Risks Related to Investments in Real Estate
Our operating results will be affected by economic and regulatory changes that impact the real estate market in
general.
We are subject to risks generally attributable to the ownership of real property, including:
•changes in global, national, regional or local economic, demographic, or capital market conditions;
•future adverse national real estate trends, including increasing vacancy rates, declining rental rates and
general deterioration of market conditions;
•adverse economic conditions as a result of an epidemic, pandemic or other health-related issues in one or
more markets where we own property;
•changes in supply of or demand for similar properties in a given market or metropolitan area, which could
result in rising vacancy rates or decreasing market rental rates;
•vacancies, fluctuations in the average occupancy and room rates for hospitality properties or inability to
lease space on favorable terms;
•increased competition for properties targeted by our investment strategy;
•bankruptcies, financial difficulties or lease defaults by our tenants;
•increases in interest rates and lack of availability of financing; and
•changes in government rules, regulations and fiscal policies, including increases in property taxes, changes
in zoning laws, limitations on rental rates, and increasing costs to comply with environmental laws.
All of these factors are beyond our control. Any negative changes in these factors could affect our performance
and our ability to meet our obligations and make distributions to stockholders.
Our success is dependent on general market and economic conditions.
Our activities and investments could be materially adversely affected by the instability in the U.S. or global
financial markets, or changes in market, economic, political or regulatory conditions, such as interest rates,
availability of credit, credit defaults, inflation rates, economic uncertainty, changes in laws (including laws relating
to taxation of our investments), trade barriers and currency exchange controls, and national and international
political, environmental and socioeconomic circumstances (including wars, terrorist acts or security operations) in
respect of the countries in which we invest, as well as by numerous other factors outside the control of the Adviser
or its affiliates. Recently, shifts in U.S. trade policy, including new or increased tariffs and uncertainty surrounding
existing international trade agreements, have contributed to heightened volatility in global markets and economic
51
conditions. Such uncertainty can influence business activity and supply chains, which may adversely affect general
market performance and our operations. Furthermore, the imposition of such tariffs or other similar trade restrictions
may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs
on goods imported from the U.S. Any future financial market disruptions may adversely affect the value of our
assets and our profitability, impede the ability of our assets to perform under or refinance their existing obligations,
and impair our ability to effectively deploy our capital or effectively exit or realize upon investments on favorable
terms. In addition, general fluctuations in the market prices of securities and interest rates may affect our investment
opportunities and the value of our investments. Any of the foregoing events could result in substantial or total losses
to us in respect of certain investments, which losses will likely be exacerbated by the presence of leverage in our
capital structure or a particular investment’s capital structure.
Such financial market disruptions may also force us to use a greater proportion of this offering proceeds to
finance our acquisitions and fund tenant improvements, reducing the cash available to make distributions and satisfy
repurchase requests and reducing the number of acquisitions we would otherwise make.
Inflation may adversely affect our financial condition and results of operations.
An increase in inflation could have an adverse impact on our floating rate mortgages, credit facilities, rental
operating expenses and general and administrative expenses, as these costs could increase at a rate higher than our
rental and other revenue. Inflation could also have an adverse effect on consumer spending, which could impact our
tenants’ revenues and, in turn, their ability to pay rent. In addition, leases of long-term duration or which include
renewal options that specify a maximum rate increase may result in below-market lease rates over time if we do not
accurately estimate inflation or market lease rates. Provisions of our leases designed to mitigate the risk of inflation
and unexpected increases in market lease rates, such as periodic rental increases, may not adequately protect us from
the impact of inflation or unexpected increases in market lease rates. If we are subject to below-market lease rates on
a significant number of our properties and our operating and other expenses are increasing faster than anticipated,
our business, financial condition, results of operations, cash flows or our ability to satisfy our debt service
obligations or to pay distributions on our common stock could be materially adversely affected. Actions to reduce
inflation, including raising interest rates, increase our cost of borrowing, which in turn could make it more difficult
to obtain financing for our operations or investments on favorable terms.
Changes in laws or regulations governing our operations, changes in the interpretation thereof or newly enacted
laws or regulations and any failure by us to comply with these laws or regulations, could require changes to
certain of our business practices, negatively impact our operations, cash flow or financial condition, impose
additional costs on us or otherwise adversely affect our business.
Certain of our investments may result in reporting and compliance obligations under the applicable regulations
of the various jurisdictions in which we make investments. To the extent that we or our investments are or may
become subject to regulation by various agencies in the United States, the European Union and other jurisdictions,
the costs of compliance will be borne by us. In addition, our investments are or may become subject to regulation by
various governmental agencies within or outside the United States. Any change in the laws or regulations governing
our operations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply
with these laws or regulations, could require changes to certain of our business practices, negatively impact our
operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our
business. We cannot predict whether new legislation or regulation will be enacted by legislative bodies or
governmental agencies, nor can we predict what effect such legislation or regulation might have. There can be no
assurance that new legislation or regulation, including changes to existing laws and regulations, will not have a
material negative impact on our investment performance.
Moreover, the SEC and various other U.S. federal, state and local agencies may conduct examinations and
inquiries into, and bring enforcement and other proceedings against us, the Adviser, the Sub-Adviser, Brookfield
and any of their respective affiliates. We, the Adviser, the Sub-Adviser, Brookfield and any of their respective
affiliates may receive requests for information or subpoenas from the SEC and other state, federal and non U.S.
regulators from time to time in connection with such inquiries and proceedings and otherwise in the ordinary course
of business. These requests may relate to a broad range of matters, including specific practices of the Adviser, the
52
Sub-Adviser or Brookfield, the securities in which the Adviser or Sub-Adviser invests on behalf of its clients or
industry wide practices. The costs of any such increased reporting, registration and compliance requirements may be
borne by us and may furthermore place us at a competitive disadvantage to the extent that the Adviser, the Sub-
Adviser, Brookfield or any of their respective affiliates are required to disclose sensitive business information.
Financial regulatory changes in the United States could adversely affect our business.
The financial services industry continues to be the subject of heightened regulatory scrutiny in the United
States. There has been active debate over the appropriate extent of regulation and oversight of private investment
funds and their managers. We may be adversely affected as a result of new or revised regulations imposed by the
SEC or other U.S. governmental regulatory authorities or self-regulatory organizations that supervise the financial
markets. We also may be adversely affected by changes in the interpretation or enforcement of existing laws and
regulations by these governmental authorities and self-regulatory organizations. Further, new regulations or
interpretations of existing laws may result in enhanced disclosure obligations, including with respect to climate
change or environmental, social and governance factors, which could negatively affect us and materially increase
our regulatory burden. Increased regulations generally increase our costs, and we could continue to experience
higher costs if new laws require us to spend more time or buy new technology to comply effectively.
Any changes in the regulatory framework applicable to our business, including the changes described above,
may impose additional compliance and other costs, increase regulatory investigations of our investment activities,
require the attention of our senior management, affect the manner in which we conduct our business and adversely
affect our profitability. The full extent of the impact on us of any new laws, regulations or initiatives that may be
proposed is impossible to determine.
We may be subject to foreign currency risk and our risk management activities may adversely affect the
performance of our operations.
While the majority of our portfolio is concentrated in the United States, we may selectively invest in large
global cities where Brookfield has comprehensive capabilities, such as Toronto, London, Sydney and Seoul. As a
result, some of our assets and operations may be in countries where the U.S. dollar (“USD”) is not the functional
currency. These operations pay distributions in currencies other than the USD which we must convert to USD prior
to making distributions on our shares. A significant depreciation in the value of such foreign currencies may have a
material adverse effect on our business, financial condition and results of operations.
When managing our exposure to such market risks, we may use forward contracts, options, swaps, caps, collars
and floors or pursue other strategies or use other forms of derivative instruments. The success of any hedging or
other derivative transactions that we enter into generally will depend on our ability to structure contracts that
appropriately offset our risk position. As a result, while we may enter into such transactions in order to reduce our
exposure to market risks, unanticipated market changes may result in poorer overall investment performance than if
the transaction had not been executed. Such transactions may also limit the opportunity for gain if the value of a
hedged position increases.
Our portfolio may be concentrated in a limited number of industries, geographies or investments.
Our portfolio may be heavily concentrated at any time in only a limited number of industries, geographies or
investments, and, as a consequence, our aggregate return may be substantially affected by the unfavorable
performance of even a single investment. To the extent the Adviser concentrates our investments in a particular type
of asset or geography, our portfolio may become more susceptible to fluctuations in value resulting from adverse
economic or business conditions affecting that particular type of asset or geography, as well as the negative
consequences of a single corporate, economic, political or regulatory event. Investors have no assurance as to the
degree of diversification in our investments, either by geographic region or asset type.
Competition in acquiring properties may reduce our profitability and our results of operations.
The activity of identifying, completing and realizing attractive real estate and real estate-related investments is
highly competitive and involves a high degree of uncertainty and risk. We face competition for investments from
53
other real estate investment vehicles, as well as individuals and companies, publicly-traded REITs, financial
institutions (such as mortgage banks and pension funds), hedge funds and investment funds affiliated with other
financial sponsors or institutional real estate investors, private equity and debt investors, and credit vehicles, some of
which are likely a source of reasonable alternatives under Regulation Best Interest. Further, over the past several
years, many real estate funds and publicly traded REITs have been formed (and many such existing funds have
grown in size) for the purpose of investing in real estate assets and real estate debt. In recent years, hedge funds and
other participants have also become increasingly active in the private mezzanine market. Other funds may have
investment objectives that overlap with us, which may create competition for investment opportunities. Some
competitors may have a lower cost of funds and access to funding sources that are not available to us, and may have
higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of
investments and establish more relationships. These competitive pressures could reduce the number of investment
opportunities available to us and adversely affect the terms, including price, upon which investments can be made
and we may not be able to take advantage of attractive investment opportunities. There can be no assurance that the
Adviser will be able to locate, complete and exit investments which satisfy our objectives, or realize upon their
values. These risks may be exaggerated as a result of the investment allocation policy adopted by Brookfield.
Furthermore, disruptions and dislocations in the credit markets could have a material impact on the cost and
availability of debt to finance real estate acquisitions. The lack of available debt on reasonable terms or at all could
result in a further reduction of suitable investment opportunities and create a competitive advantage for other entities
that have greater financial resources than we do. Additionally, rapid advances in artificial intelligence may intensify
competition and disrupt traditional operating models, creating pressures and operational uncertainties across
industries. Competition may also cause us to acquire properties and other investments at higher prices or by using
less-than-ideal capital structures, and in such case our returns will be lower and the value of our assets may not
appreciate or may decrease significantly below the amount we paid for such assets. If such events occur, our results
of operations may be adversely impacted.
We face risks associated with property acquisitions.
We intend to acquire properties and portfolios of properties, including large portfolios that could result in
changes to our capital structure. Our acquisition activities and their success are subject to the following risks:
•we may be unable to complete an acquisition after making a non-refundable deposit and incurring certain
other acquisition-related costs;
•we may be unable to obtain financing for acquisitions on commercially reasonable terms or at all;
•acquired properties may fail to perform as expected;
•acquired properties may be located in new markets in which we may face risks associated with a lack of
market knowledge or understanding of the local economy, lack of business relationships in the area and
unfamiliarity with local governmental and permitting procedures; and
•we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of
portfolios of properties, into our existing operations.
In addition, we may acquire assets that require some amount of capital investment in order to be repositioned.
These investments are generally subject to higher risk of loss than investments in stabilized real estate and there is
no guarantee that any repositioning will be successful, or that the actual costs will not be greater than our estimates.
We have made and may continue to make joint venture investments, with both third parties and Other Brookfield
Accounts. Joint venture investments could be adversely affected by our lack of sole decision-making authority,
our reliance on the financial condition of our joint venture partners and disputes between us and our joint
venture partners.
We have made joint venture investments with third parties and Other Brookfield Accounts and may, subject to
the requirements in our charter, continue to co-invest with Other Brookfield Accounts or third parties through funds,
joint ventures or other entities. Under our charter, we may invest in joint ventures with Brookfield or its affiliates,
54
including the Adviser, only if a majority of our board of directors (including a majority of independent directors) not
otherwise interested in the transaction approve such investment as being fair and reasonable to us and on
substantially the same terms and conditions as, or more favorable than, those received by other joint venturers.
Joint venture investments may involve risks not present in investments where a third-party is not involved,
including the possibility that a co-venturer or partner may at any time have other business interests and investments
other than the joint venture with us, may have economic or business goals different from ours, and may be in a
position to take actions contrary to our policies or objectives. Our ability to exercise control or significant influence
over management in these cooperative efforts will depend upon the nature of the joint venture arrangement. Such
investments may have the potential risk of impasses on decisions, such as a sale, because neither we nor the joint
venture partner has full control over the joint venture. In addition, the joint venture partner could have a right of first
offer, tag-along rights, drag-along rights, consent rights or other similar rights in respect of any transfers of the
ownership interests in the joint venture to third parties, which could have the effect of making such transfers more
complicated or limiting or delaying us from selling our interest in the applicable investment or causing us to sell our
investment in the joint venture at a time when it would not otherwise be in our best interest to do so. Our
participation in investments in which a joint venture partner participates will be less than what our participation
would have been had such other vehicle not participated. Joint venture partners might become bankrupt or fail to
fund their required capital contributions. Consequently, actions by or disputes with joint venture partners might
result in subjecting properties owned by the joint venture to additional risk. In addition, we may be liable for actions
of its co-venturers or partners. Disputes between us and joint venture partners may result in litigation or arbitration
that would increase our expenses and prevent our officers and directors from focusing their time and effort on our
business.
Furthermore, we may have conflicting fiduciary obligations if we acquire properties with our affiliates or other
related entities. As a result, in any such transaction, we may not have the benefit of arm’s-length negotiations of the
type normally conducted between unrelated parties.
We may have difficulty selling our properties, which may limit our flexibility and ability to pay distributions.
Because real estate investments are relatively illiquid, it could be difficult for us to promptly sell one or more of
our properties on favorable terms. This may limit our ability to change our portfolio quickly in response to adverse
changes in the performance of any such property or economic or market trends. In addition, U.S. federal tax laws
that impose a 100% excise tax on gains from sales of dealer property by a REIT (generally, property held for the
short-term, rather than long-term investment) could limit our ability to sell properties and may affect our ability to
sell properties without adversely affecting returns to our stockholders. These restrictions could adversely affect our
results of operations and financial condition.
We rely on property managers to operate our properties and leasing agents to lease vacancies in our properties.
We hire property managers to manage our properties and leasing agents to lease vacancies in our properties.
These property managers may be our affiliates or partners in joint ventures that we enter into. We may also use
portfolio entities owned by Brookfield to provide these property management, leasing and similar services. The
property managers have significant decision-making authority with respect to the management of our properties. In
cases where we use third-party property managers, our ability to direct and control how our properties are managed
on a day-to-day basis may be limited. Thus, the success of our business may depend in large part on the ability of
our property managers to manage the day-to-day operations and the ability of our leasing agents to lease vacancies
in our properties. In cases where we use one of Brookfield’s portfolio entities to provide property management
services, we reimburse certain 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. Any
adversity experienced by, or problems in our relationship with, our property managers or leasing agents could
adversely impact the operation and profitability of our properties.
55
We will depend on tenants for our revenue, and therefore our revenue will be dependent on the success and
economic viability of our tenants. Our reliance on single or significant tenants in certain buildings may decrease
our ability to lease vacated space.
Rental income from real property, directly or indirectly, constitutes a significant portion of our income. Delays
in collecting accounts receivable from tenants could adversely affect our cash flows and financial condition. In
addition, the inability of a single major tenant or a number of smaller tenants to meet their rental obligations would
adversely affect our income. Therefore, our financial success will be indirectly dependent on the success of the
businesses operated by the tenants in our properties or in the properties securing loans we may own. The weakening
of the financial condition of or the bankruptcy or insolvency of a significant tenant or a number of smaller tenants
and vacancies caused by defaults of tenants or the expiration of leases may adversely affect our operations and our
ability to pay distributions.
Generally, under U.S. bankruptcy law, a debtor tenant has 120 days to exercise the option of assuming or
rejecting the obligations under any unexpired lease for nonresidential real property, which period may be extended
once by the bankruptcy court for an additional 90 days. If the tenant assumes its lease, the tenant must cure all
defaults under the lease and may be required to provide adequate assurance of its future performance under the
lease. If the tenant rejects the lease, we will have a claim against the tenant’s bankruptcy estate. Although rent owing
for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense
priority and paid in full, pre-bankruptcy arrears and amounts owing under the remaining term of the lease will be
afforded general unsecured claim status (absent collateral securing the claim). Moreover, amounts owing under the
remaining term of the lease will be capped. Other than equity and subordinated claims, general unsecured claims are
the last claims paid in a bankruptcy and therefore funds may not be available to pay such claims in full.
We may be unable to renew leases as leases expire.
We may not be able to lease properties that are vacant or become vacant because a tenant decides not to renew
its lease or by the continued default of a tenant under its lease. In addition, certain of the properties we acquire may
have some level of vacancy at the time of acquisition. Certain other properties may be specifically suited to the
particular needs of a tenant and may become vacant after we acquire them. Even if a tenant renews its lease or we
enter into a lease with a new tenant, the terms of the new lease may be less favorable than the terms of the old lease.
In addition, the resale value of the property could be diminished because the market value may depend principally
upon the value of the property’s leases. If we are unable to promptly renew or enter into new leases, or if the rental
rates are lower than expected, our results of operations and financial condition will be adversely affected. For
example, following the termination or expiration of a tenant’s lease there may be a period of time before we will
begin receiving rental payments under a replacement lease. During that period, we will continue to bear fixed
expenses such as interest, real estate taxes, maintenance, security, repairs and other operating expenses. In addition,
declining economic conditions may impair our ability to attract replacement tenants and achieve rental rates equal to
or greater than the rents paid under previous leases. Increased competition for tenants may require us to make capital
improvements to properties which would not have otherwise been planned. Any unbudgeted capital improvements
that we undertake may divert cash that would otherwise be available for distributions or for satisfying repurchase
requests. Ultimately, to the extent that we are unable to renew leases or re-let space as leases expire, decreased cash
flows from tenants will result, which could adversely impact our operating results.
We may be required to expend funds to correct defects or to make improvements before a tenant can be found
for a property at an attractive lease rate or an investment in a property can be sold. No assurance can be given that
we will have funds available to correct those defects or to make those improvements. In acquiring a property, we
may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose
other restrictions, such as a limitation on the amount of debt that can be placed on that property. These factors and
others that could impede our ability to respond to adverse changes in the performance of our properties could
significantly affect our financial condition and operating results.
56
Our properties will face significant competition.
We may face significant competition from owners, operators and developers of properties. Substantially all of
our properties will face competition from similar properties in the same market. This competition may affect our
ability to attract and retain tenants and may reduce the rents we are able to charge. These competing properties may
have vacancy rates higher than our properties, which may result in their owners being willing to lease available
space at lower prices than the space in our properties. If one of our properties were to lose an anchor tenant, this
could impact the leases of other tenants, who may be able to modify or terminate their leases as a result.
Our properties may be leased at below-market rates under long-term leases.
We may seek to negotiate longer-term leases to reduce the cash flow volatility associated with lease rollovers,
provided that contractual rent increases are included. In addition, where appropriate, we will seek leases that provide
for operating expenses, or expense increases, to be paid by the tenants. These leases may allow tenants to renew the
lease with pre-defined rate increases. If we do not accurately judge the potential for increases in market rental rates,
we may set the rental rates of these long-term leases at levels such that even after contractual rental increases, the
resulting rental rates are less than then-current market rental rates. Further, we may be unable to terminate those
leases or adjust the rent to then-prevailing market rates. As a result, our income and distributions to our stockholders
could be lower than if we did not enter into long-term leases.
We may experience material losses or damage related to our properties and such losses may not be covered by
insurance.
We may experience losses related to our properties arising from natural disasters such as extreme weather
events, climate change, earthquakes or floods, and acts of God, vandalism or other crime, faulty construction or
accidents, fire, outbreaks of an infectious disease, pandemic or any other serious public health concern, war, acts of
terrorism or other catastrophes. We carry insurance covering our properties under policies the Adviser deems
appropriate. The Adviser will select policy specifications and insured limits that it believes to be appropriate and
adequate given the relative risk of loss, the cost of the coverage and industry practice. Insurance policies on our
properties may include some coverage for losses that are generally catastrophic in nature, such as losses due to
terrorism, earthquakes, typhoons and floods, though certain losses of a catastrophic nature may be uninsurable or
insurable at such high rates that to maintain such coverage would cause an adverse impact to our profitability.
Moreover, we cannot assure you that any insurance coverage we carry will be adequate to cover all losses and some
of our policies will be insured subject to limitations involving large deductibles or co-payments and policy limits
that may not be sufficient to cover losses. In general, losses related to terrorism are becoming harder and more
expensive to insure against. Some insurers are excluding terrorism coverage from their all-risk policies. In some
cases, the insurers are offering significantly limited coverage against terrorist acts for additional premiums, which
can greatly increase the total costs of casualty insurance for a property. As a result, not all investments may be
insured against terrorism. A similar dynamic has been unfolding with respect to certain weather and fire events, with
insurers excluding certain investments that have high risk of weather, earthquake or fire events. As the effects of
climate change increase, we expect the frequency and impact of weather and climate related events and conditions
could increase as well. If we or one or more of our tenants experience a loss that is uninsured or that exceeds policy
limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from
those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to
be liable for the indebtedness, even if these properties were irreparably damaged. Certain of these events, such as
war or an outbreak of an infectious disease, could have a broader negative impact on the global or local economy,
thereby affecting us, the Adviser or the Sub-Adviser.
We could become subject to liability for environmental violations, regardless of whether we caused such
violations.
We could become subject to liability in the form of fines or damages for noncompliance with environmental
laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the
operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation
and disposal of solid hazardous materials, the remediation of contaminated property associated with the disposal of
57
solid and hazardous materials and other health and safety-related concerns. Some of these laws and regulations may
impose joint and several liability on tenants, owners or managers for the costs of investigation or remediation of
contaminated properties, regardless of fault or the legality of the original disposal. Under various federal, state and
local environmental laws, ordinances, and regulations, a current or former owner or manager of real property may be
liable for the cost to remove or remediate hazardous or toxic substances, wastes, or petroleum products on, under,
from, or in such property. These costs could be substantial and liability under these laws may attach whether or not
the owner or manager knew of, or was responsible for, the presence of such contamination. Even if more than one
person may have been responsible for the contamination, each liable party may be held entirely responsible for all of
the clean-up costs incurred.
In addition, third parties may sue the owner or manager of a property for damages based on personal injury,
natural resources, or property damage or for other costs, including investigation and clean-up costs, resulting from
the environmental contamination. The presence of contamination on one of our properties, or the failure to properly
remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to
address the contamination, or otherwise adversely affect our ability to sell or lease the property or borrow using the
property as collateral. In addition, if contamination is discovered on our properties, environmental laws may impose
restrictions on the manner in which the property may be used or businesses may be operated, and these restrictions
may require substantial expenditures or prevent us from entering into leases with prospective tenants. There can be
no assurance that future laws, ordinances or regulations will not impose any material environmental liability, or that
the environmental condition of our properties will not be affected by the operations of the tenants, by the existing
condition of the land or by operations in the vicinity of the properties. There can be no assurance that these laws, or
changes in these laws, will not have a material adverse effect on our business, results of operations or financial
condition.
Short-term leases associated with any multifamily, student housing and single-family rental properties may
expose us to the effects of declining market rent and could adversely impact our ability to make cash distributions
to our stockholders.
Substantially all of our leases in multifamily, student housing and single-family rental properties are on a short-
term basis. Because these leases generally permit the residents to leave at the end of the lease term without penalty,
our rental revenues may be impacted by declines in market rents more quickly than if our leases were for longer
terms.
Increased levels of unemployment could adversely affect the occupancy and rental rates of any multifamily,
student housing and single-family rental properties we acquire.
Increased levels of unemployment in markets where we are invested in multifamily, student housing and
single-family rental properties could significantly decrease occupancy and rental rates. In times of increasing
unemployment, occupancy and rental rates have historically been adversely affected by:
•oversupply or reduced demand for housing;
•rental residents deciding to share rental units and therefore rent fewer units;
•potential residents moving back into family homes or delaying leaving family homes;
•a reduced demand for higher-rent properties;
•a decline in household formation;
•persons enrolled in college delaying leaving college or choosing to proceed to or return to graduate school
in the absence of available employment;
•rent control or rent stabilization laws, or other laws regulating housing, that could prevent us from raising
rents sufficiently to offset increases in operating costs;
•the inability or unwillingness of residents to pay rent increases; and
58
•increased collection losses.
These factors will generally contribute to lower rental rates and higher vacancy, which may adversely impact
our results of operations, financial condition and ability to make distributions to our stockholders.
Rent control and other changes in applicable laws, or noncompliance with applicable laws, could adversely affect
our multifamily, student housing and single-family rental properties.
Lower revenue growth or significant unanticipated expenditures may result from changes in rent control or rent
stabilization laws or other residential landlord/tenant laws. Municipalities may implement, consider or be urged by
advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions that could
limit our ability to raise rents based on market conditions. Any future enactments of rent control or rent stabilization
laws or other laws regulating housing, as well as any lawsuits against us arising from such rent control or other laws,
may reduce rental revenues or increase operating costs. Such laws and regulations may limit our ability to charge
market rents, increase rents, evict tenants or recover increases in our operating costs and could make it more difficult
for us to dispose of properties in certain circumstances. Expenses associated with investments in residential
properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when
circumstances cause a reduction in rental income from such properties. Additionally, recent policy proposals aimed
at limiting institutional investors from buying single-family housing could reduce our ability to acquire certain
single-family housing, increase regulatory uncertainty, and reduce the number of buyers for single-family housing,
which may adversely affect market dynamics and valuations.
Certain of the rental housing properties in which we invest must comply with the Fair Housing Amendment of
1988 (the “FHAA”).
Certain of the rental housing properties in which we invest domestically must comply with the FHAA which
requires that certain rental properties first occupied after March 13, 1991 be accessible to handicapped residents and
visitors. Compliance with the FHAA could require removal of structural barriers to handicapped access in a
community, including the interiors of apartment units covered under the FHAA. Recently there has been heightened
scrutiny of rental housing communities for compliance with the requirements of the FHAA and the Americans with
Disabilities Act (the “ADA”) and an increasing number of substantial enforcement actions and private lawsuits have
been brought against rental housing properties to ensure compliance with these requirements. Noncompliance with
the FHAA and the ADA could result in the imposition of fines, awards of damages to private litigants, payment of
attorneys’ fees and other costs to plaintiffs, substantial litigation costs and substantial costs of remediation.
We face risks related to alternative accommodation offerings at our multifamily properties.
Certain of our multifamily properties offer alternative accommodations, typically short-term-rentals, consisting
of units leased to third-party individual hosts and units managed by us, that are rented through third-party booking
platforms. These alternative accommodations face risks relating to claims of liability, regulatory developments and
continued growth and profitability.
Alternative accommodations are subject to claims of liability based on injury, death, discrimination or criminal
activities occurring at these properties. We have no control over the actions of tenants and third parties during a
guest’s stay, and cannot guarantee the safety of such individuals. In addition, we have not in the past and may not in
the future undertake to systematically verify the safety, quality, and legal compliance of alternative accommodation
listings at our properties leased to individual hosts. We rely on individual hosts to disclose information relating to
their listings and such information may be inaccurate or incomplete. Any resulting complaints or claims could result
in negative publicity and increased costs, which could adversely affect our reputation, business and results of
operations.
The regulatory environment related to alternative accommodations is evolving, and laws, regulations, or
property association rules could impose restrictions or burdens on us. For example, certain domestic and foreign
jurisdictions have adopted or are considering statutes or ordinances that prohibit or limit the ability of property
owners and managers to rent certain properties for fewer than 30 consecutive days, including laws that place many
difficult obligations on property owners that must be complied with to offer their properties, or that regulate the
59
ability to list alternative accommodations, including prohibiting the listing of unlicensed properties. Many
homeowners, condominium and neighborhood associations have adopted rules that prohibit or restrict short-term
rentals. Governments also are looking at additional taxes specific to alternative accommodations that, if
implemented, could make the business of operating an alternative accommodation less attractive or prohibitively
expensive.
In addition, our ability to attract and retain guests in our alternative accommodations may be adversely impacted
by: properties failing to meet guests’ expectations; hosts failing to provide differentiated, high-quality and an
adequate supply of stays or experiences at competitive prices; negative associations with, or reduced awareness of,
alternative accommodations; negative perceptions of the safety of alternative accommodations and macroeconomic
and other conditions outside of our control affecting travel and hospitality industries generally.
We may be adversely affected by trends in the office real estate industry.
Sustained changes in client preferences and space utilization in office spaces, moving from full-time, collective
in-person work environments to hybrid or remote work models and use of shared office and co-working spaces
could decrease overall demand for office workspaces. This will in turn place downward pressure on occupancy,
rental rates and property valuations which could have an adverse impact on our business, cash flow, financial
condition and results of operations.
Our logistics tenants may be adversely affected by a decline in manufacturing activity in the United States.
Fluctuations in manufacturing activity in the United States may adversely affect our logistics tenants and
therefore the demand for and profitability of our logistics properties. Trade agreements with foreign countries have
given employers the option to utilize less expensive foreign manufacturing workers. Outsourcing manufacturing
activities could reduce the demand for U.S. workers, thereby reducing the profitability of our logistics tenants and
the demand for and profitability of our logistics properties.
Certain of our properties may be special use or build-to-suit and may be difficult to sell or relet upon tenant
defaults or lease terminations.
Certain of our properties may include special use or build-to-suit properties. These types of properties are
relatively illiquid compared to other types of real estate and financial assets and this illiquidity will limit our ability
to quickly change our portfolio in response to changes in economic or other conditions. With such properties, if the
current lease is terminated or not renewed, we may be required to renovate the property or to make rent concessions
in order to lease the property to another tenant, finance the property or sell the property. In addition, in the event we
are forced to sell the property, we may have difficulty selling it to a party other than the tenant or borrower due to
the special purpose for which the property may have been designed. These and other limitations may affect our
ability to sell or relet these properties and adversely affect our results of operations at such properties.
We face risks associated with our investments in limited partnership interests in private real estate funds.
When investing in limited partnership interests in private real estate funds, we will have limited ability to
exercise control over the fund’s operations and investments, including the underlying real estate properties.
Generally, the general partner of the fund will have broad discretion over the structuring, operations, financing and
disposition of the fund’s investments. As a result, the fund may dispose of an investment at a time or on terms other
than what may be most favorable for us. In addition, limited partnership interests are highly illiquid and typically
subject to significant transfer restrictions. Therefore, we may not be able to generate liquidity from our limited
partnership interests by selling them to a third party and we may not receive distributions from the fund until the
general partner decides to sell one or more investments and distribute sale proceeds to the limited partners.
Generally, we will have similar rights and obligations as the other limited partners invested in the fund, which may
include future capital call funding obligations. If we are unable to fund our capital call obligations, our interest in the
investment may be diluted and we may be subject to other negative consequences.
60
General Risks Related to Investments in Real Estate-Related Debt
Investments in real estate-related debt securities are subject to various risks, including creditor risks and early
redemption features, which may materially adversely affect our results of operations and financial condition.
We invest in public and private debt investments and other obligations relating to real estate assets and real
estate-related companies, including CMBS, RMBS and corporate bonds. The value of these debt investments and
whether and to what extent such investments perform as expected will depend, in part, on the prevailing conditions
in the market for real estate investment generally and, in particular, on the value of the underlying real estate asset
collateral or real estate-related companies to which such debt investments relate. Real estate-related debt securities
can also be very volatile and their value can change rapidly and dramatically, including in response to changes in
interest rates and other market events.
Investments in real estate debt also involve many unique risks. For example, debt instruments may be “non-
recourse” loans where the sole recourse for the repayment will be the underlying real estate-related asset. As a result,
the ability of obligors to make payments is dependent upon the underlying real estate-related asset rather than upon
the existence of independent income or assets of such obligors or any parent guarantees. The debt securities and
instruments that we invest in may be subject to early redemption features, refinancing options, pre-payment options
or similar provisions which, in each case, could result in obligors of such securities or loans repaying principal to us
earlier than expected, resulting in a lower return to us than projected (even taking into consideration any make-
whole or similar feature). In addition, certain of the debt securities and instruments in which we invest may be
structured so that all or a substantial portion of the principal will not be paid until maturity, which increases the risk
of default at that time.
We may invest in mortgages, real estate loans, securities and other relatively illiquid investments.
Subject to the limitations in our charter, we may invest in mortgages, real estate loans, securities and other
relatively illiquid investments. All or a significant portion of our assets may consist of private investments,
investments that are thinly-traded, investments for which no market exists or investments that are restricted as to
their transferability under applicable securities laws or documents governing particular transactions. Some securities
or instruments that were liquid at the time they were acquired may, for a variety of reasons which may not be in our
control, later become illiquid. This factor may have the effect of limiting the availability of these securities or
instruments for purchase by us and may also limit our ability to sell such investments at their fair market value in
response to changes in the economy or the financial markets.
We may face risks in connection with frequent trading in and high portfolio turnover of our real estate-related
debt portfolio and our liquid assets.
The different strategies used by the Adviser and the Sub-Adviser with respect to our real estate-related debt
portfolio and our liquid assets may, from time to time, require frequent trading and a high portfolio turnover. The
more frequently we trade, the higher the commission and transaction costs and certain other expenses involved in
our operations. These costs will be borne by us regardless of the profitability of our investment and trading
activities. In addition, a high portfolio turnover may increase the recognition of short-term, rather than long-term,
capital gains.
Investments in subordinated debt carry greater risks than those associated with senior obligations.
The debt securities and instruments in which we may invest include secured or unsecured debt at various levels
of an issuer’s capital structure. As part of our investment strategy, it is anticipated that we will invest in a range of
mezzanine, junior tranches of debt securities in an issuer’s capital structure and pools or tranches of CMBS and
RMBS comprised of securities that are subordinated or otherwise junior in an issuer’s capital structure. To the extent
we invest in unsecured or relatively junior debt securities in an issuer’s capital structure, such investments may be
subordinated to substantial amounts of senior secured indebtedness. Investments in subordinated debt securities
involve greater credit risk of default than the more senior classes of such issuance or series. Subordinated or junior
tranches in an issuer’s capital structure absorb losses from default before other more senior tranches to which such
junior tranches are subordinate. As a result, to the extent we invest in such debt, we would potentially receive
61
payments or interest distributions after, and must bear the effects of losses or defaults on the underlying mortgage
loans before, the holders of other more senior tranches of debt.
The debt securities and instruments in which we may invest may not be protected by financial covenants or
limitations upon additional indebtedness, may have limited liquidity and may not be rated by a credit rating agency.
Debt investments are also subject to other creditor risks, including the possible invalidation of an investment
transaction as a “fraudulent conveyance” under relevant creditors’ rights laws; so-called lender liability claims by
the issuer of the obligations; and environmental liabilities that may arise with respect to collateral securing the
obligations. Our investments may be subject to early redemption features, refinancing options, pre-payment options
or similar provisions which, in each case, could result in the issuer repaying the principal on an obligation held by us
earlier than expected and thereby limiting the amount of income earned by us from such investments. In addition,
depending on fluctuations of the equity markets and other factors, warrants and other equity securities we receive
may become worthless.
Certain risks associated with CMBS and RMBS securities may adversely affect our results of operations and
financial condition.
We invest in pools or tranches of CMBS and RMBS which are subject to various risks and uncertainties,
including credit, market, interest rate, structural and legal risks. These risks may be magnified by volatility in the
credit and real estate markets. The investment characteristics of CMBS and RMBS differ from traditional debt
securities in a number of respects, and are similar to the characteristics of structured credit products in which
investors participate through a trust or other similar conduit arrangement. Mortgage loans are obligations of the
borrowers thereunder and are not typically insured or guaranteed by any other person or entity. While we intend to
analyze and underwrite our CMBS and RMBS investments from a fundamental real estate perspective, there can be
no assurance that such underwriting practices will yield their desired results or that we will be able to effectively
achieve our investment objectives.
The prospect of full repayment of the mortgage loans underlying CMBS depends on the ability of the
commercial borrower to generate current income from its commercial property. The ability to generate current
income from a commercial property is affected by a variety of factors. Such factors include differences in the
management ability and track record of the commercial borrower, and geographic or industry concentration.
Commercial borrowers may also lack the incentive to invest the funds necessary to maintain and attract tenants in
the properties underlying the commercial mortgage loans to the extent the value of the mortgage exceeds the
property value. Unlike residential mortgage loans, most commercial mortgage loans are not significantly amortized
over the loans’ terms. Instead, with most commercial mortgage loans the bulk of the loan balance is payable at
maturity with a one-time payment, commonly known as a “balloon payment.” Full satisfaction of the balloon
payment by a commercial borrower is heavily dependent on the availability of subsequent financing, which can be
negatively impacted by a difficult credit environment. Usually, a commercial borrower will seek out another loan to
satisfy the balloon payment on a commercial mortgage loan. Therefore, full satisfaction of a commercial mortgage
loan will be affected by a commercial borrower’s access to credit. In certain situations, including during periods of
credit distress, the unavailability of real estate financing may lead to default by a commercial borrower.
Mortgage loans are usually non-recourse in nature. Therefore, if a borrower defaults on the mortgage loan
underlying the CMBS or RMBS, the options for financial recovery are limited in nature. To the extent the
underlying default rates with respect to the loans comprising a pool or tranche of CMBS or RMBS in which we
invest increase, the performance of our investments related thereto may be adversely affected. Default rates and
losses on mortgage loans underlying the CMBS or RMBS will be affected by a number of factors, including global,
regional and local economic conditions in the area where the mortgage properties are located, the borrower’s equity
in the mortgage property and the financial circumstances of the borrower. A decline in specific real estate markets
and property valuations may result in higher delinquencies and defaults. In the event of default, the lender will have
no right to assets beyond collateral attached to the mortgage loan. There can be no guarantee that our investments in
CMBS and RMBS will not be adversely affected by such risks.
The value of CMBS and RMBS is subject to risk from possible geographic or industry concentration. In
addition to investing in pools or tranches of CMBS and RMBS, we may in certain circumstances invest in securities
62
relating to a single issuer or a handful of issuers, which involves a high degree of concentrated risk with no certainty
of any return of capital. These risks may be further pronounced in cases where the CMBS or RMBS is secured by a
relatively small or less diverse pool of underlying loans or real estate assets. Certain geographic regions or industries
may be more adversely affected from economic pressures when compared to other geographic regions or industries.
A pool of CMBS or RMBS comprised of mortgage loans with a substantial geographic or industry concentration
will be more susceptible to the economic environment of such concentrated geographic regions or industries, and
therefore could be at greater risk for a substantial loss in value.
We may invest in structured products that may involve structural and legal risks.
We may invest in structured products, including debt securities issued by a private investment fund that invests,
on a leveraged basis, in bank loans, high-yield debt or other asset groups, as well as certificates issued by a
structured investment vehicle that holds pools of CMBS or RMBS. Our investments in structured products will be
subject to a number of risks, including risks related to the fact that the structured products will be leveraged, and
other structural and legal risks related thereto. Utilization of leverage is a speculative investment technique and will
generally magnify the opportunities for gain and risk of loss borne by an investor in the subordinated debt securities
issued by a structured product. Many structured products contain covenants designed to protect the providers of debt
financing to such structured products. A failure to satisfy those covenants could result in the untimely liquidation of
the structured product and a complete loss of our investment therein. In addition, if the particular structured product
is invested in a security in which we are also invested, this would tend to increase our overall exposure to the credit
of the issuer of such securities, at least on an absolute, if not on a relative basis. The value of an investment in a
structured product will depend on the investment performance of the assets in which the structured product invests
and will, therefore, be subject to all of the risks associated with an investment in those assets. These risks include the
possibility of a default by, or bankruptcy of, the issuers of such assets or a claim that the pledging of collateral to
secure any such asset constituted a fraudulent conveyance or preferential transfer that can be subordinated to the
rights of other creditors of the issuer of such asset or nullified under applicable law.
We expect that we will be operated pursuant to an exemption or exclusion from the registration requirements
under the Commodity Futures Trading Commission (“CFTC”) regulations.
It is expected that we will be operated pursuant to an exemption or exclusion from the registration requirements
under the CFTC regulations, including pursuant to certain no-action relief with respect to equity REITs. Therefore,
neither the Adviser nor the Sub-Adviser will be required to provide prospective investors with a CFTC compliant
disclosure document, nor will they be required to provide investors with periodic account statements or certified
annual reports that satisfy the requirements of CFTC rules applicable to registered commodity pool operators, in
connection with any offerings of shares.
Risks Related to Debt Financing
We use mortgage indebtedness and other borrowings, which increases our business risks, could hinder our ability
to make distributions and could decrease the value of our stock.
Subject to maintaining our REIT qualification and the limitations in our charter, we have used and may continue
to use leverage for our investments on a recourse or non-recourse basis or otherwise engage in certain investment
activities that involve the use of leverage. The use of leverage involves a high degree of financial risk and will
increase the exposure of the investments to adverse economic factors such as rising interest rates, downturns in the
economy or deterioration in the condition of the investments. Any event that adversely affects the value of one of
our investments would be magnified to the extent leverage is used. To the extent that we engage in any leveraging,
we will be subject to the risks normally associated with debt financing, including those relating to the ability to
refinance and the insufficiency of cash flow to meet principal and interest payments, which could significantly
reduce or even eliminate the value of our equity in real estate investments. Leveraging our capital structure will
mean that third parties, such as banks, may be entitled to the cash flow generated by such investments prior to us or
our investors receiving a return. Additionally, if one of our assets is mortgaged or otherwise used as collateral to
secure repayment of indebtedness and such payments are not made, the asset could be foreclosed upon by or
otherwise transferred to the lender.
63
Under our charter, we have a limitation that precludes us from borrowing in excess of 300% of our net assets,
which approximates borrowing 75% of the cost of our investments (unless a majority of our independent directors
approves any borrowing in excess of the limit and we disclose the justification for doing so to our stockholders), but
such restriction does not restrict the amount of indebtedness we may incur with respect to any single investment. To
the extent that we do not employ long-term leverage (or employ less leverage than originally anticipated), our
investment returns may be lower than those that might have been achieved using long-term leverage.
No assurance can be given that financing will be available throughout the life of us or any individual
investment, or that long-term replacement financing can be obtained as intended by the Adviser. If we are unable to
obtain financing, including on favorable terms that reflect its underlying investments, this may have a material
adverse effect on our ability to achieve our investment objectives and the return on invested capital. There are also
financing costs associated with leverage. Such costs will be borne by us and therefore may adversely affect the rate
of returns we obtain. In addition, each leveraged investment will involve interest rate risk to the extent that financing
charges for such leveraged investment are based on fluctuations in the applicable benchmark.
Although the use of borrowed funds may increase investment returns if the leveraged investment earns a return
greater than the cost of our borrowed funds, investment returns will decrease if the leveraged investment fails to earn
a return equal to the cost of our borrowed funds. The extent to which we use borrowed funds may have important
consequences to our stockholders, including greater fluctuations in our net assets, use of cash flow for debt service,
rather than for additional investments, distributions, or other purposes, and in certain circumstances we may be
required to prematurely divest investments to service its debt obligations.
If we default on secured indebtedness, the lender may foreclose and we could lose our entire investment in the
collateral for such loan. If we become subject to a liability, parties seeking to have the liability satisfied may have
recourse to our assets generally and not be limited to any particular asset, such as the investment giving rise to the
liability. No assurance can be given that financing for our investments will be obtained by us, or obtained on
favorable or acceptable terms. A foreclosure may also have substantial adverse tax consequences for us.
Many of these same issues also apply to credit facilities which are expected to be in place at various times as
well. For example, the loan documents for such facilities may include various asset coverage ratios, the continued
compliance with which may not be completely within our control. If such coverage ratios are not met, the lenders
under such credit facilities may declare any unfunded commitments to be terminated and declare any amounts
outstanding to be due and payable.
If we draw on a line of credit to pay distributions, fund repurchases or for any other reason, our financial
leverage ratio could increase beyond our target.
We have entered into an uncommitted line of credit from an affiliate of Brookfield (the “Affiliate Line of
Credit”) and may seek to obtain additional lines of credit in an effort to provide for a ready source of liquidity for
any business purpose, including to pay distributions or fund repurchases of shares of our common stock in the event
that repurchase requests exceed our operating cash flow and/or net proceeds from our continuous offering. There can
be no assurances that we will be able to borrow under the line of credit, that the lender will issue a loan or extend or
renew the line of credit, or that we will be able to obtain additional lines of credit on financially reasonable terms. In
addition, we may not be able to obtain a line of credit of an appropriate size for our business until such time as we
have a substantial portfolio, or at all. If we borrow under a line of credit to pay distributions or fund repurchases of
shares of our common stock, our financial leverage will increase and may exceed our target leverage ratio. Our
leverage may remain at the higher level until we receive additional net proceeds from this offering or generate
sufficient operating cash flow or proceeds from asset sales to repay outstanding indebtedness.
Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to
make distributions to our stockholders.
Our use of leverage will subject us to interest rate risk in that increases in long-term interest rates will, absent all
else, increase our interest rate expense, impacting profitability. Interest we pay on our loan obligations will reduce
cash available for distributions. Certain of our debt obligations are variable rate and, therefore, increases in interest
rates would increase our interest costs, which would reduce our cash flows available for distribution. In addition, if
64
we need to repay existing loans during periods of rising interest rates, we could be required to liquidate one or more
of our investments at times that may not permit realization of the maximum return on such investments. We cannot
predict factors which may or may not affect interest rates.
Volatility in the financial markets and challenging economic conditions could adversely affect our ability to
secure debt financing on attractive terms and our ability to service any future indebtedness that we may incur.
If the overall cost of borrowing increases, either by increases in the index rates or by increases in lender spreads,
the increased costs may result in future acquisitions generating lower overall economic returns and potentially
reducing future cash flow available for distribution. Disruptions in the debt markets may negatively impact our
ability to borrow monies to finance the purchase of, or other activities related to, real estate assets. If we are unable
to borrow monies on terms and conditions that we find acceptable, we likely will have to reduce the number of
properties we can purchase, and the return on the properties we do purchase may be lower. In addition, we may find
it difficult, costly or impossible to refinance indebtedness that is maturing.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability
to make distributions to our stockholders.
When providing financing, a lender may impose restrictions on us that affect our distribution and operating
policies and our ability to obtain additional loans. Agreements we enter into may contain covenants that limit our
ability to further mortgage or dispose of the property or discontinue insurance coverage. In addition, loan documents
may limit our ability to enter into or terminate certain operating or lease agreements related to the property. These or
other limitations may adversely affect our flexibility and our ability to make distributions to our stockholders and the
value of our shares.
Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations
and financial condition.
Subject to any limitations required to maintain our qualification as a REIT, we may engage in interest rate
hedging or other hedging strategies in order to manage risk and return trade-offs. These agreements involve risks,
such as the risk that counterparties may fail to honor their obligations under these arrangements and that these
arrangements may not be effective in reducing our exposure to interest rate changes. These interest rate hedging
arrangements may create additional assets or liabilities from time to time that, based on the value of the underlying
hedging contract, may be held or liquidated separately from the underlying property or loan for which they were
originally established. Moreover, it may not be possible to hedge against currency exchange rate, interest rate or
public security price fluctuations at a price sufficient to provide protection from the decline in the value of the
portfolio position. Hedging may also reduce the overall returns on our investments. Failure to hedge effectively
against interest rate changes may materially adversely affect our results of operations and financial condition.
We may enter into swap transactions, which involve a variety of significant risks.
We may enter into long and short positions in all types of derivative transactions and credit-linked securities,
including interest rate and foreign exchange swaps. Swap transactions, like other financial transactions, involve a
variety of significant risks. The specific risks presented by a particular swap transaction necessarily depend upon the
terms of the transaction and our circumstances. In general, however, all swap transactions involve some combination
of market risk, credit risk, counterparty credit risk, funding risk, liquidity risk and operational risk. In evaluating the
risks and contractual obligations associated with a particular swap transaction, it is important to consider that a swap
transaction may be modified or terminated only by mutual consent of the original parties and subject to agreement
on individually negotiated terms. Therefore, it may not be possible for us to modify, terminate or offset our
obligations under a swap or our exposure to the risks associated with a swap prior to its scheduled termination date.
65
Risks Related to our Relationship with Brookfield
We depend on the Adviser to select our investments and otherwise conduct our business, and any material
adverse change in its financial condition or our relationship with the Adviser could have a material adverse effect
on our business and ability to achieve our investment objectives.
Our success is dependent upon our relationship with, and the performance of, the Adviser in the acquisition and
management of our real estate portfolio, and our corporate operations. The Adviser may suffer or become distracted
by adverse financial or operational problems in connection with Brookfield’s business and activities unrelated to us
and over which we have no control. The Adviser may also resign or our board of directors may determine to replace
the Adviser with a different investment adviser, and there is no guarantee that we will be able to find a replacement
investment adviser or that any replacement will be suitable. Should the Adviser fail to allocate sufficient resources to
perform its responsibilities to us for any reason or should the Adviser resign or be replaced, we may be unable to
achieve our investment objectives or to pay distributions to our stockholders.
The Adviser’s inability to retain the services of key real estate professionals could hurt our performance.
Our success depends to a significant degree upon the skill, acumen and contributions of certain key real estate
and other professionals employed by the Adviser, each of whom would be difficult to replace. There is ever
increasing competition among alternative asset firms, financial institutions, private equity firms, investment
advisors, investment managers, real estate investment companies, real estate investment trusts and other industry
participants for hiring and retaining qualified investment professionals and there can be no assurance that such
professionals will continue to be associated with us or the Adviser, particularly in light of our perpetual-life nature,
or that replacements will perform well. If any of these persons were to cease their association with us, our operating
results could suffer. Our future success depends, in large part, upon the Adviser’s ability to attract and retain highly
skilled managerial, operational and marketing professionals. If the Adviser loses or is unable to obtain the services
of highly skilled professionals, our ability to implement our investment strategies could be delayed or hindered.
The Adviser has engaged the Sub-Adviser to select and manage certain of our real estate-related debt and
securities and relies on the performance of the Sub-Adviser in managing these securities.
The Adviser has engaged the Sub-Adviser to select and manage certain of our investments in accordance with,
and subject to our investment objectives, strategy, guidelines, policies and limitations pursuant to the Sub-Advisory
Agreement, including certain of our real estate-related debt and securities. 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 certain liquid assets. If the Sub-Adviser does not succeed in managing this 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 success of this offering is dependent, in part, on the ability of the Dealer Manager to retain key employees
and to successfully build and maintain a network of licensed broker-dealers.
The dealer manager for this offering is Brookfield Private Wealth LLC, an affiliate of the Adviser. The success
of this offering and our ability to implement our business strategy is dependent upon the ability of our Dealer
Manager to retain key employees and to build and maintain a network of licensed securities broker-dealers and other
agents to distribute shares in this offering. If the Dealer Manager is unable to do so, we may not be able to raise
adequate proceeds through this offering to meet our investment objectives. In addition, the Dealer Manager serves as
dealer manager for other issuers, including Other Brookfield Accounts and other accounts of Oaktree (“Other
Oaktree Accounts”). As a result, the Dealer Manager may experience conflicts of interest in allocating its time
between this offering and such other issuers, which could adversely affect our ability to raise adequate proceeds
through this offering and implement our investment strategy. Further, the participating broker-dealers retained by the
Dealer Manager may have numerous competing investment products, some with similar or identical investment
strategies and areas of focus as us, which they may elect to emphasize to their retail clients.
66
Because the Dealer Manager is an affiliate of the Adviser, you will not have the benefit of an independent due
diligence review of us, which is customarily performed in firm commitment underwritten offerings.
The Dealer Manager is an affiliate of the Adviser. As a result, its due diligence review and investigation of us
and this prospectus cannot be considered to be an independent review. In addition, we do not, and do not expect to,
have research analysts reviewing our performance or our securities on an ongoing basis. If your broker-dealer does
not conduct such a review, you will not have the benefit of an independent review of the terms of this offering.
Therefore, you do not have the benefit of an independent review and investigation of this offering of the type
normally performed by an unaffiliated, independent underwriter in a firm commitment underwritten public securities
offering, which may increase the risks and uncertainty you face as a stockholder.
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, our dealer manager 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.
Various potential and actual conflicts of interest will arise, and these conflicts may not be identified or resolved in
a manner favorable to us.
Various potential and actual conflicts of interest will arise as a result of our overall investment activities and the
overall investment activities of Brookfield, Oaktree, the Dealer Manager, the Adviser, the Sub-Adviser and their
affiliates. The following risk factors enumerate all known material but not all potential conflicts of interest that
should be carefully evaluated before making an investment in us. Brookfield and Brookfield personnel may in the
future engage in further activities that may result in additional conflicts of interest not addressed below. If any
matter arises that we and our affiliates (including the Adviser, the Sub-Adviser and the Dealer Manager) determine
in our good faith judgment constitutes an actual conflict of interest, we and our affiliates (including the Adviser, the
Sub-Adviser and the Dealer Manager) may take such action as we determine in good faith may be necessary or
appropriate to ameliorate the conflict. Transactions between us and Brookfield, Oaktree or their respective affiliates
will require approval by our board of directors, including a majority of our independent directors. There can be no
assurance that our board of directors, Brookfield or Oaktree will identify or resolve all conflicts of interest in a
manner that is favorable to us.
The Adviser’s management and performance fees may not create proper incentives or may induce the Adviser
and its affiliates to make certain investments, including speculative investments, that increase the risk of our real
estate portfolio.
We will pay the Adviser a management fee regardless of the performance of our portfolio. The Adviser’s
entitlement to a management fee, which is not based upon performance metrics or goals, might reduce its incentive
to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. We
may be required to pay the Adviser a management fee in a particular period despite experiencing a net loss or a
decline in the value of our portfolio during that period. The Adviser, however, has a fiduciary duty to us. If the
Adviser fails to act in our best interests, then it will have violated this duty. The Advisory Agreement may be
terminated by a majority of our independent directors or the Adviser on 60 days’ notice. The existence of the
performance fee, which is based on our total distributions plus the change in NAV per share, may create an incentive
for the Adviser to make riskier or more speculative investments on our behalf or cause us to use more leverage than
it would otherwise make in the absence of such performance based compensation. In addition, the change in NAV
per share will be based on the value of our investments on the applicable measurement dates and not on realized
67
gains or losses. As a result, the Adviser may receive a performance fee based on unrealized gains in certain assets at
the time of such performance fees and such gains may not be realized when those assets are eventually disposed of.
Each of the Adviser and the Sub-Adviser will face a conflict of interest because the fees they will receive for
services performed are based in part on our NAV, which the Adviser and the Sub-Adviser are ultimately
responsible for determining.
Each of the Adviser and the Sub-Adviser will be paid fees for their services based on our NAV, which will be
calculated by State Street, based on valuations provided by the Adviser and the Sub-Adviser. In addition, a
component of the management and performance fees payable to the Adviser is based in part upon the Operating
Partnership’s net assets (which is a component of our NAV). The calculation of our NAV includes certain subjective
judgments with respect to estimating, for example, the value of our portfolio and our accrued expenses, net portfolio
income and liabilities, and therefore, our NAV may not correspond to realizable value upon a sale of those assets.
The Adviser or the Sub-Adviser, as applicable, may benefit by us retaining ownership of our assets at times when
our stockholders may be better served by the sale or disposition of our assets in order to avoid a reduction in our
NAV. If our NAV is calculated in a way that is not reflective of our actual NAV, then the purchase price of shares of
our common stock or the price paid for the repurchase of shares of common stock on a given date may not
accurately reflect the value of our portfolio, and shares may be worth less than the purchase price or more than the
repurchase price.
Certain Other Brookfield Accounts have similar or overlapping investment objectives and guidelines, and we will
not be allocated certain opportunities and may be allocated only opportunities with lower relative returns.
Brookfield manages other funds and accounts, which present the possibility of overlapping investments, and
thus the potential for conflicts of interest. Brookfield has adopted certain procedures intended to ensure fair and
consistent access to appropriate investment opportunities among the Other Brookfield Accounts. Some of the
investments targeted by us may be appropriate for certain Other Brookfield Accounts, and in retrospect or at
different points in the market cycle, investments that were made by us may seem more appropriate for an Other
Brookfield Account, and vice versa. Investors will have no ability to challenge such allocation so long as it was
made in good faith in accordance with Brookfield’s allocation procedures. Such procedures give Brookfield broad
authority to allocate investment opportunities, notwithstanding the potential conflicts of interest that may exist. For
example, management fees, incentive fees and liquidity provisions may differ significantly between us and the Other
Brookfield Accounts, creating an economic incentive for Brookfield to allocate investments that may be appropriate
for a lower fee or more liquid strategy to a higher fee or less liquid strategy. If any matter arises that the Adviser
determines in its good faith judgment constitutes an actual conflict of interest, the Adviser may take such actions as
may be necessary or appropriate to prevent or reduce the conflict.
We may make investments in different parts of the capital structure of companies in which Other Brookfield
Accounts already hold an investment. If any conflict were to arise, Brookfield will be permitted to take certain
actions that, in the absence of such conflict, it would not take, such as causing us to remain passive, investing in the
same class of securities to align interests, divesting investments or taking other actions to reduce adversity, which
may have the effect of benefiting Other Brookfield Accounts and not our company.
In addition, Brookfield may determine the suitability of investments for our company or Other Brookfield
Accounts based in part on the basis of financial projections and there is no guarantee that the conditions on which
such projections are based will materialize or otherwise be applicable to our investments. Accordingly, Other
Brookfield Accounts may be allocated investment opportunities that ultimately turn out to have been more
appropriate for our company, and we may be allocated investment opportunities that turn out to have been more
appropriate for Other Brookfield Accounts. In addition, events or conditions, including changes in general market
conditions, which may not have been anticipated or which are otherwise not foreseeable, may occur and have a
significant impact on the actual rate of return received with respect to our investments or the investments of Other
Brookfield Accounts.
Under certain circumstances, we may be offered an opportunity to make an investment in a transaction in which
one or more Other Brookfield Accounts is expected to make an investment, or in a company in which one or more
68
Other Brookfield Accounts already has made, or concurrently will make, an investment, subject to the limitations set
forth in our charter and any approvals by our board of directors required under our charter. As a result, we and the
Other Brookfield Accounts may have conflicting interests in negotiating the terms of such investments. In that
regard, actions may be taken for the Other Brookfield Accounts that are adverse to us. There can be no assurance
that any such conflict will be resolved in our favor and Brookfield may be required to take action where it will have
conflicting loyalties between its duties to us and to Other Brookfield Accounts, which may adversely impact us.
Such conflicts may also exist in the negotiations of amendments or waivers or in a workout or bankruptcy. It is
possible that in a bankruptcy proceeding, our interests may be subordinated or otherwise adversely affected by virtue
of such Other Brookfield Accounts’ involvement and actions relating to their investments. Brookfield will seek to
manage such conflicts in good faith and in a manner consistent with its duties to us and the other Brookfield
Accounts.
In addition, we may be competing bidders from time to time with Other Brookfield Accounts for a specific
investment opportunity. At the time such transaction is priced and at certain other times, certain personnel of
Brookfield who are not engaged in our management may be restricted from disclosing information they receive
about such investment from Other Brookfield Accounts to us.
Our Adviser also has discretion to choose which of our properties to syndicate in the DST Program, which
presents conflicts because our Adviser and the Dealer Manager earn fees from the DST Program.
Brookfield personnel will work on other projects and conflicts may arise in the allocation of personnel between
us and other projects.
The Adviser and its affiliates will devote such time as necessary to conduct our business affairs in an
appropriate manner. However, a core group of real estate professionals devote substantially all of their business time
not only to our activities but also to the activities of several Other Brookfield Accounts (and their investments) and
their related entities (which may include separate accounts, dedicated managed accounts or investment funds formed
for specific geographical areas or investments). Consequently, conflicts are expected to arise in the allocation of
personnel, and we may not receive the level of support and assistance that we otherwise might receive if we were
internally managed. The Adviser and its affiliates are not restricted from entering into other investment advisory
relationships or from engaging in other business activities.
Brookfield or Oaktree may acquire confidential or material non-public information or be restricted from
initiating transactions in certain securities, as a result of which we may not be able to initiate a transaction or sell
an investment that may otherwise have been initiated or sold.
By reason of their responsibilities in connection with us and other activities of Other Brookfield Accounts or
Other Oaktree Accounts, personnel of Brookfield or Oaktree may acquire confidential or material non-public
information or be restricted from initiating transactions in certain securities. We will not be free to act upon any such
information. Due to these restrictions, we may not be able to initiate a transaction that it otherwise might have
initiated and may not be able to sell an investment that it otherwise might have sold.
Notwithstanding the foregoing, Brookfield or Oaktree may determine, in their sole discretion at any time, that
such information could impair its ability to effect certain transactions on behalf of us, whether for legal, contractual,
or other reasons. Accordingly, Brookfield or Oaktree may elect not to receive such information. Lack of access to
any such information may adversely affect our investments that in some cases may have been avoided had
Brookfield or Oaktree, as applicable, had such information.
We may purchase assets from or sell assets to the Adviser, the Sub-Adviser and their respective affiliates, and
such transactions may cause conflicts of interest.
We may purchase assets from or sell assets to the Adviser, the Sub-Adviser and their respective affiliates or
clients. These purchases and sales may cause conflicts of interest, including with respect to the consideration offered
and the obligations of such affiliates. These purchases and sales will be subject to the approval of a majority of
directors (including a majority of our independent directors) not otherwise interested in the transaction.
69
We may make investments at different times or on different terms than Other Brookfield Accounts, ultimately
realizing different investment returns than such Other Brookfield Accounts.
Other Brookfield Accounts may make investments at different times or on different terms or exit any of such
investments at different times and/or on different terms compared to such investment made on our behalf. Therefore,
we may realize different investment returns than Other Brookfield Accounts, with respect to any investment made
alongside some or all of such entities.
Brookfield shall have sole discretion in determining what investments we will be offered to pursue. As a result,
there is no guarantee that we will be offered the opportunity to invest in any particular investments or type of
investments alongside any Other Brookfield Accounts. The terms, conditions and the time of investment and
disposition of investments held by us may be materially different from those of any Other Brookfield Accounts.
Brookfield’s or Oaktree’s existing relationships may influence the Adviser’s or the Sub-Adviser’s decision-
making and the Adviser or Sub-Adviser may take the existence and development of such relationships into
consideration in managing us and our investments.
Brookfield and Oaktree each have long-term relationships with a significant number of companies and their
respective senior management. Brookfield and Oaktree also have relationships with numerous investors, including
institutional real estate investors and their senior management. The existence and development of these relationships
may influence whether or not the Adviser undertakes a particular investment on behalf of us and, if so, the form and
level of such investment. Similarly, the Adviser or the Sub-Adviser, as applicable, may take the existence and
development of such relationships into consideration in its management of us and our investments. Without limiting
the generality of the foregoing, there may, for example, be certain strategies involving the management or realization
of particular investments that the Adviser or the Sub-Adviser will not employ on our behalf in light of these
relationships.
The Adviser and the Sub-Adviser may face conflicts of interest in choosing our service providers and financing
sources, and certain service providers may provide services to the Adviser, Brookfield, Other Brookfield
Accounts, the Sub-Adviser, Oaktree or Other Oaktree Accounts on more favorable terms than those payable by
us.
Conflicts of interest may exist with respect to the Adviser’s and Sub-Adviser’s selection of brokers, dealers and
transaction agents and counterparties (collectively, “Broker Dealers”) and financing sources for the execution of
transactions by us. When engaging the services of such Broker Dealers and financing sources, the Adviser or the
Sub-Adviser may, subject to best execution, take into consideration a variety of factors, including, to the extent
applicable, the ability to achieve prompt and reliable execution, competitive pricing, transaction costs, operational
efficiency with which transactions are effected, access to deal flow and precedent transactions, and the financial
stability and reputation of the particular Broker Dealers, as well as other factors that the Adviser or the Sub-Adviser,
as applicable, deems appropriate to consider under the circumstances. Broker Dealers and financing sources may
provide other services that are beneficial to the Adviser, Brookfield, the Sub-Adviser, Oaktree and their respective
affiliates, but that are not necessarily beneficial to us, including capital introductions, other marketing assistance,
client and personnel referrals, consulting services, and research-related services. These other services and items may
influence the Adviser’s and the Sub-Adviser’s selection of Broker Dealers and financing sources.
Conflicts of interest may also arise in connection with service providers retained by Brookfield. For example,
Brookfield and/or the Adviser may from time to time retain consultants or transition former employees to consultant
status to provide assistance with deal sourcing, industry insight or due diligence, offer financial and structuring
advice and perform other services for us, Other Brookfield Accounts or their respective portfolio companies
(“Senior Advisors”). Such services may be provided on an exclusive basis. Our share of any retainers or other fees
charged by Senior Advisors (“Senior Advisor Fees”) will be treated as an expense borne by us (whether paid by us
directly, by a portfolio company or by the Adviser or Brookfield and subsequently reimbursed by us). While such
Senior Advisor Fees are believed to be reasonable and generally at market rates for the relevant service provided,
because of the exclusive arrangements Senior Advisor Fees may not always be comparable to costs, fees and
expenses charged for such services by other third parties. In addition to such fees, we will also generally bear our
70
share of any travel costs or other out-of-pocket expenses incurred by Senior Advisors in connection with the
provision of their services. Office, accounting, network, administration and other support benefits may be provided
by Brookfield to Senior Advisors without charge. Senior Advisors may also be granted the right to participate
alongside us in transactions that they source or for which they provide advice. Such co-investment rights may result
in us investing less capital than we otherwise would have in such transactions. In addition, such Senior Advisors
may invest directly in us as stockholders.
Moreover, services that Brookfield has historically performed in-house for Other Brookfield Accounts may for
certain reasons, including efficiency considerations, be outsourced in whole or in part to third parties in the
discretion of Brookfield or the Adviser in connection with our operation. Such outsourced services may include,
without limitation, asset management, accounting, tax, compliance, trade settlement, information technology or legal
services. Outsourcing may not occur uniformly for all Other Brookfield Accounts and, accordingly, certain costs
may be incurred by us through the use of third-party service providers that are not incurred for comparable services
used by Other Brookfield Accounts. The decision by the Adviser to initially perform particular services in-house for
us will not preclude a later decision to outsource such services, or any additional services, in whole or in part to third
parties. The costs, fees or expenses of any such third-party service providers will be treated expenses borne by us.
Certain advisors and other service providers (including, without limitation, accountants, administrators, lenders,
bankers, brokers, attorneys, consultants, title agents, investment or commercial banking firms, developers or
property managers and certain other advisors and agents) to us, Brookfield or certain entities in which we have an
investment, or affiliates of such advisors or service providers, may also provide goods or services to or have
business, personal, political, financial or other relationships with Brookfield, its affiliates, Other Brookfield
Accounts or their portfolio companies. Such advisors or service providers (or their employees) may be investors in
us or Other Brookfield Accounts, Brookfield or their respective affiliates, sources of investment opportunities, co-
investors or commercial counterparties or entities in which Brookfield or Other Brookfield Accounts have an
investment, and payments by us or such portfolio companies may indirectly benefit Brookfield or such Other
Brookfield Accounts. Additionally, certain Brookfield employees may have family members or relatives employed
by advisors and service providers. These service providers and their affiliates may contract or enter into any
custodial, financial, banking, advising or brokerage, placement agency or other arrangement or transaction with us,
the Adviser, Brookfield or any investor in us or any portfolio company in which we have made an investment. These
relationships may influence the Adviser or Brookfield in deciding whether to select or recommend such a service
provider to perform services for us or a portfolio company (the cost of which will generally be borne directly or
indirectly by us). Advisors and service providers often charge different rates or have different arrangements for
specific types of services. For example, the fee for a particular type of service may vary based on the complexity of
the matter as well as the expertise required and demands placed on the service provider. Therefore, to the extent the
types of services used by us are different from those used by Brookfield, Other Brookfield Accounts, their portfolio
companies or their respective affiliates, any of the foregoing may pay different amounts or rates than those paid by
us with respect to any particular advisor or service provider.
We may co-invest with Brookfield and Oaktree affiliates in real estate-related investments and such investments
may be in different parts of the capital structure of an issuer and may otherwise involve conflicts of interest.
Other Brookfield Accounts and Other Oaktree Accounts hold a number of existing real estate-related
investments and may in the future make further such investments. To the extent permitted by our charter and, as
required, subject to approval by our board of directors (including a majority of our independent directors), we may
make investments either in those same assets or in related assets. In addition, we anticipate that we may make
investments in entities or assets in which an Other Brookfield Account or Other Oaktree Account holds an
investment in a different class of the debt or equity securities of such entities or such assets. For example, we may
make investments in the equity of entities or assets in which Other Brookfield Accounts or Other Oaktree Accounts
have made or will make investments in various tranches of CMBS securitizations or other debt instruments.
In the foregoing circumstances, to the extent we hold securities that are different (including with respect to
relative seniority) than those held by such Other Brookfield Accounts or Other Oaktree Accounts, as applicable,
Brookfield and Oaktree could have conflicting loyalties between their duties to us and such other account. In order
to mitigate any such conflicts of interest, we may recuse ourselves from participating in any decisions relating to or
71
with respect to such securities held by such Other Brookfield Accounts or Other Oaktree Accounts (notwithstanding
that if such accounts maintain voting rights with respect to the securities they hold) or, if we do not recuse ourselves
Brookfield or Oaktree may be required to take action where it will have conflicting loyalties between its duties to us
and to such Other Brookfield Accounts or Other Oaktree Accounts, as applicable, which may adversely impact us.
Brookfield, including the Adviser, may face conflicts of interest associated with the Brookfield Investor’s
investments in us and the related share repurchase arrangement.
The Brookfield Investor was issued a combination of shares of our common stock and units of the Operating
Partnership in connection with its contribution of certain assets to the Operating Partnership. Our board of directors,
including a majority of independent directors, has adopted an arrangement to repurchase securities held by the
Brookfield Investor. Because this arrangement is with an affiliate of Brookfield, the terms were not negotiated at
arm’s length. Brookfield may face conflicts of interest in conducting the share repurchase arrangement with the
Brookfield Investor. Also, because the Brookfield Investor owns a significant amount of shares of our common
stock and Operating Partnership units, the Adviser may face conflicts of interest in managing our investment
activities.
There may be conflicts of interest related to our uncommitted line of credit with an affiliate of Brookfield.
We have entered into the Affiliate Line of Credit with an affiliate of Brookfield, pursuant to which we may
borrow up to $125 million at an interest rate equal to the lowest then-current interest rate offered by a third-party
lender to us for a similar credit product, or, if no such rate is available, the USD denominated Secured Overnight
Financing Rate (“SOFR”) plus a 0.10% credit adjustment and a 2.25% margin. There can be no assurances that we
will be able to borrow under the Affiliate Line of Credit, or that the Brookfield lender will issue a loan or extend or
renew the Affiliate Line of Credit. Because this Affiliate Line of Credit is with an affiliate of Brookfield, the terms
of the agreement were not negotiated at arm’s length. The Adviser may face conflicts of interest in connection with
any borrowings or disputes under this Affiliate Line of Credit.
Our board of directors has adopted resolutions that renounce our interest or expectancy with respect to certain
business opportunities and competitive activities.
Our board of directors has adopted resolutions that provide that none of Brookfield, Oaktree or their respective
affiliates, our directors or any person our directors control are required to refrain directly or indirectly from engaging
in any business opportunities, including any business opportunities in the same or similar business activities or lines
of business in which we or our affiliates may from time to time be engaged or propose to engage, or from competing
with us, and that renounce our interest or expectancy in, or in being offered an opportunity to participate in, any such
business opportunities, unless those opportunities are offered to such person in his or her capacity as our director or
officer and intended exclusively for us or any of our subsidiaries.
We may be subject to additional potential conflicts of interests with portfolio companies of Brookfield and Other
Brookfield Accounts, as well as affiliates of Oaktree.
We may be subject to additional potential conflicts of interests with portfolio companies of Brookfield and
Other Brookfield Accounts. For example, a portfolio company of an Other Brookfield Account may be a competitor,
customer, service provider or supplier of one or more of our investments. There may also be circumstances where a
tenant or a prospective tenant in connection with one of our investments may also be interested in or eligible to be a
tenant or prospective tenant at a property owned by an Other Brookfield Account. In such circumstances, such Other
Brookfield Account or portfolio company thereof may take actions that have adverse consequences for us or one of
our investments, such as seeking to increase its market share at the investment’s detriment, withdrawing business
from the investment in favor of a competitor that offers the same product or service at a more competitive price, or
increasing prices of its products in its capacity as a supplier of the investment or commencing litigation against the
investment. In addition, in such circumstances, the Adviser may not pursue certain such actions on our behalf, which
could result in a benefit to an Other Brookfield Account or to our company. Brookfield has implemented policies
and procedures designed to mitigate such potential conflicts of interest. Such policies and procedures could reduce
the business activity among the portfolio companies of Other Brookfield Accounts, which could negatively affect
one or more of our investments and, therefore, us as a whole. An Other Brookfield Account or portfolio company
72
thereof may nonetheless continue to take such actions that have adverse consequences for us or our investments, and
Brookfield will not have any obligation or duty in this regard.
In addition, Oaktree and its affiliates currently manage and may in the future manage Other Oaktree Accounts.
We may be subject to additional potential conflicts of interests with portfolio companies of Oaktree and Other
Oaktree Accounts.
Risks Related to our REIT Status and Certain Other Tax Items
If we do not maintain our qualification as a REIT, we will face serious tax consequences that could substantially
reduce the funds available to satisfy our obligations, to implement our business strategy and to make distributions
to our stockholders for each of the years involved.
We expect to continue to operate so as to qualify as a REIT under the Code. However, qualification as a REIT
involves the application of highly technical and complex Code provisions for which only a limited number of
judicial or administrative interpretations exist. Notwithstanding the availability of cure provisions in the Code,
various compliance requirements could be failed and could jeopardize our REIT status. Furthermore, new tax
legislation, administrative guidance or court decisions, in each instance potentially applied with retroactive effect,
could make it more difficult or impossible for us to qualify as a REIT. If we fail to qualify as a REIT in any tax year,
then:
•we would be taxed as a regular domestic corporation, which under current laws, among other things, means
being unable to deduct distributions to stockholders in computing taxable income and being subject to
federal income tax on our taxable income at regular corporate income tax rates;
•any resulting tax liability could be substantial and could have a material adverse effect on our book value;
•unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes,
and thus, our cash available for distribution to stockholders would be reduced for each of the years during
which we did not qualify as a REIT and for which we had taxable income; and
•we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years.
To maintain our REIT status, we may have to borrow funds on a short-term basis during unfavorable market
conditions.
To qualify as a REIT, we generally must distribute annually to our stockholders a minimum of 90% of our net
taxable income, determined without regard to the dividends-paid deduction and excluding net capital gain. We will
be subject to regular corporate income taxes on any undistributed REIT taxable income each year, including any
undistributed capital gain. Additionally, we will be subject to a 4% nondeductible excise tax on any amount by
which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our
capital gain net income and 100% of our undistributed income from previous years. Payments we make to our
stockholders under our share repurchase plan will not be taken into account for purposes of these distribution
requirements. If we do not have sufficient cash to make distributions necessary to preserve our REIT status for any
year or to avoid taxation, we may be forced to borrow funds or sell assets even if the market conditions at that time
are not favorable for these borrowings or sales. These options could increase our cost and our leverage and reduce
the value of our investments.
Compliance with REIT requirements may cause us to forego otherwise attractive opportunities, which may
hinder or delay our ability to meet our investment objectives and reduce our overall return.
To qualify as a REIT, we are required at all times to satisfy tests relating to, among other things, the sources of
our income, the nature and diversification of our assets, the ownership of our stock and the amounts we distribute to
our stockholders. Compliance with the REIT requirements may impair our ability to operate solely on the basis of
maximizing profits. For example, we may be required to make distributions to stockholders at disadvantageous
times or when we do not have funds readily available for distribution.
73
Compliance with REIT requirements may force us to liquidate or restructure otherwise attractive investments.
To qualify as a REIT, at the end of each calendar quarter, at least 75% of the value of our assets must consist of
cash, cash items, government securities and qualified real estate assets. The remainder of our investments in
securities (other than qualified real estate assets and government securities) generally cannot include more than 10%
of the voting securities (other than securities that qualify for the straight debt safe harbor) of any one issuer or more
than 10% of the value of the outstanding securities of any one issuer unless we and such issuer jointly elect for such
issuer to be treated as a “taxable REIT subsidiary” under the Code. Debt will generally meet the “straight debt” safe
harbor if the debt is a written unconditional promise to pay on demand or on a specified date a certain sum of
money, the debt is not convertible, directly or indirectly, into stock, and the interest rate and the interest payment
dates of the debt are not contingent on profits, the borrower’s discretion, or similar factors.
Additionally, no more than 5% of the value of our assets (other than government securities and qualified real
estate assets) can consist of the securities of any one issuer, and for taxable years beginning after December 31,
2025, no more than 25% of the value of our assets may be represented by securities of one or more taxable REIT
subsidiaries. If we fail to comply with these requirements, we must dispose of a portion of our assets within 30 days
after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences.
In order to satisfy these requirements, we may be forced to liquidate assets from our portfolio or not make otherwise
attractive investments.
Our charter does not permit any person or group to own more than 9.9%, in value or by number of shares,
whichever is more restrictive, of our outstanding common stock or of our outstanding stock of all classes or
series, and attempts to acquire our common stock or our stock of all other classes or series in excess of these
9.9% limits would not be effective without an exemption (which may apply prospectively or retroactively) from
these limits by our board of directors.
For us to qualify as a REIT under the Code, not more than 50% of the value of our outstanding stock may be
owned directly or indirectly, by five or fewer individuals (including certain entities treated as individuals for this
purpose) during the last half of a taxable year. For the purpose of assisting our qualification as a REIT for U.S.
federal income tax purposes, among other purposes, our charter prohibits beneficial or constructive ownership by
any person or group of more than 9.9%, in value or by number of shares, whichever is more restrictive, of the
outstanding shares of our common stock or 9.9%, in value or by number of shares, whichever is more restrictive, of
the outstanding shares of all classes or series of our stock, which we refer to collectively as the “ownership limit.”
The constructive ownership rules under the Code and our charter are complex and may cause shares of the
outstanding common stock owned by a group of related persons to be deemed to be constructively owned by one
person. As a result, the acquisition of less than 9.9% of our outstanding common stock or our capital stock by a
person could cause another person to own constructively in excess of 9.9% of our outstanding common stock or our
capital stock, respectively, and thus violate the ownership limit. There can be no assurance that our board of
directors, as permitted in the charter, will not decrease this ownership limit in the future. Any attempt to own or
transfer shares of our common stock or capital stock in excess of the ownership limit without the consent of our
board of directors will result either in the shares in excess of the limit being transferred by operation of the charter to
a charitable trust, with the person who attempted to acquire such excess shares not having any rights in such excess
shares, or in the transfer being void.
The ownership limit may have the effect of precluding a change in control of us by a third-party, even if such
change in control would be in the best interests of our stockholders or would result in receipt of a premium to the
NAV of our common stock (and even if such change in control would not reasonably jeopardize our REIT status).
The exemptions to the ownership limit granted to date may limit our board of directors’ power to increase the
ownership limit or grant further exemptions in the future.
Non-U.S. holders may be required to file U.S. federal income tax returns and pay U.S. federal income tax upon
their receipt of certain distributions from us or upon their disposition of shares of our common stock.
In addition to any potential withholding tax on ordinary dividends, a non-U.S. holder, other than a “qualified
shareholder” or a “qualified foreign pension fund,” that disposes of a “U.S. real property interest” (“USRPI”), which
74
includes shares of stock of a U.S. corporation whose assets consist principally of USRPIs, or that receives a
distribution from a REIT that is attributable to gains from such a disposition, is generally subject to U.S. federal
income tax under the Foreign Investment in Real Property Tax Act of 1980, as amended (“FIRPTA”), on the amount
of gain recognized on (or, in the case of a distribution, the amount of the distribution attributable to gains from) such
disposition. Subject to certain exceptions, FIRPTA gains must be reported on a U.S. federal income tax return and
are taxable at regular U.S. federal income tax rates. Such tax does not apply, however, to gain from the disposition
of stock in a REIT that is “domestically controlled.” Generally, a REIT is domestically controlled if less than 50% of
its stock, by value, has been owned directly or indirectly by non-U.S. persons during a continuous five-year period
ending on the date of disposition or, if shorter, during the entire time period of the REIT’s existence. We cannot
assure you that we will qualify as a domestically controlled REIT. If we fail to qualify, amounts received by a non-
U.S. holder on certain dispositions of shares of our common stock (including repurchases) would be subject to tax
under FIRPTA, unless (1) our shares of common stock were regularly traded on an established securities market and
(2) the non-U.S. holder did not, at any time during a specified testing period, hold more than 10% of our common
stock. We do not expect our shares to be regularly traded on an established securities market. Final Treasury
regulations that are effective as of April 25, 2024 (the “Final Regulations”), modify prior tax guidance relating to the
determination of whether we are a domestically controlled REIT by providing a look-through rule for our
stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment
companies, or non-public domestic C corporations owned more than 50% directly or indirectly by foreign persons
(“foreign-controlled domestic corporations”) and by treating “qualified foreign pension funds” as foreign persons.
Recently released proposed Treasury regulations (the “Proposed Regulations”) eliminated the look-through rules
from the Final Regulations and have stated that taxpayers can choose to apply the Proposed Regulations to
transactions occurring on or after April 25, 2024.
Even if we are domestically controlled, a non-U.S. holder, other than a “qualified shareholder” or a “qualified
foreign pension fund,” that receives a distribution from us that is attributable to gains from the disposition of a
USRPI as described above, including in connection with a repurchase of our common stock, is generally subject to
U.S. federal income tax under FIRPTA to the extent such distribution is attributable to gains from such disposition,
regardless of whether the difference between the fair market value and the tax basis of the USRPI giving rise to such
gains is attributable to periods prior to or during such non-U.S. holder’s ownership of our common stock, unless the
relevant class of stock is regularly traded on an established securities market in the United States and such non-U.S.
holder did not own more than 10% of such class at any time during the one-year period ending on the date of such
distribution. In addition, a repurchase of our common stock, to the extent not treated as a sale or exchange, may be
subject to withholding as an ordinary dividend.
We may incur tax liabilities that would reduce our cash available for distribution to our stockholders.
Even if we qualify and maintain our status as a REIT, we may become subject to U.S. federal income taxes and
related state, local and foreign taxes. For example, net income from the sale of properties that are “dealer” properties
(properties held for sale in the ordinary course of a trade or business and not for investment) sold by a REIT (a
“prohibited transaction” under the Code) will be subject to a 100% tax. We may not make sufficient distributions to
avoid excise taxes applicable to REITs. Similarly, if we were to fail an income test (and did not lose our REIT status
because such failure was due to reasonable cause and not willful neglect) we would be subject to tax on the income
that does not meet the income test requirements. We also may decide to retain net capital gain we earn from the sale
or other disposition of our investments and pay income tax directly on such income. In that event, we may elect to
cause our stockholders to be treated as if they earned that income and paid the tax on it directly. However,
stockholders that are tax-exempt, such as charities or qualified pension plans, will have no benefit from their deemed
payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax.
We also may be subject to state and local taxes on our income or property, including franchise, payroll, mortgage
recording and transfer taxes, either directly or at the level of the other companies through which we indirectly own
our assets, such as our taxable REIT subsidiaries, which are subject to full U.S. federal, state, local and foreign
corporate-level income taxes. Any taxes we pay directly or indirectly will reduce our cash available for distribution
to our stockholders.
75
Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause
adverse consequences to our stockholders.
Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the
approval of our stockholders, if it determines that changes to U.S. federal income tax laws and regulations or other
considerations mean it is no longer in our best interests to qualify as a REIT. Our board of directors has duties to us
and our stockholders and could only cause such changes in our tax treatment if it determines that such changes are in
our best interests and in the best interests of our stockholders. In this event, we would become subject to U.S. federal
income tax on our taxable income and we would no longer be required to distribute most of our net taxable income
to our stockholders, which may cause a reduction in the total return to our stockholders.
Stockholders may have current tax liability on distributions they elect to reinvest in our common stock.
Stockholders that participate in our distribution reinvestment plan will be deemed to have received, and for U.S.
federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the
amount reinvested was not a tax-free return of capital. Therefore, unless such stockholders are tax-exempt entities,
they may be forced to use funds from other sources to pay their tax liability on the reinvested dividends.
Generally, ordinary dividends payable by REITs do not qualify for reduced U.S. federal income tax rates.
Currently, the maximum tax rate applicable to qualified dividend income payable to certain non-corporate U.S.
stockholders is 20% (excluding the 3.8% “net investment income” tax). Dividends payable by REITs, however,
generally are not eligible for the reduced rate. Although this does not adversely affect the taxation of REITs or
dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could
cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than
investments in the shares of non-REIT corporations that pay dividends, which could adversely affect the value of the
shares of REITs, including our common stock. However, under current law, individual taxpayers may be entitled to
claim a deduction in determining their taxable income of 20% of “ordinary” REIT dividends (i.e., dividends other
than capital gain dividends and qualified dividend income) received by them, which temporarily reduces the
effective tax rate on such dividends. See “Material U.S. Federal Income Tax Considerations— Taxation of U.S.
Holders of Our Common Stock—Distributions Generally.” You are urged to consult with your tax advisor regarding
the effect of this law on your effective tax rate with respect to REIT dividends.
We may be subject to adverse legislative or regulatory tax changes.
At any time, the tax laws or regulations governing REITs or the administrative interpretations of those laws or
regulations may be amended. Although REITs generally receive certain tax advantages compared to entities taxed as
regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it
could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal
income tax purposes as a corporation. Our charter authorizes our board of directors to revoke or otherwise terminate
our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interests
to qualify as a REIT. We cannot predict when or if any new law, regulation or administrative interpretation, or any
amendment to any existing law, regulation or administrative interpretation, will be adopted, promulgated or become
effective and any such law, regulation or interpretation may take effect retroactively. We and our stockholders could
be adversely affected by any such change in, or any new, tax law, regulation or administrative interpretation.
Additional changes to tax laws are likely to occur and we cannot assure you that any such changes will not
adversely affect the taxation of our stockholders. Any such changes could have an adverse effect on an investment in
our shares or on the market value or the resale potential of our assets. Stockholders are urged to consult with their
tax advisors with respect to the status of legislative, regulatory or administrative developments and proposals and
their potential effect on an investment in our shares.
76
The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a
REIT.
We may acquire mezzanine loans, for which the IRS has provided a safe harbor but not rules of substantive law.
Pursuant to the safe harbor, if a mezzanine loan meets certain requirements, it will be treated by the IRS as a real
estate asset for purposes of the REIT asset tests, and interest derived from the mezzanine loan will be treated as
qualifying mortgage interest for purposes of the REIT 75% income test. We may acquire mezzanine loans that do
not meet all of the requirements of this safe harbor. In the event we own a mezzanine loan that does not meet the
safe harbor, the IRS could challenge such loan’s treatment as a real estate asset for purposes of the REIT asset and
income tests and, if such a challenge were sustained, we could fail to qualify as a REIT.
Investments outside the United States may subject us to additional taxes and could present additional
complications to our ability to satisfy the REIT qualification requirements.
Non-U.S. investments may subject us to various non-U.S. tax liabilities, including withholding taxes. In
addition, operating in functional currencies other than the USD and in environments in which real estate transactions
are typically structured differently than they are in the United States or are subject to different legal rules may
present complications to our ability to structure non-U.S. investments in a manner that enables us to satisfy the REIT
qualification requirements. Even if we maintain our status as a REIT, entities through which we hold investments in
assets located outside the United States may be subject to income taxation by jurisdictions in which such assets are
located or in which our subsidiaries that hold interests in such assets are located. Any such taxes could adversely
affect our business, results of operations, cash flows or financial condition, and our cash available for distribution to
our stockholders will be reduced by any such non-U.S. income taxes.
If the Operating Partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal
income tax purposes, we would cease to qualify as a REIT.
If the IRS were to successfully challenge the status of the Operating Partnership as a partnership or disregarded
entity for U.S. federal income tax purposes, it would be taxable as a corporation. In the event that this occurs, it
would reduce the amount of distributions that the Operating Partnership could make to us. This would also result in
our failing to qualify as a REIT and becoming subject to a corporate-level tax on our income, which would
substantially reduce our cash available to pay distributions and the yield on shares of our common stock.
Restrictions on the deduction of all of our interest expense could prevent us from satisfying the REIT distribution
requirements and avoiding the incurrence of income or excise taxes.
Our ability (and the ability of entities that are not treated as disregarded entities for U.S. federal income tax
purposes and in which we hold an interest) to deduct interest expense may be limited. Under Section 163(j) of the
Code, the deduction for business interest expense may be limited to the amount of the taxpayer’s business interest
income plus 30% of the taxpayer’s “adjusted taxable income” unless the taxpayer’s gross receipts do not exceed $25
million per year during the applicable testing period or the taxpayer qualifies to elect and elects to be treated as an
“electing real property trade or business.”
A taxpayer’s adjusted taxable income starts with its taxable income and adds back items of non-business
income and expense, depreciation, amortization or depletion, business interest income and business interest expense,
net operating losses and any deductions for “qualified business income.” A taxpayer that is exempt from the interest
expense limitations as an electing real property trade or business is ineligible for certain expensing benefits and is
subject to less favorable depreciation rules for real property. The rules for business interest expense apply to us and
at the level of each entity in which or through which we invest that is not a disregarded entity for U.S. federal
income tax purposes. To the extent that our interest expense is not deductible, our taxable income will be increased,
as will our REIT distribution requirements and the amounts we need to distribute to avoid incurring income and
excise taxes.
77
Our taxable REIT subsidiaries are subject to special rules that may result in increased taxes.
We may conduct certain activities or invest in assets through one or more taxable REIT subsidiaries. A taxable
REIT subsidiary is a corporation other than a REIT in which a REIT directly or indirectly holds stock and that has
made a joint election with such REIT to be treated as a taxable REIT subsidiary. Other than some activities relating
to management of hotel and healthcare properties, a taxable REIT subsidiary may generally engage in any business,
including the provision of customary or non-customary services to tenants of its parent REIT. A domestic taxable
REIT subsidiary is subject to U.S. federal income tax as a regular C corporation.
For taxable years beginning after December 31, 2025, no more than 25% of the value of a REIT’s total assets
may consist of stock or securities of one or more taxable REIT subsidiaries. This requirement limits the extent to
which we can conduct our activities through a taxable REIT subsidiary. The values of some of our assets, including
assets that we hold through a taxable REIT subsidiary, may not be subject to precise determination, and values are
subject to change in the future. In addition, as a REIT, we must pay a 100% penalty tax on IRS adjustments to
certain payments that we make or receive if the economic arrangements between us and any of our taxable REIT
subsidiaries are not comparable to similar arrangements between unrelated parties. We intend to structure
transactions with any taxable REIT subsidiary on terms that we believe are arm’s length to avoid incurring the 100%
excise tax described above. However, the IRS may successfully assert that the economic arrangements of any of our
intercompany transactions are not comparable to similar arrangements between unrelated parties.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax
liabilities.
The REIT provisions of the Code may limit our ability to hedge our assets and operations. Under these
provisions, any income that we generate from hedging transactions will be excluded from gross income for purposes
of the 75% and 95% REIT gross income tests if: (i) the instrument (A) hedges interest rate risk or foreign currency
exposure on liabilities used to carry or acquire real estate assets, (B) hedges risk of currency fluctuations with
respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income tests or
(C) hedges a position entered into pursuant to clause (A) or (B) after the extinguishment of such liability or
disposition of the asset producing such income; and (ii) such instrument is properly identified under applicable
Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally
constitute non-qualifying income for purposes of both the 75% and 95% gross income tests. As a result of these
rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or implement those
hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because our taxable
REIT subsidiary would be subject to tax on gains or expose us to greater risks associated with changes in interest
rates than we would otherwise want to bear. In addition, losses in our taxable REIT subsidiaries will generally not
provide any tax benefit, except for being carried forward against future taxable income in the taxable REIT
subsidiary.
We may choose to pay dividends in a combination of cash and our own common stock, in which case
stockholders may be required to pay income taxes in excess of the cash dividends they receive.
Under IRS Revenue Procedure 2017-45, as a publicly offered REIT, we may give stockholders a choice, subject
to various limits and requirements, of receiving a dividend in cash or in our common stock. As long as at least 20%
of the total dividend is available in cash and certain other requirements are satisfied, the IRS will treat the stock
distribution as a dividend (to the extent applicable rules treat such distribution as being made out of our earnings and
profits). As a result, U.S. stockholders may be required to pay income taxes with respect to such dividends in excess
of the cash dividends they receive. In the case of non-U.S. stockholders, we generally will be required to withhold
tax with respect to the entire dividend, which withholding tax may exceed the amount of cash such non-U.S.
stockholder would otherwise receive.
The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur, and may limit
the manner in which we effect future securitizations.
Securitizations could result in the creation of taxable mortgage pools for U.S. federal income tax purposes. As a
REIT, so long as we own 100% of the equity interests in a taxable mortgage pool, we generally would not be
78
adversely affected by the characterization of the securitization as a taxable mortgage pool. Certain categories of
stockholders, however, such as foreign stockholders eligible for treaty or other benefits, stockholders with net
operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, could be
subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage
pool. Because we hold substantially all of our assets through the Operating Partnership, which is treated as a
partnership for U.S. federal income tax purposes, the foregoing rules would not apply if the Operating Partnership
was, or owned equity interests in, a taxable mortgage pool. Any such taxable mortgage pool would be treated as a
corporation for U.S. federal income tax purposes and could prevent us from qualifying as a REIT.
If the leases of our properties are not respected as true leases for U.S. federal income tax purposes, we may fail to
qualify as a REIT.
To qualify as a REIT, we must annually satisfy two gross income tests, under which specified percentages of
our gross income must be derived from certain sources, such as “rents from real property.” In order for rents paid to
the Operating Partnership pursuant to leases of our properties to qualify as “rents from real property” for purposes of
the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be
treated as service contracts, financing arrangements, joint ventures or some other type of arrangement. If our leases
are not respected as true leases for U.S. federal income tax purposes, we may fail to qualify as a REIT.
Sales of our properties at gains are potentially subject to the prohibited transaction tax, which could reduce the
return on a stockholder’s investment.
Our ability to dispose of property is restricted as a result of our REIT status. Under applicable provisions of the
Code regarding prohibited transactions by REITs, we will be subject to a 100% tax on any gain realized on the sale
or other disposition of any property (other than foreclosure property) we own, directly or through a subsidiary entity,
including the Operating Partnership, but excluding our taxable REIT subsidiaries, that is deemed to be inventory or
property held primarily for sale to customers in the ordinary course of trade or business unless a safe harbor applies
under the Code. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary
course of a trade or business depends on the particular facts and circumstances concerning the acquisition,
ownership and disposition of such property. We intend to avoid this 100% “prohibited transaction” tax by (1)
conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary,
(2) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or
through any subsidiary other than a taxable REIT subsidiary, will be treated as a prohibited transaction, or (3)
structuring certain dispositions of our properties to comply with certain safe harbors available under the Code.
However, no assurance can be given that any particular property will not be treated as inventory or property held
primarily for sale to customers in the ordinary course of a trade or business or that a safe harbor will apply.
Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.
We may purchase real properties and lease them back to the sellers of such properties. We cannot guarantee that
the IRS will not challenge our characterization of any sale-leaseback transactions. In the event that any such sale-
leaseback transaction is challenged and recharacterized as a financing transaction or loan for federal income tax
purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-
leaseback transaction were so recharacterized, we might fail to satisfy the REIT qualification “asset tests” or the
“gross income tests” and, consequently, lose our REIT status. Alternatively, the amount of our REIT taxable income
could be recalculated, which might also cause us to fail to meet the distribution requirements for a taxable year.
Retirement Plan Risks
If the fiduciary of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended, (“ERISA”), fails to meet the fiduciary and other standards under ERISA, the Code or common law as
a result of an investment in our stock, the fiduciary could be subject to civil penalties.
There are special considerations that apply to investing in our shares on behalf of a trust, pension, profit sharing
or 401(k) plans, health or welfare plans, trusts, individual retirement accounts (“IRAs”), or Keogh plans. If an
79
investor is investing the assets of any of the entities identified in the prior sentence in our common stock, investors
should satisfy themselves that:
•the investment is consistent with their fiduciary obligations under applicable law, including common law,
ERISA and the Code;
•the investment is made in accordance with the documents and instruments governing the trust, plan or IRA,
including a plan’s investment policy;
•the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and
404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;
•the investment will not impair the liquidity of the trust, plan or IRA;
•the investment will not produce “unrelated business taxable income” for the plan or IRA;
•our stockholders will be able to value the assets of the plan annually in accordance with ERISA
requirements and applicable provisions of the plan or IRA; and
•the investment will not constitute a non-exempt prohibited transaction under Title I of ERISA or Section
4975 of the Code.
Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA, the Code, or
other applicable statutory or common law may result in the imposition of civil penalties, and can subject the
fiduciary to equitable remedies. In addition, if an investment in our shares constitutes a non-exempt prohibited
transaction under Title I of ERISA or Section 4975 of the Code, the fiduciary that authorized or directed the
investment may be subject to the imposition of excise taxes with respect to the amount invested.
If our assets at any time are deemed to constitute “plan assets” under ERISA, that may lead to the rescission of
certain transactions, tax or fiduciary liability and our being held in violation of certain ERISA and Code
requirements.
Stockholders subject to ERISA should consult their own advisors as to the effect of ERISA on an investment in
the shares. As discussed under “Certain ERISA Considerations,” if our assets are deemed to constitute “plan assets”
of stockholders that are ERISA Plans (as defined below) (a) certain transactions that we might enter into in the
ordinary course of our business might have to be rescinded and may give rise to certain excise taxes and fiduciary
liability under Title I of ERISA and/or Section 4975 of the Code; (b) our management, as well as various providers
of fiduciary or other services to us (including the Adviser), and any other parties with authority or control with
respect to us or our assets, may be considered fiduciaries or otherwise parties in interest or disqualified persons for
purposes of the fiduciary responsibility and prohibited transaction provisions of Title I of ERISA and Section 4975
of the Code; and (c) the fiduciaries of stockholders that are ERISA Plans would not be protected from “co-fiduciary
liability” resulting from our decisions and could be in violation of certain ERISA requirements.
Accordingly, prospective investors that are (a) “employee benefit plans” (within the meaning of Section 3(3) of
ERISA), which are subject to Title I of ERISA; (b) “plans” defined in Section 4975 of the Code, which are subject
to Section 4975 of the Code (including Keogh plans and IRAs); or (c) entities whose underlying assets are deemed
to include plan assets within the meaning of Section 3(42) of ERISA and the regulations thereunder (e.g., an entity
of which 25% or more of the total value of any class of equity interests is held by “benefit plan investors”) (each
such plan, account and entity described in clauses (a), (b) and (c) we refer to as “ERISA Plans”) should consult with
their own legal, tax, financial and other advisors to review these implications in light of such investor’s particular
circumstances. The sale of our common stock to any ERISA Plan is in no respect a representation by us or any other
person associated with the offering of our shares of common stock that such an investment meets all relevant legal
requirements with respect to investments by plans generally or any particular plan, or that such an investment is
appropriate for plans generally or any particular plan.
80
ESTIMATED USE OF PROCEEDS
The following tables present information about the net proceeds raised in this offering for each class of common
stock, assuming that we sell the maximum primary offering amount of $6,000,000,000 and no shares under our
distribution reinvestment plan. The tables assume that 5% of the gross offering proceeds are from the sale of Class T
shares, 60% of the gross offering proceeds are from the sale of Class S shares, 5% of the gross offering proceeds are
from the sale of Class D shares and 30% of the gross offering proceeds are from the sale of Class I shares, which are
estimated based on the proportion of shares per class issued in our prior public offering. The number of shares of
each class sold and the relative proportions in which the classes of shares are sold are uncertain and may differ
significantly from what is shown in the tables below. We may reallocate the shares of our common stock we are
offering between the primary offering and our distribution reinvestment plan. We will only use the proceeds raised
in this offering for the purposes set forth in this prospectus and in a manner within the investment guidelines
approved by our board of directors, who serve as fiduciaries to our stockholders.
The actual amount of upfront selling commissions and dealer manager fees, however, will vary from the
estimated amounts shown because (1) our Class T, Class S and Class D shares will be sold at a price that varies
monthly generally based on our prior month’s NAV per share for that class of shares and actual upfront selling
commissions and dealer manager fees per Class T, Class S and Class D share will be a percentage of the transaction
price and (2) the upfront selling commission and dealer manager fees may be reduced in connection with certain
categories of sales of Class T, Class S and Class D shares. Any reduction in upfront selling commissions and dealer
manager fees will be accompanied by a corresponding reduction in the per share purchase price of Class T, Class S
and Class D shares to the applicable stockholder, but will not affect the amounts available to us for investment.
Because amounts in this table are estimates, they may not accurately reflect the actual receipt or use of the offering
proceeds.
We intend to use substantially all of the net proceeds from this offering to make investments in properties and
real estate-related investments in accordance with our investment strategy and policies, but may also use the net
proceeds to reduce borrowings and repay indebtedness incurred under various financing agreements we may enter
into (including the Affiliate Line of Credit), fund repurchases under our share repurchase plan and pay our expenses.
Generally, our policy will be to pay distributions from cash flows from operations. However, subject to Maryland
law and the discretion of our board of directors, particularly in the earlier part of this offering, we may choose to use
sources other than cash flows from operations to fund distributions to our stockholders.
The following table presents information regarding the use of proceeds raised in this offering with respect to
Class T shares.
Maximum Offering of $300,000,000 in Class T Shares | |||
Gross Proceeds(1) .................................................................................................... | $300,000,000 | 100.00% | |
Upfront Selling Commissions and Dealer Manager Fees(2) ................................... | 10,144,928 | 3.38% | |
Organization and Offering Expenses(3) .................................................................. | 462,722 | 0.15% | |
Net Proceeds Available for Investment ................................................................. | $289,392,350 | 96.46% | |
The following table presents information regarding the use of proceeds raised in this offering with respect to
Class S shares.
Maximum Offering of $3,600,000,000 in Class S Shares | |||
Gross Proceeds(1) .................................................................................................... | $3,600,000,000 | 100.00% | |
Upfront Selling Commissions(2) ............................................................................. | 121,739,130 | 3.38% | |
Organization and Offering Expenses(3) .................................................................. | 5,552,668 | 0.15% | |
Net Proceeds Available for Investment ................................................................. | $3,472,708,202 | 96.46% | |
81
The following table presents information regarding the use of proceeds raised in this offering with respect to
Class D shares.
Maximum Offering of $300,000,000 in Class D Shares | |||
Gross Proceeds(1) .................................................................................................... | $300,000,000 | 100.00% | |
Upfront Selling Commissions(2) ............................................................................. | 4,433,498 | 1.50% | |
Organization and Offering Expenses(3) .................................................................. | 462,722 | 0.15% | |
Net Proceeds Available for Investment ................................................................. | $295,103,780 | 98.37% | |
The following table presents information regarding the use of proceeds raised in this offering with respect to
Class I shares.
Maximum Offering of $1,800,000,000 in Class I Shares | |||
Gross Proceeds(1) .................................................................................................... | $1,800,000,000 | 100.00% | |
Upfront Selling Commissions(2) ............................................................................. | — | —% | |
Organization and Offering Expenses(3) .................................................................. | 2,776,334 | 0.15% | |
Net Proceeds Available for Investment ................................................................. | $1,797,223,666 | 98.85% | |
__________________
(1)Gross offering proceeds include upfront selling commissions and dealer manager fees that the Dealer Manager is entitled to receive
(including amounts retained by, or reallowed (paid) to, participating broker-dealers). We intend to conduct a continuous offering of an
unlimited number of shares of our common stock over an unlimited time period by filing a new registration statement prior to the end of the
three-year period described in Rule 415 under the Securities Act; however, in certain states this offering is subject to annual extensions.
(2)For Class T shares, includes upfront selling commissions of 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the
transaction price; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not
exceed 3.5% of the transaction price. For Class S shares, includes upfront selling commissions of 3.5% of the transaction price. Amounts
presented in the tables are less than 3.5% of gross proceeds because upfront selling commissions and dealer manager fees are calculated as
3.5% of the transaction price (which excludes upfront selling commissions and dealer manager fees), which means that upfront selling
commissions expressed as a percentage of the total investment (including upfront selling commissions and dealer manager fees) are less
than 3.5%. For Class D shares, includes upfront selling commissions of 1.5% of the transaction price. We will also pay the following selling
commissions over time as stockholder servicing fees to the dealer manager, subject to FINRA limitations on underwriting compensation: (a)
for Class T shares only, an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per
annum, of the aggregate NAV for the Class T shares; provided, however, that with respect to Class T shares sold through certain
participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided
that the sum of such fees will always equal 0.85% per annum of the NAV of such shares, (b) for Class S shares only, a stockholder servicing
fee equal to 0.85% per annum of the aggregate NAV for the Class S shares and (c) for Class D shares only, a stockholder servicing fee equal
to 0.25% per annum of the aggregate NAV for the Class D shares, in each case, payable monthly. The total amount that will be paid over
time for stockholder servicing fees depends on the average length of time for which shares remain outstanding, the term over which such
amount is measured and the performance of our investments, and is not expected to be paid from offering proceeds. See “Plan of
Distribution—Underwriting Compensation—Selling Commissions and Dealer Manager Fees” and “Compensation—Stockholder Servicing
Fees.”
(3)Following July 6, 2023, we reimburse the Adviser for any organization and offering expenses that it incurs on our behalf as and when
incurred. Our organization and offering expenses may include the organization and offering expenses of feeder vehicles primarily created to
hold our shares.
In the aggregate, underwriting compensation from all sources, including upfront selling commissions, dealer
manager fees, stockholder servicing fees and other underwriting compensation, will not exceed 10% of the gross
proceeds from our primary offering.
82
INVESTMENT OBJECTIVES AND STRATEGIES
Investment Objectives
Our primary investment objectives are to invest in assets that will enable us to:
•provide sustainable, stable income in the form of regular cash distributions to our stockholders;
•protect and preserve stockholders’ invested capital;
•generate appreciation from asset and market selection and hands-on proactive asset management to grow
cash flows; and
•provide an investment alternative for stockholders seeking to allocate a portion of their long-term
investment portfolios to high-quality commercial and residential real estate with lower volatility than
publicly traded real estate companies.
We cannot assure you that we will achieve our investment objectives. In particular, we note that our NAV may
be subject to volatility related to changes in the values of our assets. See the “Risk Factors” section of this
prospectus.
Investment Strategy
Our investment strategy is to invest in a diversified portfolio of:
•Income-producing real estate: High-quality properties in desirable locations – primarily income-producing
U.S. commercial real estate with upside potential through active asset management;
•Real estate-related debt: Performing real estate debt, primarily commercial first mortgages and mezzanine
loans; and
•Real estate-related securities: Real estate-related securities, structured products and cash equivalents for
purposes of liquidity management.
We anticipate approximately 80% of our portfolio (potentially ranging between 60% and 90%) will be
comprised of income-producing real estate, and approximately 20% of our portfolio (potentially ranging between
10% and 40%) will be comprised of real estate-related debt and real estate-related securities.
We invest 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. The majority of our
portfolio is concentrated in the United States, but we may selectively invest in large global cities where our sponsor,
Brookfield, has comprehensive capabilities, such as Toronto, London, Sydney and Seoul. We do not designate
specific geography or sector allocations for the portfolio; rather we invest in regions or asset classes where we see
the best opportunities that support our investment objectives. The percentage of our portfolio that is invested in each
investment type may vary from time to time due to factors such as larger inflows of capital over a short period of
time, availability of attractive investment opportunities or an increase in anticipated cash requirements for our share
repurchase plan.
Through its affiliation with Brookfield’s real estate business, the Adviser acquires, manages and sells properties
and other real estate-related investments in our portfolio on our behalf, subject to the oversight of our board of
directors. Brookfield’s real estate business is one of the world’s largest investors in real estate, with approximately
$273 billion of assets under management across office, rental housing, logistics, retail, hospitality, mixed-use and
alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments).
Through its affiliated management companies (including Brookfield Properties), Brookfield directly provides
property management, sales and leasing and renovation and capital projects services to its real estate portfolio.
83
Brookfield Properties is a fully-integrated affiliate of Brookfield that manages real estate investments, working
across sectors to bring high-quality, sustainable real estate to life around the globe every day. Brookfield Properties
raises the industry standard for quality and sustainability with its approach to operating and developing real estate
across the rental housing, logistics, office, retail and hospitality sectors. Brookfield Properties provides Brookfield
with on-the-ground expertise that lends significant scale and depth beyond traditional real estate sourcing and
execution capabilities (e.g., acquisitions and diligence, risk management, finance and capital sourcing and asset
disposition). Given its substantial functional expertise in managing and optimizing property-level performance, we
utilize Brookfield Properties for certain sector-specific operating capabilities, including:
•Property management: overseeing the day-to-day operations of individual properties and managing the
ongoing needs and relationships with tenants;
•Sales and leasing: marketing and negotiating leases as well as overseeing brokered mandates, drawing on
direct relationships with tenants as well as through the commercial real estate brokerage community; and
•Renovation and capital projects: planning, designing and overseeing capital projects, tenant improvements
and renovation.
This hands-on approach provides the Adviser a distinct perspective into “real-time” trends across commercial
property sectors.
In addition to its significant operating capabilities, Brookfield has extensive investment reach with 278 real
estate investment professionals globally, and an established reputation as a partner of choice for a ranges of property
transactions. Our investment strategy capitalizes on the capabilities of Brookfield’s real estate business where key
decisions are informed by the on-the-ground trends we see in the properties we own and operate. We believe that
Brookfield has a distinct advantage in the size and breadth of its sector “verticals,” which provides dedicated and
specialized investment, asset and property management resources. Through these verticals, Brookfield can identify
and execute on a meaningful amount of individual property transactions that can often be sourced “off-market.” We
also believe that the organization also has the capacity and resources to source and execute large-scale, complicated
transactions that limit the competitive pool, including public-to-private company acquisitions, large portfolio
acquisitions and recapitalizations. We also seek to leverage Brookfield’s extensive market network and relationships
in addition to our earned reputation as a preferred partner that can execute on investment opportunities with speed
and certainty. Finally, Brookfield has substantial capabilities in integrating and onboarding new properties and
portfolio companies seamlessly with its existing operations.
We seek to achieve attractive risk-adjusted returns through investments in real estate assets with an emphasis on
stable current income and long-term growth potential. We seek to achieve attractive returns and mitigate downside
risk by identifying price discounts relative to intrinsic value and replacement cost. Our real estate-related debt
strategy seeks to achieve high current income and superior risk-adjusted returns. Our real estate-related debt
investments focus on performing real estate-related debt, primarily commercial first mortgages and mezzanine loans,
where the investment strategy is not intended to result in real estate ownership. Our investments in real estate-related
securities include CMBS, RMBS and real estate-related corporate debt. In addition to serving our investment
purposes, our investments in real estate-related securities will also provide a source of liquidity for our share
repurchase plan and cash management.
We believe that our open-ended, perpetual life structure provides the flexibility necessary to create a diversified
portfolio of high-quality assets for long-term hold. With our long-term investment horizon, we anticipate that we
will create meaningful income and attractive total returns for our investors.
Real Estate Investments
We seek to acquire high-quality properties in desirable locations that feature stable income with limited near-
term capital needs. Brookfield seeks to enhance cash flows and capital value through active asset and property
management, including sales and leasing and, in select cases, renovation and capital projects. We believe that we can
optimize our risk-adjusted returns by maintaining a flexible investment mandate, shifting allocations based on ever-
changing market conditions.
84
We anticipate our real estate investments will be geographically diversified across the United States, including
large metro centers (targeting those which serve as headquarters to a significant concentration of Fortune 100
companies) in addition to diversified regional economies and markets experiencing population and economic
growth. Through its history, the Adviser has developed local expertise and relationships in most major U.S. markets,
which have proven critical to sourcing attractive investment opportunities on a proprietary basis. We will also
selectively invest in large global cities where the Adviser has capabilities. The Adviser will seek to build a balanced
portfolio across geographies, return profiles, and asset classes.
Our strategy employs a deliberate and disciplined bottoms-up approach, which through multiple cycles has
served as a key tenet of Brookfield’s real estate investment strategy. We seek downside protection by buying assets
at or below intrinsic value, diversifying positions across property type and geography, and prudently managing
leverage at the asset level, generally on a non-recourse basis.
Real Estate-Related Debt and Securities
Our real estate-related debt and securities strategy seeks to achieve high current income and superior risk-
adjusted returns. In addition, we believe that our investments in real estate-related securities provide a source of
liquidity for our share repurchase plan and cash management.
We seek to employ an investment and loan origination approach that leverages (a) Brookfield and Oaktree’s
shared investment philosophy, which focuses on risk control, consistency and bottom-up analysis, (b) Brookfield
and Oaktree’s collective significant sourcing relationships, and (c) collaboration with other organizational debt
strategies, including high yield, convertibles, senior loans and distressed debt. Through collaboration with these
other strategies, we will evaluate the relative value of potential investments in the context of Brookfield’s and
Oaktree’s global credit lens. We expect that most of our real estate-related investments will relate to U.S. properties,
but we may also invest in real estate-related investments associated with non-U.S. properties.
We will primarily pursue real estate-related debt and real estate-related securities investments across three tiers:
(i) diversified liquid debt (cash and cash equivalents, treasuries, agency and investment grade real-estate related
corporate and structured credit securities), (ii) higher-yielding real estate-related corporate and structured credit
securities and (iii) longer-term private debt positions (including commercial and residential first mortgages and
mezzanine or junior debt). We intend to allocate our real estate-related debt among these three categories, tactically
shifting to where we believe the most attractive risk-adjusted returns are available.
Additional details on the types of real estate-related debt and real estate-related securities in which we seek to
invest are below:
•Agency securities refer to debt obligations generally issued by a government agency or related government-
sponsored enterprise.
•Real estate-related corporate securities encompass loans to real estate-related companies which may be
either secured (by a pledge of specific assets) or unsecured (that is, general claims on the assets of the
borrower that are effectively junior to the claims of any secured creditors to the extent of the value of the
pledged assets).
•Structured credit primarily consists of CMBS, RMBS and other asset-backed securities (“ABS”) that are
collateralized by the cash flows of a financial asset, such as a commercial loan, a residential loan, or
receivables.
•Mezzanine or junior loans are debt obligations secured by a pledge of equity, membership interests or
partnership interests in one or more companies owning a direct or indirect interest in real estate.
•Commercial first mortgages are secured loans collateralized by a first lien on commercial assets, which
typically include rental housing, logistics, retail, office and hospitality properties. Such investments may be
made in individual loans secured by a single property or portfolio as well as in pools of loans.
85
•Residential first mortgages are anticipated to be comprised of pools of first-lien mortgages collateralized by
residential properties.
Potential Competitive Strengths
We believe that investing in our common stock may offer investors five primary benefits:
Access to a leading global real estate business with experience over multiple market cycles. Brookfield’s real
estate business is one of the world’s largest investors in real estate, with approximately $273 billion of assets under
management across office, rental housing, logistics, retail, hospitality, mixed-use and alternative real estate (such as
life sciences, manufactured housing, student housing and serviced apartments). Through its deep global sourcing
network, Brookfield seeks to acquire high-quality assets in supply-constrained markets and execute operational
enhancements to deliver consistent cash flows.
Brookfield’s operational expertise. Building on Brookfield’s history of successfully operating properties
through multiple market cycles, the Adviser employs an operations-oriented approach to create value through
intensive asset management, proactive leasing and capital initiatives. With access to approximately 24,000 real
estate operating employees around the world in various sectors, the Adviser leverages Brookfield’s in-house
expertise and operating capabilities to enhance value and execute business plans with certainty.
An investment team with the ability to access deal flow that is proprietary and less competitive. Brookfield
believes its deal sourcing networks provide a distinct advantage in identifying opportunities, allowing it to transact
often on a proprietary or direct basis with fewer competitors. The Adviser leverages Brookfield’s regionally-focused
network of acquisitions, asset management, leasing and operations professionals, which consists of 278 real estate
investment professionals , as an ongoing source of inbound deal flow for us. Furthermore, Brookfield has a
substantial presence in several large global cities which leads to selective investment opportunities for us. We also
utilize Brookfield’s sophisticated mergers and acquisitions expertise as well as its extensive network of long-
standing industry relationships to execute a large number of transactions across the full spectrum of complexity
(e.g., individual asset acquisitions, large portfolio deals, privatizations and carve-outs) where not all firms can
compete.
Deep market knowledge and sector expertise. Over more than 30 years, Brookfield has deployed a significant
amount of capital into real estate investments globally, developing significant ownership and management expertise
across a variety of markets and real estate sectors. The large scale of Brookfield’s portfolio provides access to
propriety real-time market data, allowing the Adviser to identify trends and attractive market conditions impacting
our portfolio and investment strategy more quickly than our competitors, which is used to inform both investment
and portfolio management decisions. We believe this advantage is unique to Brookfield and will enable us to
construct a superior portfolio of high-quality, long-term assets.
Access to Oaktree’s credit investing expertise. Oaktree manages $223 billion in assets as of December 31, 2025
and has a long history of making opportunistic, value-oriented and risk-managed debt investments that complement
Brookfield’s long-term, contrarian investment style and focus on the protection of capital. We believe that access to
Oaktree’s broad and deep credit experience through Brookfield’s ownership interest in Oaktree and the Adviser’s
sub-advisory relationship with the Sub-Adviser allows us to opportunistically pivot our debt investments across
property types and throughout the capital structure to optimize investments and ensure adequate liquidity for our
share repurchase plan and facilitating large acquisitions.
Investment Guidelines and Portfolio Allocation
Our board of directors has adopted investment guidelines for the Adviser to implement and actively monitor.
Our board of directors, including our independent directors, formally review our investment guidelines on an annual
basis and our investment portfolio on a quarterly basis or, in each case, more often as it deems appropriate. Our
independent directors review the investment guidelines to ensure that the guidelines are being followed and are in
the best interests of our stockholders. Changes to our investment guidelines must be approved by our board of
directors, including a majority of our independent directors, and do not require notice to or the vote of our
stockholders. However, our board of directors will not amend our charter, including any investment policies that are
86
provided in our charter and described under “Charter-Imposed Investment Limitations” below, without the
concurrence of holders of a majority of the outstanding shares entitled to vote, except for certain amendments that
do not adversely affect the rights, preferences and privileges of our stockholders and do not require the approval of
stockholders under Maryland law.
Our investment guidelines delegate to the Adviser authority to execute acquisitions and dispositions of
investments in properties and real estate-related investments, in each case so long as such acquisitions and
dispositions are consistent with the investment guidelines adopted by our board of directors. Our board of directors
will at all times have ultimate oversight over our investments and may change from time to time the scope of
authority delegated to the Adviser with respect to acquisition and disposition transactions. In addition, under our
investment guidelines our board of directors is required to approve any acquisition of a single property or portfolio
of properties with a purchase price exceeding 10% of the greater of (i) $2 billion and (ii) our most recent month-end
total asset value (as measured under GAAP) plus the proceeds expected in good faith to be raised in our registered
offering over the next twelve months. Our board of directors is responsible for determining the consideration we pay
for each property we acquire. However, our board has adopted investment guidelines that delegate this authority to
the Adviser, so long as the Adviser complies with these investment guidelines. If a majority of our independent
directors determines that a valuation is necessary, or if the property is acquired from the Adviser, a director,
Brookfield, Oaktree or any of their affiliates, the fair market value of the acquired property shall be determined by a
qualified independent appraiser selected by our independent directors.
We anticipate approximately 80% of our portfolio (potentially ranging between 60% and 90%) will be
comprised of income-producing real estate, and approximately 20% of our portfolio (potentially ranging between
10% and 40%) will be comprised of real estate-related debt and securities. In addition, we also expect to hold a
small amount of our assets in cash. The percentage of our portfolio that is invested in each investment type may vary
from time to time due to factors such as larger inflows of capital over a short period of time, availability of attractive
investment opportunities or an increase in anticipated cash requirements for our share repurchase plan.
Investment Horizon and Investment Size
In our primary strategy, our average holding period for each real property investment is expected to be between
seven and ten years, though the hold period for any particular asset may be longer or shorter. Importantly, our
perpetual life structure provides us with the flexibility to hold assets for the long term to maximize yield in lieu of
selling.
When evaluating exit strategies for real estate investments, the Adviser will consider a variety of factors
including: (i) macro and micro market conditions, (ii) the status of the Adviser’s progress relative to the property’s
business plan and what remaining opportunities exist for additional value creation; (iii) expected future returns; and
(iv) the condition of the property and its suitability for sale. Generally, the Adviser seeks to reinvest proceeds
generated from asset sales into new equity investments, consistent with our investment strategy.
We will also invest in real estate-related debt. While we will generally hold our debt investments to maturity,
fundamental buy/sell discipline is another critical component of our investment process. Particularly in the case of
corporate bonds and CMBS, the Sub-Adviser will buy when liquidity is constrained and may sell when liquidity is
abundant. This approach has historically been important in Oaktree’s efforts to generate attractive risk-adjusted
returns for investors. Regular interfacings with private and public market participants, and collaboration with other
Oaktree strategies, are keys to effectively managing our Investment Sleeve.
Investment Process
Our investment strategy will be executed through a well-defined investment process overseen by the global
leadership of Brookfield’s real estate business, led by Brian Kingston, our Chief Executive Officer and Chairman of
the Board, and Alex Elawadi, our Chief Investment Officer, in conjunction with Brookfield’s Investment
Committee. Our Chief Executive Officer and Chief Investment Officer work with leadership of Brookfield’s real
estate business and relevant investment teams to develop investment targets and oversee underwriting of potential
investments.
87
Brookfield’s Investment Committee provides the relevant investment team and portfolio management teams
with senior oversight and guidance throughout the investment lifecycle. The Investment Committee evaluates
investment opportunities, reviews and resolves potential conflicts and has ultimate authority with respect to
approvals of investments, dispositions and other material transaction decisions. This committee is comprised of
senior representatives across Brookfield’s global real estate business who perform the same role across multiple
Brookfield-managed funds.
Transaction Review and Acquisitions
Brookfield employs a well-defined transaction review and approval process for all real estate equity and debt
transactions.
All potential transactions are vetted by the lead member of the relevant investment team and discussed during
regular pipeline meetings held by Brookfield’s real estate business. The meetings serve as a forum to discuss new
business and to provide updates on investment opportunities, including adherence to investment theses, transaction
timelines, and progress updates. Transactions are reviewed with the Chief Executive Officer and Chief Investment
Officer prior to submitting non-binding proposals and commencing formal due diligence.
In evaluating a potential transaction, Brookfield conducts thorough due diligence to analyze and evaluate each
investment opportunity, drawing extensively on the expertise of Brookfield’s portfolio management teams and real
estate operating teams. Brookfield develops an investment thesis based on a comprehensive assessment of physical
asset quality; capital investment requirements and opportunities; revenue enhancement and cost reduction
opportunities; and business, market, operating and contingent risks and opportunities. This thesis serves as the basis
for the business plan for the asset.
As transactions progress through the due diligence process, the investment team prepares a preliminary
Investment Committee memo. This document is reviewed with our Chief Investment Officer and distributed to
members of our operations teams for input.
Prior to approving any acquisition, disposition or other material transaction, comprehensive confirmatory due
diligence is completed, and the results are integrated into the opportunity’s Investment Committee memo.
Thereafter, the transaction and memo are reviewed and approved through the Investment Committee process, and a
final decision is made with respect to the transaction.
Ownership Interests
We may make equity investments in real estate, both directly and with partners where we may enter into joint
ventures, general partnerships, co-tenancies, or other participation agreements arrangements with other investors.
Investments will be made through the purchase of all or part of a fee simple ownership or a more limited form
of ownership, or all or part of a leasehold interest. Investment in an equity interest will give us a right to part or all of
the cash flow and capital appreciation generated by the property after satisfaction of liens on the property. Liens
usually include the payment of principal and interest on mortgage loans, ground lease rents, real estate taxes and
other assessments. We may make control investments through the purchase of equity securities.
Joint Ventures and Other Co-Ownership Arrangements
Subject to limitations set forth in our charter, we may enter into joint ventures, partnerships, tenant-in-common
investments or other co-ownership arrangements with entities affiliated with the Adviser or the Sub-Adviser, as well
as third parties, for the acquisition or improvement of properties. In many cases, we may not control the
management of the affairs of the joint venture. A joint venture creates an alignment of interest with a private source
of capital for the benefit of our stockholders. In determining whether to invest in a particular joint venture, the
Adviser will evaluate the real property that such joint venture owns or is being formed to own under the same
criteria described elsewhere in this prospectus for our selection of real property investments.
The terms of any particular joint venture will be established on a case-by-case basis considering all relevant
facts, including the nature and attributes of the potential joint venture partner, the proposed structure of the joint
88
venture, the nature of the operations, the liabilities and assets associated with the proposed joint venture and the size
of our interest in the venture. Other factors we will consider include: (1) our ability to manage and control the joint
venture; (2) our ability to exit the joint venture; and (3) our ability to control transfers of interests held by other
partners to the venture. Our interests may not be totally aligned with those of our partner.
In the event that the joint venture partner elects to sell property held in any such joint venture, we may not have
sufficient funds to exercise any right of first refusal or other purchase right that we may have. Entering into joint
ventures with Other Brookfield Accounts will result in certain conflicts of interest. See “Risk Factors—Risks
Related to our Relationship with Brookfield” and “Conflicts of Interest.”
We may enter into joint ventures with Brookfield, the Adviser, Oaktree, the Sub-Adviser, one or more of our
directors or any of their affiliates, including Other Brookfield Accounts and Other Oaktree Accounts, only if a
majority of our directors, including a majority of the independent directors, not otherwise interested in the
transaction approve the transaction as being fair and reasonable to us and on substantially the same, or more
favorable, terms and conditions as those received by other affiliate joint venture partners.
Co-Investments
We may co-invest with third parties or, subject to the limitations set forth in our charter, with Other Brookfield
Accounts or Other Oaktree Accounts, including by dividing a portfolio of assets among us and such co-investor.
Derivatives, Swaps and Credit-Linked Securities
We may enter into long and short positions in all types of derivative transactions and credit-linked securities,
including total return swaps, rate of return swaps, credit default swaps (including index-related credit default swaps),
interest rate swaps, and credit-linked notes and deposits. Credit-linked securities, including credit default swaps, are
bilateral over the counter agreements between two parties that transfer a defined credit risk from one party to
another. In connection with certain financing transactions relating to new or existing investments, we (or our
subsidiaries) may enter into certain swaps (including total return swaps), collars or other derivative products.
Issuing Securities for Property
Subject to limitations contained in our charter, we may issue, or cause to be issued, shares of our stock or units
of the Operating Partnership in any manner (and on such terms and for such consideration as we determine) in
exchange for real estate. Our existing stockholders have no preemptive rights to purchase any such shares of our
stock or units of the Operating Partnership, and any such issuance might cause a dilution of a stockholder’s initial
investment.
Other Investment Techniques and Instruments
Subject to the limitations placed on us in our charter as described below, we may employ other investment
techniques and invest in other instruments that the Adviser believes will help achieve our investment objectives,
whether or not such investment techniques or instruments are specifically described herein.
Cash, Cash Equivalents and Reserves
We may hold in reserve such cash and cash equivalents and other liquid investments as the Adviser considers
appropriate to provide for our anticipated obligations, including for the payment of distributions and share
repurchases, payment of property taxes, insurance, improvements and maintenance costs associated with real estate
held by us, the exercise of options and warrants and the payment of our other expenses. We may also hold cash in
reserve in order to maintain liquidity to take advantage of investment opportunities.
Pending the purchase of other permitted investments, or to provide the reserves described above, we may invest
temporarily in one or more unaffiliated money market mutual funds or directly in certificates of deposit, commercial
paper, interest-bearing government securities, repurchase contracts and other short-term instruments. We may also
make such investments to reduce volatility at times when risk is considered high and market conditions become so
volatile that effective hedging becomes difficult or cost-inefficient.
89
DST Program
We, through the Operating Partnership, have a DST Program to issue and sell up to a maximum aggregate
offering amount of $1.0 billion of DST Interests in specific DSTs holding one or more DST Properties. These DST
Interests will be issued and sold to “accredited investors,” as that term is defined under Regulation D promulgated
by the SEC under the Securities Act, in one or more DST Offerings. Under the DST Program, each DST Property
will be sourced from our real properties or third parties, which will be held in a DST and subsequently leased by one
of our wholly owned subsidiaries in accordance with a certain master lease agreement. Each master lease agreement
will be guaranteed by the Operating Partnership, which will hold a FMV Option, giving it the right, but not the
obligation, to acquire the DST Interests in the applicable DST from the investors in exchange for Operating
Partnership units or cash, at the Operating Partnership’s discretion. Such FMV Option shall be exercisable during a
one-year option period, beginning two years following the sale of the last DST Interest in any such DST Offering.
The Operating Partnership, in its sole and absolute discretion, may assign its rights in the FMV Option to a
subsidiary, an affiliate, a successor entity to the Operating Partnership or the acquiror of a majority of the Operating
Partnership’s assets. After a one-year holding period, investors who acquire Operating Partnership units pursuant to
the FMV Option generally have the right to request that the Operating Partnership redeem all or a portion of their
Operating Partnership units for, at the sole discretion of the general partner of the Operating Partnership, shares of
our common stock, cash, or a combination of both.
We expect that the DST Program will give us the opportunity to expand and diversify our capital-raising
strategies by offering what we believe to be an attractive investment product for investors that may be seeking like-
kind replacement properties to complete tax-deferred exchange transactions under Section 1031 of the Code.
Affiliates of the Adviser may provide mortgage financing with respect to certain DST Properties and are expected to
receive fees in connection with the sale of the DST Interests and the management of the DSTs. We intend to use the
net offering proceeds from the DST Program to make investments in accordance with our investment strategy and
policies, reduce our borrowings, repay indebtedness, fund the repurchase of shares of all classes of our common
stock under our share repurchase plan and for other corporate purposes. We have not allocated specific amounts of
the net proceeds from the DST Program for any specific purpose.
Dealer Manager for the DST Program
In connection with the DST Program, the DST Sponsor, the Dealer Manager and, solely with respect to its
obligations with respect to the investor servicing fee, the Operating Partnership, entered into the DST Dealer
Manager Agreement, pursuant to which the Dealer Manager serves as the dealer manager for the DST Offerings on
a “best efforts” basis. Under the DST Dealer Manager Agreement, each DST will pay the Dealer Manager upfront
selling commissions of up to 5.0% of the total cash purchase price paid per DST Interest sold, upfront dealer
manager fees of up to 1.0% of the total cash purchase price paid per DST Interest sold, and placement fees in an
amount up to 1.0% of the total cash purchase price paid per DST Interest sold. Additionally, each DST will pay to
the Dealer Manager an ongoing investor servicing fee of up to 0.25% per annum of the total cash purchase price
paid for the DST Interests sold in the applicable DST Offering.
The Operating Partnership will pay the Dealer Manager, solely with respect to Operating Partnership units
issued in connection with the FMV Option in exchange for DST Interests and only until the fee limit (if any) set
forth in the applicable agreement between the Dealer Manager and the participating distribution agent that sold such
DST Interests in a DST Offering has been reached, an investor servicing fee equal to 0.85% per annum of the
aggregate NAV for the applicable Class T-1 units, an investor servicing fee equal to 0.85% per annum of the
aggregate NAV for the applicable Class S-1 units and an investor servicing fee equal to 0.25% per annum of the
aggregate NAV for the applicable Class D-1 units. No investor servicing fee will be paid for Class I-1 units. All or a
portion of the selling commissions, dealer manager fees and investor servicing fees may be reallowed to
participating distribution agents, as set forth in the applicable agreement between the Dealer Manager and such
participating distribution agent.
90
DST Manager
BREX Manager LLC, an affiliate of the DST Sponsor, will serve as the manager of each DST (the “DST
Manager”). The DST Manager has the power and authority (i) to manage the limited investment activities and affairs
of the DSTs, (ii) to perform administrative actions in connection with the DSTs, (iii) to act as signatory trustee of the
applicable DSTs, and (iv) to determine when it is appropriate to sell, transfer or dispose of the DST Properties, all of
such power and authority is limited to the extent such powers and authority are materially consistent with the powers
and authority conferred upon the trustee in Revenue Ruling 2004-86.
As compensation for its management services, each DST will pay the DST Manager an administration fee of up
to 0.15% per annum of the total cash purchase price paid for the DST Interests sold in the applicable DST Offering,
which fee will be paid monthly in arrears as set forth in the applicable trust agreement.
Other DST Program Fees
In connection with the DST Program, the following additional fees and expenses will be paid to the DST
Sponsor and its affiliates in addition to those described above.
•Each DST, or the DST Manager or its affiliate, will pay us, the DST Sponsor or our or its assignee a fixed
percentage fee of up to 0.5% of the total cash purchase price paid for the DST Interests sold in the
applicable DST Offering as reimbursement for organizational and offering costs and related expenses,
assuming that the maximum offering amount of the relevant DST Offering is sold without discounts.
•Each DST, or the DST Manager or its affiliate, will pay the DST Sponsor or its assignee a fixed percentage
fee of up to 0.5% of the total cash purchase price paid for the DST Interests sold in the applicable DST
Offering, assuming that the maximum offering of the relevant DST Offering is sold without discounts, as
reimbursement for legal and closing costs incurred in connection with the due diligence and acquisition of
the applicable DST Property, including but not limited to certain closing costs with respect to such DST
Property, such as title insurance, transfer taxes, recording fees, legal fees and other expenses that may be
incurred in the purchase of real estate.
•If a DST Property is subject to mortgage indebtedness, each DST, or the DST Manager or its affiliate, will
pay to the applicable lender (i) a loan fee and (ii) reimbursement for any costs and fees, including recording
fees and taxes, legal fees, title fees and other expenses associated with the closing of such indebtedness.
Affiliates of the Adviser may provide mortgage financing with respect to certain DST Properties, and
therefore may receive the foregoing fees and reimbursements in connection with such services.
Temporary Strategies
During periods in which the Adviser determines that economic or market conditions are unfavorable to
investors and a defensive strategy would benefit us, we may temporarily depart from our investment strategy.
During these periods, subject to compliance with the Investment Company Act, we may deviate from our target
allocations, or invest all or any portion of our assets in cash, cash equivalents or similar assets. It is impossible to
predict when, or for how long, the Adviser will use these alternative strategies. There can be no assurance that such
strategies will be successful.
Charter-Imposed Investment Limitations
Our charter places numerous limitations on us with respect to the manner in which we may invest our funds,
including, but not limited to, the following:
•We will not make investments in unimproved real property or indebtedness secured by a deed of trust or
mortgage loans on unimproved real property in excess of 10% of our total assets. Unimproved real property
means a property in which we have an equity interest that was not acquired for the purpose of producing
rental or other income, that has no development or construction in process and for which no development or
construction is planned, in good faith, to commence within one year;
91
•We will not invest in commodities or commodity futures contracts (which term does not include derivatives
related to non-commodity investments, including futures contracts when used solely for the purpose of
hedging in connection with our ordinary business of investing in real estate assets, mortgages and real
estate-related securities);
•We will not invest in real estate contracts of sale, otherwise known as land sale contracts, unless the
contract is in recordable form and is appropriately recorded in the chain of title;
•We will not make or invest in individual mortgage loans (excluding any investments in mortgage pools,
CMBS, RMBS or any other real estate-related asset backed securities) unless an appraisal is obtained
concerning the underlying property except for mortgage loans insured or guaranteed by a government or
government agency. In cases where a majority of our independent directors determines and in all cases in
which a mortgage loan transaction is with the Adviser, the Sub-Adviser, our sponsor, any of our directors
or any of their affiliates, the appraisal shall be obtained from an independent appraiser. We will maintain
the appraisal in our records for at least five years and it will be available for inspection and duplication by
our common stockholders. We will also obtain a mortgagee’s or owner’s title insurance policy as to the
priority of the mortgage or condition of the title;
•We will not make or invest in mortgage loans, including construction loans but excluding any investment in
mortgage pools, CMBS, RMBS or any other real estate-related asset backed securities, on any one real
property if the aggregate amount of all mortgage loans on such real property would exceed an amount equal
to 85% of the appraised value of such real property as determined by appraisal unless substantial
justification exists because of the presence of other underwriting criteria;
•We will not make or invest in mortgage loans (excluding any investments in mortgage pools, CMBS,
RMBS or any other real estate-related asset backed securities) that are subordinate to any lien or other
indebtedness or equity interest of any of our directors, our sponsor, the Adviser, the Sub-Adviser or any of
our affiliates;
•We will not issue (1) equity securities redeemable solely at the option of the holder (except that
stockholders may offer their shares of our common stock to us pursuant to our share repurchase plan), (2)
debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as
adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt, (3)
equity securities on a deferred payment basis or under similar arrangements or (4) options or warrants to
the directors, our sponsor, the Adviser, the Sub-Adviser or any of their respective affiliates, except on the
same terms as such options or warrants, if any, are sold to the general public. Options or warrants may be
issued to persons other than the directors, our sponsor, the Adviser, the Sub-Adviser or any of their
respective affiliates, but not at exercise prices less than the fair value of the underlying securities on the
date of grant and not for consideration (which may include services) that in the judgment of the
independent directors has a fair value less than the value of the option or warrant on the date of grant;
•We will not engage in the business of underwriting or the agency distribution of securities issued by other
persons;
•We will not make any investment that we believe will cause us to be classified as an “investment company”
under the Investment Company Act;
•We will not make any investment that we believe will be inconsistent with our objectives of qualifying and
remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that
REIT qualification is not in our best interests;
•We will not acquire interests or equity securities in any entity holding investments or engaging in activities
prohibited by our charter except for investments in which we hold a non-controlling interest or investments
in any entity having securities listed on a national securities exchange or included for quotation on an
interdealer quotation system; or
92
•We will not acquire securities, other than equity securities that are listed on a national securities exchange
or traded in an over-the-counter market, unless a majority of the board of directors (including a majority of
the independent directors) not otherwise interested in the transaction approves such investment as being
fair, competitive and commercially reasonable.
In addition, our charter includes many other investment limitations in connection with transactions with
affiliated entities or persons. Our charter also includes restrictions on roll-up transactions, which are described under
“Description of Capital Stock—Restrictions on Roll-Up Transactions.”
Borrowing Policies
We use financial leverage to provide additional funds to support our investment activities. This allows us to
make more investments than would otherwise be possible, resulting in a broader portfolio of investments. Subject to
the limitation on indebtedness for money borrowed in our charter described below, our target leverage ratio is 50%
to 60%. Our leverage ratio is measured 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. For purposes of determining our gross real estate assets (but not necessarily for federal income tax
purposes), we include the asset values of the DST Properties due to the master lease structure, including the
Operating Partnership’s FMV Option. Our leverage ratio calculation does not include (i) indebtedness incurred in
connection with funding a deposit in advance of the closing of an investment, (ii) indebtedness incurred as other
working capital advances or (iii) any financing liability resulting from the sale of DST Interests included in our
NAV calculation. Furthermore, the refinancing of any amount of existing indebtedness will not be deemed to
constitute incurrence of new indebtedness so long as no additional amount of net indebtedness is incurred in
connection therewith (excluding the amount of transaction expenses associated with such refinancing).
Our real estate-related investments portfolio may have embedded leverage, including through the use of reverse
repurchase agreements and derivatives, including, but not limited to, total return swaps, securities lending
arrangements and credit default swaps. We may leverage our portfolio by assuming or incurring secured or
unsecured property-level or entity-level debt. An example of property-level debt is a mortgage loan secured by an
individual property or portfolio of properties incurred or assumed in connection with our acquisition of such
property or portfolio of properties. An example of entity-level debt is our line of credit pursuant to the Affiliate Line
of Credit with the Brookfield lender. In an effort to provide for a ready source of liquidity to pay distributions or
fund repurchases of shares of our common stock in the event that repurchase requests exceed our operating cash
flows or net proceeds from our continuous offering, we have entered into the Affiliate Line of Credit under which
we would reserve borrowing capacity. Borrowings under the Affiliate Line of Credit may be used not only to
repurchase shares, but also to fund acquisitions or for any other corporate purpose.
Our actual leverage level will be affected by a number of factors, some of which are outside our control.
Significant inflows of proceeds from the sale of shares of our common stock generally will cause our leverage as a
percentage of our net assets, or our leverage ratio, to decrease, at least temporarily. Significant outflows of equity as
a result of repurchases of shares of our common stock generally will cause our leverage ratio to increase, at least
temporarily. Our leverage ratio will also increase or decrease with decreases or increases, respectively, in the value
of our portfolio. If we borrow under the Affiliate Line of Credit to pay distributions or fund repurchases of shares of
our common stock or for other purposes, our leverage would increase and may exceed our target leverage. In such
cases, our leverage may remain at the higher level until we receive additional net proceeds from our continuous
offering or sell some of our assets to repay outstanding indebtedness.
Our board of directors will review our aggregate borrowings at least quarterly. In connection with such review,
our board of directors may determine to modify our target leverage ratio in light of then-current economic
conditions, relative costs of debt and equity capital, fair values of our properties, general conditions in the market for
debt and equity securities, growth and investment opportunities or other factors. We may exceed our targeted
leverage ratio at times if the Adviser deems it advisable for us. For example, if we borrow under the Affiliate Line of
Credit to fund repurchases, we will consider actual borrowings when determining whether we are at our leverage
93
target, but not unused borrowing capacity. If, therefore, we are at a leverage ratio of 60% and we borrow additional
amounts under the Affiliate Line of Credit, or if the value of our portfolio decreases, our leverage could exceed 60%
of our gross real estate assets. In the event that our leverage ratio exceeds our target, regardless of the reason, we
will thereafter endeavor to manage our leverage back down to our target.
There is no limit on the amount we may borrow with respect to any individual property or portfolio. However,
under our charter we may not incur indebtedness for money borrowed in an amount exceeding 300% of the cost of
our net assets, which approximates borrowing 75% of the cost of our investments. This limitation includes
indebtedness for money borrowed with respect to our securities portfolio. “Net assets” is defined as our total assets
other than intangibles valued at cost (prior to deducting depreciation, reserves for bad debts and other non-cash
reserves) less total liabilities. However, we may borrow in excess of this amount if such excess is approved by a
majority of our independent directors, and disclosed to stockholders in our next quarterly report, along with
justification for such excess.
Our charter prohibits us from obtaining loans from any of our directors, Brookfield, the Adviser, the Sub-
Adviser or any of their affiliates, unless approved by a majority of our board of directors (including a majority of our
independent directors) not otherwise interested in the transaction as fair, competitive and commercially reasonable
and on terms and conditions not less favorable than comparable loans between unaffiliated parties under the same or
similar circumstances.
Investment Company Act Considerations
We intend to engage primarily in the business of investing in real estate and to conduct our operations so that
neither we, the Operating Partnership, nor any of our subsidiaries is required to register as an investment company
under the Investment Company Act. Under the Investment Company Act, in relevant part, a company is an
“investment company” if:
•under Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage
primarily, in the business of investing, reinvesting or trading in securities; or
•under Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting,
owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” having a
value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on
an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally
includes all securities except U.S. government securities and securities of majority-owned subsidiaries that
are not themselves investment companies and are not relying on the exemption from the definition of
investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.
We intend to acquire real estate and real estate-related assets directly, primarily by acquiring fee interests in real
property. We may also invest in real property indirectly through investments in joint venture entities, including joint
venture entities in which we do not own a controlling interest and joint venture entities in which Other Brookfield
Accounts may invest. We anticipate that our assets generally will be held in our wholly and majority-owned
subsidiaries, each formed to hold a particular asset. A smaller portion of our assets are anticipated to be real estate-
related investments.
We intend to conduct our operations so that we, the Operating Partnership and most of our wholly and majority-
owned subsidiaries will comply with the 40% test. We will continuously monitor our holdings on an ongoing basis
to determine compliance with this test. We expect that most of our wholly owned and majority-owned subsidiaries
will not be relying on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
Consequently, interests in these subsidiaries (which are expected to constitute a substantial majority of our assets)
generally will not constitute “investment securities.” Accordingly, we believe that we and most of our wholly and
majority-owned subsidiaries will not be considered investment companies under Section 3(a)(1)(C) of the
Investment Company Act.
In addition, we believe that neither we, the Operating Partnership, nor most of our wholly or majority-owned
subsidiaries will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act
94
because neither we nor the Operating Partnership will engage primarily or hold ourselves out as being engaged
primarily in the business of investing, reinvesting or trading in securities. Rather, we, the Operating Partnership, and
most of our subsidiaries will be primarily engaged in non-investment company businesses related to real estate. If,
however, any of our subsidiaries relies on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment
Company Act, we intend to limit the amount of assets held by such subsidiaries to the extent necessary to ensure that
our and our other subsidiaries’ status as non-investment companies exempt from the Investment Company Act
would not be adversely affected. This may require us to forgo opportunities to acquire traded securities or certain
other assets that we would otherwise want to acquire or sell such assets when we would otherwise wish to retain
them.
We will determine whether an entity is a majority-owned subsidiary of our company. The Investment Company
Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities
of which are owned by such person, or by another company which is a majority-owned subsidiary of such person.
The Investment Company Act defines voting securities as any security presently entitling the owner or holder
thereof to vote for the election of directors of a company. We treat entities in which we own at least 50% of the
outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested
that the SEC or its staff approve our treatment of any entity as a majority-owned subsidiary, and neither has done so.
If the SEC or its staff were to disagree with our treatment of one or more subsidiary entities as majority-owned
subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any
adjustment in our strategy could have a material adverse effect on us.
Alternatively, we or any of our wholly or majority-owned subsidiaries may rely on the exemption provided by
Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the
business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” The SEC
staff has taken the position that Section 3(c)(5)(C), in addition to prohibiting the issuance of certain types of
securities, generally requires that at least 55% of an entity’s assets must be comprised of mortgages and other liens
on and interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s assets must
be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-related
assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be comprised of
miscellaneous assets).
We will classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by
the SEC staff and interpretive guidance provided by the SEC and its staff. These no-action positions are based on
specific factual situations that may be substantially different from the factual situations we may face, and a number
of these no-action positions were issued more than 20 years ago. No assurance can be given that the SEC or its staff
will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further
guidance that may require us to reclassify our assets for purposes of the Investment Company Act. If we are required
to reclassify our assets, we may no longer be in compliance with the exemption from the definition of an investment
company provided by Section 3(c)(5)(C) of the Investment Company Act.
For purposes of determining whether we satisfy the 55%/25% test, based on the no-action letters issued by the
SEC staff, we intend to classify our fee interests in real property, held by us directly or through our wholly or
majority-owned subsidiaries as qualifying assets. In addition, based on no-action letters issued by the SEC staff, we
will treat our investments in joint ventures, which in turn invest in qualifying assets such as real property, as
qualifying assets only if we are active in the management and operation of the joint venture and have the right to
approve major decisions by the joint venture; otherwise, they will be classified as real estate-related assets. We will
not participate in joint ventures in which we do not have or share control to the extent that we believe such
participation would potentially threaten our status as a non-investment company exempt from the Investment
Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that
are suitable for both us and one or more Other Brookfield Accounts. We expect that no less than 55% of our assets
will consist of investments in real property, including any joint ventures that we control or in which we share
control.
We and certain of our subsidiaries may in addition to, or alternatively rely on the exclusion from the definition
of investment company provided by Section 3(c)(6) to the extent that they hold mortgage assets or other real-estate
95
assets through majority-owned subsidiaries that rely on Section 3(c)(5)(C). Litte interpretive guidance has been
issued by the SEC, or its staff, with respect to Section 3(c)(6) and any guidance published by the SEC, or its staff,
could require us to adjust our strategy accordingly. Although little interpretive guidance has been issued with respect
to Section 3(c)(6), we believe that we or certain of our subsidiaries may rely on Section 3(c)(6) if, among other
things 55% of the assets of such subsidiaries consist of, an d at least 55% of the income of such subsidiaries are
derived from, qualifying real estate investment assets owned by wholly-owned or majority-owned subsidiaries of
such subsidiaries.
We also intend to treat as qualifying assets senior mortgage loans, certain B-Notes and certain mezzanine loans
that satisfy various conditions as set forth in SEC staff no-action letters and other guidance, and other assets that the
SEC staff in various no-action letters and other guidance has determined are the functional equivalent of senior
mortgage loans for the purposes of the Investment Company Act. We will treat as real estate-related assets B-Notes
and mezzanine loans that do not satisfy the conditions set forth in the relevant SEC staff no-action letters and other
guidance, and debt and equity securities of companies primarily engaged in real estate businesses. Unless a relevant
SEC no-action letter or other guidance applies, we expect to treat preferred equity interests as real estate-related
assets. The SEC has not published guidance with respect to the treatment of CMBS for purposes of the
Section 3(c)(5)(C) exclusion. Unless the SEC or its staff issues guidance with respect to CMBS, we intend to treat
CMBS as a real estate-related asset.
Maintaining status as a non-investment company or qualifying for an exemption from registration under the
Investment Company Act will limit our ability to make certain investments. For example, these restrictions may
limit our and our subsidiaries’ ability to invest directly in mortgage-backed securities that represent less than the
entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed
securities, non-controlling equity interests in real estate companies or in assets not related to real estate; however, we
and our subsidiaries may invest in such securities to a certain extent.
Although we intend to monitor our portfolio, there can be no assurance that we and our subsidiaries will be able
to maintain the exemptions from registration discussed above.
Our board of directors has made a finding pursuant to Rule 3a-2 under the Investment Company Act related to
our ability to operate as a transient investment company for a period not to exceed one year from the date on which
we would otherwise be required to register as an investment company under the Investment Company Act.
A change in the value of any of our assets could negatively affect our, the Operating Partnership’s or our
respective subsidiaries’ ability to maintain exemptions from regulation under the Investment Company Act. To
maintain compliance with these exemptions, we may be unable to sell assets we would otherwise want to sell and
may need to sell assets we would otherwise wish to retain. In addition, we or the Operating Partnership may have to
acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire
assets that we would otherwise want to acquire and would be important to our investment strategy.
To the extent that the SEC or its staff provide more specific guidance regarding any of the matters bearing upon
the definition of investment company and the exemptions to that definition, we may be required to adjust our
strategy accordingly. On August 31, 2011, the SEC issued a concept release and request for comments regarding the
Section 3(c)(5)(C) exemption (Release No. IC-29778) in which it contemplated the possibility of issuing new rules
or providing new interpretations of the exemption that might, among other things, define the phrase “liens on and
other interests in real estate” or consider sources of income in determining a company’s “primary business.” Any
additional guidance from the SEC or its staff could provide additional flexibility to us, or it could further inhibit our
ability to pursue the strategies we have chosen.
If we are required to register as an investment company under the Investment Company Act, we would become
subject to substantial regulation with respect to our capital structure (including our ability to use borrowings),
management, operations, transactions with affiliated persons (as defined in the Investment Company Act) and
portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry
concentration and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability
to make certain investments and require us to significantly restructure our business plan. For additional discussion of
96
the risks that we would face if we were required to register as an investment company under the Investment
Company Act, see “Risk Factors—Risks Related to This Offering and Our Organizational Structure—Our results of
operations may be adversely affected if we are required to register as an investment company under the Investment
Company Act.”
97
INVESTMENTS IN REAL ESTATE AND REAL ESTATE DEBT
Summary of Portfolio
As of December 31, 2025, our portfolio, based on the net asset value of our investments, consisted of 81% real estate
properties and 19% real estate-related loans and securities. As of December 31, 2025, we owned a diversified portfolio of 18
properties, 787 single-family rental homes and four unconsolidated interests in real estate joint ventures. Our real estate
properties consisted of multifamily (47%), net lease (21%), logistics (15%), single-family rental (10%), student housing (5%)
and office (2%) based on the fair value of our real estate investments as of December 31, 2025. As of December 31, 2025, our
investments in real estate-related loans and securities consisted of 26 investments with an aggregate fair value of approximately
$101 million. As of December 31, 2025, the geographic distribution of our real estate properties was as follows: South (40%),
East (28%), West (16%), Non-U.S. (9%) and Midwest (7%).
Investments in Real Property
The following table provides information regarding our portfolio of real estate properties as of December 31, 2025 ($ in
millions):
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 | Multifamily | April 2019 | 90% | $59.2 | 448 | 89% | |||||||
Arbors of Las Colinas | Dallas, TX | Multifamily | December 2020 | 90% | 63.5 | 408 | 95% | |||||||
1110 Key Federal Hill | Baltimore, MD | Multifamily | September 2021 | 100% | 73.6 | 224 | 84% | |||||||
Domain | Orlando, FL | Multifamily | November 2021 | 100% | 74.1 | 324 | 92% | |||||||
The Burnham | Nashville, TN | Multifamily | November 2021 | 100% | 129.0 | 328 | 96% | |||||||
Flats on Front | Wilmington, NC | Multifamily | December 2021 | 100% | 97.5 | 273 | 94% | |||||||
Verso | Beaverton, OR | Multifamily | December 2021 | 100% | 74.0 | 172 | 94% | |||||||
2626 South Side Flats | Pittsburgh, PA | Multifamily | January 2022 | 100% | 90.0 | 264 | 90% | |||||||
The Parker at Huntington Metro(5) | Alexandria, VA | Multifamily | March 2022 | 100% | 136.0 | 360 | 93% | |||||||
Briggs + Union(5) | Mount Laurel, NJ | Multifamily | April 2022 | 100% | 158.0 | 490 | 93% | |||||||
Single-Family Rentals | Various | Single-Family Rental | Various | 100% | 210.7 | 787 | 92% | |||||||
Reflection | Atlanta, GA | Student Housing | June 2024 | 97% | 116.0 | 741 | 84% | |||||||
Principal Place(6) | 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% | |||||||
Lakes at West Covina | Los Angeles, CA | Office | February 2020 | 95% | 41.0 | 177,000 | 96% | |||||||
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% | |||||||
US Diversified Logistics Portfolio I(7) | Various | Logistics | February 2025 | 19% | 41.0 | 9,384,444 | 91% | |||||||
US Diversified Logistics Portfolio II(7) | Various | Logistics | June 2025 | 19% | 14.4 | 1,926,759 | 90% | |||||||
Total | $1,913.4 |
98
(1) | Investments in real estate properties includes our consolidated property investments and our unconsolidated investments in Principal Place, U.S. Diversified Logistics Portfolio I and U.S. Diversified Logistics Portfolio II. |
(2) | The joint venture agreements entered into by us (other than the Principal Place joint venture, and U.S. Diversified Logistics Portfolio I and II) 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) | Excludes acquisition costs. |
(4) | For multifamily and student housing investments, occupancy represents the percentage of all leased units divided by the total available units as of December 31, 2025. 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 December 31, 2025. |
(5) | Held through our DST Program. The property has been consolidated on our Consolidated Balance Sheets and any profits interest due to the third-party investors in the DST Program are reported within non-controlling interests in consolidated joint ventures. |
(6) | Purchase price represents our initial equity investment in the joint venture of £73.3 million British Pounds (“GBP”) converted to USD using the spot rate on the acquisition date. |
(7) | Held through a limited partnership interest in a Brookfield-managed fund that owns the investments. Purchase price represents the aggregate amount of capital funded to the limited partnership by us as of December 31, 2025. |
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 December 31, 2025 ($ and square feet data in thousands). The table below excludes our
multifamily, student housing and single-family rental 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 | |||||
2026 ................. | 6 | $1,327 | 5% | 39 | 3% | |||||
2027 ................. | 6 | 769 | 3% | 46 | 3% | |||||
2028 ................. | 10 | 1,648 | 6% | 76 | 5% | |||||
2029 ................. | 11 | 2,195 | 8% | 182 | 12% | |||||
2030 ................. | 12 | 1,964 | 7% | 120 | 8% | |||||
2031 ................. | 5 | 1,185 | 4% | 54 | 4% | |||||
2032 ................. | 1 | 1,390 | 5% | 211 | 14% | |||||
2033 ................. | 2 | 109 | —% | 3 | —% | |||||
2034 ................. | 1 | 1,467 | 5% | 300 | 20% | |||||
2035 ................. | 1 | 15,284 | 57% | 460 | 31% | |||||
Thereafter ......... | 0 | — | —% | — | —% | |||||
Total ................. | 55 | $27,338 | 100% | 1,491 | 100% |
__________________
(1)Annualized base rent is determined from the annualized base rent per leased square foot of the applicable year and excludes tenant recoveries, straight-line
rent, and above-market and below-market lease amortization.
99
Investments in Real Estate-Related Loans and Securities
The following table details our investments in real estate-related loans and securities as of December 31, 2025 ($ in
thousands):
December 31, 2025 | ||||||||||||
Type of Loan/ Security | Number of Positions | Weighted Average Coupon(1) | Weighted Average Maturity Date(2) | Face Amount | Cost Basis/ Allowance Adjustment (3) | Carrying Amount | ||||||
Investments held at Fair value | ||||||||||||
CMBS - floating | 7 | SOFR+ 3.91% | May 2027 | $28,765 | $25,985 | $27,133 | ||||||
CMBS - fixed | 4 | 4.56% | November 2026 | 23,413 | 20,650 | 5,170 | ||||||
RMBS - floating | 2 | SOFR+ 1.76% | August 2030 | 2,499 | 2,501 | 2,504 | ||||||
RMBS - fixed | 8 | 4.71% | January 2036 | 21,492 | 21,000 | 21,226 | ||||||
Cross currency forward contracts | 1 | N/A | January 2026 | — | — | (3) | ||||||
Total investments held at fair value | 22 | 5.85% | October 2029 | 76,169 | 70,136 | 56,030 | ||||||
Investments held at amortized cost | ||||||||||||
Real estate-related loans - floating | 1 | SOFR+8.15% | June 2026 | 7,044 | — | 7,044 | ||||||
Real estate-related loans - fixed | 3 | 9.92% | May 2028 | 42,013 | (4,034) | 37,979 | ||||||
Total investments held at amortized cost | 4 | 10.22% | January 2028 | 49,057 | (4,034) | 45,023 | ||||||
Total investments in real estate-related loans and securities | 26 | 7.56% | February 2029 | $125,226 | $66,102 | $101,053 | ||||||
(1) | As of December 31, 2025, SOFR was equal to 3.87%. |
(2) | Weighted average maturity date is based on the fully extended maturity date of the instruments. |
(3) | Adjustments include the cumulative provision for current expected credit losses, unamortized fee income, and a foreign currency translation adjustment attributable to real estate-related loans. |
100
SELECTED INFORMATION REGARDING OUR OPERATIONS
The following selected financial data should be read in conjunction with the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related
notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2025 which is incorporated by
reference. Our historical results are not necessarily indicative of results for any future period.
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
and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real
estate held by the entity, 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 measure 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 real estate-related securities, derivatives, and
investments in unconsolidated entities reported at fair value, (vii) non-cash performance fee or other non-cash
incentive compensation, (viii) similar adjustments for non-controlling interests, and (ix) our allocable share of AFFO
from unconsolidated entities.
We also believe funds available for distribution (“FAD”) is an additional meaningful non-GAAP supplemental
measure 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, (v) similar adjustments for non-controlling interests, and (vi) our allocable share of FAD
from unconsolidated entities. 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 which are not considered when determining cash flows from operating activities in
accordance with GAAP.
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 ($ and shares in thousands):
101
For the year ended December 31, 2025 | For the year ended December 31, 2024 (1) | ||
Net loss attributable to Brookfield REIT stockholders, redeemable non- controlling interests, and third-party Operating Partnership unitholders | $(5,129) | $(31,450) | |
Adjustments to arrive at FFO: | |||
Depreciation and amortization | 52,550 | 55,259 | |
Impairment of investments in real estate | — | 33,922 | |
Gain on extinguishment of debt | — | (32,251) | |
Amount attributed to non-controlling interests attributable to third party joint ventures for above adjustments | (757) | (789) | |
FFO attributable to Brookfield REIT stockholders, redeemable non-controlling interests, and third-party Operating Partnership unitholders | 46,664 | 24,691 | |
Adjustments to arrive at AFFO: | |||
Straight-line rental income | (1,127) | (2,360) | |
Amortization of above and below market lease intangibles, net | (1,322) | (907) | |
Amortization of deferred financing costs | 1,973 | 3,501 | |
Amortization of upfront derivative acquisition costs | 1,056 | 1,860 | |
Amortization of origination fees and discount | — | — | |
Amortization of restricted stock awards | 323 | 323 | |
Unrealized (gain) loss on investments, net(2) | (22,681) | 1,305 | |
Provision for current expected credit losses | 565 | 848 | |
Allocable share of AFFO related to unconsolidated entities | (812) | 5,340 | |
Amount attributed to non-controlling interests attributable third party joint ventures for above adjustments | (255) | (165) | |
AFFO attributable to Brookfield REIT stockholders, redeemable non-controlling interests, and third-party Operating Partnership unitholders | 24,384 | 34,435 | |
Adjustments to arrive at FAD: | |||
Non-cash management fee | 12,726 | 11,183 | |
Realized gain on sale of real estate-related loans and securities | (992) | (6,770) | |
Realized gain on sale of treasury bills | (1,558) | (820) | |
Realized loss (gain) on financial instruments(3) | 1,967 | (2,838) | |
Stockholder servicing fees | (2,287) | (2,710) | |
Allocable share of FAD related to unconsolidated entities | 178 | — | |
FAD attributable to Brookfield REIT stockholders, redeemable non-controlling interests, and third-party Operating Partnership unitholders | $34,418 | $32,480 | |
Per common share and Operating Partnership unit data: | |||
FAD per share/unit - basic and diluted | $0.36 | $0.38 | |
Weighted average number of shares/units outstanding - basic and diluted | 95,956 | 84,680 |
(1) | The prior period has been recast to present unconsolidated entities in a consistent manner with the current period presentation. |
(2) | Unrealized loss (gain) on investments, net relates to mark-to-market changes on our investments in real estate-related securities, derivative contracts, and investments in unconsolidated entities reported at fair value. |
(3) | Realized loss (gain) on financial instruments relates to settlements on our foreign currency swaps and interest rate swaps. |
FFO, AFFO, and FAD should not be considered to be more relevant or accurate than the GAAP methodology in
calculating net income (loss) or in evaluating our operating performance. In addition, FFO, AFFO, and FAD should
not be considered as alternatives to net (loss) income as indications of our performance or as alternatives to cash
flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with
these and other GAAP measurements. Further, FFO, AFFO, and FAD are not intended to be used as liquidity
measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our
stockholders.
102
Our Indebtedness
The following table summarizes the components of mortgage loans and total indebtedness as of December 31,
2025 and December 31, 2024 ($ in thousands).
Principal Balance Outstanding | ||||||||||
Indebtedness | Weighted Average Interest Rate(1) | Weighted Average Maturity Date(2) | Maximum Facility Size | December 31, 2025 | December 31, 2024 | |||||
Fixed rate loans: | ||||||||||
Fixed rate mortgages | 4.06% | October 2030 | N/A | $500,420 | $395,720 | |||||
Total fixed rate loans | 500,420 | 395,720 | ||||||||
Variable rate loans: | ||||||||||
Variable rate mortgages | SOFR+1.72% | February 2028 | N/A | 479,561 | 524,597 | |||||
Secured credit facility | SOFR+2.75% | May 2027 | $250,000 | — | 144,485 | |||||
SFR Secured credit facility(3) | SOFR+1.85% | April 2029 | $185,000 | 129,973 | — | |||||
Affiliate line of credit(4) | SOFR+2.25% | November 2026 | $125,000 | — | 12,790 | |||||
Total variable rate loans | 609,534 | 681,872 | ||||||||
Total indebtedness | 1,109,954 | 1,077,592 | ||||||||
Deferred financing costs, net | (6,447) | (3,436) | ||||||||
Total indebtedness, net | $1,103,507 | $1,074,156 | ||||||||
(1) | As of December 31, 2025 and 2024, SOFR was 3.87% and 4.49%, respectively. |
(2) | Includes the fully extended maturity date for loans with extension options that are at the Company’s discretion and the Company currently expect to be able to exercise. |
(3) | As of December 31, 2025 borrowings on the SFR Secured Credit Facility were secured by the single-family rental portfolio. |
(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 the Company or its subsidiaries or, if not available, SOFR plus a 0.10% credit adjustment and a 2.25% margin. |
Mortgage Loans
During the year ended December 31, 2025, we obtained a $23.7 million fixed-rate mortgage loan in connection
with the refinancing of an office property and a $81.0 million fixed-rate mortgage loan from an affiliate of the
Adviser in relation to a property held through the DST Program. We also obtained a $62.0 million floating-rate
mortgage loan secured by five logistics properties. During the year ended December 31, 2024, we obtained a
$65.0 million fixed-rate mortgage loan related to the acquisition of a property and a $67.0 million fixed-rate
mortgage loan from an affiliate of the Adviser in relation to a property held through the DST Program. During the
year ended December 31, 2025, we repaid $107.0 million of mortgage loans, including full repayments of an
$80.0 million mortgage loan secured by a multifamily property and a $26.5 million mortgage loan secured by an
office property. During the year ended December 31, 2024, we repaid $125.5 million of mortgage loans, including a
$25.5 million repayment of a mortgage loan secured by an office property that we disposed of in September 2024,
resulting in a $32.3 million gain on extinguishment of debt.
Secured Credit Facility
In November 2021, we 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 us.
In December 2022, the Secured Credit Facility was amended to increase the maximum aggregate principal
amount to $300.0 million with an interest at a rate of SOFR plus 2.00% and a maturity date of January 2025, which
was extended to May 2025.
103
In May 2025, we refinanced the Secured Credit Facility with the lender. The maximum aggregate principal
amount of the facility was amended to $250.0 million. The Secured Credit Facility bears interest at a rate of SOFR
plus 2.75% and has a maturity date of May 2026, with a one-year extension option.
During the year ended December 31, 2025, there were no borrowings made on the credit facility and we repaid
$144.5 million on the Secured Credit Facility related to the single-family rental portfolio and certain logistics
properties. As of December 31, 2025, there were no outstanding borrowings on the Secured Credit Facility.
SFR Secured Credit Facility
In April 2025, we entered into a credit agreement with a lender (the “SFR Secured Credit Facility”) providing
for a secured credit facility to be used for the acquisition or refinancing of our single-family rental properties.
Borrowings on the SFR Secured Credit Facility are secured by single-family rental properties owned by us. The
facility has a total capacity of $185.0 million, of which $50.0 million is uncommitted but may be drawn for future
acquisitions of single-family rental properties. The SFR Secured Credit Facility bears interest at a rate of SOFR plus
1.85% and has a maturity date of April 2028, with a one-year extension option. During the year ended December 31,
2025, we borrowed $130.0 million on the SFR Secured Credit Facility.
Affiliate Line of Credit
In November 2021, we 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
continuous one-year extension options subject to the lender’s approval. Effective November 2, 2025, the maturity
date of the Affiliate Line of Credit was extended to November 2, 2026.
During the year ended December 31, 2025, we borrowed $110.0 million and repaid $122.8 million on the
Affiliate Line of Credit. During the year ended December 31, 2024, we borrowed $93.5 million and repaid
$80.7 million on the Affiliate Line of Credit. As of December 31, 2025, there were no outstanding borrowings on
the Affiliate Line of Credit.
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 comply with the REIT provisions
of the Code.
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 fee, management fee and performance fees which
are deducted from the monthly distribution per share.
104
The following table details the net distributions per share for each of our share classes for the year ended
December 31, 2025.
Declaration Date | Class S Shares | Class I Shares | Class C Shares | Class E Shares | Class T Shares | Class D Shares | ||||||
January 30, 2025 ................... | $0.0521 | $0.0598 | $0.0601 | $0.0713 | — | $0.0573 | ||||||
February 27, 2025 ................. | $0.0528 | $0.0598 | $0.0601 | $0.0712 | 0.0527 | $0.0576 | ||||||
March 28, 2025 ..................... | $0.0523 | $0.0598 | $0.0601 | $0.0709 | 0.0519 | $0.0574 | ||||||
April 29, 2025 ....................... | $0.0526 | $0.0598 | $0.0601 | $0.0708 | 0.0523 | $0.0575 | ||||||
May 29, 2025 ........................ | $0.0524 | $0.0598 | $0.0601 | $0.0708 | 0.0521 | $0.0574 | ||||||
June 27, 2025 ........................ | $0.0526 | $0.0598 | $0.0601 | $0.0708 | 0.0524 | $0.0575 | ||||||
July 30, 2025 ........................ | $0.0525 | $0.0598 | $0.0602 | $0.0708 | 0.0522 | $0.0574 | ||||||
August 28, 2025 ................... | $0.0524 | $0.0598 | $0.0601 | $0.0707 | 0.0521 | $0.0574 | ||||||
September 29, 2025 .............. | $0.0527 | $0.0598 | $0.0601 | $0.0707 | 0.0523 | $0.0575 | ||||||
October 30, 2025 .................. | $0.0524 | $0.0598 | $0.0601 | $0.0707 | 0.0521 | $0.0575 | ||||||
November 26, 2025 .............. | $0.0527 | $0.0598 | $0.0602 | $0.0716 | 0.0523 | $0.0575 | ||||||
December 30, 2025 ............... | $0.0525 | $0.0598 | $0.0602 | $0.0718 | 0.0524 | $0.0575 |
The following table summarizes our distributions declared during the years ended December 31, 2025 and
December 31, 2024.
For the year ended December 31, 2025 | For the year ended December 31, 2024 | ||||||
Amount | Percentage | Amount | Percentage | ||||
Company Distributions | |||||||
Payable in cash | $33,039 | 67% | $21,692 | 39% | |||
Reinvested in shares | 16,615 | 33% | 33,270 | 61% | |||
Total Company distributions | $49,654 | 100% | $54,962 | 100% | |||
Operating Partnership Distributions(1) | |||||||
Payable in cash | $186 | 1% | $— | —% | |||
Reinvested in units | 17,256 | 99% | 3,396 | 100% | |||
Total Operating Partnership distributions | $17,442 | 100% | $3,396 | 100% | |||
Total Company and Operating Partnership Distributions | $67,096 | 100% | $58,358 | 100% | |||
Sources of Company and Operating Partnership Distributions | |||||||
Cash flows from operating activities | $36,644 | 55% | $43,296 | 74% | |||
Cash flows from other sources(2) | 30,452 | 45% | 15,062 | 26% | |||
Total sources of distributions | $67,096 | 100% | $58,358 | 100% | |||
Cash flows from operating activities | $36,644 | $43,296 | |||||
Funds from Operations(3) | $46,664 | $24,691 | |||||
Adjusted Funds from Operations(3) | $24,384 | $29,096 | |||||
Funds Available for Distribution(3) | $34,418 | $27,141 | |||||
(1) | Distributions paid by the Operating Partnership to third parties other than the Company. |
(2) | Includes cash flows from investing activities, such as proceeds from sales of trading securities and real estate-related securities. |
(3) | 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. |
105
Repurchases of our Shares
For the year ended December 31, 2025, 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 | Average Price Paid Per Shares | 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) | |||||
January 2025 ..................................... | 740,354 | 1.0% | $10.9421 | 740,354 | — | |||||
February 2025 ................................... | 1,151,307 | 1.6% | $10.7916 | 1,151,307 | — | |||||
March 2025(2) .................................... | 1,440,845 | 2.0% | $10.5921 | 1,196,200 | — | |||||
April 2025 ......................................... | 1,250,131 | 1.8% | $10.4666 | 1,250,131 | — | |||||
May 2025 .......................................... | 460,555 | 0.7% | $10.4804 | 460,555 | — | |||||
June 2025(2) ....................................... | 1,356,622 | 2.0% | $10.4777 | 1,057,784 | — | |||||
July 2025 ........................................... | 796,694 | 1.2% | $10.4675 | 796,694 | — | |||||
August 2025 ...................................... | 712,299 | 1.0% | $10.3787 | 712,299 | — | |||||
September 2025(2) ............................. | 860,808 | 1.3% | $10.4323 | 560,677 | — | |||||
October 2025 ..................................... | 1,419,158 | 2.2% | $10.3424 | 1,419,158 | — | |||||
November 2025 ................................. | 928,508 | 1.0% | $10.3240 | 928,508 | — | |||||
December 2025(2) .............................. | 732,536 | 0.8% | $10.3490 | 418,932 | — |
_________________
(1)Repurchases are limited under the share repurchase plan as described in “Share Repurchases.”
(2)Includes 244,645, 298,838, 300,132, and 313,604 Class I shares repurchased in March 2025, June 2025, September 2025, December 2025,
respectively, related to shares previously issued to the Adviser as payment for management and performance fees. The repurchase of such
shares from the Adviser is outside of our share repurchase plan. For the year ended December 31, 2025, repurchases as a percentage of
aggregate NAV did not exceed our monthly and quarterly limits under our share repurchase plan.
(3)All repurchase requests under our share repurchase plan were satisfied.
Compensation to the Adviser and its Affiliates
The following table details the fees and expenses paid to the Adviser and its affiliates for the years ended
December 31, 2025 and December 31, 2024 ($ in thousands).
Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||
Management fees(1) .................................................................................................... | $12,726 | $11,183 | |
Upfront selling commissions and stockholder servicing fees(2) ................................ | 2,463 | 3,078 | |
Affiliate service provider expenses ........................................................................... | 13,454 | 11,803 | |
Total ........................................................................................................................... | $28,643 | $26,064 |
__________________
(1)Represents the management fees earned by the Adviser during the periods. The Adviser elected to receive Class I shares of common stock
as payment for the management fees. No performance fees were earned by the Adviser during the periods.
(2)The Dealer Manager has entered into agreements with the selected dealers distributing our shares in this offering, which provide, among
other things, for the re-allowance of the full amount of the selling commissions and dealer manager fee and all or a portion of the
stockholder servicing fees received by the Dealer Manager to such selected dealers.
106
The following table details the components of due to affiliates as of December 31, 2025 and December 31, 2024 ($
in thousands).
December 31, 2025 | December 31, 2024 | ||
Accrued stockholder servicing fee ............................................................................ | $12,937 | $17,451 | |
Advanced organization and offering costs ................................................................ | 4,295 | 7,014 | |
Stock repurchase payable to the Adviser for management fees ................................ | 3,271 | 2,742 | |
Other(1) ....................................................................................................................... | 3,221 | 1,908 | |
Accrued management fee .......................................................................................... | 1,088 | 867 | |
Accrued affiliate service provider expenses .............................................................. | 1,831 | 1,227 | |
OP Units Distributions Payable | 193 | 1,674 | |
Total ........................................................................................................................... | $26,836 | $32,883 |
(1) | Represents costs advanced by the Adviser and the Sub-Adviser on behalf of the Company for general corporate expenses provided by unaffiliated third parties. |
The following table details the compensation paid to the DST Dealer Manager, the DST Manager and their
affiliates in connection with the DST Program during the years ended December 31, 2025 and 2024 ($ in
thousands).
For the Year Ended December 31, 2025 | For the Year Ended December 31, 2024 | |
DST upfront selling commissions and dealer manager fees ............................ | $3,713 | $213 |
DST placement fees ......................................................................................... | 1,017 | 159 |
DST investor servicing fee .............................................................................. | 75 | — |
DST administration fee ................................................................................... | 82 | 2 |
DST organization and offering expense reimbursement .................................. | 508 | 79 |
DST legal and closing costs reimbursements .................................................. | 508 | 79 |
DST loan fee and reimbursement costs ............................................................ | 1,702 | 265 |
Total ............................................................................................................ | $7,605 | $797 |
Status of Our Public Offering
On April 30, 2018, the SEC declared effective our registration statement for our initial public offering for up to
$2.0 billion in shares of our common stock. Our initial public offering terminated upon the commencement of the
second public offering of up to $7.5 billion of our common stock on November 2, 2021. Our second public offering
terminated upon the commencement of this public offering.
On July 2, 2025 we commenced our third public offering, pursuant to which, we are offering on a continuous
basis up to $7.5 billion in shares of common stock, consisting of up to $6.0 billion in shares in our primary offering
and up to $1.5 billion in shares pursuant to our distribution reinvestment plan. As of April 1, 2026, we have issued
and sold (i) 1,225,456 shares of our common stock (consisting of 18,976 Class T shares, 773,763 Class S shares, 955
Class D shares and 431,762 Class I shares) in our primary offering for total proceeds of $12,677,971, and (ii)
728,247 shares of our common stock (consisting of 713 Class T shares,602,789 Class S shares, 200 Class D shares
and 124,545 Class I shares) pursuant to our distribution reinvestment plan for a total value of $7,554,302. We intend
to continue selling shares in this offering on a monthly basis. This offering will terminate no later than July 2, 2028,
unless extended in accordance with applicable SEC rules.
107
April 1, 2026 Transaction Price
The transaction price for each share class of our common stock for subscriptions accepted as of April 1, 2026
(and repurchases as of March 31, 2026) is as follows:
Transaction Price (per share) | |
Class S ................................................................................................................................................... | $10.2590 |
Class I .................................................................................................................................................... | $10.3726 |
Class D .................................................................................................................................................. | $10.4681 |
Class T .................................................................................................................................................. | $10.4565 |
The April 1, 2026 transaction price for each of our share classes is equal to such class’s NAV per share as of
February 28, 2026. A detailed calculation of the NAV per share is set forth below. The purchase price of our
common stock for each share class equals the transaction price of such class, plus applicable upfront selling
commissions and dealer manager fees. The repurchase price for each share class equals the transaction price of such
class..
February 28, 2026
NAV Per Share
NAV per share is calculated in accordance with the valuation guidelines that have been approved by our board
of directors. Our NAV per share, which is updated as of the last calendar day of each month, is posted on our
website at www.BrookfieldREIT.com and is made available on our toll-free, automated telephone line at (833)
625-7348. Please refer to “Net Asset Value Calculation and Valuation Guidelines” for important information about
how our NAV is determined. We have included a breakdown of the components of total NAV and NAV per share
for February 28, 2026.
Our total NAV presented in the following tables includes the NAV of our Class S, Class I, Class D, Class T,
Class C and Class E shares of common stock, as well as partnership interests in the Operating Partnership held by
parties other than us. The following table provides a breakdown of the major components of our total NAV as of
February 28, 2026 ($ and shares/units in thousands):
Components of NAV | February 28, 2026 | |
Investments in real estate ..................................................................................................................... | $1,832,695 | |
Investments in real estate-related loans and securities ........................................................................ | 111,131 | |
Investments in unconsolidated entities(1) ............................................................................................. | 171,753 | |
Cash and cash equivalents ................................................................................................................... | 23,711 | |
Restricted cash ..................................................................................................................................... | 12,295 | |
Other assets .......................................................................................................................................... | 96,698 | |
Debt obligations ................................................................................................................................... | (1,096,344) | |
Accrued stockholder servicing fees(2) .................................................................................................. | (177) | |
Management fee payable ..................................................................................................................... | (1,100) | |
Distribution payable ............................................................................................................................. | (5,523) | |
Subscriptions received in advance ....................................................................................................... | (2,122) | |
Other liabilities .................................................................................................................................... | (38,518) | |
Non-controlling interests in consolidated entities ............................................................................... | (141,568) | |
Net asset value .................................................................................................................................... | $962,931 | |
Number of shares/units outstanding | 93,284 |
108
(1) | Investments in unconsolidated entities reflects the value of our net equity investment in entities we do not consolidate. As of February 28, 2026, our allocable share of the gross real estate asset value held by such entities was $418.2 million. |
(2) | Stockholder servicing fees only apply to Class S, Class T and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. 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 February 28, 2026, we had accrued under GAAP approximately $12.3 million of stockholder servicing fees payable to the Dealer Manager related to the Class S, Class T and Class D shares sold. |
The following table provides a breakdown of our total NAV and NAV per share/unit by class as of February 28,
2026 ($ and shares/units in thousands, except per share/unit data):
Class S Shares | Class I Shares | Class D Shares | Class T Shares | Class C Shares(1) | Class E Shares(1) | Third-party Class I OP Units(2) | Third-party Class E OP Units(2) | Total | |||||||||
Net asset value ....... | $250,474 | $593,551 | $1,017 | $215 | $59,175 | $41,387 | $16,139 | $973 | $962,931 | ||||||||
Number of shares/ units outstanding .... | 24,415 | 57,223 | 97 | 21 | 5,885 | 3,993 | 1,556 | 94 | 93,284 | ||||||||
NAV per share/ unit as of .............. | $10.2590 | $10.3726 | $10.4681 | $10.4565 | $10.0554 | $10.3640 | $10.3726 | $10.3640 |
(1) | Class C and Class E shares of our common stock are not sold in this Offering. |
(2) | Includes the units of the Operating Partnership held by parties other than the Company. |
Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used
in the February 28, 2026 valuations, based on property types. In the event that we own more than one office
investment in the portfolio, we will include the key assumptions for that property type.
Property Type | Discount Rate | Exit Capitalization Rate | ||
Multifamily/Student Housing ....................................................................................... | 7.3% | 5.8% | ||
Single-Family Rental .................................................................................................... | 7.2% | 5.5% | ||
Net Lease ...................................................................................................................... | 6.9% | 5.4% | ||
Logistics ........................................................................................................................ | 9.6% | 6.2% |
A change in these assumptions would impact the calculation of the value of our property investments. For
example, assuming all other factors remained unchanged, the changes listed below would result in the following
effects on our investment values:
Input | Hypothetical Change | Multifamily/ Student Housing Investment Values | Single-Family Rental Investment Values | Net Lease Investment Values | Logistics Investment Values | |||||
Discount Rate ................ | 0.25% Decrease | 1.9% | 1.1% | 2.1% | 1.9% | |||||
(weighted average) ........ | 0.25% Increase | (1.8)% | (1.1)% | (2.0)% | (1.9)% | |||||
Exit Capitalization Rate | 0.25% Decrease | 2.7% | 3.7% | 2.8% | 2.7% | |||||
(weighted average) ........ | 0.25% Increase | (2.4)% | (3.3)% | (2.5)% | (2.4)% |
The preceding tables do not include recently acquired properties, which are held at cost in accordance with our
valuation guidelines.
109
Historical NAV Per Share
The following table presents our monthly NAV per share for each of the six classes of shares from
December 31, 2022 through the date of this prospectus.
Class S Shares | Class I Shares | Class C Shares | Class E Shares | Class T Shares | Class D Shares | ||||||
December 31, 2022 ........................... | $13.2712 | $13.3602 | $13.0716 | $13.6732 | $— | $13.2204 | |||||
January 31, 2023 ............................... | $13.2112 | $13.3019 | $13.0050 | $13.2742 | $— | $13.2957 | |||||
February 28, 2023 ............................. | $13.1299 | $13.2192 | $12.9231 | $13.1923 | $— | $13.2047 | |||||
March 31, 2023 ................................. | $12.8583 | $12.9469 | $12.6584 | $12.9215 | $— | $12.9538 | |||||
April 30, 2023 ................................... | $12.8531 | $12.9465 | $12.6617 | $12.9087 | $— | $12.9928 | |||||
May 31, 2023 .................................... | $12.7076 | $12.8002 | $12.5181 | $12.7723 | $— | $12.8466 | |||||
June 30, 2023 .................................... | $12.4704 | $12.5603 | $12.2839 | $12.5345 | $— | $12.6073 | |||||
July 31, 2023 .................................... | $12.4159 | $12.5063 | $12.2284 | $12.4806 | $— | $12.5746 | |||||
August 31, 2023 ............................... | $12.2713 | $12.3597 | $12.0856 | $12.3356 | $— | $12.4305 | |||||
September 30, 2023 .......................... | $12.2754 | $12.3651 | $12.0879 | $12.3397 | $— | $12.4373 | |||||
October 31, 2023 .............................. | $12.2236 | $12.3138 | $12.0361 | $12.2887 | $— | $12.3859 | |||||
November 30, 2023 .......................... | $11.9828 | $12.0743 | $11.8006 | $12.0471 | $— | $12.1459 | |||||
December 31, 2023 ........................... | $11.6835 | $11.7742 | $11.5092 | $11.7522 | $— | $11.8483 | |||||
January 31, 2024 ............................... | $11.6574 | $11.7507 | $11.4815 | $11.7274 | $— | $11.8473 | |||||
February 29, 2024 ............................. | $11.3510 | $11.4431 | $11.1759 | $11.4318 | $— | $11.5337 | |||||
March 31, 2024 ................................. | $11.2240 | $11.3174 | $11.0461 | $11.3070 | $— | $11.4227 | |||||
April 30, 2024 ................................... | $11.2146 | $11.3109 | $11.0368 | $11.2980 | $— | $11.4093 | |||||
May 31, 2024 .................................... | $11.1726 | $11.2698 | $10.9952 | $11.2573 | $— | $11.3688 | |||||
June 30, 2024 .................................... | $11.1158 | $11.2130 | $10.9360 | $11.2012 | $— | $11.3137 | |||||
July 31, 2024 .................................... | $11.0662 | $11.1665 | $10.8880 | $11.1540 | $— | $11.2666 | |||||
August 31, 2024 ............................... | $10.9145 | $11.0178 | $10.7421 | $11.0065 | $— | $11.1154 | |||||
September 30, 2024 .......................... | $10.9753 | $11.0809 | $10.7991 | $11.0677 | $— | $11.1828 | |||||
October 31, 2024 .............................. | $10.9331 | $11.0385 | $10.7570 | $11.0273 | $— | $11.1365 | |||||
November 30, 2024 .......................... | $10.8872 | $10.9920 | $10.7129 | $10.9805 | $— | $11.0910 | |||||
December 31, 2024 ........................... | $10.8911 | $10.9967 | $10.7161 | $10.9854 | $— | $11.0958 | |||||
January 31, 2025 ............................... | $10.8406 | $10.9454 | $10.6659 | $10.9355 | $— | $11.0453 | |||||
February 28, 2025 ............................. | $10.5818 | $10.6888 | $10.7893 | $10.6687 | $10.7394 | $10.7893 | |||||
March 31, 2025 ................................. | $10.4729 | $10.5784 | $10.2856 | $10.5614 | $10.6304 | $10.6791 | |||||
April 30, 2025 ................................... | $10.4412 | $10.5472 | $10.2518 | $10.5340 | $10.5994 | $10.6413 | |||||
May 31, 2025 .................................... | $10.4322 | $10.5389 | $10.2416 | $10.5261 | $10.5937 | $10.6326 | |||||
June 30, 2025 .................................... | $10.4067 | $10.5143 | $10.2154 | $10.5017 | $10.5713 | $10.6082 | |||||
July 31, 2025 .................................... | $10.3987 | $10.5073 | $10.2061 | $10.4948 | $10.5664 | $10.6013 | |||||
August 31, 2025 ............................... | $10.3727 | $10.4821 | $10.1791 | $10.4702 | $10.5437 | $10.5760 | |||||
September 30, 2025 .......................... | $10.3763 | $10.4864 | $10.1810 | $10.4760 | $10.5505 | $10.5808 | |||||
October 31, 2025 .............................. | $10.3478 | $10.4584 | $10.1506 | $10.4490 | $10.5252 | $10.5534 | |||||
November 30, 2025 .......................... | $10.3191 | $10.4310 | $10.1201 | $10.4210 | $10.4997 | $10.5254 | |||||
December 31, 2025 ........................... | $10.2656 | $10.3778 | $10.0657 | $10.3687 | $10.4557 | $10.4720 | |||||
January 31, 2026 ............................... | $10.2474 | $10.3602 | $10.0459 | $10.3516 | $10.4412 | $10.4546 | |||||
February 28, 2026 ............................. | $10.2590 | $10.3726 | $10.0554 | $10.3640 | $10.4565 | $10.4681 |
110
MANAGEMENT
Board of Directors
We operate under the direction of our board of directors, the members of which are accountable to us and our
stockholders as fiduciaries. Our board of directors has retained the Adviser to manage the acquisition and
dispositions of our investments, subject to the board of directors’ supervision.
We have a six-member board. Our board of directors may change the number of directors, but not to fewer than
three directors nor, unless our bylaws are amended, more than 15. Our charter provides that a majority of our
directors must be independent directors, except for a period of up to 60 days after the death, removal or resignation
of an independent director pending the election of a successor independent director. Our charter defines an
independent director as a director who is not on the date of determination, and has not for the last two years from the
date of determination, been associated, directly or indirectly, with Brookfield or the Adviser. A director is deemed to
be associated with Brookfield or the Adviser if he or she owns any interest (other than an interest in us or an
immaterial interest in an affiliate of us) in, is employed by, is an officer or director of, or has any material business
or professional relationship with Brookfield, the Adviser or any of their affiliates, performs services (other than as a
director) for us, or serves as a director or trustee for more than three REITs organized by Brookfield or advised by
the Adviser. A business or professional relationship or an interest in our sponsor, the Adviser or any of their
affiliates will be deemed material per se if the aggregate gross income derived by the director from Brookfield, the
Adviser or any of their affiliates exceeds 5% of (1) the director’s annual gross income derived from all sources
during either of the last two years or (2) the director’s net worth on a fair market value basis. An indirect relationship
is defined to include circumstances in which the director’s spouse, parents, children, siblings, mothers- or fathers-in-
law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with us, Brookfield, the
Adviser or any of their affiliates. Our charter requires that a director have at least three years of relevant experience
and demonstrate the knowledge required to successfully acquire and manage the type of assets that we intend to
acquire to serve as a director. Our charter also requires that at all times at least one of our independent directors must
have at least three years of relevant real estate experience. Our charter and bylaws have been reviewed and ratified
by a majority of our directors, including a majority of our independent directors.
For so long as the Advisory Agreement is in effect, (i) the Adviser has the right to designate for nomination,
subject to the approval of such nomination by our board of directors, up to four directors to the slate of directors to
be voted on by the stockholders at our annual meeting of stockholders; provided, however, that such number of
director nominees shall be reduced as necessary by a number that will result in a majority of directors being
independent directors, (ii) our board of directors must consult with the Adviser before nominating individuals for the
remaining directorships and (iii) only individuals nominated in accordance with clauses (i) and (ii) of this sentence
or our bylaws will be eligible for election as directors. Our board of directors must also consult with the Adviser in
connection with filling any vacancies on the board of directors.
Each director will serve until the next annual meeting of stockholders and until his or her successor is duly
elected and qualifies. Although the number of directors may be increased or decreased by our board of directors, a
decrease may not shorten the term of any incumbent director. Any director may resign at any time or may be
removed with or without cause by the stockholders upon the affirmative vote of stockholders entitled to cast at least
a majority of all the votes entitled to be cast generally in the election of directors. The notice of a special meeting
called to remove a director must indicate that the purpose, or one of the purposes, of the meeting is to determine if
the director shall be removed. Except as may be provided by the board of directors in setting the terms of any class
or series of preferred stock, a vacancy on our board of directors may be filled only by a vote of a majority of the
remaining directors, even if the remaining directors do not constitute a quorum, and in the case of election of an
independent director, after nomination by the remaining independent directors. Any director elected to fill a vacancy
will serve for the remainder of the full term of the directorship in which the vacancy occurred.
Our directors are not required to devote all of their time to our business and are only required to devote the time
to our business as their duties may require. Consequently, in the exercise of their responsibilities, our directors will
rely heavily on the Adviser and on information provided by the Adviser. Our directors owe duties to us and our
111
stockholders, including to supervise the relationship between us and the Adviser, which duties may not be delegated
to any third-party (including the Adviser or the Sub-Adviser), by contract or otherwise.
Our board of directors has adopted written policies on investments and borrowings, the general terms of which
are set forth in this prospectus. The board of directors may revise these policies or establish further written policies
on investments and borrowings and will monitor our administrative procedures, investment operations and
performance to ensure that the policies are fulfilled and are in the best interests of our stockholders. Our board of
directors, including a majority of our independent directors, will review our investment policies with sufficient
frequency, and, at least annually, to determine that they are in the best interest of our stockholders.
Directors and Executive Officers
As of April 1, 2026, our directors and executive officers are set forth below.
Name | Age | Position | ||
Brian W. Kingston .................................................... | 52 | Chief Executive Officer and Chairman of the Board | ||
Dana E. Petitto .......................................................... | 48 | Chief Operating Officer and Portfolio Manager | ||
Theodore C. Hanno .................................................. | 41 | Chief Financial Officer | ||
K. Alexander Elawadi ............................................... | 43 | Chief Investment Officer | ||
Lori-Ann Beausoleil ................................................. | 62 | Independent Director | ||
Richard W. Eaddy .................................................... | 64 | Independent Director | ||
Thomas F. Farley ...................................................... | 70 | Independent Director | ||
Robert L. Stelzl ........................................................ | 80 | Independent Director | ||
Lis S. Wigmore ........................................................ | 63 | Independent Director |
Brian W. Kingston has served as our Chief Executive Officer since March 2023 and as Chairman of the Board
since November 2021. Mr. Kingston has also served as an Executive Chairman of Brookfield’s Real Estate Group
since 2025 and Chief Executive Officer and a director of Brookfield Property Partners L.P. since 2015. Mr.
Kingston joined Brookfield in 2001 and holds an Honors Bachelor of Commerce from Queens University. Mr.
Kingston is a valuable member of our board of directors because of his vast real estate experience, his history with
Brookfield and his leadership of Brookfield’s Real Estate Group.
Dana E. Petitto has served as our Chief Operating Officer and Portfolio Manager since January 2024 and prior
to that served as our Chief Financial Officer since November 2021. Ms. Petitto has served as a Managing Director of
Finance in Brookfield’s Real Estate Group since 2018. Ms. Petitto joined Brookfield in 2005 and has held numerous
roles across the organization during her tenure. She was initially Assistant Controller for Brookfield Office
Properties Inc. followed by Vice President and Controller and then Senior Vice President, Finance, before moving to
Brookfield Property Partners L.P. in 2013, where she served as Senior Vice President, Finance until 2018. Prior to
joining Brookfield, Ms. Petitto was a manager in the corporate finance department of Bristol-Myers Squibb
Company from 2003 to 2005, following three years in the audit group at KPMG LLP. Ms. Petitto holds a B.S. in
Accounting from the A.B. Freeman School of Business at Tulane University.
Theodore C. Hanno has served as our Chief Financial Officer since January 2024 and as a Managing Director
in Brookfield’s Real Estate Group since 2025. Mr. Hanno previously served as our Chief Accounting Officer from
2021 to 2023. Mr. Hanno joined Brookfield in 2019 and has served as the Controller for Brookfield’s open-end U.S.
core-plus fund, responsible for the accounting, reporting and operations of the fund. Prior to joining Brookfield, Mr.
Hanno served as Director and Controller at Guggenheim Partners from 2014 to 2019, leading the team responsible
for the accounting and reporting for their open-end real estate fund. Mr. Hanno has also held positions at TA
Associates Realty from 2011 to 2014 and at the public accounting firm Caturano and Company from 2007 to 2009.
Mr. Hanno is a Certified Public Accountant and holds an M.S. in Accounting from the University of Massachusetts
Amherst and a B.S. in Accounting from Boston College.
K. Alexander Elawadi has served as our Chief Investment Officer since December 1, 2025. He also serves as
Head of Acquisitions for North America within Brookfield’s Real Estate Group. Mr. Elawadi joined Brookfield in
112
2017 and has since held several positions across the organization, with responsibilities spanning property
transactions, capital formation and portfolio management. Prior to joining Brookfield, Mr. Elawadi held various
investing and asset management positions at a global private equity firm and a leading investment bank. Mr.
Elawadi holds an MBA from Columbia University and a Bachelor of Science degree from Virginia Tech.
Lori-Ann Beausoleil has served as one of our independent directors since November 2021. Ms. Beausoleil is a
retired Partner of PricewaterhouseCoopers LLP (“PwC”), where she held a variety of leadership positions including
National Leader – Compliance, Ethics and Governance and Real Estate Advisory Partner. She also served as the
National Forensic Services Leader, a member of PwC’s Deals Leadership Team, Chief Diversity Officer and the
National Leader for PwC’s Canadian Real Estate practice. Ms. Beausoleil began her career at Coopers & Lybrand in
1986 and became a partner at PwC in 1999 until her retirement in 2021. Ms. Beausoleil is currently a director and
Audit Committee member of Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR); a director,
Audit Committee member and Governance and Corporate Responsibility Committee Chair of Metro Inc. (TSX:
MRU) and a director and audit committee chair of Go Residential Real Estate Investment Trust (TSX: GO.U). Ms.
Beausoleil served as a director and Audit Committee Chair of Slate Office REIT (TSX: SOT) from 2021 to 2024.
She holds a Bachelor of Commerce from the University of Toronto and is a member of the Canadian Chartered
Professional Accountants and is a Fellow Chartered Professional Accountant of Ontario. Ms. Beausoleil is a
valuable member of our board of directors with her over 38 years of experience focused in the real estate industry
and her significant risk, audit, finance, regulatory compliance, investigations, governance and internal audit
experience working with a variety of real estate corporations and REITs.
Richard W. Eaddy has served as one of our independent directors since November 2021. Mr. Eaddy has
served as an Executive Managing Director at Savills plc (LSE: SVS) in its brokerage/advisory practice since July
2008. Mr. Eaddy has over 30 years of experience in real estate, and ten of those years he spent holding full-time
state and city-appointed government offices, including serving as project manager for the Grand Central Terminal
redevelopment from 1992 to 1996, Executive Director and Chief Executive Officer of Harlem CDC from 1996 to
1998, and Deputy Borough President of the Bronx from 1998 to 2001. In addition, he has held numerous positions
in the private and nonprofit sectors, managing commercial projects and initiatives throughout New York City and
has been involved with various real estate projects throughout the city. From 2002 to 2022, Mr. Eaddy served as a
member of the NYC Planning Commission and currently serves on the board of numerous civic and philanthropic
organizations. In addition, Mr. Eaddy is a member of the Real Estate Board of New York (“REBNY”) and was a co-
recipient of REBNY’s 2021 Edward S. Gordon Memorial Award for Most Ingenious Deal of the Year. Mr. Eaddy
holds a M.S. in Real Estate Development from Columbia University and a B.A. in Social Studies and Theater from
Wesleyan University. Mr. Eaddy is a valuable member of our board of directors and has a unique insight into our
investment activities because of his extensive experience in the real estate industry.
Thomas F. Farley has served as one of our independent directors since November 2021. Mr. Farley is a
corporate director with over 40 years of real estate industry experience. He has served as chair of the board of
trustees of Slate Office REIT (TSX: SOT) from January 2021 to November 2022 and as a member of its board of
trustees from June 2017 to November 2022. Mr. Farley has also served as a member of the board of trustees of Slate
Grocery REIT (TSX: SGR) from 2014 to 2022, and as chair of its board of trustees from 2014 to 2020. Prior to these
positions, Mr. Farley was chair of the board of directors of Brookfield Canada Office Properties and President and
Global Chief Operating Officer of Brookfield Office Properties Inc. from 2010 to 2014. Further, he served as chair
of the board of directors of Brookfield Johnson Controls from 2003 to 2014. Mr. Farley received a Certificate in
Real Estate Finance (CRF) designation from the Real Estate Institute of Canada, he completed the executive
management program of the American Management Institute and holds a B.A. from the University of Victoria. Mr.
Farley is a valuable member of our board of directors because of his significant experience in the real estate industry
and his experience as a member of the board of directors of several other public REITs.
Robert L. Stelzl has served as one of our independent directors since November 2021. Mr. Stelzl has served as
a member of the board of directors of Brookfield Residential Properties Inc. since 2011. Mr. Stelzl served on the
Van Eck family of mutual funds’ board of trustees and chair of its Governance Committee from 2007 through 2021
and on the board of directors of Brookfield DTLA Fund Office Trust Investor Inc. from 2014 to 2025. Mr. Stelzl is a
private real estate investor and investment manager. He currently serves as a trustee of several private trusts which
hold substantial real estate and other assets. In 2003 he retired from a private, global real estate equity fund manager,
113
after 14 years as principal and member of the Investment Committee. Mr. Stelzl holds a M.B.A. from Harvard
Business School, a B.A. in Fine Arts and a B.A. in Architecture from Rice University. Mr. Stelzl is a valuable
member of our board of directors because of his experience of over 35 years in commercial real estate and finance.
Elisabeth (Lis) S. Wigmore has served as one of our independent directors since November 2021. Ms.
Wigmore brings over 35 years of real estate experience and governance expertise. Ms. Wigmore is Lead Director,
Chair of Governance, Nomination and Compensation and member of the Investment Committee at RFA Financial
(TSX: RFA:CA). Ms. Wigmore has served on various boards including Artis Real Estate Investment Trust (TSX:
AX.UN) from 2020 to 2026 as Chair of Governance, Nomination and Compensation; Chair of the Special
Committee; and member of the Audit Committee. Amongst others, Ms. Wigmore is a former trustee and Chair of
Governance of Pinchin Ltd, and a former trustee of Pure Industrial REIT. She was Chief Operating Officer of IPC
US Real Estate Investment Trust from 2001 to 2007. Ms. Wigmore holds an M.B.A. from York University
(Schulich) and is a Chartered Director (C.Dir) from DeGroote School of Business. Ms. Wigmore is a valuable
member of our Board of Directors because of her more than 30 years of real estate experience and her experience as
a corporate director.
Although most of the services provided to us by the individuals who are executive officers are in their
respective roles as executive officers of the Adviser, they have certain responsibilities as executive officers of our
company arising from Maryland law, our charter and our bylaws. These responsibilities include executing contracts
and other instruments in our name and on our behalf and such other responsibilities as may be prescribed by our
board of directors from time to time.
Our executive officers act as our agents, execute contracts and other instruments in our name and on our behalf,
and in general perform all duties incident to their offices and such other responsibilities as may be prescribed by our
board of directors from time to time. Our officers will devote such portions of their time to our affairs as is required
for the performance of their responsibilities, but they are not required to devote all of their time to us.
Committees of the Board of Directors
Our entire board of directors is responsible for supervising our business. However, pursuant to our charter, our
board of directors may delegate some of its powers to one or more committees as deemed appropriate by the board
of directors, provided that each committee consists of at least a majority of independent directors. We currently have
an audit committee, discussed below, with members appointed by our board of directors.
Audit Committee. Our board of directors has established an audit committee, which consists of Ms. Beausoleil
and Messrs. Eaddy and Stelzl, each an independent director. Ms. Beausoleil serves as the chairperson of the audit
committee. Ms. Beausoleil qualifies as an “audit committee financial expert” as that term is defined by the SEC.
The audit committee assists the board of directors in overseeing:
•our accounting and financial reporting processes;
•the integrity and audits of our financial statements;
•our compliance with legal and regulatory requirements;
•the qualifications, performance and independence of our independent accountants; and
•cybersecurity risk.
The audit committee is responsible for engaging our independent auditors, reviewing the plans and results of
each audit engagement with our independent auditors, approving professional services provided by our independent
accountants, considering the range of audit and non-audit fees charged by our independent auditors and reviewing
the adequacy of our internal accounting controls.
The audit committee has adopted procedures for the processing of complaints relating to accounting, internal
control and auditing matters. The audit committee oversees the review and handling of any complaints submitted
114
pursuant to the forgoing procedures and of any whistleblower complaints subject to Section 21F of the Exchange
Act.
Corporate Governance
Code of Business Conduct and Ethics. We have adopted Brookfield’s Code of Business Conduct and Ethics
(the “CBCE”). The CBCE applies to all of our directors, officers and employees (if any), and to all of the officers
and employees of the Adviser, including our principal executive officer, principal financial officer, principal
accounting officer, or persons performing similar functions. The CBCE is designed to comply with SEC regulations
relating to codes of conduct and ethics.
Corporate Governance Guidelines. We have also adopted corporate governance guidelines to advance the
functioning of our board of directors and its committees and to set forth our board of directors’ expectations as to
how it and they should perform its and their respective functions.
Insider Trading Policy. We have adopted Brookfield’s Personal Trading Policy which governs the purchase,
sale and other dispositions of our securities by directors, officers and employees of Brookfield.
Compensation of Directors
Our independent directors receive an annual retainer of $125,000, plus an additional retainer of $20,000 to the
chairperson of the Audit Committee. We pay 50% of this compensation in cash in quarterly installments and the
remaining 50% in an annual grant of restricted shares of our Class E common stock based on the most recent prior
month’s NAV per Class E share. The annual grant of Class E shares of restricted stock occurs on the first business
day of the second quarter of each fiscal year. This restricted stock generally vests one year from the date of grant,
provided that shares of restricted stock will become fully vested on the earlier to occur of (i) the termination of the
recipient’s service as a director due to his or her death, disability or our failure to renominate the independent
director to the board of directors, or (ii) a change in control of our company. Shares of restricted stock will be
eligible to participate in our distribution reinvestment plan. Shares of restricted stock will not be eligible for
repurchase pursuant to our share repurchase plan until fully vested, which will generally not occur until one year
from the date of the grant of such shares, subject to earlier vesting upon certain events as described above.
We do not pay our directors additional fees for attending board of directors meetings, but we reimburse each of
our directors for reasonable out-of-pocket expenses incurred in attending board of directors and committee meetings
(including, but not limited to, airfare, hotel and food). Our director who is affiliated with the Adviser and Brookfield
does not receive additional compensation for serving on the board of directors or committees thereof.
Executive Compensation
We are externally managed and currently have no employees. Our executive officers serve as officers of the
Adviser and are employees of the Adviser or one or more of its affiliates. Our Advisory Agreement provides that the
Adviser is responsible for managing our investment activities, as such our executive officers do not receive any cash
compensation from us or any of our subsidiaries for serving as our executive officers but, instead, receive
compensation from the Adviser. In addition, we do not reimburse the Adviser for compensation it pays to our
executive officers. The Advisory Agreement does not require our executive officers to dedicate a specific amount of
time to fulfilling the Adviser’s obligations to us under the Advisory Agreement. Accordingly, the Adviser has
informed us that it cannot identify the portion of the compensation it awards to our executive officers that relates
solely to such executives’ services to us, as the Adviser does not compensate its employees specifically for such
services. Furthermore, we do not have employment agreements with our executive officers, we do not provide
pension or retirement benefits, perquisites or other personal benefits to our executive officers, our executive officers
have not received any non-qualified deferred compensation and we do not have arrangements to make payments to
our executive officers upon their termination or in the event of a change in control of us.
Although we do not pay our executive officers any cash compensation, we pay the Adviser the fees described
under the heading “—The Advisory Agreement.”
115
Brookfield and the Adviser
Brookfield is a leading global alternative asset manager with over $1 trillion of assets under management as of
December 31, 2025 across renewable power and transition, infrastructure, private equity, real estate and credit.
Brookfield invests client capital for the long-term with a focus on real assets and essential service businesses that
form the backbone of the global economy. Brookfield offers a range of alternative investment products to investors
around the world — including public and private pension plans, endowments and foundations, sovereign wealth
funds, financial institutions, insurance companies and private wealth investors. Brookfield draws on its heritage as
an owner and operator to invest for value and generate strong returns for our clients, across economic cycles.
Brookfield’s real estate business is one of the world’s largest investors in real estate, with approximately $273
billion of assets under management across office, rental housing, logistics, retail, hospitality, mixed-use and
alternative real estate (such as life sciences, manufactured housing, student housing and serviced apartments).
Through its deep global sourcing network of 278 real estate investment professionals and approximately 24,000 real
estate operating employees around the world, Brookfield seeks to acquire high-quality assets in supply-constrained
markets and execute operational enhancements to deliver consistent cash flows. Building on Brookfield’s history of
successfully operating properties through multiple market cycles, Brookfield’s long-term goal is to generate strong
risk-adjusted returns while mitigating downside risk.
We are externally managed by our adviser, Brookfield REIT Adviser LLC. The Adviser is an affiliate of
Brookfield. Pursuant to the Advisory Agreement, the Adviser is responsible for implementing our investment
strategy, which includes making investment decisions in constructing our portfolio and providing related portfolio
management services, in accordance with our investment guidelines, policies and objectives and limitations, subject
to oversight by our board of directors. The Adviser is also responsible for oversight over our other service providers.
The Adviser performs its duties and will serve as a fiduciary under the Advisory Agreement.
Oaktree and the Sub-Adviser
The Sub-Adviser is an affiliate of Oaktree, which is a leader among global investment managers specializing in
alternative investments, with approximately $223 billion of assets under management as of December 31, 2025.
Brookfield holds a majority stake in Oaktree. Oaktree’s mission is to deliver superior investment results with risk
under control and to conduct its business with the highest integrity. Oaktree emphasizes an opportunistic, value-
oriented and risk-controlled approach to investing across real assets (including real estate), credit strategies, private
equity and listed equities. Over more than two decades, Oaktree has developed a large and growing client base
through its ability to identify and capitalize on opportunities for attractive investment returns in less efficient
markets.
The Advisory Agreement
Our board of directors will at all times have ultimate oversight and policy-making authority, including
responsibility for governance, financial controls, compliance and disclosure with respect to our company and the
Operating Partnership. Pursuant to the Advisory Agreement among us, the Operating Partnership, and the Adviser,
our board of directors has delegated to the Adviser the authority to implement our investment strategy, which
includes making investment decisions in constructing our portfolio and providing related portfolio management
services, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by
our board of directors. We or the Adviser may retain other service providers in connection with our operations,
including, without limitation, administration, legal and accounting support. The Adviser will leverage Brookfield’s
global resources to achieve our investment goals and objectives.
Services
Pursuant to the terms of the Advisory Agreement, among us, the Operating Partnership and the Adviser, the
Adviser is responsible for, among other things:
•serving as an advisor to us with respect to the establishment and periodic review of our investment
guidelines and our investment and financing activities and operations;
116
•purchasing, selling, exchanging, converting, trading, financing, refinancing, mortgaging, encumbering,
conveying, assigning, pledging, constructing, lending or otherwise effecting transactions for our portfolio
with respect to investment opportunities and our investments, in accordance with our investment
guidelines, policies and objectives and limitations, subject to oversight by our board of directors;
•investigating, analyzing, evaluating, structuring and negotiating, on our behalf, potential acquisitions,
purchases, sales, exchanges or other dispositions of investments with sellers, purchasers and other
counterparties and, if applicable, their respective agents, advisors and representatives;
•providing us with portfolio management and other related services, including managing, operating,
improving, developing, redeveloping, renovating and monitoring our investments;
•negotiating, arranging and executing any borrowings or financings in accordance with our investment
guidelines;
•engaging and supervising, on our behalf and at our expense, various service providers;
•coordinating and managing operations of any joint venture or co-investment interests held by us and
conducting matters with our joint venture or co-investment partners;
•advising us as to our capital structure and capital raising activities; and
•overseeing, or arranging for, the performance of the administrative services necessary for our operation.
The above summary is provided to illustrate the material functions which the Adviser performs for us and it is
not intended to include all of the services which may be provided to us by the Adviser or third parties.
Term and Termination Rights
The Advisory Agreement has a one-year term, subject to renewals by our board of directors for an unlimited
number of successive one-year periods. Our independent directors will evaluate the performance of the Adviser
before renewing the Advisory Agreement. The Advisory Agreement may be terminated:
•immediately by us (1) for “cause,” (2) upon the bankruptcy of the Adviser or (3) upon a material breach of
the Advisory Agreement by the Adviser;
•upon 60 days’ written notice by us without cause or penalty upon the vote of a majority of our independent
directors; or
•upon 60 days’ written notice by the Adviser.
“Cause” is defined in the Advisory Agreement to mean fraud, criminal conduct, willful misconduct or willful or
negligent breach of fiduciary duty by the Adviser under the Advisory Agreement.
In the event the Advisory Agreement is terminated, the Adviser will be entitled to receive its prorated
management fee through the date of termination and a distribution of any accrued performance fee as of the date of
such termination. In addition, upon the termination or expiration of the Advisory Agreement, the Adviser will
cooperate with us and take all reasonable steps requested to assist our board of directors in making an orderly
transition of the advisory function.
Management Fee, Performance Fee and Expense Reimbursements
Management Fee. As compensation for its services provided pursuant to the Advisory Agreement, we pay the
Adviser a management fee equal to 1.25% of our NAV of the Participating Shares per annum payable monthly, and
the Operating Partnership pays the Adviser a management fee equal to 1.25% of the Operating Partnership’s NAV
of the Participating Units per annum payable monthly. In addition, we and the Operating Partnership pay the
Adviser a management fee equal to 1.25% per annum payable monthly of the aggregate DST Property consideration
per annum payable monthly for all DST Properties subject to the FMV Option held by the Operating Partnership.
117
For avoidance of doubt, the Adviser does not receive a duplicative management fee with respect to any DST
Property. In calculating the management fee, we use our NAV and the Operating Partnership’s NAV before giving
effect to any accruals for the management fee, the performance fee, the stockholder servicing fee, the investor
servicing fee or distributions payable on our shares or the Operating Partnership’s units. No management fee is paid
with respect to Class E shares or Class E units.
The management fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares, or Class E or
Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its management fee in
Class E or Class I shares, we may repurchase such shares from the Adviser at a later date without such shares being
subject to the repurchase limits in our share repurchase plan or any early repurchase deduction.
Performance Fee. Pursuant to the Advisory Agreement, the Adviser receives a performance fee with respect to
the Participating Shares paid annually in an amount equal to 12.5% of the Total Return, subject to a 5% Hurdle
Amount and a High-Water Mark, with a Catch-Up (each term as defined below). We do not pay the Adviser a
performance fee with respect to the Class E shares. In addition, to the extent that the Operating Partnership issues
Participating Units, the Operating Partnership will pay the Adviser a performance fee with respect to such
Participating Units paid annually in an amount equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount
and a High-Water Mark, with a Catch-Up.
Specifically, we pay the Adviser a performance fee in an amount equal to:
•First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period
and (ii) the Loss Carryforward Amount (any such excess, “Excess Profits”), 100% of such Excess Profits
until the total amount paid to the Adviser equals 12.5% of the sum of (x) the Hurdle Amount for that period
and (y) any amount paid to the Adviser pursuant to this clause (this is commonly referred to as a “Catch-
Up”); and
•Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits.
“Total Return” for any period since the end of the prior calendar year shall equal the sum of:
(i)all distributions accrued or paid (without duplication) on either (x) with respect to the performance fee
on Participating Shares, the Participating Shares outstanding at the end of such period since the
beginning of the then-current calendar year or (y) with respect to the performance fee on Participating
Units, the Participating Units outstanding at the end of such period since the beginning of the then-
current calendar year, plus
(ii)the change in aggregate NAV of such Participating Shares or Participating Units, as applicable, since
the beginning of the year, before giving effect to (x) changes resulting solely from the proceeds of
issuances of Participating Shares or Participating Units, as applicable, (y) any performance fee accrual
and (z) applicable stockholder servicing fee or investor servicing fee expenses (including any payments
made to us for payment of such expenses).
For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in
the NAV of Participating Shares or Participating Units, as applicable, issued during the then-current calendar year
but (ii) exclude the proceeds from the initial issuance of such Participating Shares or Participating Units, as
applicable.
“Hurdle Amount” for any period during a calendar year means that amount that results in a 5% annualized
internal rate of return on the NAV of either (x) with respect to the performance fee on Participating Shares, the
Participating Shares outstanding at the beginning of the then-current calendar year and all Participating Shares
issued since the beginning of the then-current calendar year, or (y) with respect to the performance fee on
Participating Units, the Participating Units outstanding at the beginning of the then-current calendar year and all
Participating Units issued since the beginning of the then-current calendar year, in each case taking into account the
timing and amount of all distributions accrued or paid (without duplication) on all such Participating Shares or
Participating Units, as applicable, and all issuances of Participating Shares or Participating Units, as applicable, over
118
the period and calculated in accordance with recognized industry practices. The ending NAV of the Participating
Shares or Participating Units, as applicable, used in calculating the internal rate of return is calculated before giving
effect to any accrual of performance fees and applicable stockholder servicing fee or investor servicing fee expenses,
provided that the calculation of the Hurdle Amount for any period will exclude any Participating Shares or
Participating Units, as applicable, repurchased during such period, which such Participating Shares or Participating
Units, as applicable, are subject to the performance fee upon repurchase as described below.
Except as described below in “Loss Carryforward Amount”, any amount by which Total Return falls below the
Hurdle Amount is not carried forward to subsequent periods.
“Loss Carryforward Amount” shall initially equal zero and shall cumulatively increase by the absolute value of
any negative annual Total Return and decrease by any positive annual Total Return, provided that the Loss
Carryforward Amount shall at no time be less than zero and provided further that the calculation of the Loss
Carryforward Amount will exclude the Total Return related to any Participating Shares or Participating Units, as
applicable, repurchased during such year, which Participating Shares or Participating Units, as applicable, are
subject to the performance fee upon repurchase as described below. The effect of the Loss Carryforward Amount is
that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of
the calculation of the Adviser’s performance fee. This is referred to as a “High-Water Mark.”
The Adviser will also receive a performance fee with respect to all Participating Shares and Participating Units
that are repurchased at the end of any month (in connection with repurchases of our shares in our share repurchase
plan) in an amount calculated as described above with the relevant period being the portion of the year for which
such Participating Share or Participating Unit, as applicable, was outstanding, and proceeds for any such
Participating Share or Participating Unit repurchase will be reduced by the amount of any such performance fee.
The performance fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares of our common
stock, or Class E or Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its
performance fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We
expect to repurchase any such Class E shares or Class I shares as of a Repurchase Date at the transaction price in
effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I common
stock obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early
Repurchase Deduction. If the Adviser elects to receive any portion of its performance fee in Class E or Class I-1
units, the Adviser may request the Operating Partnership to repurchase such units from the Adviser at a later date.
Any such repurchase requests are not subject to the Early Repurchase Deduction or minimum holding period. The
Operating Partnership will repurchase any such Operating Partnership units for cash unless our board of directors
determines that any such repurchase for cash would be prohibited by applicable law or the partnership agreement, in
which case such Operating Partnership units will be repurchased for Class E or Class I shares of our common stock
with an equivalent aggregate NAV.
Our NAV and the NAV of the Operating Partnership calculated on the last trading day of a calendar year shall
be the amounts against which changes in NAV are measured during the subsequent calendar year. The measurement
of the foregoing net assets change is also subject to adjustment by our board of directors to account for any unit
dividend, unit split, recapitalization or any other similar change in our or the Operating Partnership’s capital
structure or any distributions that the board of directors deems to be a return of capital (if such changes are not
already reflected in our or the Operating Partnership’s NAV).
The Adviser is not obligated to return any portion of the performance fees it receives based on our subsequent
performance.
Changes in the Operating Partnership’s NAV per unit of each class of Participating Units will generally
correspond to changes in our NAV per share of the corresponding class of our common stock, except that for
purposes of calculating the Adviser’s performance fee, the effect of any payment of the performance fee or any
stockholder servicing fee expenses will be excluded. The performance fee is calculated from our or the Operating
Partnership’s Total Return, as applicable, over a calendar year. As a result, the Adviser may be entitled to receive a
119
performance fee for a given year even if some of our stockholders who purchased shares during such year
experienced a decline in NAV per share.
Similarly, stockholders whose shares are repurchased during a given year may have their shares repurchased at
a lower NAV per share as a result of an accrual for the estimated performance fee at such time, even if no
performance fee for such year is ultimately payable to the Adviser at the end of such calendar year.
In the event the Advisory Agreement is terminated or expires by non-renewal, the Adviser will be paid any
accrued performance fee with respect to all Participating Shares and Participating Units as of the date of such
termination or non-renewal.
Expense Reimbursement. We will reimburse the Adviser for costs and expenses it incurs in connection with the
services it provides to us, including, but not limited to, (1) legal, accounting and printing fees and other expenses
attributable to our organization, preparation of the registration statement, registration and qualification of our
common stock for sale with the SEC and in the various states and filing fees incurred by the Adviser, (2) the actual
cost of goods and services used by us and obtained from third parties, including fees paid to administrators,
consultants, attorneys, technology providers and other service providers, and brokerage fees paid in connection with
the purchase and sale of investments and securities, (3) expenses of managing and operating our properties, whether
payable to an affiliate or a non-affiliated person, (4) out-of-pocket expenses in connection with the acquisition,
origination, financing and development of properties and real estate-related investments, whether or not such
investments are acquired, and (5) administrative service expenses, including, but not limited to, personnel and
related employment costs incurred by the Adviser or its affiliates in performing administrative services on our behalf
(including legal, accounting, investor relations, tax, capital markets, financial operations services and other
administrative services) and the Adviser’s reasonable estimates of the allocable portion of salaries, bonuses and
wages, benefits and overhead of all individuals performing such services, provided that no reimbursement shall be
made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to
us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our
board of directors. Such costs and expenses will include expenses relating to compliance-related matters and
regulatory filings relating to our activities (including, without limitation, expenses relating to the preparation and
filing of Form PF, Form ADV), reports to be filed with the CFTC, reports, disclosures or other regulatory filings of
the Adviser and its affiliates relating to our activities (including our pro rata share of the costs of the Adviser and its
affiliates of regulatory expenses that relate to us and Other Brookfield Accounts).
The Adviser advanced all of our 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) we reimburse the Adviser for all such advanced expenses paid through July 5, 2022
ratably over the 60 months following July 6, 2022; and (2) we reimburse 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. We reimburse the
Adviser for any organization and offering expenses that it incurs on our behalf and on behalf of feeder vehicles
primarily created to hold our shares as and when incurred after July 6, 2023. Our organization and offering expenses
include the organization and offering expenses and management and operating expenses of feeder vehicles primarily
created to hold our shares. As of December 31, 2025, the reimbursement payable to the Adviser for advanced
organization and offering costs was $4.3 million.
Total management and performance fees and total expense and cost reimbursements paid to the Adviser and its
affiliates for the year ended December 31, 2025 was equal to 2.97% of the NAV as of December 31, 2025.
Reimbursement by the Adviser. Our Total Operating Expenses are limited during any four fiscal quarters to the
greater of (a) 2.0% of our Average Invested Assets or (b) 25.0% of our Net Income. This limit may be exceeded
only if our independent directors have made a finding that, based on such unusual and non-recurring factors as they
deem sufficient, a higher level of expenses is justified, and such finding is recorded in the minutes of a meeting of
the independent directors. For purposes of these limits:
•“Total Operating Expenses” are all costs and expenses paid or incurred by us, as determined under GAAP,
including the management and performance fees, but excluding: (i) the expenses of raising capital such as
120
organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration
and other fees, printing and other such expenses and taxes incurred in connection with the issuance,
distribution, transfer, registration and listing of our capital stock, (ii) property-level expenses incurred at
each property, (iii) interest payments, (iv) taxes, (v) non-cash expenditures such as depreciation,
amortization and bad debt reserves, (vi) incentive fees paid in compliance with our charter, (vii) acquisition
fees and acquisition expenses related to the selection and acquisition of assets, whether or not a property is
actually acquired, (viii) real estate commissions on the sale of property and (ix) other fees and expenses
connected with the acquisition, disposition, management and ownership of real estate interests, mortgage
loans or other property (including the costs of foreclosure, insurance premiums, legal services,
maintenance, repair and improvement of property).
•“Average Invested Assets” means, for any period, the average of the aggregate book value of our assets,
invested, directly or indirectly, in equity interests in and loans secured by real estate, including all
properties, mortgages and real estate-related securities and consolidated and unconsolidated joint ventures
or other partnerships, before deducting depreciation, amortization, impairments, bad debt reserves or other
non-cash reserves, computed by taking the average of such values at the end of each month during such
period.
•“Net Income” means, for any period, total revenues applicable to such period, less the total expenses
applicable to such period other than additions to, or allowances for, non-cash charges such as depreciation,
amortization, impairments and reserves for bad debt or other similar non-cash reserves.
Notwithstanding the foregoing, to the extent that our Total Operating Expenses exceed these limits and the
independent directors determine that the excess expenses were justified based on unusual and nonrecurring factors
that they deem sufficient, the Adviser would not be required to reimburse us. Within 60 days after the end of any
fiscal quarter for which our Total Operating Expenses for the four consecutive fiscal quarters then ended exceed
these limits and our independent directors approve such excess amount, we will send our stockholders a written
disclosure of such fact, or will include such information in our next quarterly report on Form 10-Q or in a current
report on Form 8-K filed with the SEC, together with an explanation of the factors our independent directors
considered in arriving at the conclusion that such excess expenses were justified. In addition, our independent
directors will review at least annually the total fees and expenses to determine if they are reasonable in light of our
performance, our net assets and our net income and the fees and expenses of other comparable unaffiliated REITs.
Each such determination will be recorded in the minutes of a meeting of the independent directors.
Independent Directors’ Review of Compensation. Our independent directors evaluate at least annually whether
the compensation that we contract to pay to the Adviser is reasonable in relation to the nature and quality of services
performed and that such compensation is within the limits prescribed by our charter. Our independent directors
supervise the performance of the Adviser and the compensation we pay to it to determine that the provisions of the
Advisory Agreement are being carried out. This evaluation is based on the factors set forth below, as well as any
other factors deemed relevant by the independent directors:
•the amount of fees paid to the Adviser in relation to the size, composition and performance of our assets;
•the success of the Adviser in generating investments that meet our investment objectives;
•rates charged to other REITs and to investors other than REITs by advisors performing the same or similar
services;
•additional revenues realized by the Adviser and its affiliates through their advisory relationship with us,
including loan administration, underwriting or broker commissions, servicing, engineering, inspection and
other fees, whether paid by us or by others with whom we do business;
•the quality and extent of the services and advice furnished by the Adviser;
•the performance of the assets, including income, conservation or appreciation of capital, frequency of
problem investments and competence in dealing with distress situations; and
121
•the quality of our assets in relationship to the investments generated by the Adviser for its own account.
We have agreed to indemnify and hold harmless the Adviser and its affiliates performing services for us from
specific claims and liabilities arising out of the performance of their obligations under the Advisory Agreement,
subject to certain limitations. See “—Limited Liability and Indemnification of Directors, Officers, the Adviser and
Other Agents” below.
The Sub-Advisory Agreement
Pursuant to the Sub-Advisory Agreement, the Sub-Adviser (i) provides services related to the acquisition,
management and disposition of the Investment Sleeve in accordance with, and subject to, our investment objectives,
strategy, guidelines, policies and limitations; and (ii) provides certain services with respect to Adviser CMBS
subject to specified guidelines and limitations.
The Sub-Advisory Agreement may be terminated by the Adviser or by the Sub-Adviser at any time and will
terminate immediately in the event of termination of the Advisory Agreement. In addition, the Sub-Advisory
Agreement may be terminated (1) by us, at any time, without payment of any penalty, by our board of directors; (2)
by the Adviser, (a) upon no less than 60 days’ prior written notice to the Sub-Adviser, (b) at any time, if the Sub-
Adviser materially breaches any of the representations and warranties set forth in the Sub-Advisory Agreement,
including if the Sub-Adviser is not in material compliance with its obligations under the Investment Advisers Act of
1940, as amended, or (c) at any time, if the Sub-Adviser becomes unable to discharge its duties and obligations
under the Sub-Advisory Agreement, including circumstances such as financial insolvency of the Sub-Adviser or
other circumstances that could materially adversely affect us; or (3) by the Sub-Adviser, (x) upon no less than 120
days’ prior written notice to the Adviser, (y) at any time, if the Adviser materially breaches any of the
representations and warranties set forth in the Sub-Advisory Agreement, or (z) at any time, if the Adviser becomes
unable to discharge its duties and obligations under the Sub-Advisory Agreement, including circumstances such as
financial insolvency of the Adviser.
The fees paid to the Sub-Adviser under the Sub-Advisory Agreement are not paid by us, but instead are paid by
the Adviser out of the management and performance fees that we pay to the Adviser. The expense reimbursements
that we pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf that the Adviser is required
to reimburse to the Sub-Adviser under the Sub-Advisory Agreement. In the event that the Sub-Advisory Agreement
is terminated, the Sub-Adviser will be paid all accrued and unpaid fees and expense reimbursements thereunder
through the date of termination. The Sub-Adviser performs its duties and serves as a fiduciary under the Sub-
Advisory Agreement.
Limited Liability and Indemnification of Directors, Officers, the Adviser and Other Agents
Our charter generally limits the personal liability of our stockholders, directors and officers for monetary
damages and requires us to indemnify and advance expenses to our directors, officers and other agents subject to the
limitations of the NASAA REIT Guidelines and Maryland law. Maryland law permits a corporation to include in its
charter a provision limiting the liability of directors and officers to the corporation and its stockholders for money
damages, except for liability resulting from actual receipt of an improper benefit or profit in money, property or
services or active and deliberate dishonesty established by a final judgment and which is material to the cause of
action. The MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to
indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding
to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The
MGCL allows directors and officers to be indemnified against judgments, penalties, fines, settlements and
reasonable expenses actually incurred in connection with a proceeding unless the following can be established:
•an act or omission of the director or officer was material to the cause of action adjudicated in the
proceeding and was committed in bad faith or was the result of active and deliberate dishonesty;
•the director or officer actually received an improper personal benefit in money, property or services; or
122
•with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act
or omission was unlawful.
A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to
indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged
liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment
in a suit by the corporation or in its right, or for a judgment of liability on the basis that personal benefit was
improperly received, is limited to expenses. The MGCL permits a corporation to advance reasonable expenses to a
director or officer upon receipt of a written affirmation by the director or officer of his or her good faith belief that
he or she has met the standard of conduct necessary for indemnification and a written undertaking by him or her or
on his or her behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct
was not met.
In addition to the above limitations of the MGCL, our charter provides that our directors, the Adviser and its or
our affiliates may be indemnified for losses or liability suffered by them or held harmless for losses or liability
suffered by us only if all of the following conditions are met:
•the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was
in our best interest;
•the indemnitee was acting on our behalf or performing services for us;
•in the case of affiliated directors, the Adviser or its or our affiliates, the liability or loss was not the result of
negligence or misconduct by the party seeking indemnification; and
•in the case of our independent directors, the liability or loss was not the result of gross negligence or willful
misconduct by the party seeking indemnification.
In addition, any indemnification or any agreement to hold harmless is recoverable only out of our net assets and
not from our stockholders.
Our charter also provides that we may not provide indemnification to a director, the Adviser or any of our or the
Adviser’s affiliates for any loss, liability or expense arising from or out of an alleged violation of federal or state
securities laws by such party unless one or more of the following conditions are met:
•there has been a successful adjudication on the merits of each count involving alleged securities law
violations as to the party seeking indemnification;
•such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to
such party; or
•a court of competent jurisdiction approves a settlement of the claims against such party and finds that
indemnification of the settlement and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the SEC and of the published position of any
state securities regulatory authority in which our securities were offered or sold as to indemnification for
violations of securities laws.
Finally, our charter provides that we may pay or reimburse reasonable legal expenses and other costs incurred
by our directors, the Adviser and its or our affiliates in advance of final disposition of a proceeding only if all of the
following are satisfied:
•the proceeding relates to acts or omissions with respect to the performance of duties or services on our
behalf;
•the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the
standard of conduct necessary for indemnification;
123
•the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in
his or her capacity as such, a court of competent jurisdiction approves such advancement; and
•the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with
the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with
the requisite standard of conduct and is not entitled to indemnification.
We have entered into indemnification agreements with our directors. Pursuant to the terms of these
indemnification agreements, we must indemnify and advance expenses and costs incurred by these directors in
connection with any claims, suits or proceedings brought against such directors as a result of their service. However,
our indemnification obligation is subject to the limitations set forth in the indemnification agreements and in our
charter. We also maintain a directors and officers’ insurance policy.
The general effect to investors of any arrangement under which any of our controlling persons, directors or
officers are insured or indemnified against liability is a potential reduction in distributions resulting from our
payment of premiums, deductibles and other costs associated with such insurance or, to the extent any such loss is
not covered by insurance, our payment of indemnified losses. In addition, indemnification could reduce the legal
remedies available to us and our stockholders against the indemnified individuals; however, this provision does not
reduce the exposure of our directors and officers to liability under federal or state securities laws, nor does it limit
our stockholder’s ability to obtain injunctive relief or other equitable remedies for a violation of a director’s or an
officer’s duties to us or our stockholders, although the equitable remedies may not be an effective remedy in some
circumstances.
The SEC and state securities regulators take the position that indemnification against liabilities arising under the
Securities Act and state securities laws, respectively, is against public policy and unenforceable.
The Operating Partnership must also indemnify us and our directors and officers and other persons we may
designate against damages and liabilities in our capacity as the sole member of its general partner.
Determinations by Our Board of Directors
Our charter contains a provision that codifies the authority of our board of directors to manage our business and
affairs. This provision enumerates certain matters and states that the determination as to any such enumerated
matters made by or pursuant to the direction of our board of directors (consistent with our charter) is final and
conclusive and binding upon us and our stockholders. This provision does not alter the duties our board of directors
owes to us or our stockholders pursuant to our charter and under Maryland law. Further, it would not restrict the
ability of a stockholder to challenge an action by our board of directors which was taken in a manner that is
inconsistent with our charter or the board of directors’ duties under Maryland law or which did not comply with the
requirements of the provision.
Legal Proceedings
Neither we nor the Adviser is currently involved in any material litigation. As a registered investment advisor,
the Adviser may be examined periodically by the SEC.
124
COMPENSATION
We pay the Adviser, the Dealer Manager and their respective affiliates the fees and expense reimbursements
described below in connection with performing services for us. In addition, affiliates of the Advisor receive fees and
expense reimbursements in connection with our DST Program as described in “Investment Objectives and Strategies
—DST Program.” We do not intend to pay the Adviser or its affiliates any separate fees for property acquisitions,
dispositions or financings (except interest and other payments to the lender in cases where the lender is an affiliate
of the Adviser), although our charter permits us to do so, subject to certain limitations. We will, however, reimburse
the Adviser for out-of-pocket expenses related to the foregoing activities to the extent such expenses are paid by the
Adviser.
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Organization and Offering Activities | ||||
Upfront Selling Commissions and Dealer Manager Fees (1)(2) — The Dealer Manager ............ | The Dealer Manager is entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5%, of the transaction price of each Class T share sold in the primary offering; provided, however, that such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager is entitled to receive upfront selling commissions of up to 3.5% of the transaction price of each Class S share sold in the primary offering and up to 1.5% of the transaction price of each Class D share sold in the primary offering. The Dealer Manager anticipates that all of the upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers. | The actual amount will depend on the number of Class T, Class S and Class D shares sold. Aggregate upfront selling commissions will equal approximately $134.9 million, and dealer manager fees will equal approximately $1.4 million, in each case, assuming we sell the maximum amount in our primary offering, assuming payment of the full upfront selling commissions and dealer manager fees (with a split for Class T shares of 3.0% and 0.5%, respectively), and assuming that 5%, 60% and 5% of our offering proceeds are from the sale of each of Class T, Class S and Class D shares, respectively, and that the transaction prices of our Class T, Class S and Class D shares remain constant. | ||
No upfront or other selling commissions or dealer manager fees are paid with respect to Class I shares, or shares of any class sold pursuant to our distribution reinvestment plan. |
125
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Stockholder Servicing Fees(2)(3) — The Dealer Manager ............ | Subject to FINRA limitations on underwriting compensation, we pay the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker- dealers or broker-dealers servicing investors’ accounts, referred to as servicing broker-dealers: •with respect to our outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of our outstanding Class T shares; provided, however, that with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares; | Actual amounts depend upon the per share NAVs of our Class T, Class S and Class D shares, the number of Class T, Class S and Class D shares purchased and when such shares are purchased. For Class T shares, the stockholder servicing fees will equal approximately $2.5 million per annum if we sell the maximum amount. For Class S shares, the stockholder servicing fees will equal approximately $29.6 million per annum if we sell the maximum amount. For Class D shares, the stockholder servicing fees will equal approximately $.7 million per annum if we sell the maximum amount. In each case, assuming that, in our primary offering, 5% of our offering proceeds are from the sale of Class T shares, 60% of our offering proceeds are from the sale of Class S shares and 5% of our offering proceeds are from the sale of Class D shares, that the NAV per share of our Class T shares, Class S shares and Class D shares remains constant and none of our stockholders participate in our distribution reinvestment plan. | ||
•with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares; and | ||||
•with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of our outstanding Class D shares. | ||||
126
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
We do not pay a stockholder servicing fee with respect to our outstanding Class I shares. The stockholder servicing fees are paid monthly in arrears. The Dealer Manager reallows (pays) the stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers, and waives stockholder servicing fees to the extent a broker- dealer is not eligible to receive it for failure to provide such services. Stockholder servicing fees are paid on Class T, Class S and Class D shares issued under our distribution reinvestment plan. Because the stockholder servicing fees are calculated based on the NAV for our Class T, Class S and Class D shares, they will reduce the NAV or, alternatively, the distributions payable. | ||||
We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the applicable dealer agreement between the Dealer Manager and a participating broker- dealer at the time such shares were issued) of the sum of the gross proceeds from the sale of such shares. | ||||
127
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
At the end of such month, any Class T share, Class S share or Class D share held in such stockholder’s account will convert into a number of Class I shares with an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with respect to a Class T share or Class S share over approximately 6.5 years from the date of purchase and with respect to a Class D share held in a stockholder’s account over approximately 29.5 years from the date of purchase, assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions and dealer manager fees (as applicable), opting out of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for these time periods, this fee with respect to a Class T share or Class S share would total approximately $0.56 and with respect to a Class D share would total approximately $0.74. | ||||
128
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
In addition, we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class D shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof, or (iii) the end of the month following the completion of this offering in which we, with the assistance of the Dealer Manager, determine that, in the aggregate, underwriting compensation paid or incurred from all sources in connection with this offering, determined pursuant to the rules and guidance of FINRA, including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. If not already converted as described in the preceding paragraph, on the earliest of the foregoing, each Class T share, Class S share or Class D share held in a stockholder’s account will convert into a number of Class I shares with an equivalent aggregate NAV as such share. | ||||
For a description of the services required from the participating broker- dealer or servicing broker-dealer, see the “Plan of Distribution— Underwriting Compensation— Stockholder Servicing Fees—Class T, Class S and Class D Shares.” | ||||
129
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Organization and Offering Expense Reimbursement(2)(4)— The Adviser .............................. | The Adviser advanced all of our 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) we reimburse the Adviser for all such advanced expenses paid through July 5, 2022 ratably over the 60 months following July 6, 2022; and (2) we reimburse 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. Following July 6, 2023, we reimburse the Adviser for any organization and offering expenses that it incurs on our behalf and on behalf of feeder vehicles primarily created to hold our shares as and when incurred. Our organization and offering expenses include the organization and offering expenses and management and operating expenses of feeder vehicles primarily created to hold our shares. As of December 31, 2025, the reimbursement payable to the Adviser for advanced organization and offering costs was $4.3 million. | We estimate our organization and offering expenses to be approximately $9.2 million if we sell the maximum offering amount. | ||
After the termination of the primary offering and again after termination of the offering under our distribution reinvestment plan, the Adviser has agreed to reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of our gross proceeds from the applicable offering. | ||||
130
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Investment Activities | ||||
Acquisition Expense Reimbursement(5)—The Adviser ...................................... | We do not intend to pay the Adviser any acquisition or other similar fees in connection with making investments, though our charter authorizes us to do so. We will, however, reimburse the Adviser for out-of-pocket expenses in connection with the acquisition, origination and financing of properties and real estate-related investments, whether or not such investments are acquired, and make payments to third parties or certain of the Adviser’s affiliates in connection with making investments, as described in “—Fees from Other Services” below. | Actual amounts are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. | ||
131
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Operational Activities | ||||
Management Fee, Performance Fee and Expense Reimbursements(6)—The Adviser ...................................... | We pay the Adviser a management fee equal to 1.25% of our NAV of the Participating Shares per annum payable monthly, and the Operating Partnership pays the Adviser a management fee equal to 1.25% of the Operating Partnership’s NAV of the Participating Units per annum payable monthly. In addition, we and the Operating Partnership pay the Adviser a management fee equal to 1.25% of the aggregate DST Property consideration per annum payable monthly for all DST Properties subject to a FMV Option held by the Operating Partnership. For avoidance of doubt, the Adviser does not receive a duplicative management fee with respect to any DST Property. No management fee is paid with respect to Class E shares or Class E units and as a result, it is a class-specific expense. The management fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares, or Class E or Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I shares obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. | Actual amounts of the management fee depend upon our aggregate NAV. The management fee will equal approximately $73.3 million per annum if we sell the maximum amount in our primary offering, assuming that the NAV per share of each class of our common stock remains constant and before giving effect to any shares issued under our distribution reinvestment plan. Actual amounts of the performance fee depend upon our total distributions plus the change in NAV per share or per unit, as applicable. Actual amounts of out-of-pocket expenses paid by the Adviser that we reimburse are dependent upon actual expenses incurred and, therefore, cannot be determined at this time. | ||
132
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
In addition, we pay the Adviser a performance fee equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High-Water Mark, with a Catch-Up with respect to the Participating Shares payable annually. We do not pay the Adviser a performance fee with respect to the Class E shares and as a result, it is a class-specific expense. | ||||
The performance fee may be paid, at the Adviser’s election, in cash, Class E or Class I shares, or Class E or Class I-1 units of the Operating Partnership. If the Adviser elects to receive any portion of its management fee in Class E or Class I shares, we may repurchase such shares from the Adviser at a later date. We expect to repurchase any such Class E or Class I shares as of a Repurchase Date at the transaction price in effect for repurchases made on such Repurchase Date under our share repurchase plan. Class E and Class I shares obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction. If the Adviser elects to receive any portion of its performance fee in Class E or Class I-1 units, the Adviser may request the Operating Partnership to repurchase such units from the Adviser at a later date. Any such repurchase requests are not subject to the Early Repurchase Deduction or minimum holding period. The Operating Partnership will repurchase any such Operating Partnership units for cash unless our board of directors determines that any such repurchase for cash would be prohibited by applicable law or the partnership agreement, in which case such Operating Partnership units will be repurchased for Class E or Class I shares of our common stock with an equivalent aggregate NAV. | ||||
133
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
To the extent that the Operating Partnership issues Participating Units, the Operating Partnership will pay the Adviser both (i) a management fee of 1.25% of the Operating Partnership’s NAV of the Participating Units per annum payable monthly, and (ii) a performance fee with respect to such Participating Units paid annually in an amount equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High-Water Mark, with a Catch-Up (each term as defined herein). | ||||
For a detailed explanation of how the performance fee is calculated, see “Management—The Advisory Agreement—Management Fee, Performance Fee and Expense Reimbursements.” For a hypothetical example of the performance fee calculation, see “Compensation— Performance Fee Example.” | ||||
134
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
In addition to the organization and offering expense and acquisition expense reimbursements described above, we will reimburse the Adviser for costs and expenses it incurs in connection with the services it provides to us, including, but not limited to, (1) the actual cost of goods and services used by us and obtained from third parties, including fees paid to administrators, consultants, attorneys, technology providers and other service providers, and brokerage fees paid in connection with the purchase and sale of investments and securities, (2) expenses of managing and operating our properties, whether payable to an affiliate or a non-affiliated person and (3) administrative service expenses, including, but not limited to, personnel and related employment costs incurred by the Adviser or its affiliates in performing administrative services on our behalf (including legal, accounting, investor relations, tax, capital markets, financial operations services and other administrative services), provided that no reimbursement shall be made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our board of directors. The expense reimbursements that we will pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf. | ||||
See “Management—The Advisory Agreement—Management Fee, Performance Fee and Expense Reimbursements.” |
135
Type of Compensation and Recipient | Determination of Amount | Estimated Amount | ||
Fees from Other Services— Affiliates of the Adviser ............. | We may retain third parties, including certain of the Adviser’s affiliates, for necessary services relating to our investments or our operations, including, but not limited to, lending and loan special servicing; investment banking, advisory, consulting, brokerage and managing foreclosures and workouts; the placement and provision of insurance policies and coverage, including risk retention or insurance captives; entitlement, development, construction and design (including oversight thereof); portfolio company, real estate operations and property management (and oversight thereof) and leasing; legal, financial, compliance, tax, back office, corporate secretarial, accounting, human resources, bank account and cash management; supply or procurement of power and energy; transaction support; accounting and reporting (including coordinating onboarding, due diligence, reporting and other administrative services) and other financial operations services; hedging, derivatives, financing and other treasury services and capital markets services; data generation, analysis, collection and management services; physical and digital security, life and physical safety, and other technical specialties; information technology services and innovation; appraisal and valuation services; market research; cash flow modeling and forecasting; client onboarding; and other services or products. Any fees paid to the Adviser’s affiliates for any such services will not reduce the management or performance fees. Any such arrangements will subject to approval by a majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transaction. | Actual amounts depend on whether affiliates of the Adviser are actually engaged to perform such services. |
__________________
(1)Upfront selling commissions and dealer manager fees for sales of Class T and Class S shares may be reduced or waived in connection with
volume or other discounts, other fee arrangements or for sales to certain categories of purchasers. See “Plan of Distribution—Underwriting
Compensation—Selling Commissions and Dealer Manager Fees.” If all shares sold in this offering are Class S shares, our total upfront
selling commissions would be approximately $202,898,551 if we raise the maximum offering, assuming that the maximum upfront selling
136
commission is paid for each share sold in our primary offering, the NAV per Class S share is $10.00 and we do not reallocate any shares
between our primary offering and our distribution reinvestment plan.
(2)We will cease paying stockholder servicing fees at the date following the completion of this offering at which total underwriting
compensation from any source in connection with this offering equals 10% of the gross proceeds from our primary offering (i.e., excluding
proceeds from sales pursuant to our distribution reinvestment plan). This limitation is intended to ensure that we satisfy the FINRA
requirement that total underwriting compensation paid in connection with this offering does not exceed 10% of the gross proceeds of our
primary offering.
(3)In calculating our stockholder servicing fee, we will use our NAV before giving effect to accruals for the stockholder servicing fee or
distributions payable on our shares. If all shares sold in this offering are Class S shares, our total annual stockholder servicing fees would be
approximately $49,275,362 if we raise the maximum offering, assuming that our NAV per share for Class S shares is $10.00 and no shares
are issued pursuant to our distribution reinvestment plan.
(4)These amounts represent estimated expenses incurred in connection with our organization and this offering, including legal, accounting,
printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized
invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of our transfer agent, fees to
attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals. Under no
circumstances may our total organization and offering expenses (including upfront selling commissions, stockholder servicing fees and due
diligence expenses) exceed 15% of the gross proceeds from this offering.
(5)We will pay all expenses incurred in connection with the acquisition of our investments, including legal and accounting fees and expenses,
brokerage commissions payable to unaffiliated third parties, travel expenses, costs of appraisals (including independent appraisals),
nonrefundable option payments on property not acquired, engineering, due diligence, title insurance and other expenses related to the
selection and acquisition of investments, whether or not acquired. While most of the acquisition expenses are expected to be paid to third
parties, a portion of the out-of-pocket acquisition expenses may be paid or reimbursed to the Adviser or its affiliates. Acquisition expenses,
together with any acquisition fees for a particular real estate-related asset, will in no event exceed 6% of the gross purchase price of the
property. In addition, the expenses we pay to the Adviser include expenses incurred by the Sub-Adviser on our behalf that the Adviser is
required to reimburse to the Sub-Adviser under the Sub-Advisory Agreement.
(6)In calculating the management fee, we use our NAV and the Operating Partnership’s NAV before giving effect to any accruals for the
management fee, the performance fee, the stockholder servicing fee, the investor servicing fee or distributions payable on our shares or the
Operating Partnership’s units.
Our Total Operating Expenses are limited during any four fiscal quarters to the greater of (a) 2.0% of our
Average Invested Assets or (b) 25.0% of our Net Income. This limit may be exceeded only if our independent
directors have made a finding that, based on such unusual and non-recurring factors as they deem sufficient, a higher
level of expenses is justified, and such finding is recorded in the minutes of a meeting of the independent directors.
Within 60 days after the end of any fiscal quarter for which there is an excess amount that the independent directors
conclude was justified, a written disclosure of such fact, together with an explanation of the factors the independent
directors considered in determining that such excess amount was justified, must be sent to the holders of shares of
common stock (or disclosed in our next quarterly report on Form 10-Q or by filing a current report on Form 8-K
with the SEC). See “Management—The Advisory Agreement—Management Fee, Performance Fee and Expense
Reimbursements.”
Performance Fee Example
The following hypothetical illustrates how we would calculate the performance fee at the end of the year based
on the assumptions set forth in rows A through E of the table below. All amounts are with respect to the shares
outstanding at the end of the year. Actual results may differ materially from the following hypothetical calculation.
A. | Beginning NAV .............................................................................................................................. | $500,000,000 |
B. | Loss Carryforward Amount ............................................................................................................ | $— |
C. | Net proceeds from new issuances ................................................................................................... | $— |
D. | Distributions paid (in 12 equal monthly installments) .................................................................... | $20,000,000 |
E. | Change in NAV required to meet 5% annualized internal rate of return(1) .................................... | $4,600,000 |
F. | Hurdle Amount(1) (D plus E) ........................................................................................................... | $24,600,000 |
G. | Actual change in NAV .................................................................................................................... | $25,000,000 |
H. | Annual Total Return prior to performance fee (D plus G) ............................................................. | $45,000,000 |
I. | Excess Proceeds (H minus the sum of B and F) ............................................................................. | $20,400,000 |
J. | Performance fee is equal to 12.5% of annual Total Return (H) because the annual Total Return exceeds the Hurdle Rate (F) plus loss carryforward account balance (B) with enough Excess Proceeds (I) to achieve the full Catch-Up ................................................................................... | $5,625,000 |
137
__________________
(1)Amounts rounded to the nearest $100,000. The Hurdle Amount for any period is the amount that results in a 5% annualized internal rate of
return on the NAV of the shares outstanding at the end of the period. An internal rate of return reflects the timing and amount of all
distributions accrued or paid (without duplication) and any issuances of such shares during the period. Internal rate of return is a metric used
in business and asset management to measure the profitability of an investment and is calculated according to a standard formula that
determines the total return provided by gains on an investment over time.
138
CONFLICTS OF INTEREST
We are subject to conflicts of interest arising out of our relationship with Brookfield and Oaktree, including the
Adviser, the Sub-Adviser and their respective affiliates. One member of our board of directors (who serves as
Chairman of our board of directors and Chief Executive Officer) is affiliated with Brookfield, and our Chief
Operating Officer and Portfolio Manager, Chief Financial Officer and our other executive officers are also
executives of Brookfield or one or more of its affiliates. There is no guarantee that the terms of our charter, the terms
of the Advisory Agreement, the Sub-Advisory Agreement or the policies and procedures adopted by the Adviser,
Brookfield, Oaktree and their respective affiliates will enable us to identify, adequately address or mitigate these
conflicts of interest. Transactions between us and the Adviser, Brookfield, Oaktree or their affiliates require
approval by a majority of our independent directors. See “Risk Factors—Risks Related to our Relationship with
Brookfield.”
General
Brookfield is a leading global alternative asset manager with over $1 trillion of assets under management as of
December 31, 2025 across renewable power and transition, infrastructure, private equity, real estate and credit. It
invests client capital for the long-term with a focus on real assets and essential service businesses that form the
backbone of the global economy. Brookfield offers a range of alternative investment products to investors around
the world — including public and private pension plans, endowments and foundations, sovereign wealth funds,
financial institutions, insurance companies and private wealth investors. Brookfield draws on its heritage as an
owner and operator to invest for value and seeks to generate strong returns for its clients, across economic cycles.
A key element of our strategy is to leverage Brookfield’s experience, expertise, and its broad reach,
relationships and position in the market for investment opportunities and deal flow, financial resources, access to
capital markets and operating needs. Brookfield believes that leveraging these capabilities is in the best interests of
our company and our stockholders. However, being part of Brookfield’s broader platform, as well as activities of
and other considerations relating Other Brookfield Accounts, give rise to actual or potential conflicts of interest
which may not be resolved in favor of our interests. Certain Other Brookfield Accounts may invest in, and in some
cases, have priority ahead of us, with respect to, properties, securities or investments that are suitable for us.
Brookfield’s activities include, among others: investment and asset management; sponsoring, offering and
managing private and public investment vehicles that invest in the global fixed income, currency, commodity,
equities, private and other markets; developing, constructing, owning, managing, operating and servicing real estate
and related companies and assets, renewable power and related companies, assets and facilities, infrastructure and
related companies and assets, and other businesses and assets, including data centers, transportation facilities,
electric utilities, industrial and manufacturing facilities, energy companies, metals and mining companies,
timberlands and agricultural land, natural gas pipelines and storage systems and other assets; providing capital and
financing solutions, as well as financial advisory, business development and other financial services; and other
activities (collectively, “Brookfield Activities”). While it is expected that we will benefit from Brookfield’s
expertise, market positioning and connectivity that arise from the Brookfield Activities, in the ordinary course of its
business, Brookfield’s interests or the interests of the clients or others receiving services through Brookfield
Activities (including Other Brookfield Accounts) may conflict with our interests.
The discussion below enumerates certain actual and potential conflicts of interest that are expected to arise in
connection with Brookfield Activities (including those relating to Other Brookfield Accounts), on the one hand, and
the services Brookfield provides to us and in connection with our portfolio, on the other hand. These conflicts of
interest do not purport to be a complete list or explanation of all actual or potential conflicts of interest that could
arise in connection with an investment in us. Dealing with conflicts of interest is difficult and complex, and it is not
possible to predict all of the types of conflicts that may arise. Subject to the provisions of our charter, on any matter
involving a potential or actual conflict of interest, the Adviser will be guided by its fiduciary duties to us and will
manage such conflict in good faith; provided, that the Adviser will not be required to present any potential or actual
conflict of interest to our board of directors unless required by our charter, the terms of the Advisory Agreement or
by applicable law. In the event that any matter arises that the Adviser determines in its good faith judgment to
constitute an actual conflict of interest between us, on the one hand, and Brookfield, Oaktree, an Other Oaktree
139
Account or any existing or future Other Brookfield Account, on the other hand, the Adviser may, subject to internal
Brookfield policies and the restrictions set forth in our charter, take such actions as it deems necessary or
appropriate, including such actions as described elsewhere herein, taking into consideration the interests of the
relevant parties, the circumstances giving rise to the conflict and applicable law. Brookfield’s internal policies and
protocols may be amended from time to time by Brookfield in its discretion without notice to or the consent of our
stockholders or any other person. Any such resolutions will take into consideration the interests of the relevant
parties and the circumstances giving rise to the conflict.
Transactions between us and Brookfield, Oaktree or their respective affiliates require approval by our board of
directors, including a majority of our independent directors. There can be no assurance that our board of directors or
the Adviser will identify, mitigate or resolve all conflicts of interest in a manner that is favorable to us.
Allocation of Investment Opportunities
Investment opportunities identified by the Adviser and its affiliates that are within the scope of our investment
objectives and strategy generally are expected to be presented to us. Notwithstanding the foregoing, Other
Brookfield Accounts, in certain cases, will have overlapping investment objectives with us or priority over us with
respect to investment opportunities that meet both our and such Other Brookfield Account’s investment objectives.
Where our investment objectives overlap with the investment objectives of one or more Other Brookfield
Accounts, investment opportunities will be allocated on a basis that Brookfield determines in good faith is fair and
equitable taking into account one or more principles (the “Allocation Principles”) as it deems relevant in its
discretion, including (among others) (i) the size, nature and type of the investment opportunity (including the risk
and return profiles of the opportunity, expected holding period and other attributes) as well as its fit within each
account’s investment focus; (ii) the nature of our company’s and the Other Brookfield Accounts’ investment
mandates (including their investment focus, objectives, strategies, guidelines, limitations, risk-return targets, client
instructions (if any) and risk tolerance, as each is determined and adjusted from time to time over the lives of our
company and the Other Brookfield Accounts; (iii) the geographic location of the investment opportunity, and
Brookfield’s determination of the appropriateness of the risks of investing in such location for our company and the
Other Brookfield Accounts; (iv) investment priorities of our company and the Other Brookfield Accounts, including
in connection with follow-on opportunities; (v) the relative amounts of capital available (or expected to be available)
for investment for the period in which such investment will be consummated; (vi) principles of diversification of
investments (including, among others, sector, geographic, risk, asset and/or other portfolio diversification and/or
concentration considerations); (vii) the expected future capacity of our company and the Other Brookfield
Accounts; (viii) our company’s and the Other Brookfield Accounts’ liquidity needs (including for pipeline, follow-
on, staged draw investments (including funding obligations with respect to such investments that are contingent
upon achievement of certain milestones) and other opportunities pursued by our company and the Other Brookfield
Accounts); (ix) the management (including mitigation) of any actual or potential conflict of interest considerations,
including in connection with investment in different parts of an issuer’s capital structure; (x) limitations imposed by
investors in our company and the Other Brookfield Accounts (pursuant to consent and/or approval rights or as
otherwise agreed to with such investors); (xi) statutory minimum capital, risk retention and surplus requirements
applicable to our company and/or the Other Brookfield Accounts; (xii) the capital efficiency of the investment
opportunity for insurance and/or other purposes; (xiii) expected or actual ratings or lack of ratings of the investment
opportunity; (xiv) the availability of other appropriate or similar investment opportunities; (xv) the extent to which
the investment professionals involved in our company or the Other Brookfield Accounts participated in the sourcing
and/or diligencing of the investment opportunity and as a result their knowledge and understanding of the
investment opportunity; (xvi) whether the allocation would result in our company receiving a de minimis amount or
an amount below the established minimum quantity; (xvii) related-party nature of the transaction and potential
conflicts considerations that could arise as a result; (xviii) whether our company is in liquidation; and/or (xix) other
considerations deemed relevant by Brookfield (including legal, regulatory, tax, structuring, compliance, investment -
specific, timing and similar considerations). To the extent that Brookfield determines that an overlap situation is
likely to be recurring for particular types of investment opportunities, Brookfield could (but will not be required to)
determine to apply the Allocation Principles in accordance with a formulaic or other systematic approach for any
period of time, as it deems appropriate in its sole discretion.
140
In particular, Other Brookfield Accounts include an open-end private fund whose primary objective is to seek
investments in high-quality properties located primarily in major markets in the United States, and other Open-
Ended Core Plus Funds. Investment opportunities that are appropriate for the Open-Ended Core Plus Funds often
require asset management or repositioning activities that are generally expected to result in greater appreciation
potential than investment opportunities that are allocated to us, but in many cases will not be expected to generate
sufficient stable current income to be consistent with our investment objectives and strategy. However, since the
Open-Ended Core Plus Funds’ investment objectives do overlap with ours, we expect that from time to time
investment opportunities that fit the investment criteria of both us and one of the Open-Ended Core Plus Funds will
arise. Such opportunities will be allocated in accordance with the Allocation Principles. In addition, Brookfield
manages certain Other Brookfield Accounts (including Brookfield proprietary, Brookfield-related and third-party
accounts) that invest in real estate debt (collectively, the “Credit Platform Accounts”). Investment opportunities in
real estate debt are generally expected to be allocated among such Credit Platform Accounts pursuant to: (a) a pro
rata allocation methodology based on each account’s respective target investment amounts for such category of
investments, as determined by Brookfield from time to time in its sole discretion, or (b) a rotational allocation
methodology or another non pro-rata basis where Brookfield determines, in its sole discretion, that such allocation
methodology is more appropriate. Further, Brookfield may act as general partner and/or manager to, and otherwise
participate in, sidecar funds, which will be considered Credit Platform Accounts and be allocated investment
opportunities pursuant to the same methodology as other Credit Platform Accounts. Under certain circumstances,
where the investment mandate of Credit Platform Accounts overlap with our investment mandate, investment
opportunities will be allocated between us and such Credit Platform Accounts on a basis that Brookfield believes is
fair and equitable taking into account one or more of the Allocation Principles, as it deems relevant in its discretion.
However, Brookfield generally expects to offer debt investment opportunities to its Credit Platform Accounts before
offering them to us because, while we expect to selectively invest in real estate debt, our investment strategy focuses
primarily on equity investments. Brookfield also manages Other Brookfield Accounts that target “opportunistic”
returns, Other Brookfield Accounts that focus on real estate secondary investments (which include, among other
things, investments in pooled investment vehicles managed by third parties or recapitalization of third-party
managed investment vehicles (in whole or in part)) and Other Brookfield Accounts that focus on single-family rental
properties, each of which is expected to receive allocations of investment opportunities suitable for their investment
mandates before such opportunities are offered to us.
Further, Brookfield may source a future investment opportunity related to, or arising from, an existing
investment, and such future investment opportunity may be allocated to an Other Brookfield Account instead of us
because of timing or other considerations, such as lack of required available funds. These subsequent investments
may dilute or otherwise adversely affect our interests or the interests of the previously invested Other Brookfield
Account. As a result of the foregoing, opportunities sourced by Brookfield that would otherwise be suitable for us
may not be available to us, or we may receive a smaller allocation of such opportunities than would otherwise have
been the case.
From time to time, we may fund deposits or incur other costs and expenses in respect of an investment
opportunity that is ultimately shared with or made entirely by an Other Brookfield Account. In such cases, such
Other Brookfield Account would be expected to reimburse us for such deposits or other costs or expenses. In other
cases, an Other Brookfield Account may fund deposits or incur other costs and expenses in respect of an investment
opportunity that is ultimately shared with or made entirely by us, in which case we will similarly be expected to
reimburse such Other Brookfield Account for such deposits or other costs or expenses. Additionally, any such
reimbursements are expected, but not guaranteed, to include expenses (including interest and other amounts related
to borrowings) incurred by us or such Other Brookfield Account, but are not expected to include any interest or
other compensation for making any deposits or funding such other costs or expenses.
Co-Investment Expenses
Co-investors will typically bear their pro rata share of fees, costs and expenses related to the discovery,
investigation, development, acquisition or consummation, ownership, maintenance, monitoring, hedging and
disposition of their co-investments and, in certain cases, may be required to pay their pro rata share of fees, costs
and expenses related to potential investments that are not consummated, such as broken deal expenses (including
“reverse” breakup fees). Brookfield will endeavor to allocate such fees, costs and expenses on a fair and equitable
141
basis. Notwithstanding the foregoing, co-investors may not be required to pay or otherwise bear fees, costs and
expenses related to unconsummated co-investments, and we may bear fees, costs and expenses (including those
incurred as a result of hedging related to such co-investment opportunity) that we would not have otherwise incurred
if Brookfield had not expected to allocate such investment opportunity to co-investors. In addition, in certain
circumstances, co-investors may not bear such fees, costs and expenses because the co-investors have not yet been
identified (or their anticipated allocation has not yet been identified) as of the time such potential investment ceases
to be pursued, are not yet committed to such potential investment or are not contractually required to bear such fees,
costs, and expenses. In those events, such fees, costs and expenses will be considered operating expenses of, and be
borne by, us; provided that, in all instances, Brookfield, in its capacity as a co-investor or a prospective co-investor
intends to bear its pro rata share of such fees, costs and expenses based on the amount it has committed to co-invest
as of the time we make a binding offer. In addition, we will bear the costs and expenses of drafting form agreements
used to facilitate investments by co-investors alongside us.
Facilitation of Co-Investments
Subject to the limitations set forth in our charter, we may provide interim debt or equity financing (including
emergency funding or as part of a follow-on investment) for the purpose of bridging a potential co-investment or a
follow-on investment related to an existing co-investment (including prior to allocating or syndicating the co-
investment or follow-on investment, as applicable, to co-investors, including Brookfield and/or Other Brookfield
Accounts). Co-investment vehicles are similarly permitted to provide interim debt or equity financing for the
purpose of bridging a potential co-investment or a follow-on investment. In order to potentially make available or
otherwise facilitate co-investments, at any time during the course of an co-investment, we may also use our loan
facilities to consummate, support, guarantee or issue letters of credit to support the portion of the co-investment
made (or to be made) by co-investors (including, for the avoidance of doubt, on behalf of any co-investors in the co-
investment vehicles including Brookfield and/or other Brookfield Accounts), including in connection with
financings, refinancings and/or other restructurings of an investment, as deemed appropriate by Brookfield in its sole
discretion. In those circumstances, such co-investors would be expected to bear their pro rata share of fees, costs and
expenses (including hedging expenses) associated therewith and repay any amounts that come due and payable
under such loan facility, guarantee or letter of credit issued for their benefit (but, for the avoidance of doubt, will not
bear any other fees and/or expenses relating to the establishment and maintenance of the loan facility, guarantee and/
or letter of credit, including for example set-up costs, standby and/or commitment fees relating to undrawn amounts,
fees and expenses relating to renegotiation, extension and/or renewal of the facility, guarantee and/or letter of credit
and other fees and/or expenses, which will only be borne by our company and its investors). In connection with any
such interim investment, we may hedge our currency, interest rate or other exposure and, as a result, may incur
hedging or borrowing costs. In order to potentially make available or otherwise facilitate our investments, at any
time during the course of an investment, we may also use our line of credit to consummate, support, guarantee or
issue letters of credit to support the portion of the investment made (or to be made) by co-investors. In those
circumstances, such co-investors would be expected to bear their pro rata share of fees, costs and expenses
(including hedging expenses) associated therewith and repay any amounts that come due and payable under such
loan facility, guarantee or letter of credit issued for their benefit. In connection with any such interim investment, we
may hedge our currency, interest rate or other exposure and, as a result, may incur hedging or borrowing costs.
There is no guarantee that any co-investor will ultimately bear the costs or expenses associated with any such
hedging or borrowing, and we may be exposed to losses from currency exchange rate fluctuations, hedge gains or
losses or additional expenses. Even where we hedge currency or other exposure attributable to co-investors’ portion
of an investment, such hedges are expected to be imperfect and we may accordingly be exposed to losses.
Fluctuations in exchange rates during the time we hold an interim investment prior to acquisition by co-investors
may affect the portion of the investment that is acquired by co-investors or the price paid for such co-investment.
We will bear risks associated with the investment, currency exchange rates, interest rates and other factors during the
term we hold the investment.
In order to potentially make available or otherwise facilitate our investments, at any time during the course of an
investment, we may also use the line of credit we obtained pursuant to the Affiliate Line of Credit to consummate,
support, guarantee or issue letters of credit to support the portion of the investment made (or to be made) by co-
investors. In those circumstances, such co-investors would be expected to bear their pro rata share of fees, costs and
142
expenses (including hedging expenses) associated therewith and repay any amounts that come due and payable
under such line of credit, guarantee or letter of credit issued for their benefit. However, there can be no assurance
that any such co-investor will bear such fees, costs and expenses or not default on its obligations to repay such
amounts, in which case, such amounts may be borne disproportionately by us.
Where we acquire an investment on behalf of co-investors (including a follow-on investment), the terms of the
sale of such investment to co-investors may not be favorable to us and may result in better terms for such co-
investors than us. For example, to the extent the investment is consummated, there is no guarantee that any co-
investor will ultimately agree to bear its pro rata portion of the fees, costs and/or expenses associated with any such
hedging or borrowing activities (including those incurred in connection with an investment and/or carry costs related
to an investment) or not default on its obligations to repay such amounts, in which case, such amounts would be
borne disproportionately by us. Moreover, we may be exposed to losses and/or expenses in connection with such
activities as a result of currency exchange rate fluctuations, hedge gains and/or other events beyond a pro rata
allocation based on the size of our investment. Even where we hedge currency or other exposure attributable to co-
investors’ portion of an investment, such hedges are expected to be imperfect and we could accordingly be exposed
to losses and/or additional expenses. Fluctuations in exchange rates during the time an interim investment is held by
our company prior to acquisition by co-investors may affect the portion of the investment that is acquired by co-
investors or the price paid for such co-investment. We will bear risks associated with facilitation and the making of
the investment, including among others in connection with borrowing and hedging activities, during the term it holds
the investment, which could be significant or perpetual if it is not able to successfully syndicate the co-investment.
Similarly, if an investment depreciates during the period when we hold it, co-investors may negotiate a lower price
and we may take a loss on the portion of an investment we were holding on behalf of co-investors. Additionally, if
an investment appreciates during the period when our company holds it, we may be unable to syndicate or sell such
investment above its acquisition cost and we may therefore not realize gains on the appreciation of the portion of an
investment our company was holding on behalf of (or with a view to syndication to) co-investors. In these types of
situations, we may nonetheless sell the investment to co-investors on the terms negotiated by such co-investors at the
relevant time in the event that the Adviser determines it is in our best interest, for example out of a desire to reduce
our exposure to such investment or to include other participants in the investment.
DST Program
We, the Operating Partnership and our affiliates may encounter various conflicts of interest as a result of the
operating of the DST Program. The Adviser is affiliated with the Dealer Manager, which serves as the dealer
manager for the DST Program. This relationship may create conflicts of interest with respect to decisions regarding
whether to place properties into the DST Program. The Adviser, the Dealer Manager and their affiliates will receive
fees and expense reimbursements in connection with their roles in the DST Program (certain of which costs are
expected to be substantially paid by the private investors in the DST Program). Brookfield employees, including
certain employees of the Adviser, will play key roles in managing the DST Program. Time spent on managing each
DST could conflict with their responsibilities to the Adviser and to us. These potential conflicts may be exacerbated
in situations where employees may be entitled to greater incentive compensation or other remuneration in
connection with certain responsibilities (including responsibilities in connection with the DST Program).
Certain master tenant subsidiaries of ours will pay rent to each DST pursuant to the applicable master lease
agreement. Any shortfall in the operating revenue received by a master tenant entity below the negotiated rent due to
the applicable DST must be covered either by us directly or by the Operating Partnership pursuant to a guaranty. The
master tenant entities and the manager of the DST Program are all affiliates of each other and of Brookfield. They
may face conflicts of interests in determining the amount of rent and projected costs under each master lease
agreement, and these conflicts may not be resolved in our favor or the favor of the Operating Partnership.
We have in the past and may continue to source DST Properties from our real properties held through the
Operating Partnership. Although we believe the purchase price for each DST Property has been and will continue to
be determined in a fair, reasonable, and impartial manner, there can be no assurance that such determination will
accurately reflect the actual cost or arm’s length market rate of an acquisition of such DST Property, that our or
Brookfield’s own interests did not influence this determination, or that a different methodology in determining the
purchase price would not have also been fair, reasonable or yield a different (including more accurate) result.
143
Moreover, following the acquisition of any DST Property, including those sourced from our real properties and
those sourced from third parties, the FMV Option is exercisable at the Operating Partnership’s sole and absolute
discretion. The Operating Partnership may choose to exercise the FMV Option in its own best interest and at a time
when the value of the Operating Partnership units as compared to the value of the DST Interests is high. In addition,
it may determine not to exercise the FMV Option if the underlying Property is not an attractive acquisition
opportunity for the Operating Partnership. Further, the Operating Partnership has the sole discretion to acquire the
DST Interests for cash instead of Operating Partnership units. As such, it may be acting in its own or in the interest
of its affiliates when determining to exercise the FMV Option. In addition, upon the exercise of the FMV Option,
the manager of the DST Program is responsible for selecting a third-party appraisal firm to evaluate the fair market
value of the DST Interests to be acquired by the Operating Partnership. A high appraisal value of DST Interests
could harm us and the Operating Partnership for the benefit of the applicable DST. The manager of the DST
Program, as an affiliate of Brookfield, may face conflicts of interest in selecting a third-party appraisal firm to
determine the fair market value of DST Interests and such conflicts may not be resolved in our favor or the favor of
the Operating Partnership.
Client and Other Relationships
Brookfield and Oaktree each have long-term relationships with a significant number of developers, institutions,
corporations and other market participants and their advisors (“Brookfield Client Relationships”). These Brookfield
Client Relationships may hold or may have held investments similar to the investments intended to be made by us,
including certain investments that may represent appropriate investment opportunities for us. These Brookfield
Client Relationships may compete with us for investment opportunities. In determining whether to pursue a
particular opportunity on our behalf, the Adviser may consider these relationships, and there may be certain potential
opportunities which would not be pursued on our behalf in view of such relationships. In addition, we may invest or
enter into joint ventures or other similar arrangements with clients of Brookfield in particular investments, and the
relationship with such clients may influence the decisions made by the Adviser with respect to such investments.
Pursuit of Investment Opportunities by Certain Non-Controlled Affiliates
Certain companies affiliated with Brookfield (i) are controlled, in whole or in part, by persons other than
Brookfield or entities controlled by it, including, for example, joint ventures or similar arrangements with third
parties where Brookfield does not have complete control, or (ii) do not coordinate or consult with Brookfield or
entities controlled by it with respect to investment decisions (together, “Non-Controlled Affiliates”). Such Non-
Controlled Affiliates are likely to have investment objectives which overlap with our investment objectives and
conflicts are likely to arise therefrom. For example, from time to time such Non-Controlled Affiliates or investment
vehicles managed by such Non-Controlled Affiliates will pursue investment opportunities which are suitable for us
but which are not made available to us since such Non-Controlled Affiliates do not consult with or are not controlled
by Brookfield or entities controlled by it.
Conflicts Relating to Investments by Other Brookfield Accounts
It is expected that (i) Brookfield (including through the Adviser, its personnel or one of its affiliates) will give
advice, and take actions, with respect to current or future Other Brookfield Accounts (including proprietary accounts
of Brookfield) that will compete or conflict with the advice the Adviser gives to our company, or will involve a
different timing or nature of action than that taken with respect to our company, and (ii) investments by Other
Brookfield Accounts may have the effect of disadvantaging our investment strategies. When an Other Brookfield
Account either manages or implements a portfolio decision ahead of, or contemporaneously with, portfolio decisions
for our company, market impact, liquidity constraints, or other factors could result in our company receiving less
favorable results, paying higher transaction costs, or being otherwise disadvantaged.
In making certain decisions with regard to our investments that compete with or differ from the interests of one
or more Other Brookfield Accounts, the Adviser could face certain conflicts of interest between our interests and the
interests of such Other Brookfield Accounts. These potential conflicts will be exacerbated in situations where
Brookfield is entitled to higher fees from Other Brookfield Accounts than from us, where portfolio managers
making an allocation decision are entitled to performance-based compensation from an Other Brookfield Account,
144
where there are differences in proprietary investments in us and an Other Brookfield Account, including the Related-
Party Investor (as defined below), or where there are capacity constraints with respect to a particular strategy or
opportunity as a result of, for example, position limits or regulatory reporting obligations applicable to the Adviser.
In addition, as an investment changes over time, additional conflicts of interest are expected to arise, including as a
result of earlier investment allocation decisions. Brookfield (including in its capacity as the general partner or
investment manager of an Other Brookfield Account) will determine the appropriate investment decision for us and
for each Other Brookfield Account, taking into account our interests and the interests of such Brookfield Account
and, when applicable, in accordance with Brookfield’s investment allocation protocols and such Other Brookfield
Account’s governing documents. The investment and divestment decisions made with respect to Other Brookfield
Accounts may be made without regard to our interests, even where such decisions are informed by our investment
activities or adversely affect us.
In addition, certain Other Brookfield Accounts or portfolio companies of such Other Brookfield Accounts may
provide investment banking and other advisory services to third parties with respect to assets in which we may be
invested or seeking to invest. The interests of such Other Brookfield Accounts or portfolio companies of such Other
Brookfield Accounts in such circumstances may conflict with our interests, and we may compete with such Other
Brookfield Accounts in pursuing certain investments.
Different business units and teams within the Adviser and Brookfield may take views, and make decisions or
recommendations, that are different than other areas of the Adviser and Brookfield. Different portfolio management
teams within the Adviser and Brookfield may make decisions or take (or refrain from taking) actions with respect to
Other Brookfield Accounts they advise in a manner that may be different than or adverse to us. Such teams might
not share information with our portfolio management team, including as a result of certain information barriers.
In particular, Other Brookfield Accounts that focus on making secondary investments are expected to invest in
pooled investment funds or other investment vehicles that are managed by third parties. While such Other
Brookfield Accounts are expected to negotiate for certain rights with respect to (and to offer strategic advice to) such
third-party funds and other investment vehicles, such third-party funds and other investment vehicles will not be
“Other Brookfield Accounts” and will generally not be considered “affiliates” of Brookfield for purposes of our
charter, provided that such Other Brookfield Account does not own more than ten percent of the outstanding voting
securities of such third-party fund or other investment vehicle and does not otherwise directly or indirectly control
such third-party fund or other investment vehicle. In such cases, we will not be restricted from purchasing
investments from, selling investments to, or otherwise transacting with or alongside such third-party funds or other
investment vehicles. The interests of such Other Brookfield Accounts and the third-party funds or other investment
vehicles in which they invest may conflict with our interests, including in circumstances in which such Other
Brookfield Accounts exercise (or decline to exercise) rights with respect to, or otherwise offer strategic advice to,
such third-party funds or other investment vehicles in a manner that differs from Brookfield’s advice to us.
Data and Information Sharing
Brookfield often has or obtains data and information that are utilized by Brookfield, our company, Other
Brookfield Accounts or their portfolio companies across multiple strategies, businesses and operations that it would
not otherwise have or obtain in the ordinary course. For example, information relating to business operations, trends,
budgets, customers or users, assets, funding and other metrics that Brookfield has or acquires through its
management of Other Brookfield Accounts or its own business and investment activities is used by Brookfield to
identify or evaluate potential investments for us and to facilitate the management of our investments, including
through operational improvements. Conversely, Brookfield uses data and information that it has or acquires in
connection with our activities for the benefit of its own business and investment activities as well as those of Other
Brookfield Accounts and their portfolio companies (for example, by utilizing data to train AI models owned by
Brookfield Accounts (including proprietary accounts). From time to time, Brookfield expects to commission third-
party research, at our expense, in connection with its diligence of an investment opportunity for us or in connection
with its management of one or more of our investments, and such research is expected to subsequently be available
to Other Brookfield Accounts and Other Oaktree Accounts, who will generally not be required to compensate us for
the benefit they receive from such research. Such benefits could be material and Brookfield will have no duty,
contractual, fiduciary or otherwise, to keep such information confidential from, or not use such information in
145
connection with the business and investment activities of itself, Other Brookfield Accounts or Other Oaktree
Accounts or their respective portfolio companies.
Brookfield believes that it will be better able to anticipate macroeconomic and other trends, and otherwise make
more informed investment and other decisions for us as a result of its access to (and rights regarding) the data and
information that it has or obtains through the business and investment activities of Brookfield, our company, Other
Brookfield Accounts or their portfolio companies. Brookfield will also make investment and other decisions for
itself, Other Brookfield Accounts and their portfolio companies on the basis of information Brookfield has or
obtains through our investment activities. Brookfield believes that using this data and information from across our
company, Other Brookfield Accounts and their portfolio companies will provide overall benefits to, and improve
Brookfield’s management of, us and our investment activities. For example, data analytics based on inputs from a
portfolio company of an Other Brookfield Account could inform business decisions for us. In addition, aggregating
data provides Brookfield with opportunities to obtain bulk discounts for itself, our company, Other Brookfield
Accounts and portfolio companies on products and services if that data shows significant demand across multiple
Other Brookfield Accounts and portfolio companies. Any such discounts would be allocated among Brookfield, our
company, Other Brookfield Accounts and portfolio companies on a fair and equitable basis as determined by
Brookfield in its sole discretion, with Brookfield able to make corrective allocations should it determine
subsequently that such corrections were necessary or advisable. This practice gives rise to conflicts of interest,
however, because in some cases, this will result in Brookfield, an Other Brookfield Account or its portfolio company
taking a position that is different from, and potentially adverse to, a position taken by us, or result in Brookfield, an
Other Brookfield Account or portfolio company benefiting from our business and investment activities (or vice
versa). For example, Brookfield’s ability to invest on behalf of an Other Brookfield Account in a particular company
could be enhanced by information obtained from one of our investments in the same or a related industry. Such
investments can be expected to provide a material benefit to Brookfield (or Other Brookfield Accounts or their
portfolio companies) without compensation or other benefits to, or participation by us, and the benefits received by
Brookfield (or Other Brookfield Accounts or their portfolio companies) will not offset the fees we pay to the
Adviser, or otherwise be shared with us. In certain cases, portfolio companies of Other Brookfield Accounts will
compete with, or provide services to competitors of, our investments.
As a result, Brookfield has an incentive to pursue and manage investments for our company that have data and
information that can be utilized in a manner that benefits Brookfield, Other Brookfield Accounts or their portfolio
companies, including investments that Brookfield would not otherwise have invested in or investments on terms less
favorable than Brookfield otherwise would have sought in the ordinary course. Brookfield has implemented policies
and procedures designed to mitigate conflicts of interest and address certain regulatory requirements and contractual
restrictions with respect to its use and sharing of data and information. Brookfield is also subject to contractual
obligations and legal limitations on its use and sharing of data and information. Such policies and procedures,
obligations and limitations generally reduce synergies across Brookfield’s various activities and negatively affect
Brookfield’s and our ability to pursue and manage investment opportunities that would otherwise be available to
Brookfield or us if such policies and procedures were not implemented. From time to time, these policies and
procedures also will result in our company or Other Brookfield Accounts having reduced investment opportunities
or investment flexibility, or otherwise restrict us or Brookfield in its management and investment activities with
respect to such information, such as our ability to make certain investments. See “Material, Non-Public Information;
Trading Restrictions; Information Not Made Available” below.
Regardless of the existence of information barriers, Brookfield will not have any obligation or other duty to
make available for the benefit of us or our investments any information regarding Brookfield’s investment activities,
strategies or views, or the activities, strategies or views used for Other Brookfield Accounts. Subject to its
obligations not to share our confidential information, Brookfield may share information relating to us and our
investments with its affiliates, including those that are managed independently (in accordance with information
barriers and related protocols). Furthermore, to the extent that the Adviser has access to analyses, models or
information developed by other parts of Brookfield or its personnel, the Adviser will not be under any obligation or
other duty to effect transactions on our behalf or on behalf of our investments in accordance with such analysis and
models. In the event Brookfield does not share certain information with the Adviser, we may make investments or
146
other decisions that differ from those we would have made if the Adviser had such information, which may be
disadvantageous to us.
Data Management
To the extent it deems necessary or appropriate, in its sole discretion, Brookfield may provide data management
services to us and our investments or Other Brookfield Accounts and their portfolio companies (collectively, “Data
Holders”). Such services could include, among other things, assistance with obtaining, analyzing, curating,
processing, packaging, organizing, mapping, holding, transforming, enhancing, marketing and selling data for
monetization through licensing or sale arrangements with third parties or directly with Data Holders. To the extent
provided, these services would be subject to the limitations discussed below and applicable contractual or legal
obligations or limitations, including on the use of material, non-public information. Moreover, where an
arrangement is with our company or our investments, we would directly or indirectly bear our appropriate share of
related compensation. In addition, in Brookfield’s sole discretion, data from one Data Holder may be pooled with
data from other Data Holders, subject to applicable laws and regulations (including privacy laws and regulations),
and any revenues arising from such pooled data sets would be allocated among Brookfield and the applicable Data
Holders on a fair and equitable basis as determined by Brookfield in its sole discretion, with Brookfield able to make
corrective allocations should it determine subsequently that such corrections were necessary or advisable.
Brookfield’s compensation for any data management services could include a percentage of the revenues
generated through any licensing or sale arrangements, fees, royalties and cost and expense reimbursement (including
start-up costs and allocable overhead associated with personnel working on relevant matters (including salaries,
benefits and other similar expenses)). This compensation will not offset advisory or management fees or otherwise
be shared with the Data Holders, us, Other Brookfield Accounts or their portfolio companies. Brookfield may share
the products from its data management services within Brookfield (including with our company, Other Brookfield
Accounts and their portfolio companies) at no charge and, in such cases, the Data Holders are not expected to
receive any financial or other benefit from having provided their data to Brookfield. The provision of data
management services will create incentives for Brookfield to pursue and make investments that generate a
significant amount of data, including on our behalf. While all of our investments will be within our investment
mandate and consistent with our investment objectives, they could include investments that Brookfield might not
otherwise have made or investments on terms less favorable than Brookfield otherwise would have sought to obtain
had it not been providing data management services.
Terms of an Investment by an Other Brookfield Account May Benefit or Disadvantage Another Brookfield
Account
From time to time, in making investment decisions for us or an Other Brookfield Account, the Adviser will face
certain conflicts of interest between our interests, on the one hand, and the interests of the Other Brookfield
Account. For example, subject to applicable law and any limitations contained in our charter, the Adviser from time
to time could cause us to invest in securities, bank loans or other obligations of portfolio companies or properties
affiliated with or advised by Brookfield or in which Brookfield Accounts have an equity, debt or other interest, or to
engage in investment transactions that result in Other Brookfield Accounts getting an economic benefit, being
relieved of obligations or divested of investments. For example, from time to time, we could make debt or equity
investments in entities which are expected to use the proceeds of such investment to repay loans from an Other
Brookfield Account. Depending on the circumstance, such Other Brookfield Account would benefit if we invested
more money, thus providing sufficient funds to repay such Other Brookfield Account, or it would benefit if the loans
remained outstanding and such Other Brookfield Account continued to receive payment under the existing loans, if
the loans were on attractive terms (including an attractive interest rate) from the perspective of such Other
Brookfield Account. Alternatively, from time to time, an Other Brookfield Account is in the position of making an
investment that could be used to repay loans from us (which could occur earlier than otherwise expected), which
would present the opposite conflict. Similarly, such conflicts will also be present in other situations. For example, in
certain circumstances, we may pursue an asset purchase or other material transaction with an issuer in which an
Other Brookfield Account is invested, which will result in a benefit to the Other Brookfield Account. In situations
where our activities enhance the profitability of Other Brookfield Accounts with respect to their investment in and
147
activities relating to portfolio companies, the Adviser could take the interests of such Other Brookfield Accounts
into consideration in connection with actions it takes on our behalf.
Conflicts between Us and Other Brookfield Accounts and Their Portfolio Companies
There may be conflicts between us or one of our investments, on the one hand, and Brookfield or an Other
Brookfield Account or one or more portfolio companies thereof, on the other hand. For example, a portfolio
company of an Other Brookfield Account may be a competitor, customer, service provider or supplier of one or
more of our investments. There may also be circumstances where a tenant or a prospective tenant in connection with
one of our investments may also be interested in or eligible to be a tenant or prospective tenant at a property owned
by an Other Brookfield Account. In such circumstances, such Other Brookfield Account or portfolio company
thereof may take actions that have adverse consequences for us or one of our investments, such as seeking to
increase its market share at the investment’s detriment, withdrawing business from the investment in favor of a
competitor that offers the same product or service at a more competitive price, or increasing prices of its products in
its capacity as a supplier of the investment or commencing litigation against the investment. In addition, in such
circumstances, the Adviser may not pursue certain such actions on our behalf, which could result in a benefit to an
Other Brookfield Account, or vice versa. Brookfield has implemented policies and procedures designed to mitigate
such potential conflicts of interest. Such policies and procedures could reduce the business activity among the
portfolio companies of Other Brookfield Accounts, which could negatively affect one of our investments and,
therefore, our company as a whole. An Other Brookfield Account or portfolio company thereof may nonetheless
continue to take such actions that have adverse consequences for us or our investments, and Brookfield will not have
any obligation or duty in this regard.
Purchase or Sale of Investments with Brookfield Affiliates
Without approval by a majority of our board of directors (including a majority of our independent directors) not
otherwise interested in the transaction, we will not purchase any investments from, or sell any investments to, any
Other Brookfield Account or any other Brookfield affiliate. In certain circumstances, subject to the limitations set
forth in our charter, we could invest in assets or companies in which Brookfield or an Other Brookfield Account
(including a co-investment account) holds an equity or debt position or in which Brookfield or an Other Brookfield
Account invests (either in equity or debt positions) subsequent to our investment. For example, from time to time,
Brookfield or an Other Brookfield Account (including a co-investment account) will: (a) enter into a joint
transaction with us; (b) in its discretion, invest alongside us in order to facilitate one of our investments (e.g., to the
extent there is excess capacity); (c) be a borrower from or lender to us; or (d) invest in different levels of an issuer’s
capital structure. Relatedly, we could own (y) equity positions of real estate assets that have been pledged as
collateral or otherwise provide security for notes owned by Brookfield or an Other Brookfield Account or (z)
structured products (including CMBS) in which one or more Other Brookfield Accounts invest.
Brookfield and Other Brookfield Accounts invest in a broad range of asset classes throughout the corporate
capital structure, including debt positions and equity securities. It is possible that we will hold an interest in one part
of a company’s capital structure while an Other Brookfield Account or its portfolio company holds an interest in
another. In accordance with our charter, we will not make or invest in mortgage loans (excluding any investments in
mortgage pools, CMBS, RMBS or any other real estate-related asset backed securities) that are subordinate to any
lien or other indebtedness or equity interest of any of our directors, our sponsor, the Adviser or any of their affiliates.
It is possible, however, that we may make or invest in mortgage loans (excluding any investments in mortgage
pools, CMBS, RMBS or any other real estate-related asset backed securities) that are subordinate to a lien or other
indebtedness or equity interest that is thereafter acquired by one of our directors, our sponsor, the Adviser or any of
their affiliates, and in such cases we will not be required to sell our interest in such mortgage loan. We could make
an investment in a real estate asset in which an Other Brookfield Account invests, and such asset may already be
experiencing (or may in the future experience) distress or bankruptcy. We could foreclose on the underlying real
estate asset and, as a result, become the equity owner of such asset. We may, or may not, be successful in managing
it out of such distress. The conflicts between such parties and our company will be more pronounced where the asset
is near default on existing loans and we may not have the ability to use offering proceeds, reserves or other sources
of capital in order to sustain our position in the asset. In this case, Other Brookfield Accounts, Brookfield Credit &
148
Insurance Accounts (defined below), Oaktree or Other Oaktree Accounts could, for a relatively small investment,
obtain a stake in such asset or take over the management of (and risk relating to) such asset to our detriment.
The interests of Other Brookfield Accounts and other consortium members in certain investments could differ
from ours and could be acquired at different times, at different prices, with a different view (including different
investment objectives and other considerations) and be subject to different terms and conditions. In addition, Other
Brookfield Accounts and other consortium members could dispose of their interests in applicable investments at
different times and on different terms than us, including in situations where Other Brookfield Accounts facilitated an
investment with a view to reselling their portion of such investment to third parties following the closing of the
transaction (which could, in certain situations, result in the Other Brookfield Account receiving compensation for (or
related to) such sale) or where Other Brookfield Accounts or such consortium members seek to reallocate capital to
other opportunities, de-risk of exposures, or otherwise manage their investments differently than us, which could
have an adverse effect on the value or liquidity of our investment. In any such circumstances, such Other Brookfield
Accounts or other consortium members will likely sell interests at different values, and possibly higher values, than
we will be able to when disposing of the applicable investment. Where we invest alongside an Other Brookfield
Account, we may desire to manage our investment differently than such Other Brookfield Account, but may be
restrained from doing so because of the Other Brookfield Account.
Moreover, from time to time, we and one or more Other Brookfield Accounts will jointly acquire a portfolio of
properties or other assets with a view to dividing up the properties or other assets between them in accordance with
our respective investment mandates. In this circumstance, Brookfield will determine the terms and conditions
relating to the investment, including the purchase price associated with each property or other asset, which price
may not represent the price we would have paid if we had acquired only those properties or other assets we
ultimately retain. In certain circumstances, we may have residual liability for assets that were allocated to an Other
Brookfield Account, including potential tax liabilities. Furthermore, from time to time we and an Other Brookfield
Account will jointly enter into a binding agreement to acquire an investment. If such Other Brookfield Account is
unable to consummate such investment, we will likely be subject to additional liabilities, including the potential loss
of any deposit or the obligation to fund the entire investment. Similarly, to the extent that indebtedness in connection
with an investment is structured such that both we and an Other Brookfield Account are jointly responsible on a
cross-collateralized, joint borrower, joint guarantor or similar basis for the repayment of the indebtedness, the failure
of the Other Brookfield Account to repay such indebtedness or meet other obligations may result in our company
being required to fund more than our pro rata share of the indebtedness.
In situations in which Brookfield or an Other Brookfield Account holds an interest in an investment that differs
from ours, conflicts of interest will arise in connection with, among other things, the following: (i) the nature, timing
and terms of our investment and Brookfield’s or such Other Brookfield Account’s investment, (ii) the allocation of
control and other governance rights among our company and Brookfield or such Other Brookfield Account, (iii) the
strategic objectives or timing underlying our investment and Brookfield’s or such Other Brookfield Account’s
investment, (iv) differing disposition rights, views or needs for all or part of an investment, or (v) resolution of
liabilities in connection with an investment among our company and Brookfield or such Other Brookfield Account.
These conflicts result from various factors, including, among other things, investments in different levels of the
capital structure, different measurements of control, different risk profiles, different rights with respect to disposition
alternatives, different investment objectives, strategies and horizons and different target rates of return as well as
rights in connection with co-investors.
As noted above, from time to time, we and Other Brookfield Accounts (including co-investment accounts) will
invest in different classes or types of securities of the same company (or other assets, instruments or obligations
issued by such company) or otherwise on different terms thereby creating divergent interests. For example, if the
company or asset experiences financial distress, bankruptcy or a similar situation, our interest may be subordinated
or otherwise adversely affected by virtue of such Other Brookfield Account’s involvement and actions relating to its
investment to the extent such interest is more senior to, or has different contractual rights than, our position. In these
situations, Brookfield will face conflicts in managing each side’s investment with a view to maximizing its value
and, in connection therewith, pursuing or enforcing rights or activities. At all times, Brookfield will seek to treat our
company and each Other Brookfield Account fairly, equitably and consistent with its investment mandate in
pursuing and managing these investments. However, these factors could result in our and Other Brookfield
149
Accounts’ interests being managed differently under certain circumstances and our company realizing different
returns (including, possibly lower returns) on our investment than Brookfield or Other Brookfield Accounts on
theirs.
In addition, Brookfield will advise Other Brookfield Accounts with respect to different parts of the capital
structure of an investment. As a result, Brookfield could pursue or enforce rights or activities, or refrain from
pursuing or enforcing rights or activities, with respect to a particular investment in which we have invested. We or
such investment could be negatively affected by these activities, and our transactions may be executed at prices or
terms that may be less favorable than would otherwise have been the case. In addition, in the event that Other
Brookfield Accounts hold voting securities of an issuer in which we holds loans, bonds, or other credit-related
securities, Brookfield or such Other Brookfield Accounts may have the right to vote on certain matters that could
have an adverse effect on the positions held by us.
In order to mitigate potential conflicts of interest in these situations, Brookfield may but will not be obligated to
take one or more actions on our behalf or on behalf of itself or an Other Brookfield Account, including one or more
of the following (as it determines in its sole discretion): (i) forbearance of rights, such as causing Brookfield, us or
an Other Brookfield Account to remain passive in a situation in which it is otherwise entitled to vote, which could
mean that we (or Brookfield or an Other Brookfield Account, as applicable) defer to the decision or judgment of an
independent, third-party investor in the same class of securities with respect to decisions regarding defaults,
foreclosures, workouts, restructurings, or similar matters, including actions taken by a trustee or administrative or
other agent of the investment, such as a release, waiver, forgiveness or reduction of any claim for principal or
interest, extension of maturity date or due date of any payment of any principal or interest, release or substitution of
any material collateral, release, waiver, termination or modification of any material provision of any guaranty or
indemnity, subordination of any lien, and release, waiver or permission with respect to any covenants; (ii) causing
Brookfield, us or an Other Brookfield Account to hold only a non-controlling interests in any such investment; (iii)
referring the matter to one or more persons that is not affiliated with Brookfield, such as a third-party loan servicer,
administrative agent or other agent to review or approve of an intended course of action; (iv) establishing ethical
screens or information barriers (which can be temporary and of limited purpose) designed to separate Brookfield
investment professionals to act independently on our behalf, on the one hand, and the Other Brookfield Account, on
the other hand, in each case with support of separate legal counsel and other advisers; (v) seeking to ensure that we
and the Other Brookfield Account own interests in the same securities or financial instruments and in the same
proportions so as to preserve an alignment of interests; or (vi) subject to the limitations set forth in our charter,
causing us (or an Other Brookfield Account) to divest of an investment that it otherwise could have held on to,
including, without limitation, causing us to sell our position to Brookfield or an Other Brookfield Account (or vice
versa).
In the event that a situation arises in the future where our interests with respect to a particular investment
conflict with the interests of one or more Other Brookfield Accounts, Brookfield will in good faith seek to manage
such conflicts of interest in a manner consistent with the procedures described herein, subject to the terms of our
charter. At all times, Brookfield will endeavor to treat us and all Other Brookfield Accounts fairly, equitably and in
an impartial manner. However, there can be no assurance that any action or measure pursued by Brookfield will be
feasible or effective in any particular situation, or that its own interests will not influence its conduct, and it is
possible that the outcome for us will be less favorable than otherwise would have been the case if Brookfield did not
face these conflicts of interest. In addition, the actions and measures that Brookfield pursues are expected to vary
based on the particular facts and circumstances of each situation and, as such, there will be some degree of variation
and potentially inconsistency in the manner in which these situations are addressed.
Investment Platforms
We, alone or co-investing alongside Other Brookfield Accounts or third parties, may develop, organize or
acquire assets that will serve as a platform for investments in a particular sector, geographic area or other niche
(such arrangements, “Investment Platforms”). The management teams for such Investment Platforms (“Platform
Management Teams”) will be owned and controlled by us, Other Brookfield Accounts or third parties, and may be
established through recruitment, contract or the acquisition of one or more portfolio companies. The executives,
officers, directors and shareholders of Platform Management Teams may represent other financial investors with
150
whom we are not affiliated and whose interests may conflict with our interests, or which may include other
professional interests that may conflict with our interests. Platform Management Teams may also provide services
to, and facilitate investments by, our company and Other Brookfield Accounts. We will bear the expenses of
Platform Management Teams as appropriate, which may include (i) overhead expenses, employee compensation,
diligence expenses or other related expenses in connection with backing the Platform Management Team, and (ii)
building out the Investment Platform. Such expenses may be borne directly by us and may include applicable broken
deal expenses. In certain cases, the services provided by a Platform Management Team may overlap with the
services provided by the Adviser to us. The compensation of Platform Management Teams may include interests in
the profits of the Investment Platform, including profits realized in connection with the disposition of an asset, and
co-investments alongside us. Although an Investment Platform may be controlled by us, Other Brookfield Accounts,
or third parties, members of the Platform Management Team will not be treated as employees of Brookfield, and
none of the expenses, profit interests or other arrangements described above will offset the fees we pay to the
Adviser. From time to time, Platform Management Teams (or portions thereof) may be transferred to Brookfield,
and we and our Investment Platforms will not be compensated for such transfer.
Insurance and Reinsurance Capital
Brookfield currently manages, and expects in the future to manage, one or more Other Brookfield Accounts that
include insurance- and reinsurance-related capital (including, for the avoidance of doubt, Brookfield Wealth
Solutions Ltd., formerly known as Brookfield Reinsurance Partners (“BWS”, and together with any other insurance
and reinsurance-related Brookfield Accounts, the “Brookfield Credit & Insurance Solutions Accounts”)). Among
other things, Brookfield Credit & Insurance Solutions Accounts are expected to (a) invest in or alongside our
company and Other Brookfield Accounts, (b) invest in securities, loans, structured financings, and/or other financial
instruments issued by our Company and Other Brookfield Accounts and/or portfolio companies thereof, (c) invest in
different parts of an issuer’s or portfolio company’s capital structure (relative to investments made by our company
and Other Brookfield Accounts, (d) transact with our company and Other Brookfield Accounts, including in respect
of investments (such as certain renewable tax credit investments) and/or other assets or services, (e) provide
financing, refinancing and/or other loans to our company and Other Brookfield Accounts and/or portfolio companies
or investments thereof for acquisition, investment, financing, working capital, and/or other purposes, (f) provide
acquisition financing and other capital solutions to purchasers of assets sold by our company and Other Brookfield
Accounts, and (g) warehouse investments on behalf of our company and Other Brookfield Accounts. These
situations will give rise to conflicts of interests and potential adverse impacts on us.
Structuring of Investments and Subsidiaries
Because Brookfield controls the Adviser, which is entitled to receive management and performance fees,
Brookfield may structure our company and our investments in a manner that is advantageous for Brookfield, and
may implement various strategies and structures over time based on its own interests and objectives, while also
taking into account the interests of our stockholders. In that regard, Brookfield may undertake transactions involving
subsidiary entities of our company that result in such subsidiaries winding up via a series of loans and repayments
that may leave such subsidiaries in existence and owned by Brookfield or its affiliate, but no longer owned by our
company, after the realization of the relevant investment. Brookfield may also cause our company’s subsidiaries to
lend proceeds to Brookfield (without interest), with such proceeds ultimately paid back to our company. Brookfield
may also take all or a portion of distributions to which it is entitled in the form of an interest-free loan from our
company that is later erased. Brookfield may also implement various other strategies and structures over time based
on its own interests and objectives.
Financings
If an Other Brookfield Account, Other Oaktree Account or Brookfield Credit & Insurance Account participates
as a lender in borrowings by us or any of our subsidiaries, Brookfield’s or Oaktree’s interests may conflict with our
interests. In this situation, our assets may be pledged to such Other Brookfield Account, Other Oaktree Account or
Other Insurance Account as security for the loan. In its capacity as a lender, the relevant Other Brookfield Account,
Other Oaktree Account or Brookfield Credit & Insurance Account may act in its own interest, without regard for our
interests, which may materially and adversely affect us, any subsidiary or investment entity and, in certain
151
circumstances such as an event of default, ultimately may result in realization of our assets and a loss of the entire
investment. Any such lending or financing arrangements where we or our subsidiaries are borrowing money from an
affiliate will be subject to approval by a majority of our board of directors (including a majority of our independent
directors) not otherwise interested in the transaction.
Financing to Fund Counterparties
There may be situations in which an Other Brookfield Account or Brookfield Credit & Insurance Account will
offer or commit to provide financing to one or more third parties that are expected to bid for or purchase one of our
investments (in whole or in part) from us.
This type of financing could be provided through pre-arranged financing packages arranged and offered by an
Other Brookfield Account or Brookfield Credit & Insurance Account to potential bidders in the relevant sales
process or otherwise pursuant to bilateral negotiations between one or more bidders and the Other Brookfield
Account. For example, where we seek to sell one of our investments (in whole or in part) to a third party in the
normal course, an Other Brookfield Account or Brookfield Credit & Insurance Account may offer such third-party
debt financing to facilitate its bid and potential purchase of such investment.
This type of arrangement will only be offered in situations in which Brookfield believes it provides benefits to
us by supporting third parties in their efforts to successfully bid for or acquire our investments. However, acquisition
financing arranged and offered by Other Brookfield Accounts or Brookfield Credit & Insurance Accounts also
creates potential conflicts of interest. In particular, such account’s participation as a potential lender in the sales
process could create an incentive to select a third-party bidder that uses financing arranged by an Other Brookfield
Account or Brookfield Credit & Insurance Account to our potential detriment.
In order to mitigate potential conflicts of interest in these situations, the Adviser and its affiliates generally will
seek to take one or more of the following actions (as it determines in their sole discretion) in satisfaction of the
Adviser’s duties to us: (i) offer our investments for sale in the normal course via competitive and blind bidding
processes designed to maximize the sales value for us, (ii) engage one or more independent advisers, such as sell-
side bankers, on our behalf to administer and facilitate a commercially fair and equitable sales process, (iii) consult
with independent advisers with respect to an intended course of action; (iv) establish ethical screens or information
barriers (which can be temporary and of limited purpose) to separate the Brookfield investment professionals that act
on our behalf, on the one hand, from the Brookfield investment professionals that act on behalf of the Other
Brookfield Account or Brookfield Credit & Insurance Account arranging and offering the acquisition financing, on
the other hand, and (v) such other actions that Brookfield deems necessary or appropriate taking into account the
relevant facts and circumstances. However, there can be no assurance that any particular action will be feasible or
effective in any particular situation, or that Brookfield’s own interests will not influence its conduct, and it is
possible that the outcome for our company will be less favorable than otherwise would have been the case if
Brookfield did not face these conflicts of interest. In addition, the actions that Brookfield pursues are expected to
vary based on the particular facts and circumstances of each situation and, as such, there will be some degree of
variation and potentially inconsistency in the manner in which these situations are addressed.
In addition, in certain situations the Adviser may accept a bid for one of our investments from a bidder that
received acquisition financing from an Other Brookfield Account or Brookfield Credit & Insurance Account that is
at a lower price than an offer that it received from a party that has independent financing sources. For example,
although price is often the deciding factor in selecting whom to sell one of our investments to, other factors
frequently influence the seller, including, among other things, closing conditions, lack of committed financing
sources, regulatory or other consent requirements, and such other factors that increase the risk of the higher-priced
bidder being able to complete or close the transaction under the circumstances. The Adviser could therefore cause us
to sell an asset to a third party that has received financing from an Other Brookfield Account or Brookfield Credit &
Insurance Account, even when such third party has not offered the most attractive price. In exercising its discretion
hereunder, the Adviser will seek to ensure that we obtain the most favorable sale package (including sales price and
certainty and speed of closing) on the basis of a commercially fair and equitable sales process.
152
Investments by Brookfield Personnel
The partners, members, shareholders, directors, officers and employees of Brookfield, including the Adviser
(“Brookfield Personnel”), are permitted to buy and sell securities or other investments for their own accounts
(including our securities and interests in Other Brookfield Accounts) or accounts of their family members, including
trusts and other controlled entities. Positions may be taken by such Brookfield Personnel that are the same, different
from, or made at different times than positions taken for our company. To reduce the possibility of (a) potential
conflicts between our investment activities and those of Brookfield Personnel, and (b) our company being materially
adversely affected by personal trading activities described above, Brookfield has established policies and procedures
relating to personal securities trading. To this end, Brookfield Personnel that participate in managing our investment
activities are generally restricted from engaging in personal trading activities (unless such activities are conducted
through accounts over which Brookfield Personnel have no influence or control), and other Brookfield Personnel
generally must pre-clear proposed personal trades. In addition, Brookfield’s policies include prohibitions on insider
trading, front running, trading in securities that are on Brookfield’s securities watch list, trading in securities that are
subject to a black-out period and other restrictions.
Investments by the Related-Party Investor
Certain executives and former executives of Brookfield own a substantial majority of an investment vehicle (the
“Related-Party Investor”) whose investment mandate is managed by Brookfield. The Related-Party Investor’s
investments include, among other things, interests in companies that Other Brookfield Accounts have invested in,
are investing in, are invested in or will in the future invest in, including in certain cases investments made alongside
Other Brookfield Accounts.
There is no information barrier between the personnel managing the Related-Party Investor’s activities and the
rest of Brookfield (with the exception of Oaktree and PSG, which are walled off). Brookfield has adopted protocols
designed to ensure that the Related-Party Investor’s activities do not materially conflict with or adversely affect our
activities (or any Other Brookfield Account) and to ensure that our interests(and the interests of Other Brookfield
Accounts) are, to the extent feasible, prioritized relative to the Related-Party Investor’s interests, including among
others in connection with the allocation of investment opportunities and the timing of execution of investments.
Businesses Subject to Information Walls
Brookfield Corporation holds interests in various asset management businesses that manage their investment
activities independently of each other. These include: (a) Brookfield Asset Management; (b) Brookfield Public
Securities Group, which manages investment funds and accounts that invest in public debt and equity markets
(“PSG”); (c) Castlelake, which focuses on private and public credit including aviation leasing and lending, consumer
credit and SME financing; (d) Duration Capital Partners, which focuses on transportation infrastructure investments;
(e) 17Capital, which focuses on providing financing for private equity portfolios; (f) Pinegrove Capital Partners LLC
(“Pinegrove”), a new, independent asset management business focused on secondary and structured capital solutions
investments in the technology and venture capital space; (g) LCM Capital Management, which provides investment
advisory services to individuals, pension and profit-sharing plans, charitable organizations and corporations; (h)
Primary Wave, which focuses on investments in music royalties and (i) Oaktree, a global investment manager with
significant assets under management, emphasizing an opportunistic, value-oriented and risk-controlled approach to
investments in credit, private equity, real assets and listed equities. As part of the broader Brookfield platform, the
businesses are managed with a view to exploring and executing strategic business development and other initiatives
that are designed to enhance the overall business, including (among others) new marketing strategies, improved
delivery of client services and the sharing of best practices. At the same time, each of these businesses other than
Brookfield Asset Management (collectively, the “Walled-Off Businesses”) is managed pursuant to an information
barrier designed to enable each business to carry out its investment activities independently of the other businesses.
It is expected that Brookfield, our company and its portfolio companies, and the Other Brookfield Accounts and
their portfolio companies will engage in activities and have business relationships that give rise to conflicts (and
153
potential conflicts) of interest between them, on the one hand, and Walled-Off Businesses (including Oaktree, for
the avoidance of doubt), such businesses’ funds and accounts and their portfolio companies, on the other hand.
Conflicts Relating to the Ownership of Oaktree
The Adviser has engaged Oaktree as a sub-adviser. Brookfield holds a majority stake in Oaktree. Brookfield
and Oaktree operate their respective investment businesses largely independently pursuant to an information barrier,
with each operating under its brand and led by its own management and investment teams. So long as the
information barrier remains in place, Oaktree, Other Oaktree Accounts and their respective portfolio companies will
not be treated as “affiliates” of Brookfield or us for purposes of Brookfield’s identification and management of
conflicts of interest (e.g., allocation of investment opportunities, transactions or services with us or Other Oaktree
Accounts). It is expected we and our investments (as well as Other Brookfield Accounts and their portfolio
companies) will engage in activities and have business relationships that give rise to conflicts (and potential
conflicts) of interest between us (or such Other Brookfield Account), on the one hand, and Oaktree and Other
Oaktree Accounts, on the other hand.
There is (and in the future will continue to be) overlap in investment strategies and investments pursued by us
(directly and indirectly) and Other Oaktree Accounts. Nevertheless, the Adviser does not expect to coordinate or
consult with Oaktree with respect to investment activities or decisions for our company other than with respect to the
services provided to us by the Sub-Adviser pursuant to the Sub-Advisory Agreement. While this absence of
coordination and consultation, and the information barrier described above, will in some respects serve to mitigate
conflicts of interests between us and Other Oaktree Accounts, these same factors also will give rise to certain
conflicts and risks in connection with Brookfield’s and Oaktree’s investment activities, and make it more difficult to
mitigate, ameliorate or avoid such situations. For example, because neither Brookfield nor Oaktree are expected to
coordinate or consult with the other about investment activities or decisions made by the other, other than with
respect to the services provided to us by the Sub-Adviser, and neither Brookfield nor Oaktree is expected to be
subject to any internal approvals over its investment activities and decisions by any person who would have
knowledge or decision-making control of the investment decisions of the other, it is expected that Oaktree will
pursue investment opportunities for Other Oaktree Accounts which are suitable for us or Other Brookfield Accounts,
but which are not made available to us or such Other Brookfield Accounts. We and Oaktree may also compete for
the same investment opportunities. Such competition may adversely impact the purchase price of investments.
Oaktree will have no obligation to, and generally will not, share investment opportunities that may be suitable for us
with Brookfield, and Brookfield and we will have no rights with respect to any such opportunities. In addition,
Oaktree will not be restricted from forming or establishing new Other Oaktree Accounts, such as additional funds or
successor funds, some of which may directly compete with us for investment opportunities. We and Other Oaktree
Accounts may purchase or sell an investment from each other. The Adviser and Oaktree will seek to ensure that any
such transaction is executed on an arm’s-length basis and subject to approvals, if any, that may be required from a
governance, regulatory or other perspective.
In addition, from time to time and subject to the limitations set forth in our charter, Other Oaktree Accounts
may hold an interest in an investment (or potential investment) of ours, or subsequently purchase (or sell) an interest
in an investment (or potential investment) of ours including in different parts of the capital structure. For example,
subject to the limitations set forth in our charter, we may hold the equity of a portfolio company of an Other Oaktree
Account. In such situations, Other Oaktree Accounts could benefit from our direct or indirect activities. Conversely,
we could be adversely impacted by Oaktree’s activities. In addition, as a result of different investment objectives,
views or interests in investments, it is expected that Oaktree will manage certain Other Oaktree Accounts’ interests
in a way that is different from our interests (including, for example, by investing in different portions of an issuer’s
capital structure, short selling securities, voting securities or exercising rights it holds in a different manner, or
selling its interests at different times than us), which could adversely impact our direct or indirect interests. Oaktree
and Other Oaktree Accounts are also expected to take positions, give advice and provide recommendations that are
different, and potentially contrary to those which are taken by, or given or provided to, us, and are expected to hold
interests that potentially are adverse to those held by us, directly or indirectly. We, on the one hand, and Other
Oaktree Accounts, on the other hand, will in certain cases have divergent interests, including the possibility that,
subject to the limitations set forth in our charter, our interests are subordinated to Other Oaktree Accounts’ interests
or are otherwise adversely affected by Other Oaktree Accounts’ involvement in and actions related to an investment.
154
Oaktree will not have any obligation or other duty to make available for our benefit any information regarding its
activities, strategies or views.
Brookfield and Oaktree may decide at any time to remove or modify the information barrier between Brookfield
and Oaktree. In the event that the information barrier is removed or modified, it would be expected that Brookfield
and Oaktree will adopt certain protocols designed to address potential conflicts and other considerations relating to
the management of their investment activities in a different framework.
The Sub-Advisory Agreement was approved by a majority of our board of directors (including a majority of our
independent directors) not otherwise interested in such transaction. The Sub-Advisory Agreement was not the result
of arm’s-length negotiations, and as a result, the fees paid to the Sub-Adviser thereunder may exceed what would be
paid to an independent third party. In addition, Oaktree or an affiliate thereof may also be retained by the Adviser to
provide a variety of additional services to us that would otherwise be provided by an independent third party. Any
such engagement would require approval by a majority of our board of directors (including a majority of our
independent directors) not otherwise interested in the transaction.
In addition, Oaktree or an affiliate thereof may also be retained by the Adviser to provide a variety of additional
services to us that would otherwise be provided by an independent third party. Any such engagement would require
approval by a majority of our board of directors (including a majority of our independent directors) not otherwise
interested in the transaction.
Material, Non-Public Information
We have engaged Oaktree as our sub-adviser with respect to our Investment Sleeve. Our ability to buy or sell
certain securities or take other actions is expected to be restricted in certain circumstances, including by applicable
securities laws, regulatory requirements, contractual obligations or reputational risk considerations applicable to
Brookfield and Oaktree (or their internal policies designed to comply with these and similar requirements). For
example, Brookfield and Oaktree will possess material, non-public information about issuers that would limit our
ability to buy and sell securities related to those issuers.
Furthermore, Brookfield (including PSG, Oaktree and other Brookfield businesses that are separated by
information barriers) and Other Brookfield Accounts are deemed to be affiliates for purposes of certain laws and
regulations and it is anticipated that, from time to time and subject to the limitations set forth in our charter, we and
Other Brookfield Accounts will each have positions (which in some cases will be significant) in one or more of the
same investments in one or more of the same issuers that Brookfield needs to aggregate for certain securities laws
and other regulatory purposes (including for purposes of certain trading restrictions and/or reporting obligations in
various jurisdictions). Consequently, activities by Brookfield Accounts could result in earlier public disclosure of
investments by us or Other Brookfield Accounts, restrictions on transactions by us or Other Brookfield Accounts
(including the ability to make or dispose of certain investments at certain times), adverse effects on the prices of
investments made by us or Other Brookfield Accounts, potential short-swing profit disgorgement, penalties and/or
regulatory remedies, or otherwise create conflicts of interest for Brookfield and the Adviser.
As a result of the foregoing, the Adviser may restrict, limit or reduce the amount of our investments. In addition,
certain of our investments may become subject to legal or other restrictions on transfer following their acquisition.
The Adviser may also reduce our interest in, or restrict us from participating in, an investment opportunity that has
limited availability or where Brookfield has determined to cap its aggregate investment in consideration of certain
regulatory or other requirements so that Other Brookfield Accounts that pursue similar investment strategies may be
able to acquire an interest in such investment opportunity. The Adviser may determine not to engage in certain
transactions or activities which may otherwise be beneficial to us because engaging in such transactions or activities
in compliance with applicable law would result in significant cost to, or administrative burden on, the Adviser or
create the potential risk of trade or other errors.
Allocation of Costs and Expenses
The Adviser decides whether costs and expenses (including, among others, those incurred in connection with
Affiliated Services, internal audits and engagements of third-party service providers) are to be borne by us, on the
155
one hand, or the Adviser (or an affiliate thereof), on the other hand, and whether certain costs and expenses should
be allocated between or among us, on the one hand, and Other Brookfield Accounts, on the other hand, pursuant to
the terms of the Advisory Agreement. Examples of costs and expenses allocated across multiple Other Brookfield
Accounts (and expected to be allocated in part to us) would be investor reporting systems and software, technology
services, accounting, group insurance policies, portfolio and investment tracking and monitoring systems, trade
order management system and legal, tax, compliance, support personnel and other similar costs and expenses that
relate to our company and one or more Other Brookfield Accounts. Costs and expenses are expected to be allocated
by the Adviser, as applicable, in its good faith judgment, which is inherently subjective, among our company and
those Other Brookfield Accounts that benefit from such costs and expense. Certain costs and expenses, such as costs
and expenses relating to support services performed for our benefit, may be aggregated together with similar costs
and expenses applicable to Other Brookfield Accounts and split among us and such Other Brookfield Accounts in a
manner determined by the Adviser (which may include, among other possible methodologies, allocating based on
the relative size of each relevant Other Brookfield Account and our company). In these cases, such aggregation will
result in us or our investments bearing a portion of costs and expenses that relate to services performed for the
benefit of Other Brookfield Accounts (while Brookfield or such Other Brookfield Accounts will bear a portion of
costs and expenses that relate to services performed for us). Any such allocation could result in us bearing a higher
portion of such costs and expenses than it would under a different allocation methodology. See “Administrative
Services” below.
In addition, where a potential investment is pursued on behalf of one or more Other Brookfield Accounts and
us, the party that ultimately makes the investment (or, in the case of a potential investment that is not consummated,
the party that Brookfield determines, in its discretion, ultimately would have made the investment) will generally
bear the costs and expenses related to such investment (including broken deal costs, in the case of an investment that
is not consummated), which may include reimbursing the Other Brookfield Accounts for such costs and expenses.
Examples of broken deal expenses include (i) research costs, (ii) fees and expenses of legal, financial, accounting,
consulting or other advisers (including, subject to the limitations set forth in our charter and the Advisory
Agreement, the Adviser or its affiliates) in connection with conducting due diligence or otherwise pursuing a
particular non-consummated transaction, (iii) fees and expenses in connection with arranging financing for a
particular non-consummated transaction, (iv) travel costs, (v) deposits or down payments that are forfeited in
connection with, or amounts paid as a penalty for, a particular non-consummated transaction and (vi) other expenses
incurred in connection with activities related to a particular non-consummated transaction. The Adviser intends to
make such expense allocation judgments in its discretion, and it may modify or change its allocation methodologies
from time to time to the extent it determines such modifications or changes are necessary or advisable, which
modifications or changes could result in us or Other Brookfield Accounts bearing less (or more) costs and expenses
than it otherwise would have borne without such modifications.
Affiliated Services and Transactions
Brookfield intends to perform or provide a variety of different services or products to us and our investments or
potential investments that would otherwise be provided by the management team of an investment or independent
third parties, including (among others): lending and loan special servicing, arranging, negotiating and managing
financing, refinancing, hedging, derivative, managing workouts and foreclosures and other treasury and capital
markets arrangements; investment banking; investment support, including investment backstop, guarantees and
similar investment support arrangements; advisory, consulting, brokerage, market research, appraisal, valuation, risk
management, assurance, and audit services (including related to investment, assets, commodities, goods and
services); financial planning, cash flow modeling and forecasting, accounting, consolidation, reporting, books and
records, bank account and cash management, controls and other financial operations services; transaction support,
assisting with review, underwriting, analytics, due diligence and pursuit of investments and potential investments;
anti-bribery and corruption, anti-money laundering and “know your customer” reviews, assessments and compliance
measures; investment onboarding (including training employees of investments on relevant policies and procedures
relating to risks); legal (including, but not limited to, in connection with Rate Schedule (as defined below) services),
compliance, regulatory, tax and corporate secretarial services; fund administration, accounting and reporting
(including coordinating, supervising and administering onboarding, due diligence, reporting and other administrative
services, including those associated with the third-party fund administrator and placement agents and client
156
onboarding (including review of subscription materials and coordination of anti-bribery and corruption, anti-money
laundering or “know your customer” reviews and assessments)); preparation and review of operative documents,
negotiation with prospective investors and other services that would be considered organizational expenses of our
company if performed by a third party; real estate asset management, including but not limited to performing
portfolio company executive functions (CEO, CFO, CIO, COO, CAO, General Counsel, etc.), developing and
overseeing execution of strategic business plans, budgets, managing tenant relationships and marketing strategy,
asset onboarding and integration, and appointing and overseeing property managers and development managers;
acting as owner’s representative; data generation, data analytics, data analysis, data collection and data management
services; participation in and/or advice on a range of activities by strategic and/or operations of professionals with
established industry expertise, including among others in connection with (or with respect to) the origination,
identification, assessment, pursuit, coordination, execution and consummation of investment opportunities,
including project planning, engineering and other technical analysis, securing site control, preparing and managing
approvals and permits, financial analysis and managing related-stakeholder matters; real estate, leasing and/or asset/
facility management; service as administrative and collateral agent; development management (including pre-
development, market and site analysis, modeling, zoning, entitlements, land use, pre-construction, community and
government relations, design, environmental review and approvals, securing and administering compliance with
governmental agreements, government approvals and incentive programs, permitting, site safety planning and
construction); marketing, branding and communications (including of power or other output by an underlying asset/
portfolio company); environmental and sustainability services; the placement and provision of various insurance
policies and coverage and/or reinsurance thereof, including via risk retention, insurance captives and/or alternative
insurance solutions; system controls; human resources, payroll and welfare benefits services; health, life and
physical safety, security, operations, maintenance and other technical specialties; supply and/or procurement of
power, energy and/or other commodities/goods/products; information technology services, risk management and
innovation (including cyber/digital security and related services); all services contemplated by the Rate Schedule;
property operations (i.e., facilities management); other operational, back office, administrative and governance
related services; oversight and supervision of the provision, whether by a Brookfield affiliate/related party or a third
party, of the above-referenced services and products; and any other services that Brookfield deems appropriate,
relevant and/or necessary in connection with the operations and/or management of our company and its
stockholders, investments, potential investments and/or investment entities (such services, collectively, “Affiliated
Services”). To the extent that Brookfield (including any of its affiliates or personnel, other than portfolio companies
of Other Brookfield Accounts) provides Affiliated Services to us, a feeder vehicle or any of our investments, such
person or their affiliates or designees will receive fees or cost reimbursement (which may include a carried interest
or similar type of incentive fee): (a) at rates set out in a rate schedule that is approved by a majority of our board of
directors (including a majority of our independent directors) not otherwise interested in the transaction, as fair and
reasonable and no less favorable than rates charged by third parties for comparable services (the “Rate Schedule”);
(b) to the extent that rates for an Affiliated Service are not included in the Rate Schedule, at or below an arm’s-
length market rate that is approved by a majority of our board of directors (including a majority of our independent
directors) not otherwise interested in the transaction as fair and reasonable and no less favorable than rates charged
by third parties for comparable services (“Affiliated Service Rate”); (c) at cost (including an allocable share of
internal costs), plus an administrative fee of 5%; or (d) at any other rates with consent from a majority of our board
of directors (including a majority of our independent directors). A portion of any fees paid to Brookfield affiliates in
accordance with the Rate Schedule or for any support services that are not included on the Rate Schedule may be
paid as a pass-through of payroll costs for the Brookfield personnel providing such services (in which case the
amount payable as a fee in accordance with the Rate Schedule will be reduced on a dollar-for-dollar basis).
Additionally, pass-through or other costs may be charged for support services in advance based on estimated
budgets (including estimates regarding costs, expected services, estimated relative sizes of the assets and/or
businesses, and/or estimated time frames) and, to the extent determined by Brookfield to be required or warranted,
will be subject to true-up once the relevant Affiliate Services are complete or periodically throughout the services
period for any material adjustments. For the avoidance of doubt, Brookfield has discretion to decide when to charge
cost plus an administrative fee of 5% instead of using the Rate Schedule or the Affiliate Service Rate, including in
situations where cost plus 5% results in a higher fee.
With respect to Affiliated Services, the costs of personnel managing day to day operations of an investment
(collectively, “Operating Personnel”), in each case whether employed by Brookfield or a third-party and whether
157
performing services on site or off site, will be charged our investments at cost (including an allocable share of
internal costs) in addition to the fees that are prescribed by the Rate Schedule or the Affiliate Service Rate, as
applicable. For the avoidance of doubt, the fees so charged will not be reduced by the costs of Operating Personnel.
The passed-through costs of such Operating Personnel are often substantial, and in certain cases, are expected to
exceed the amount of fees charged in accordance with the Rate Schedule or the Affiliated Services Rate, as
applicable.
In certain cases, Brookfield will oversee and/or supervise third-party service providers who provide services
that, if performed by Brookfield, would be charged to us in accordance with the Rate Schedule and/or the Affiliate
Service Rate; in such cases, Brookfield may charge, (i) fees that, when combined with the fees charged by the third-
party services provider, are at a rate equal to or less than those set out in the Rate Schedule, or (ii) at cost (including
an allocable share of internal costs) plus an administrative fee of 5% in addition to the third-party service provider’s
fees, which amounts may in the aggregate exceed the rates set forth on the Rate Schedule. In addition to overseeing
or supervising third-party service providers, Brookfield may provide certain ancillary services connected to the
third-party service provider’s engagement (including, but not limited to, financial reporting and business planning).
To the extent such ancillary services are not covered by the Rate Schedule, they will generally be provided at cost
(including an allocable share of internal costs) plus an administrative fee of 5% in addition to the third-party service
provider's fees, which amounts may in the aggregate exceed the rates set forth on the Rate Schedule.
For the avoidance of doubt, where a Brookfield affiliate is engaged to provide Affiliated Services in connection
with one of our investments, the amount charged (whether such Affiliated Services are provided in accordance with
the Rate Schedule, at the Affiliate Service Rate, or otherwise) may include (i) a management promote, incentive fee
or other performance-based compensation for certain employees and the cost of such performance compensation
will be paid by the applicable investment and (ii) a pass-through of costs, including (a) compensation for personnel
(including salary and other compensation), expenses (including human resources, rent and office services, talent
acquisition, professional development, travel and professional fees), and other benefits, as reasonably allocated, and
(b) information technology hardware, computing power or storage, software licenses and related ancillary and
information technology personnel costs incurred in providing the service; in each case, the passed-through costs may
be substantial relative to the fees charged for the service. In certain situations, personnel may provide an Affiliate
Service to multiple assets (including assets not owned by us) or to our company and one or more Other Brookfield
Accounts, in which case only a portion of the applicable costs would be passed through to us. Where Affiliated
Services are in place prior to our ownership of an investment and cannot be amended without the consent of an
unaffiliated third party, we will inherit the pre-existing fee rates for such Affiliated Services (subject to the approval
of such fees by a majority of our board of directors (including a majority of our independent directors) not otherwise
interested in the transaction as being fair and reasonable to us and on terms and conditions no less favorable than
those which could be obtained from unaffiliated third parties) until (i) such time at which third-party consent is no
longer required or (ii) we seek consent from the unaffiliated third party to amend such rates. Accordingly, while we
may seek consent of the unaffiliated third party to amend any pre-existing fee rates, Brookfield will be incentivized
to seek to amend the pre-existing fee arrangement in certain circumstances and dis-incentivized to do so in others.
For example, Brookfield will be incentivized to seek consent to amend the rate in circumstances where the amended
fee would be higher than the pre-existing rate, and conversely may choose not to (and will not be required to) seek
consent to amend any pre-existing fee rates if the amended rate would be lower than the pre-existing rate.
We may amend the Rate Schedule from time to time in our discretion with approval of a majority of our board
of directors (including a majority of our independent directors) not otherwise interested in the transaction; provided,
that we may, in our sole discretion, amend the Rate Schedule from time to time to reflect any reductions in any rates
listed therein. For the avoidance of doubt, any determination to utilize any Affiliate Services made by a portfolio
company in respect of which we do not hold a controlling interest shall not be subject to the foregoing limitations.
To the extent Affiliated Services are provided, the Adviser will provide our board of directors with notice of any
such material arrangements on a quarterly basis. Compensation for Affiliated Services will not be shared with us (or
offset against the fees we pay to the Adviser) and may be substantial. The potential for compensation, both current
and future, inherent in a particular transaction could be an incentive for the Adviser to seek to refer or recommend a
transaction to us. Furthermore, providing services or products to us and our investments may enhance Brookfield’s
158
relationships with various parties, facilitate additional business development and enable Brookfield to obtain
additional business and generate additional revenue.
Subject to the approval of a majority of our board of directors (including a majority of our independent
directors) not otherwise interested in the transaction. Brookfield will determine the Affiliate Service Rate for each
Affiliate Service in good faith at the time that it is engaged to provide the service. The determination of the Affiliate
Service Rate will be based on one or more factors, including, among other things: (i) the rate that one or more
comparable service providers (which may or may not be a competitor of Brookfield) charge third parties for similar
services (at the time of determination); (ii) market knowledge (which may be based on inquiries with one or more
market participants); (iii) the rate charged by Brookfield to a third party for similar services (or the methodology
used to set such rates); (iv) advice of and/or information provided by one or more third-party agents, consultants
and/or other market participants, including fee data and benchmark analyses (which could be based on proprietary
models that utilize various inputs, assumptions and/or estimates deemed relevant by the third-party); (v) commodity
or other rate forecasting; (vi) the rate agreed to pursuant to a competitive arm’s length bidding process (which may
not reflect the lowest rate bid during the process, but that is inherent in an engagement that is deemed by Brookfield
to be in the best interests of our company and/or its investments taking into account the totality of factors relating
thereto); (vii) the rate required to meet certain regulatory requirements or qualify for particular governmental
programs; the rate charged by professional services firms for the similar services (at the time of determination);
(viii) rates required to meet certain regulatory requirements or qualify for particular governmental programs; (ix) in
the case of services which Brookfield provides as part of a syndicate, such as investment banking or brokerage
services, the rate that is negotiated and/or determined by a third-party member of the syndicate; (x) the rate that a
third party agreed to provide the service at pursuant to a term sheet or similar agreement or understanding; (xi) the
rate the portfolio company agreed to pay (in cases where the relevant Other Brookfield Account holds a minority
investment in the portfolio company with limited or no control rights, such that Brookfield negotiates such rate with
the portfolio company on an arm’s length basis); and/or (xii) other subjective and/or objective metrics deemed
relevant by Brookfield or our board of directors. To the extent Brookfield retains the services of a third-party
consultant or agent to assist in determining an Affiliate Service Rate, we will bear the fees and cost of such third-
party consultant or agent. In addition, to the extent that an Affiliate Service charged at the Affiliate Service Rate is
programmatic rather than a one-off engagement (and thus expected to be entered into repeatedly over the course of a
number of years), we will refresh our analysis of the Affiliate Service Rate utilizing the foregoing factors at a
frequency determined by how often rates change in the relevant market.
While Brookfield will determine in good faith, subject to the approval of a majority of our board of directors
(including a majority of our independent directors) not otherwise interested in the transaction, each Affiliate Service
Rate at the time of the relevant engagement as set out above, there will likely be variances in the marketplace for
similar services based on an array of factors that affect providers and rates for services, including, but not limited to,
loss leader pricing strategies or other marketing and competitive practices, integration efficiencies, geographic
market differences, and the quality of the services provided. In addition, in determining the Affiliated Service Rate
for any Affiliated Service, Brookfield will exercise discretion as to which factor(s), and which elements within such
factor(s), to rely on. For example, in relying on information provided by one or more third parties, such as fee data
and benchmark analyses, Brookfield could determine to rely on data and/or analyses relating to one benchmark
transaction, a set of transactions that were executed within a particular time period and/or one or more particular
industries, or other universe of benchmark transaction(s), as it determines in its sole discretion. There can be no
assurances that the Affiliate Service Rate charged by Brookfield for any Affiliate Service will not be greater than the
rate charged by certain similarly situated service providers for similar services in any given circumstance. In
addition, the Affiliate Service Rate charged for any Affiliate Service at any given time following the relevant
engagement may not match a then-current market rate because the market rate for the service may have increased or
decreased over time. For the avoidance of doubt, fees may be charged for Affiliated Services (whether in accordance
with the Rate Schedule, Affiliate Service Rates or otherwise) in advance based on estimated budgets or time periods,
and subject to true-up once the relevant Affiliated Services are complete.
In addition, Brookfield, the Adviser and their personnel from time to time receive certain intangible or other
benefits or perquisites arising or resulting from their activities on our behalf, which will not reduce the fees we pay
to the Adviser or otherwise be shared with us. Such benefits will inure exclusively to Brookfield or its personnel
159
receiving them, even if they are significant or difficult to value and even though the cost of the underlying service is
borne by us or our investments. For example, airline travel or hotel stays we or the Adviser incur as expenses
typically result in “miles” or “points” or credit in loyalty or status programs and such benefits or amounts will,
whether or not de minimis or difficult to value, inure exclusively to Brookfield, the Adviser or such personnel (and
not us) even though the cost of the underlying service is ultimately borne by us or our investments. Similarly, the
volume of work that service providers receive from Brookfield, which include those from us and our investments,
results in discounts for such services that Brookfield will benefit from, while we and our investments will not be
able to benefit from certain discounts that apply to Brookfield. In addition, Brookfield makes available certain
discount programs to its employees as a result of Brookfield’s relationship with a given investment (e.g., “friends
and family” discounts). The size of these discounts on products and services provided by portfolio companies (and,
potentially, customers or suppliers of such portfolio companies) could be significant. The potential to receive such
discounts could provide an incentive for Brookfield to cause us or an investment to enter into transactions that may
or may not have otherwise been entered into in the absence of these arrangements and benefits. Financial benefits
that Brookfield and its personnel derive from such transactions will generally not be shared with us. Such discounts
may include the ability to lease units in rental housing owned by us at significantly discounted rates. Brookfield may
also offer referral bonuses to its employees who refer tenants to buildings owned by us.
When permitted by applicable law and subject to the limitations set forth in our charter, the Adviser may (but is
under no obligation to) cause us to acquire or dispose of investments in cross trades between us and Other
Brookfield Accounts or effect principal transactions where the Adviser causes us to purchase investments from or
sell investments to Brookfield or certain Other Brookfield Accounts; provided that, any such transaction must be
approved by a majority of our board of directors (including a majority of our independent directors) not otherwise
interested in the transaction. There may be potential conflicts of interest or regulatory issues relating to these
transactions which could limit the Adviser’s decision to engage in these transactions. In connection with a cross
trade or a principal transaction, the Adviser and its affiliates may have a potentially conflicting division of loyalties
and responsibilities regarding us and the other parties to the trade and have developed policies and procedures in
relation to such transactions and conflicts. However, there can be no assurance that such transactions will be
effected, or that such transactions will be effected in the manner that is most favorable to us as a party to any such
transaction.
Administrative Services
The Adviser expects to perform certain support services for us and our investments that could otherwise be
outsourced to third parties, including legal, accounting, investor relations, tax, capital markets, financial operations
services and other administrative services. Pursuant to the Advisory Agreement, we will reimburse the Adviser for
such administrative service expenses, including, but not limited to, personnel and related employment costs incurred
by the Adviser or its affiliates in performing such services on our behalf, provided that no reimbursement shall be
made for expenses related to personnel of the Adviser and its affiliates who provide investment advisory services to
us pursuant to the Advisory Agreement or who serve as our directors or executive officers as designated by our
board of directors.
When these administrative services described above are provided, we will also reimburse the Adviser for its
costs and expenses incurred in providing these services (including an allocable share of internal costs). Such internal
costs will include an allocable portion of the compensation (including incentive compensation), expenses (including
information technology costs, human resources support, rent and office services, talent acquisition, professional
development, travel, and professional fees) and other benefits associated with the Brookfield employees providing
these services, in accordance with Brookfield’s internal allocation practices.
While the Adviser believes that the cost of the expense reimbursements associated with these administrative
services is reasonable, the extensive and specialized nature of the services may result in such costs not being
comparable to those charged for similar services (to the extent available) by other third parties. The Adviser will be
under no obligation to evaluate alternative providers or to compare pricing for these administrative services. While
the Adviser believes that this enhances the services the Adviser can offer to us and our investments in a cost-
efficient manner, the relationship presents conflicts of interest. The Adviser will set the compensation for the
160
employees who provide these administrative services and will determine other significant expenditures that will
affect the expense reimbursement provided by us and our investments.
The types of administrative services that the Adviser provides to us and our investments will not remain fixed
and should be expected to change over time as determined by the Adviser, and the Adviser expects that our overall
share of expense reimbursements for administrative services will vary over time based on the particular scope of
services provided to us and Other Brookfield Accounts.
Brookfield expects (but will not be obligated) to utilize different methodologies (that it determines, in its sole
discretion, to be fair and reasonable) to determine the portion of pass-through and other costs to be allocated to us
and/or one or more Other Brookfield Accounts in respect of the administrative services. The methodologies will, in
certain cases, be based on estimates made by the Adviser in its sole discretion in good faith. These methodologies
are expected to include (i) the amount of time spent by employees providing such services (including on the basis of
estimates and/or at a blended rate); and (ii) the estimated level of effort required to provide a service relative to other
services provided by the same employees (for instance, the allocation of costs for employees providing financial
reporting services could be allocate based on the estimated level of effort required for audited financial statements
versus unaudited financials).
At all times, Brookfield will endeavor to make these determinations fairly, reasonably and in an impartial
manner. However, there can be no assurance that any determination will accurately reflect the actual value of the
administrative services received in any particular situation, or that its own interests won’t influence its
determinations, or that a different methodology would not have also been fair and reasonable and that such other
methodology would not yield a different result. The pass through and other costs described above will not be shared
by us or our shareholders or offset against management fees. Pass through or other costs may be charged for
administrative services in advance based on estimated budgets (including estimates regarding costs, expected
services, estimated relative sizes of the assets and/or businesses, and/or estimated time frames) and to the extent
determined by Brookfield to be required or warranted will be subject to true-up once the relevant Affiliated Services
are complete, or periodically throughout the services period for any material adjustments.
Transactions with Portfolio Companies
In addition to any Affiliated Services described above, certain of our investments will in the ordinary course of
business provide services or goods to, receive services or goods from, lease space to or from, or participate in
agreements, transactions or other arrangements with (including the purchase and sale of assets and other matters that
would otherwise be transacted with independent third parties), portfolio companies owned by Other Brookfield
Accounts, PSG, Oaktree, Other Oaktree Accounts and Non-Controlled Affiliates. Some of these agreements,
transactions and other arrangements would not have been entered into but for the affiliation or relationship with
Brookfield and, in certain cases, are expected to replace agreements, transactions or arrangements with third parties.
In cases where such portfolio companies are “affiliates” of Brookfield, the Adviser, the Sub-Adviser, or any of their
respective affiliates for purposes of our charter, these transactions will be entered into only with the approval by a
majority of our board of directors (including a majority of our independent directors) not otherwise interested in the
transactions as being fair and reasonable to us and on terms and conditions no less favorable than those which could
be obtained from unaffiliated third parties. These agreements, transactions and other arrangements will involve
payment or receipt of fees, expenses and other amounts or other benefits to or from the portfolio companies of such
Other Brookfield Accounts, PSG, Oaktree, Other Oaktree Accounts and Non-Controlled Affiliates (including, in
certain cases, performance-based compensation paid to such portfolio companies). While such arrangements or
transactions and the fees or compensation involved have the potential for inherent conflicts of interest, Brookfield
believes that the access to Brookfield (including portfolio companies of Other Brookfield Accounts) enhances our
capabilities and is an integral part of our operations.
None of the agreements, transactions or other arrangements will impact the fees that we pay the Adviser
pursuant to the Advisory Agreement or any fee for Affiliated Services payable to Brookfield (i.e., such portfolio
companies and Non-Controlled Affiliates will be free to transact in the ordinary course of their businesses without
limitations, including by charging their ordinary rates for such services or, in Brookfield’s discretion, by charging
rates consistent with the Rate Schedule).
161
Furthermore, Brookfield (or Other Brookfield Accounts, Other Oaktree Accounts or their businesses) will from
time to time make equity or other investments in companies or businesses that provide services to or otherwise
contract with us or our investments. In particular, Brookfield has in the past entered into, and expects to continue to
enter into, relationships with companies in the technology, real assets services and other sectors and industries in
which Brookfield has broad expertise and knowledge, whereby Brookfield acquires an equity or other interest in
such companies that may, in turn, transact with us or our investments. For example, Brookfield (through an
investment program referred to as Brookfield Technology Partners) invests in emerging technology companies that
develop and offer technology products that are expected to be of relevance to us and our investments (as well as
third-party companies operating in similar sectors and industries). In connection with such relationships, Brookfield
refers, introduces or otherwise facilitates transactions between such companies and us and our investments, which
result in benefits to Brookfield (or Other Brookfield Accounts, Other Oaktree Accounts or their businesses),
including via increased profitability of the relevant company, as well as financial incentives or milestones which
benefit Other Brookfield Accounts or businesses (including through increased equity allotments), which are likely in
some cases to be significant. Such financial incentives that inure to or benefit Other Brookfield Accounts, Other
Oaktree Accounts or their businesses pose an incentive for the Adviser to cause us or our investments to enter into
such transactions that may or may not have otherwise been entered into. Financial incentives derived from such
transactions will generally not be shared with us. Furthermore, such transactions are likely to contribute to the
development of expertise, reputational benefits or the development of new products or services by Brookfield (or
Other Brookfield Accounts, Other Oaktree Accounts or their businesses), which Brookfield will seek to capitalize on
to generate additional benefits that are likely to inure solely to Brookfield (or Other Brookfield Accounts, Other
Oaktree Accounts or their businesses) and not to us.
Brookfield (or the portfolio companies’ management teams, as applicable) will seek to ensure that each
transaction or other arrangement that we or our investments enter into satisfies a legitimate business need of ours or
the applicable investment, with terms to be determined in good faith as fair, reasonable and equitable under the
circumstances based on our or our investments’ normal course process for evaluating potential business transactions
and counterparties. In making these determinations, Brookfield or the management teams of the portfolio companies
will take into account such factors that they deem relevant, which will include the potential benefits and synergies of
transacting with a Brookfield related party. Brookfield may take its own interests (or the interests of Other
Brookfield Accounts or businesses) into account in considering and making determinations regarding these matters.
In certain cases, these transactions will be entered into with active participation by Brookfield and in other cases by
the portfolio companies’ management teams independently of Brookfield. Moreover, any fees or other financial
incentives paid to the relevant company will not offset or otherwise reduce fees that we pay the Adviser pursuant to
the Advisory Agreement or other compensation paid to Brookfield, will not otherwise be shared with us and, subject
to the limitations set forth in our charter, will not be subject to the Affiliate Service Rates.
While these agreements, transactions or arrangements raise potential conflicts of interest, Brookfield believes
that our access to Other Brookfield Accounts and their portfolio companies enhances our (and our investments’)
capabilities, is an integral part of our operations and will provide benefits to us that would not exist but for our
affiliation with Brookfield.
Notwithstanding anything herein to the contrary, subject to the limitations set forth in our charter, where
Brookfield employees are hired or retained by, or seconded to, one or more of our investments or a Brookfield
affiliate on behalf of an investment, all or a portion of the compensation and overhead expenses relating to such
employees (including salaries, benefits, and incentive compensation, among other things) will directly or indirectly
be borne by the applicable investment, and in turn, may be directly or indirectly borne by us via our ownership
interest in such investment. Any such arrangement may be on a permanent or temporary basis, or on a full-time or
part-time basis, in order to fill positions or provide services that may otherwise be filled or provided by third parties
hired or retained by such investment. To the extent any Brookfield employees are hired or retained by, or seconded
to, an investment, the investment may pay such persons directors’ fees, salaries, consultant fees, other cash
compensation, stock options or other compensation and incentives and may reimburse such persons for any travel
costs or other out-of-pocket expenses incurred in connection with the provision of their services. Brookfield may
also advance compensation to seconded Brookfield employees and be subsequently reimbursed by the applicable
investments. Any compensation customarily paid directly by Brookfield to such persons typically will be reduced to
162
reflect amounts paid directly or indirectly by the investment even though the fees we pay to the Adviser will not be
reduced, and amounts paid to such persons by an investment will not be offset against such fees. Additionally, the
method for determining how (i) certain compensation arrangements are structured and valued (particularly with
respect to the structure of various forms of incentive compensation that vest over time and whose value upon
payment is based on estimates) and (ii) overhead expenses are allocated, in each case require certain judgments and
assumptions, and as a result our investments (and our company indirectly) may bear higher costs than they would
have had such expenses been valued, allocated or charged differently.
Brookfield could benefit from arrangements where Brookfield employees are hired or retained by, or seconded
to, one or more investments or a Brookfield affiliate on behalf of an investment (for example, in the case where an
investment makes a fixed payment to Brookfield to compensate Brookfield for a portion of an employee’s incentive
compensation, but such employee does not ultimately collect such incentive compensation). Additionally, there
could be a circumstance where an employee of Brookfield or a portfolio company of a Brookfield Account, PSG,
Oaktree or an Oaktree Account may become an employee or secondee of one or more of our investments (or vice
versa) and, in connection therewith, be entitled to retain unvested incentive compensation received from the
company it is transferring or being seconded from. While such incentive compensation would be subject to
forfeiture under other circumstances, given the prior employment by a Brookfield related company, such incentive
compensation may continue to vest as if such employee continued to be an employee of the company from which it
is transferring. Any such arrangements would require approval by a majority of our board of directors (including a
majority of our independent directors) not otherwise interested in the transaction.
Brookfield may take its own interests into account in considering and making determinations regarding the
matters outlined in this section and in “Affiliated Services and Transactions” above. Additionally, the aggregate
economic benefit to Brookfield or its affiliates as a result of the transactions outlined herein and therein could
influence investment allocation decisions made by Brookfield in certain circumstances (i.e., if the financial
incentives as a result of such transactions are greater if the investment opportunity is allocated to us rather than
another Brookfield Account or co-investment vehicle (or vice versa)). For a broader discussion regarding the
allocation of investment opportunities, see “Allocation of Investment Opportunities” above.
Possible Future Activities
Brookfield expects to expand the range of services that it provides over time. Except as provided herein,
Brookfield will not be restricted in the scope of its business or in the performance of any services (whether now
offered or undertaken in the future) even if such activities could give rise to conflicts of interest, and whether or not
such conflicts are described herein. Brookfield has, and will continue to develop, relationships with a significant
number of companies, financial sponsors and their senior managers, including relationships with companies that
hold or may have held investments similar to those made by us as well as companies that compete with us. These
companies may themselves represent appropriate investment opportunities for us or may compete with us for
investment opportunities and other business activities.
Advisors
Brookfield from time to time engages or retains strategic advisors, senior advisors, operating partners, executive
advisors, consultants or other professionals who are not employees or affiliates of Brookfield, but which include
former Brookfield employees as well as current and former officers of Brookfield portfolio companies (collectively,
“Consultants”). Consultants generally have established industry expertise and are expected to advise on a range of
investment-related activities, including by providing services that may be similar in nature to those provided by the
Adviser’s investment team or the portfolio management team, such as sourcing, consideration and pursuit of
investment opportunities, strategies to achieve investment objectives, development and implementation of business
plans, and recruiting for portfolio companies, and to serve on boards of portfolio companies. Additionally,
Brookfield’s decision to initially perform certain services in-house for us will not preclude a later decision to
outsource such services, or any additional services, in whole or in part, to any Consultants. Brookfield believes that
these arrangements may benefit our investment activities. However, they also give rise to certain conflicts of interest
considerations.
163
Consultants are expected, from time to time, to receive payments from, or allocations or performance-based
compensation with respect to, Brookfield, us or our investments. In such circumstances, payments from, or
allocations or performance-based compensation with respect to, us or our investments generally will be treated as
our expenses. Additionally, while Brookfield believes such compensation arrangements will be reasonable and
generally at market rates for the relevant services provided, exclusive arrangements or other factors may result in
such compensation arrangements not always being comparable to costs, fees or expenses charged by other third
parties. In addition to any compensation arrangements, we may also generally bear our share of any travel costs or
other out-of-pocket expenses incurred by Consultants in connection with the provision of their services. Accounting,
network, communications, administration and other support benefits, including office space, may be provided by
Brookfield or us to Consultants without charge, and any costs associated with such support may be borne by us.
Brookfield expects from time to time to offer Consultants the ability to co-invest alongside us, including in
those investments in which they are involved (and for which they may be entitled to receive performance-based
compensation, which will reduce our returns), or otherwise participate in equity plans for management of an
investment or invest directly in us or in a vehicle controlled by us subject to reduced or waived fees as compared to
an investment in us, including after the termination of their engagement (or other status) with Brookfield.
In certain cases, these persons are likely to have certain attributes of Brookfield “employees” (e.g., they have
dedicated offices at Brookfield, receive access to Brookfield information, systems and meetings for Brookfield
personnel, work on Brookfield matters as their primary or sole business activity, have Brookfield-related email
addresses, business cards and titles, or participate in certain benefit arrangements typically reserved for Brookfield
employees) even though they are not considered Brookfield employees, affiliates or personnel for purposes of our
charter. In this scenario, a Consultant would be subject to Brookfield’s compliance policies and procedures. Where
applicable, Brookfield allocates to us or applicable portfolio companies the costs of such personnel or the fees paid
to such personnel in connection with the applicable services, and such expenses or fees, to the extent allocated to us,
would be treated as our expenses. Payments or allocations to Consultants can be expected to increase the overall
costs and expenses borne indirectly by our stockholders.
Shared Resources
In certain circumstances, in order to create efficiencies and optimize performance, one or more of our
investments or properties may determine to share the operational, legal, financial, back-office or other resources of
another investment or property, or an investment, or property of Brookfield or an Other Brookfield Account. In
connection therewith, the costs and expenses related to such services will be allocated among the relevant entities on
a basis that Brookfield determines in good faith is fair and equitable (but which will be inherently subjective). To the
extent these types of arrangements constitute transactions between us or our investments on the one hand, and
“affiliates” of Brookfield, the Adviser, the Sub-Adviser, or any of their respective affiliates for purposes of our
charter, these arrangements will be entered into only with the approval by a majority of our board of directors
(including a majority of our independent directors) not otherwise interested in the transactions as being fair and
reasonable to us and on terms and conditions no less favorable than those which could be obtained from unaffiliated
entities. Determining an allocable share of internal and other costs, or otherwise allocating costs, inherently requires
the judgment of Brookfield and there can be no assurance that we will not bear a disproportionate amount of any
costs, including Brookfield’s internal costs.
Travel Expenses
We will reimburse the Adviser and its affiliates for out-of-pocket travel expenses, including air travel (generally
business class), car services, meals and hotels (generally business or luxury class accommodations), incurred in
identifying, evaluating, sourcing, researching, structuring, negotiating, acquiring, making, holding, developing,
operating, managing, selling or potentially selling, restructuring or otherwise disposing of our proposed or actual
investments (including fees for attendance of industry conferences, the primary purpose of which is sourcing
investments), in connection with the formation, marketing and offering of our shares and otherwise in connection
with our business. In addition, travel expenses incurred in the marketing and offering of our shares will be
considered offering expenses, including where such travel expenses relate to the offering of a feeder vehicle
primarily created to hold our shares of common stock. Brookfield employees will generally be encouraged to utilize
164
preferred travel and accommodation partners, including hotels, when incurring travel expenses. Such preferred
partners will often be assets or portfolio companies of Brookfield Accounts and typically will not be the most
economical option available.
Service Providers
From time to time, our service providers or service providers of our investment entities (including deal sources,
consultants, lenders, brokers, accountants, attorneys, outside directors and their affiliates) invest in us or are sources
of investment opportunities and counterparties therein, or otherwise participate in transactions or other arrangements
(or otherwise have a business, financial or other relationship) with us, Brookfield or Brookfield affiliates (for
example, as tenants). Furthermore, employees of Brookfield or Brookfield portfolio companies have and may in the
future have family members or relatives employed by service providers (particularly large global providers) to us,
any Other Brookfield Account or Brookfield. All of the above factors may influence Brookfield in deciding whether
to select such a service provider. Notwithstanding the foregoing, the Adviser will only select a service provider
when the Adviser determines that doing so is appropriate for us given all surrounding facts and circumstances and is
consistent with the Adviser’s responsibilities under applicable law.
In addition, we and Other Brookfield Accounts (including Brookfield for its own account) and their portfolio
companies often engage common providers of goods or services. These common providers sometimes provide bulk
discounts or other fee discount arrangements, which may be based on an expectation of a certain amount of
aggregate engagements by Other Brookfield Accounts and portfolio companies over a period of time. Brookfield
generally extends fee discount arrangements to Brookfield and all Other Brookfield Accounts and their portfolio
companies in a fair and equitable manner.
In certain cases, a service provider (e.g., a law firm) will provide Brookfield a bulk discount on fees that is
applicable only prospectively (within an annual period) once a certain aggregate spending threshold has been met
during the relevant annual period. The Brookfield parties that engage the service provider after the aggregate
spending threshold has been met will get the benefit of the discount and, as a result, pay lower rates for than the rates
paid by Brookfield parties that engaged the same provider prior to the discount being triggered.
The engagement of common providers for us, Other Brookfield Accounts and their portfolio companies and the
related fee discount arrangements give rise to certain potential conflicts of interest. For example, as a result of these
arrangements, Brookfield will face conflicts of interest in determining which providers to engage on behalf of us and
our investments and when to engage such providers, including an incentive to engage certain providers for us and
our investments because it will result in the maintenance or enhancement of a discounted fee arrangement that
benefits Brookfield, Other Brookfield Accounts and their portfolio companies. Notwithstanding these conflicts
considerations, Brookfield makes these determinations in a manner that it believes is in our best interest, taking into
account all applicable facts and circumstances.
In the normal course, common providers (e.g., law firms) will staff engagements based on the particular needs
of the engagement and charge such staff’s then-applicable rates, subject to any negotiated discounts. While these
rates will be the same as the rates such providers would charge Brookfield for the same engagement, Brookfield
generally engages providers for different needs than us and our investments, and the total fees charged for different
engagements are expected to vary. In addition, as a result of the foregoing, the overall rates paid by us and our
investments over a period of time to a common provider could be higher (or lower) than the overall rates paid to the
same provider by Brookfield, Other Brookfield Accounts and their portfolio companies.
Without limitation of the foregoing, conflicts arise with respect to Brookfield’s selection of financial institutions
or other third parties to provide services to us, any Other Brookfield Account or Brookfield and its negotiation of
fees payable to such parties. Brookfield has relationships with many financial institutions and other third parties,
which may introduce prospective investors, afford Brookfield the opportunity to market its services to certain
qualified investors at no additional cost, provide benchmarking analysis or third-party verification of market rates, or
provide other services (e.g., consulting services) at favorable or below market rates. Such relationships create
incentives for Brookfield to select a financial institution or other third party based on its best interests and not our
best interest. For example, in connection with the disposition of a portfolio company, several financial institutions
165
with which Brookfield has pre-existing business relationships may provide valuation services through a bidding
process. Although Brookfield will select the financial institution it believes is the most appropriate in the
circumstances, the relationships between the financial institution and Brookfield as described herein will influence
Brookfield in deciding whether to select such a financial institution to underwrite the disposition, and may influence
the financial institution in the terms offered. The cost of this disposition will generally be borne directly or indirectly
by us and creates an incentive for Brookfield to engage such a financial institution over one with which Brookfield
has no prior relationship that could result in worse terms to us or the portfolio company than would be the case
absent the conflict.
Use of Brookfield Arrangements
We may seek to use a swap, currency conversion or hedging arrangement or line of credit or other financing
that Brookfield has in place for our own benefit or the benefit of Other Brookfield Accounts. In this case, Brookfield
will pass through the terms of such arrangement to us as if we had entered into the transaction itself. However, in
such cases we will be exposed to Brookfield’s credit risk since we will not have direct contractual privity with the
counterparty. Further, it is possible that we would have been able to obtain more favorable terms for our company if
we had entered into the arrangement directly with the counterparty.
Insurance
The Adviser will cause us to purchase, or bear premiums, fees, costs and expenses (including the expenses or
fees of affiliates and non-affiliates for placement and administration of insurance) with respect to, insurance for the
benefit of our company and other indemnified parties with respect to matters related to our business (including
directors and officers liability insurance and errors and omissions insurance), or for our benefit or any of our
investments, with respect to investment-related matters (including, but not limited to, terrorism, property, title,
liability and fire insurance or extended coverage). We and Other Brookfield Accounts and their portfolio companies
and other investments may utilize Brookfield affiliates for placement and administration of insurance or an affiliated
insurance broker or insurance provider in connection with all or part of their insurance coverage and we may
leverage the scale of Brookfield by participating in shared, blanket or umbrella insurance policies as part of a
broader group of entities affiliated with Brookfield. Any insurance policy purchased by us or on our behalf
(including policies covering us, the Adviser and Other Brookfield Accounts) may provide coverage for situations
where we would not provide indemnification, including situations involving culpable conduct by the Adviser.
Nonetheless, our share of the fees and expenses in respect of insurance coverage will not be reduced to account for
these types of situations.
To the extent an insurance policy provides coverage with respect to matters related to our company or our
investments, all or a portion of the fees and expenses (including premiums) of such insurance policy and its
placement will be allocated to us. The amount of any such insurance-related fees and expenses allocated to us will
be determined by Brookfield in its reasonable discretion taking into consideration certain facts and circumstances,
including the value of each covered fund’s and account’s investments and capital commitments (if applicable) or the
risk that the each of the covered funds, accounts and investments pose to the insurance provider. While Brookfield
expects to consider certain objective criteria when determining how to allocate the cost of insurance coverage that
applies to multiple funds and accounts, because of the uncertainty of whether claims will arise in the future and the
timing and the amount that may be involved in any such claim, the determination of how to allocate such fees and
expenses also requires Brookfield to take into consideration other facts and circumstances that are more subjective in
nature. In addition, because Brookfield will bear a portion of such fees and expenses and has differing investment
interests in the funds and accounts it manages, conflicts may arise in the determination of the proper allocation of
such fees and expenses among Brookfield and such funds and accounts. It is unlikely that Brookfield will be able to
accurately allocate the fees and expenses of any such insurance based on the actual claims of a particular Other
Brookfield Account or our company.
While shared insurance policies may be cost-effective, claims made by any entities affiliated with Brookfield
may result in increased costs to us and such policies may have an overall cap on coverage. To the extent an insurable
event results in claims in excess of such cap, we may not receive as much in insurance proceeds as we would have
received if separate insurance policies had been purchased for each party and Brookfield may face a conflict in
166
interest in properly allocating insurance proceeds across all claimants, which could result in us receiving less in
insurance proceeds than if separate insurance policies had been purchased for each insured party individually.
Similarly, insurable events may occur sequentially in time while subject to a single overall cap. To the extent
insurance proceeds for one such event are applied towards a cap and we experience an insurable loss after such
event, our receipts from such insurance policy may be diminished or we may not receive any insurance proceeds. A
shared insurance policy may also make it less likely that Brookfield will make a claim against such policy on our
behalf.
In addition, we may need to determine whether or not to initiate litigation (including potentially litigation
adverse to Brookfield where it is the broker or provider of such insurance) in order to collect from an insurance
provider, which may be lengthy and expensive and which ultimately may not result in a financial award. The
potential for Brookfield to be a counterparty in any litigation or other proceedings regarding insurance claims creates
a further potential conflict of interest. Furthermore, in providing such insurance, Brookfield may seek reinsurance
for all or a portion of the coverage, which could result in Brookfield earning and retaining fees or a portion of the
premiums associated with such insurance while not retaining all or a commensurate portion of the risk insured.
Brookfield will seek to allocate the costs of such insurance and proceeds from claims in respect of such
insurance policies and resolve any conflicts of interest, as applicable, in a manner it determines to be fair. In that
regard, Brookfield may, if it determines it to be necessary, consult with one or more third parties in allocating such
costs and proceeds and resolving such conflicts.
Diverse Interests
In certain circumstances, the Brookfield Investor in its capacity as one of our stockholders will have conflicting
investment, tax and other interests with respect to (a) their interests across our company and Other Brookfield
Accounts and (b) the interests of other stockholders, including Other Brookfield Accounts that participate in the
same investments. Such conflicting interests could relate to or arise from, among other things, the nature of our
investments, the residency or domicile of our stockholders and the manner in which one or more of our investments
are reported for tax purposes. As a consequence, in certain circumstances, conflicts of interest will arise in
connection with the decision made by the Adviser, including with respect to the nature, structuring or reporting of
our investments, that may be adverse to our stockholders generally, or may be more beneficial for a particular
stockholders than for another, including with respect to stockholders’ particular tax situations. In selecting and
structuring potential investments appropriate for us, the Adviser will consider our investment and tax objectives and
those of our stockholders as a whole (and those of investors in Other Brookfield Accounts that participate in the
same investments as us), not the investment, tax or other objectives of any stockholder individually. However,
conflicts may arise if certain stockholders have objectives that conflict with ours. In addition, Brookfield may face
certain tax risks based on positions we take, including as a withholding agent. In connection therewith, Brookfield
may take certain actions, including withholding amounts to cover actual or potential tax liabilities, that it may not
have taken in the absence of such tax risks.
Allocation of Personnel
The Adviser and its affiliates will devote such time as they deem necessary to conduct our business affairs in an
appropriate manner. However, Brookfield personnel will also work on matters related to Other Brookfield Accounts.
Accordingly, conflicts may arise in the allocation of personnel among us and such Other Brookfield Accounts. For
example, certain of the investment professionals who are expected to devote their business time to us will also
devote substantial portions of their business time to the management and operation of Other Brookfield Accounts,
and such circumstances may result in conflicts of interest for such personnel.
Affiliated Dealer Manager
Brookfield Private Wealth LLC, the dealer manager for this offering, is an affiliate of the Adviser and also
serves or has served as the dealer manager in connection with the offerings of shares by other investment funds
sponsored by Brookfield and Oaktree. These relationships may create conflicts in connection with the dealer
manager’s due diligence obligations under the federal securities laws. Although the Dealer Manager will examine
the information in this prospectus for accuracy and completeness, due to its affiliation with Brookfield, no
167
independent review of us will be made by the Dealer Manager in connection with the distribution of our shares in
this offering of the type normally performed by an unaffiliated underwriter in connection with the offering of
securities. Accordingly, investors in this offering do not have the benefit of an independent due diligence review and
investigation except to the extent that such a review and investigation is performed by other broker-dealers
participating in this offering. In addition, the dealer manager is entitled to compensation in connection with this
offering. See “Plan of Distribution.”
Fees and Other Compensation to the Adviser and the Dealer Manager
The agreements between us and the Adviser and the dealer manager are not the result of arm’s-length
negotiations. As a result, the fees we agree to pay pursuant to these agreements may exceed what we would pay to
an independent third party. These agreements, including the Advisory Agreement and the Dealer Manager
Agreement, require approval by a majority of our directors, including a majority of the independent directors, not
otherwise interested in such agreements, as being fair and reasonable to us and on terms and conditions no less
favorable than those which could be obtained from unaffiliated entities.
The timing and nature of the fees the Adviser and the dealer manager will receive from us could create a
conflict of interest between the Adviser and our stockholders. Specifically, the Adviser is responsible for the
calculation of our NAV, and the management fee and performance fee we pay the Adviser and the fees we pay the
dealer manager are based on our NAV. Among other matters, the compensation arrangements could affect the
judgment of the Adviser’s personnel with respect to:
•the continuation, renewal or enforcement of our agreements with the Adviser and its affiliates, including the
Advisory Agreement and the Dealer Manager Agreement;
•the decision to adjust the value of any of our investments or the calculation of our NAV; and
•public offerings of equity by us, which may result in increased advisory fees to the Adviser and increased
fees to the dealer manager.
We pay the Adviser a management fee regardless of the performance of our portfolio. The Adviser’s entitlement
to a management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its
time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. We will be
required to pay the Adviser a management fee in a particular period despite experiencing a net loss or a decline in
the value of our portfolio during that period. The Adviser, however, has a fiduciary duty to us. If the Adviser fails to
act in our best interests, then it will have violated this duty. The Advisory Agreement may be terminated by us or the
Adviser on 60 days’ notice.
We also pay the Adviser a performance fee based on our total distributions plus the change in NAV per share,
which may create an incentive for the Adviser to make riskier or more speculative investments on our behalf than it
would otherwise make in the absence of such fee. In addition, the change in NAV per share will be based on the
value of our investments on the applicable measurement dates and not on realized gains or losses. As a result, the
Adviser may receive performance fees based on unrealized gains in certain assets at the applicable measurement
date and such gains may not be realized when those assets are eventually disposed of.
UPREIT Structure
Our UPREIT structure may result in potential conflicts of interest with limited partners in the Operating
Partnership whose interests may not be aligned with those of our stockholders.
Our directors and officers have duties to our company and our stockholders under Maryland law and our charter
in connection with their management of the corporation. At the same time, Brookfield REIT OP GP LLC, our
wholly owned subsidiary, as general partner of the Operating Partnership, has fiduciary duties under Delaware law
to the Operating Partnership and to the limited partners in connection with the management of the Operating
Partnership. Our duties as the sole member of the general partner of the Operating Partnership may come into
conflict with the duties of our directors and officers to our company and our stockholders. Under Delaware law, a
168
general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing.
Other duties, including fiduciary duties, may be modified or eliminated in the partnership’s partnership agreement.
The partnership agreement of the Operating Partnership provides that, for so long as we own a controlling interest in
our operating partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or
the limited partners will be resolved in favor of our stockholders.
Additionally, the partnership agreement expressly limits the general partner’s liability by providing that it will
not be liable or accountable to the Operating Partnership for losses sustained, liabilities incurred or benefits not
derived if it acted in good faith. In addition, the Operating Partnership is required to indemnify the general partner
for liabilities the general partner incurs in dealings with third parties on behalf of the Operating Partnership. To the
extent that the indemnification provisions purport to include indemnification of liabilities arising under the
Securities Act, in the opinion of the SEC, such indemnification is contrary to public policy and therefore
unenforceable.
The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a
partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel
covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.
Calculation Errors
The calculation of amounts due to the Adviser and Brookfield affiliates in connection with the provision of
services to us and our investments (including amounts owed in respect of Affiliated Services, protective loans, cost
allocations, and other matters) is complex and at times based on estimates and/or subject to periodic (post-
transaction) reconciliations. Brookfield may make errors in calculating such amounts, and/or recognize over-or
under-estimates of such amounts in performing routine reconciliations and/or other internal reviews. When such an
error or under-or over-estimate that disadvantaged us is discovered, Brookfield will make us whole for such amount
based on the particular situation, which may involve a return of distributions or fees or a waiver of future
distributions or fees, in each case in an amount necessary to reimburse us for such overpayment. As a general matter,
Brookfield does not expect to pay interest on such amounts. Likewise, when an error or under-or over-estimate that
advantaged us is discovered, Brookfield will make itself whole for such amount, as applicable, and generally will
not charge interest in connection with any such make-whole payment.
Investment Banking and Other Activities
Brookfield and its affiliates may provide investment banking, advisory, consulting, restructuring, broker-dealer
and other services to third parties, including investments in which we may desire to invest or issuers with which we
may desire to transact. In such circumstances, we may be restricted from pursuing such investment or transaction as
a result of limitations imposed by, among other things, applicable law or Brookfield’s internal conflicts or
compliance policies.
Brookfield Conflicts Committee
Numerous actual and potential conflicts of interest are expected to arise in connection with the management and
operation of our company, our investments and other activities. Pursuant to our charter, certain conflicts of interest
are required to be disclosed to, or approved by, our board of directors. Other conflicts of interest, however, will be
resolved by Brookfield. In certain circumstances, potential conflicts of interest related to Brookfield and us may
arise, which the Adviser, in its discretion, determines to present to Brookfield’s conflicts committee for review and
approval. Brookfield’s conflicts committee is intended to provide review and analysis, and ensure appropriate
resolution, of potential conflicts of interest. However, there can be no assurance that the Adviser will send all
potential conflicts of interest to the conflicts committee. Furthermore, the conflicts committee is comprised of
representatives from Brookfield and, as a result, (a) such representatives may themselves be subject to conflicts of
interest and (b) there can be no assurance that any determinations made by the conflicts committee will be favorable
to us. The conflicts committee will act in good faith to resolve potential conflicts of interest in a manner that is fair
and balanced, taking into account the facts and circumstances known to it at the time. However, there is no
guarantee that the conflicts committee will make the decision that is most beneficial to us or that the conflicts
committee would not have reached a different decision if additional information were available to it.
169
Review of Transactions by the Independent Directors of the Board of Directors
Every transaction that we enter into with the Adviser, the Sub-Adviser, or their respective affiliates will be
subject to an inherent conflict of interest. Our board of directors may encounter conflicts of interest in enforcing our
rights against any affiliate of the Adviser in the event of a default by or disagreement or in invoking powers, rights
or options pursuant to any agreement between us and the Adviser or any of its affiliates. In order to reduce or
eliminate certain potential conflicts of interest, our charter requires that certain transactions are to be reviewed by
our independent directors. Our independent directors are permitted to retain their own legal and financial advisors in
connection with any review that they are obligated to undertake pursuant to the terms of our charter.
Among the matters we expect our independent directors to review are:
•the continuation, renewal or enforcement of our agreements with the Adviser and its affiliates, including the
Advisory Agreement;
•the continuation, renewal or enforcement of our agreements with the Sub-Adviser and its affiliates,
including the Sub-Advisory Agreement;
•the continuation, renewal or enforcement of our agreements with the Dealer Manager and its affiliates,
including the Dealer Manager Agreement;
•the allocation of investment opportunities to us by the Adviser and its affiliates; and
•transactions with affiliates of the Adviser, Brookfield, the Sub-Adviser and Oaktree.
Our charter contains many other restrictions relating to conflicts of interest including the following:
Adviser Compensation. Our independent directors must evaluate at least annually whether our fees and
expenses, including the compensation that we pay to the Adviser and its affiliates are reasonable in light of our
investment performance, our net assets, our net income and the fees and expenses of other comparable REITs, and in
relation to the nature and quality of services performed and that such compensation is within the limits prescribed by
our charter. Our independent directors supervise the performance of the Adviser and its affiliates and the
compensation we pay to them to determine that the provisions of our compensation arrangements are being carried
out. Our independent directors base this evaluation on the factors set forth below as well as any other factors they
deem relevant, and such findings will be recorded in the minutes of the board of directors:
•the amount of the fees paid to the Adviser and its affiliates in relation to the size, composition and
performance of our assets;
•the success of the Adviser in generating appropriate investment opportunities;
•the rates charged to other REITs and to investors other than REITs by advisors performing the same or
similar services;
•additional revenues realized by the Adviser and its affiliates through their relationship with us, including
loan administration, underwriting or broker commissions, servicing, engineering, inspection and other fees,
whether we pay them or they are paid by others with whom we do business;
•the quality and extent of service and advice furnished by the Adviser and its affiliates;
•the performance of our investment portfolio; and
•the quality of our assets relative to the investments generated by the Adviser for its own account and for its
other clients.
Term of Advisory Agreement. According to our charter, each contract for the services of the Adviser may not
exceed one year, although there is no limit on the number of times that a particular advisor may be retained. The
independent directors of our board of directors or the Adviser may terminate the Advisory Agreement without cause
170
or penalty on 60 days’ written notice. For purposes of that charter provision, “without penalty” means that we can
terminate the Adviser without having to compensate the Adviser for income lost as a result of the termination of the
Advisory Agreement.
Mortgage Loans to Affiliates. Our charter prohibits us from investing in or making mortgage loans in which the
borrower is Brookfield, the Adviser, the Sub-Adviser, or our directors or any of their respective affiliates unless an
independent expert appraises the underlying property. We must keep the appraisal for at least five years and make it
available for inspection and duplication by any of our stockholders. In addition, we must obtain a mortgagee’s or
owner’s title insurance policy or commitment as to the priority of the mortgage or the condition of the title. Our
charter prohibits us from making or investing in any mortgage loans that are subordinate to any mortgage or equity
interest of Brookfield, the Adviser, our directors or any of our affiliates.
Other Transactions Involving Affiliates. According to our charter, a majority of the members of our board of
directors (including a majority of our independent directors) not otherwise interested in the transaction must
conclude that all other transactions, including sales and acquisitions of assets and any joint ventures, between us and
Brookfield, the Adviser, the Sub-Adviser, our directors or any of their respective affiliates are fair and reasonable to
us and on terms and conditions not less favorable to us than those available from unaffiliated third parties. In the
case of an asset purchase, a majority of our disinterested directors, including a majority of our disinterested
independent directors, must also determine that the purchase is at a price to us no greater than the cost of the asset to
Brookfield, the Adviser, the Sub-Adviser, the director or the affiliate or, if the price to us is in excess of such cost,
that substantial justification for such excess exists and such excess is reasonable. In no event will the purchase price
paid by us for any such asset exceed the asset’s current appraised value.
Limitation on Operating Expenses. According to our charter, the Adviser must reimburse us the amount by
which our aggregate total operating expenses for any four consecutive fiscal quarters exceed the greater of 2.0% of
our Average Invested Assets or 25.0% of our Net Income, unless a majority of our independent directors have made
a finding that such excess expenses were justified based on unusual and non-recurring factors that they deem
sufficient. Any findings and the reasons in support thereof shall be reflected in the minutes of the meeting of the
board of directors. Within 60 days after the end of any of our fiscal quarters for which total operating expenses
exceeded 2.0% of Average Invested Assets or 25.0% of our Net Income, whichever is greater, we will send to the
stockholders a written disclosure of such fact together with an explanation of the factors the independent members
of our board of directors considered in arriving at the conclusion that such higher operating expenses were justified.
In the event the independent members of our board of directors do not determine such excess expenses are justified,
the Adviser shall reimburse us the amount by which the aggregate annual expenses paid or incurred by us exceed the
limitation provided herein. For the avoidance of doubt, our board of directors has passed a resolution that we will
not read the defined term “total operating expenses” in our charter (including exclusions therefrom) in a manner that
is inconsistent with the NASAA REIT Guidelines and that “total operating expenses” shall include any company-
level management fees.
Issuance of Options and Warrants to Certain Affiliates. According to our charter, we may not issue options or
warrants to purchase our stock to Brookfield, the Adviser, the Sub-Adviser, any of our directors or any of their
respective affiliates, except on the same terms as such options or warrants, if any, are sold to the general public. We
may not issue options or warrants at exercise prices less than the fair market value of the underlying securities on the
date of grant and not for consideration (which may include services) that in the judgment of a majority of our
independent directors has a market value less than the value of such option or warrant on the date of grant. Any
options or warrants we issue to Brookfield, the Adviser, the Sub-Adviser, any of our directors or any of their
respective affiliates shall not exceed an amount equal to 10% of our outstanding stock on the date of grant.
Loans. We will not make any loans to Brookfield, the Adviser, the Sub-Adviser, any of our directors or any of
their respective affiliates except for certain mortgage loans described above and loans to our wholly owned
subsidiaries. In addition, we will not borrow from any of these persons unless a majority of our directors, including a
majority of our independent directors, not otherwise interested in such transaction approves the transaction as being
fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between
unaffiliated parties under the same circumstances. These charter restrictions on loans will only apply to advances of
cash that are commonly viewed as loans, as determined by our board of directors. By way of example only, the
171
prohibition on loans would not restrict advances of cash for legal expenses or other costs incurred as a result of any
legal action for which indemnification is being sought, nor would the prohibition limit our ability to advance
reimbursable expenses incurred by directors or officers or the Adviser or its affiliates.
Voting of Shares Owned by Affiliates. According to our charter, the Adviser or a director or any of their
respective affiliates may not vote their shares regarding (i) the removal of the Adviser, such director or any of these
affiliates or (ii) any transaction between them and us. In determining the requisite percentage in interest of shares
necessary to approve a matter on which these persons may not vote or consent, any shares owned by any of them
will not be included.
172
NET ASSET VALUE CALCULATION AND VALUATION GUIDELINES
Following the end of each full calendar month, our NAV for each class of shares will be based on the net asset
values of our investments (including real estate-related debt and real estate-related securities), the addition of any
other assets (such as cash on hand) and the deduction of any liabilities, and will also include the deduction of any
stockholder servicing fees specifically applicable to such class of shares, in all cases as described below.
General
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. These
guidelines are designed to produce a fair and accurate estimate of the price that would be received for our
investments in an arm’s-length transaction between a willing buyer and a willing seller in possession of all material
information about our investments. Our independent valuation advisor will review our valuation guidelines and
methodologies related to investments in real property with the Adviser and our board of directors at least annually.
From time to time, our board of directors, including a majority of our independent directors, may adopt changes to
the valuation guidelines if it (1) determines that such changes are likely to result in a more accurate reflection of
NAV or a more efficient or less costly procedure for the determination of NAV without having a material adverse
effect on the accuracy of such determination or (2) otherwise reasonably believes a change is appropriate for the
determination of NAV.
The calculation of our NAV is intended to be a calculation of the fair value of our assets less our outstanding
liabilities as described below and will likely differ from the book value of our equity reflected in our financial
statements. As a public company, we are required to issue financial statements based on historical cost in accordance
with GAAP. To calculate our NAV for the purpose of establishing a purchase and repurchase price for our shares,
we have adopted a model, as explained below, that adjusts the value of our assets and liabilities from historical cost
to fair value generally in accordance with the GAAP principles set forth in FASB Accounting Standards
Codification Topic 820, Fair Value Measurements and Disclosures. Because the fair value calculations of our real
estate properties will involve significant professional judgment in the application of both observable and
unobservable inputs, the calculated fair value of our assets may differ from their actual realizable value or future fair
value. While we believe our NAV calculation methodologies are consistent with standard industry practices, there is
no rule or regulation that requires we calculate NAV in a certain way. As a result, other public REITs may use
different methodologies or assumptions to determine NAV. In addition, NAV is not a measure used under GAAP
and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV
will differ from GAAP. You should not consider NAV to be equivalent to stockholders’ equity or any other GAAP
measure.
Our Independent Valuation Advisor
With the approval of our board of directors, including a majority of the independent directors, we have engaged
Altus Group U.S. Inc. to serve as our independent valuation advisor. At the end of each month, our independent
valuation advisor will (1) with respect to our properties that are not single-family rental or international properties,
prepare update appraisals for each property, (2) with respect to our properties that are not single-family rental
properties, review the annual appraisals obtained by third-party appraisal firms, and (3) with respect to our
international properties, review the monthly valuations performed by the Adviser. We have also engaged an
independent third-party appraisal firm to prepare monthly valuations of our single-family rental properties, as well
as an independent third-party valuation provider to prepare monthly valuations of our property-level debt liabilities.
When identified by the Adviser, individual property appraisals will be updated for events that materially impact our
gross asset value; however, there may be a lag in time between the occurrence of such event(s) and the
determination of the impact on our gross asset value. The Adviser, with the approval of our board of directors,
including a majority of the independent directors, may engage additional independent valuation advisors in the
future as our portfolio grows. While our independent valuation advisor performs an important role with respect to
our property valuations, our independent valuation advisor is not responsible for, and does not calculate, our NAV.
The Adviser is ultimately responsible for the determination of our NAV.
173
Our independent valuation advisor may be replaced at any time, in accordance with agreed-upon notice
requirements, by a majority vote of our board of directors, including a majority of our independent directors. We
will promptly disclose any changes to the identity or role of the independent valuation advisor in reports we publicly
file with the SEC.
Our independent valuation advisor will discharge its responsibilities in accordance with our valuation
guidelines. Our board of directors will not be involved in the monthly valuation of our assets and liabilities, but will
periodically receive and review such information about the valuation of our assets and liabilities as it deems
necessary to exercise its oversight responsibility. Our NAV per share for each class of shares will be calculated by
State Street, and such calculation will be reviewed and confirmed by the Adviser.
We have agreed to pay fees to our independent valuation advisor upon its delivery to us of its reports on a
quarterly basis. We have also agreed to indemnify our independent valuation advisor against certain liabilities
arising out of this engagement. The compensation we pay to our independent valuation advisor is not based on the
estimated values of our properties.
Our independent valuation advisor and certain of the independent third-party appraisers have provided, and are
expected to continue to provide, real estate appraisal, appraisal review, valuation management and real estate
valuation advisory services to Brookfield, Oaktree and their respective affiliates and have received, and are expected
to continue to receive, fees in connection with such services. Our independent valuation advisor and certain of the
independent third-party appraisers and their respective affiliates may from time to time in the future perform other
commercial real estate and financial advisory services for Brookfield, Oaktree and their respective affiliates, or in
transactions related to the properties that are the subjects of the valuations being performed for us, or otherwise, so
long as such other services do not adversely affect the independence of the independent valuation advisor or the
applicable appraiser as certified in the applicable appraisal report.
Valuation of Investments
Consolidated Properties
For the purposes of calculating our monthly NAV, our properties initially will be valued at cost, which we
expect to represent the fair value at that time. Each property will be appraised by an independent third-party
appraisal firm no less than annually, which annual third-party appraisal will be considered by our independent
valuation advisor in determining the value of our properties. Upon conclusion of the appraisal, the independent
third-party appraisal firm prepares a written report with an estimated range of fair value of the property. Concurrent
with the appraisal process, the independent valuation advisor values each property and, taking into account the
appraisal, among other factors, determines the appropriate valuation of the property. Properties purchased as a
portfolio may be appraised as a single asset and will exclude any portfolio discounts or premiums. Annual appraisals
completed by independent third-party appraisal firms will be conducted on a rotating basis with approximately one
quarter of our properties being appraised each quarter. Although monthly update appraisals of each of our real
properties will be determined by the independent valuation advisor, such appraisals are based on asset and portfolio
level information provided by the Adviser, including historical operating revenues and expenses of the properties,
lease agreements on the properties, budgeted revenues and expenses of the properties, information regarding recent
or planned capital expenditures and any other information relevant to valuing the real estate property, which
information will be reviewed and professional skepticism applied as to its reasonableness but will not be
independently verified by the independent valuation advisor.
Each third-party appraisal is performed in accordance with the Uniform Standards of Professional Appraisal
Practice and reviewed by the independent valuation advisor for reasonableness. Upon conclusion of the appraisal,
the independent third-party appraisal firm prepares a written report with an estimated range of fair value of the
property. Each third-party appraisal must be reviewed, approved and signed by an individual with the professional
MAI designation of the Appraisal Institute. Each appraisal performed by the independent valuation advisor is
performed in accordance with the Uniform Standards of Professional Appraisal Practice and reviewed by the
Adviser. Upon conclusion of the appraisal performed by the independent valuation advisor, the independent
valuation advisor prepares a written report with an estimated fair value of the property. Each appraisal prepared by
174
the independent valuation advisor must be reviewed, approved and signed by an individual with the professional
MAI designation of the Appraisal Institute. We believe our policy of obtaining annual appraisals by independent
third parties for each of our properties, as well as having the independent valuation advisor prepare update appraisals
at the end of each month for each of our properties, other than any single-family rental properties, international
properties and equity investments in and alongside private investment funds, will meaningfully enhance the
accuracy of our NAV calculation. Any appraisal provided by an independent third-party appraisal firm will be
performed in accordance with these Valuation Guidelines and will not be considered in our NAV calculation until
the independent valuation advisor has reviewed and confirmed the reasonableness of such appraisal, excluding
single-family rental properties, international properties and equity investments in and alongside private investment
funds. See “—Single-Family Rental Properties,” “—International Properties” and “—Equity Investments in and
Alongside Private Investment Funds” below for how our single-family rental, international properties and equity
investments in and alongside private investment funds are valued.
The Adviser will monitor our properties for events that the Adviser believes may be expected to have a material
impact on the most recent estimated values of such property and will notify our independent valuation advisor of
such events. If, in the opinion of the Adviser, an event becomes known to the Adviser (including through
communication with the independent valuation advisor) that is likely to have any material impact on current
estimated values of the affected properties, the independent valuation advisor will provide an update appraisal of
such properties, which will be reviewed by the Adviser. State Street will then incorporate the update appraisal into
our NAV, which will then be reviewed and confirmed by the Adviser.
For example, an appraisal update may be appropriate to reflect the occurrence of an unexpected property-
specific event such as a termination or renewal of a material lease, a material change in vacancies or an
unanticipated structural or environmental event at a property that may cause the value of a property to change
materially. An appraisal update may also be appropriate to reflect the occurrence of broader market-driven events
identified by the Adviser, the Sub-Adviser or our independent valuation advisor which may impact more than a
specific property, such as a significant capital market event. Any such appraisal updates will be estimates of the
market impact of specific events as they occur, based on assumptions and judgments that may or may not prove to
be correct, and may also be based on the limited information readily available at that time. If deemed appropriate by
the Adviser, the Sub-Adviser or our independent valuation advisor, any necessary appraisal updates will be
determined as soon as practicable. An appraisal received during the year for one property may also trigger an
appraisal update for another property.
In general, we expect that any updates to appraised values will be calculated promptly after a determination that
a material change has occurred and the financial effects of such change are quantifiable by the Adviser. However,
rapidly changing market conditions or material events may not be immediately reflected in our monthly NAV. The
resulting potential disparity in our NAV may be detrimental to stockholders whose shares are repurchased or new
purchasers of our common stock, depending on whether our published NAV per share for such class is overstated or
understated.
Real estate appraisals will be reported on a free and clear basis (for example, without taking into consideration
any mortgage on the property), irrespective of any property-level financing that may be in place. We expect to use
the discounted cash flow methodology (income approach) as the primary methodology to value properties, whereby
a property’s value is calculated by discounting the estimated cash flows and the anticipated terminal value of the
subject property by the assumed market supported discount and terminal capitalization rates.
Consistent with industry practices, the income approach also incorporates subjective judgments regarding
comparable rental and operating expense data, capitalization and discount rates, and projections of future rent and
expenses based on appropriate market evidence as well as the residual value of the asset as components in
determining value. Other methodologies that may also be used to value properties include sales comparisons and
cost approaches. Under the sales comparison approach, the independent third-party appraiser or independent
valuation advisor, as applicable, develops an opinion of value by comparing the subject property to similar, recently
sold properties in the surrounding or competing area. The cost approach is based on the understanding that market
participants relate value to cost. The value of a property is derived by adding the estimated land value to the current
cost of constructing a replacement for the improvements and then subtracting the amount of depreciation in the
175
structures from all causes. Because appraisals performed by third-party appraisal firms or the independent valuation
advisor as applicable, involve subjective judgments, the estimated fair value of our assets that will be included in our
NAV may not reflect the liquidation value or net realizable value of our properties.
In conducting their investigations and analyses, our independent valuation advisor and other independent third-
party appraisal firms will take into account customary and accepted financial and commercial procedures and
considerations as they deem relevant, which may include, without limitation, the review of documents, materials and
information relevant to valuing the property that are provided by us, such as (i) historical operating revenues and
expenses of the property; (ii) lease agreements on the property; (iii) budgeted revenues and expenses of the property;
(iv) information regarding recent or planned capital expenditures; and (v) any other information relevant to valuing
the real estate property. Although our independent appraisers may review and apply professional skepticism to
information supplied or otherwise made available by the Adviser for reasonableness, they will assume and rely upon
the accuracy and completeness of all such information and of all information supplied or otherwise made available
to them by any other party and will not undertake any duty or responsibility to verify independently any of such
information. The independent appraisers will not make or obtain an independent valuation or appraisal of any of our
other assets or liabilities (contingent or otherwise) other than our real properties. With respect to operating or
financial forecasts and other information and data to be provided to or otherwise to be reviewed by or discussed with
our independent appraisers, our independent appraisers will assume that such forecasts and other information and
data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments
of the Adviser and will rely upon the Adviser to advise our independent appraisers promptly if any information
previously provided becomes inaccurate or was required to be updated during the period of review.
The appraisals and other estimates of value provided by the independent appraisers will be submitted to the
Adviser based on general economic, social and political factors in existence at the time that the appraisal or estimate
is delivered. As required under our valuation guidelines, the Adviser will review the appraisals or estimates
submitted by our independent appraisers in the event of a material change in general economic, political or social
factors, and will take such steps to obtain updated or revised appraisals and estimates as are appropriate under the
circumstances. Any such updated or revised appraisals or estimates may have an impact on our NAV.
In performing their analyses, the Adviser, our independent valuation advisor and other independent third-party
appraisal firms will make numerous other assumptions with respect to industry performance, general business,
economic and regulatory conditions and other matters, many of which are beyond their control and our control, as
well as certain factual matters. For example, our independent valuation advisor and other independent third-party
appraisal firms will assume that we have clear and marketable title to each real estate property valued, that no title
defects exist unless specifically informed to the contrary, that improvements were made in accordance with law, that
no hazardous materials are present or were present previously, that no deed restrictions exist, and that no changes to
zoning ordinances or regulations governing use, density or shape are pending or being considered. Furthermore, our
independent valuation advisor’s review and conclusions will necessarily be based upon market, economic, financial
and other circumstances and conditions existing prior to the valuation, and any material change in such
circumstances and conditions may affect our independent valuation advisor’s review and conclusions. The appraisal
reports provided by our independent valuation advisor and other third-party appraisal firms may contain other
assumptions, qualifications and limitations set forth in the respective reports that qualify the conclusions set forth
therein. As such, the carrying values of our real properties may not reflect the price at which the properties could be
sold in the market, and the difference between carrying values and the ultimate sales prices could be material. In
addition, accurate valuations are more difficult to obtain in times of low transaction volume because there are fewer
market transactions that can be considered in the context of the appraisal.
Pursuant to our valuation services agreement with our independent valuation advisor, each individual appraisal
report for our assets will be addressed solely to us to assist the Adviser in calculating our NAV. The appraisal
reports relating to our properties will not be addressed to the public and may not be relied upon by any other person
to establish an estimated value of our common stock and will not constitute a recommendation to any person to
purchase or sell any shares of our common stock. In preparing appraisal reports, independent third-party appraisal
firms and our independent valuation advisor will not, and will not be requested to, solicit third-party indications of
interest for our common stock or any of our properties in connection with possible purchases thereof or the
acquisition of all or any part of us.
176
Single-Family Rental Properties
Single-family rental properties are valued monthly by an independent third-party appraisal firm other than the
Independent Valuation Advisor.
International Properties
International properties will be appraised no less than once annually by an independent third-party appraisal
firm and each such appraisal will be reviewed by the Independent Valuation Advisor as to its reasonableness. Upon
conclusion of the appraisal, the independent third-party appraisal firm prepares a written report with an estimated
range of fair value of the property. Concurrent with the appraisal process, the Adviser values the property and,
taking into account the independent third-party appraisal, among other factors, determines the appropriate valuation
of the property, which will be reviewed by the independent valuation advisor as to its reasonableness. For months
where an independent third-party appraiser does not perform an appraisal, the Adviser will perform a monthly
valuation of each of our international properties, which will be reviewed by the Independent Valuation Advisor as to
its reasonableness.
Unconsolidated Properties Held Through Joint Ventures
Unconsolidated properties held through joint ventures generally will be valued in a manner that is consistent
with the guidelines described above for consolidated properties. Once the value of a property held by the joint
venture is determined in a manner that is consistent with the guidelines described above for consolidated properties
and the Adviser determines the fair value of any other assets and liabilities of the joint venture, the value of our
interest in the joint venture would then be determined by the Adviser using a hypothetical liquidation calculation to
value our interest in the joint venture, which would be a percentage of the joint venture’s NAV. Unconsolidated
properties held in a joint venture that acquires multiple properties over time may be valued as a single investment.
Our independent valuation advisor will not be responsible for the calculation of our interest in the joint venture’s
NAV.
Equity Investments in and Alongside Private Investment Funds
Investments in equity interests in any private investment fund (including but not limited to any fund for which
Brookfield acts as sponsor, general partner, or manager) are valued monthly by the Adviser. In addition,
unconsolidated investments made alongside any private investment fund for which Brookfield acts as sponsor,
general partner, or manager are valued monthly by the Adviser. In evaluating the fair value of our interests in or
alongside a fund as described above, the Adviser will value the real estate in a manner that is consistent with the
guidelines described above for our consolidated properties, incorporating the fair value of any other assets and
liabilities of the fund or entity in which we hold an unconsolidated investment alongside a fund. Not less than
annually, the valuation of the underlying real estate assets in such fund or entity will either be reviewed by the
independent valuation advisor as to its reasonableness or be appraised by an independent third-party appraiser. The
independent valuation advisor or the independent third-party appraiser will not be responsible for the calculation of
our interest in or alongside a private investment fund.
Real Estate-Related Debt Investments and Real Estate-Related Securities
Our investments in real estate-related debt and real estate-related securities will be valued at fair value in
accordance with GAAP. GAAP defines fair value as the price that would be received to sell an asset or be paid to
transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.
Real estate-related securities will be valued monthly by the Sub-Adviser using market quotations from third-party
pricing vendors, and real estate-related debt investments will be valued monthly by the Sub-Adviser using valuations
prepared by independent third-party valuation providers.
Market quotations may be obtained from third-party pricing service providers or broker-dealers. When reliable
market quotations for such assets are available the Sub-Adviser will value such investments based on the quotations
obtained. If market quotations are not readily available (or are otherwise not a reliable indication of fair value for a
particular investment), the fair value will be determined in good faith by the Sub-Adviser. Due to the inherent
177
uncertainty of these estimates, estimates of fair value may differ from the values that would have been used had a
ready market for these investments existed and the differences could be material. Market quotes are considered not
readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade
information, bid/ask information, or broker-dealer quotations).
Certain real estate-related debt investments, such as private real estate loans, are unlikely to have market
quotations. The initial value of such investments will generally be the acquisition price. Thereafter, each such
investment will be valued monthly by a third-party valuation provider using generally accepted valuation
methodologies to value such investments. Generally, the third-party valuation provider’s analysis will consider the
underlying collateral real estate, the investment’s yield, and the current market yield. Market yield is estimated based
on a variety of inputs regarding the collateral asset(s) performance, local/macro real estate performance, and capital
market conditions. These factors may include, but are not limited to: purchase price/par value of such real estate debt
or other difficult to value securities; debt yield, capitalization rates, loan-to-value ratio, and replacement cost of the
collateral asset(s); borrower financial condition, reputation, and indications of intent (e.g., pending repayments,
extensions, defaults, etc.); and known transactions or other price discovery for comparable debt investments.
Our board of directors has delegated to the Adviser the responsibility for monitoring significant events that may
materially affect the values of our real estate-related debt investments and real estate-related securities and for
determining whether the value of the applicable investments should be re-evaluated in light of such significant
events, and the Adviser will rely upon the Sub-Adviser with respect to monitoring significant events related to select
investments that it manages pursuant to the Sub-Advisory Agreement. The valuation of our real estate-related debt
investments and real estate-related securities will not be reviewed or appraised by our independent valuation advisor.
Liabilities
We include the fair value of our liabilities as part of our NAV calculation. These liabilities include the fees
payable to the Adviser (including any accrued performance fees) and the Dealer Manager, accounts payable, accrued
operating expenses, property-level mortgages, any portfolio-level credit facilities and other liabilities. All liabilities
will be valued using widely accepted methodologies specific to each type of liability. Liabilities related to class-
specific fees will be allocable to a specific class of shares and will only be included in the NAV calculation for such
class. Therefore, (i) liabilities related to stockholder servicing fees will be allocable to Class T shares, Class S shares
and Class D shares, as applicable, and will only be included in the NAV calculation for that class, and (ii) liabilities
related to management fees and performance fees will be allocable to Class T shares, Class S shares, Class D shares,
Class I shares and Class C shares and will only be included in the NAV calculation for such class. Our debt will
typically be valued at fair value in accordance with GAAP. The Adviser advanced all of our 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) we reimburse the Adviser for
all such advanced expenses paid through July 5, 2022 ratably over the 60 months following July 6, 2022; and (2) we
reimburse 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. For purposes of calculating our NAV, organization and offering expenses
advanced by the Adviser will not be recognized as expenses or as a component of equity and reflected in our NAV
until we reimburse the Adviser for these costs.
We have engaged an independent third-party valuation provider to prepare monthly valuations for our property-
level debt liabilities that will be used by us in calculating our NAV. The Adviser’s valuation of other liabilities,
including any third-party incentive fee payments or deal terms and structure, will not be reviewed or appraised by
the independent valuation advisor.
Valuation of Assets and Liabilities Associated with the DST Program
We intend to conduct the DST Program to raise capital in private placements through the sale of DST Interests
in DSTs that own one or more DST Properties in which we, through a wholly owned subsidiary, will hold a long-
term leasehold interest in each DST Property pursuant to a master lease that will be guaranteed by the Operating
Partnership. In accordance with the applicable master lease, such subsidiary or applicable master tenant will make
rental payments to the applicable DST (as landlord and owner of such DST Property) and such subsidiary or
178
applicable master tenant will be responsible for subleasing the applicable DST Property to various end-user tenants.
This master lease arrangement means that we will bear the risk that the underlying cash flow received from the
applicable DST Property may be less than the master lease payments. Additionally, the Operating Partnership will
hold the FMV Option, giving it the right, but not the obligation, to acquire the DST Interests from the investors at a
later date in exchange for Operating Partnership units or cash, at the Operating Partnership’s discretion.
Due to the continuing management of each DST Property by our subsidiary through the master lease
arrangement, we will, for purposes of calculating NAV but not necessarily for federal income tax purposes, include
each DST Property in the calculation of our NAV at its fair value (without taking into account the master lease
obligations) in the same manner as described under “Valuation of Investments—Consolidated Properties,” provided,
however, that any mortgage liability related to a DST Property will be valued at cost rather than estimated fair value
for purposes of calculating our NAV.
The cash received by us in exchange for the indirect sale of DST Interests in each DST Property will be valued
as an asset with a corresponding liability, initially equal to the cash received, representing the obligations under the
master lease. Accordingly, the indirect sale of DST Interests in each DST Property will have no initial net effect to
the NAV calculation. Following the close of the offering of each DST Property, the value of the DST Property
(taking into account the master lease obligations) will be multiplied by the third-party investors’ percentage interest
in the DST Property to determine the fair value of the corresponding liability on an ongoing basis. Therefore, any
differences between the fair value of the DST Property and the fair value of the DST Property subject to the master
lease obligations will be incorporated into our NAV.
NAV and NAV Per Share Calculation
State Street will calculate the NAV for each of our classes of common stock. Our board of directors, including a
majority of the independent directors, may replace State Street with another party, including the Adviser, if it is
deemed appropriate to do so. The Adviser is responsible for reviewing and confirming our NAV, and overseeing the
process around the calculation of our NAV, in each case, as performed by State Street. While the Adviser will rely
upon the Sub-Adviser to review and confirm valuations of certain investments, the Adviser remains ultimately
responsible for oversight of the NAV calculation process.
Each class of our common stock will have an undivided interest in our assets and liabilities, other than class-
specific stockholder servicing fees, management fees and performance fees. State Street will calculate our NAV per
share for each class as of the last calendar day of each month, using a process that reflects several components (each
as described above), including the estimated fair value of (1) each of our properties, (2) our real estate-related debt
investments and real estate-related securities (3) our other real estate-related investments, if any, and (4) our other
assets and liabilities. Because class specific fees are allocable to a specific class of shares and will only be included
in the NAV calculation for such class, the NAV per share for our share classes may differ. Units of the Operating
Partnership will be valued in the same fashion. Each class of Operating Partnership units is economically equivalent
to our corresponding class of shares (with Class T-1 units equivalent to Class T shares, Class D-1 units equivalent to
Class D shares, Class S-1 units equivalent to Class S shares and Class I-1 units equivalent to Class I shares).
Accordingly, on the last day of each month, the NAV per class of Operating Partnership units equals the NAV per
share of the corresponding class of common stock. The NAV of the Operating Partnership on the last day of each
calendar month equals the sum of the NAVs of each outstanding Operating Partnership unit on such day.
At the end of each month, before taking into consideration repurchases or class-specific expense accruals for
that month, any change in our aggregate NAV (whether an increase or decrease) is allocated among each class of
shares based on each class’s relative percentage of the previous aggregate NAV plus issuances that were effective on
the first calendar day of such month. The NAV calculation is available generally within 15 days after the end of the
applicable month. Changes in our monthly NAV will include, without limitation, accruals of our net portfolio
income, interest expense, the management fee, any accrued performance fee, distributions, unrealized/realized gains
and losses on assets, any applicable organization and offering costs and any expense reimbursements. Changes in
our monthly NAV will also include material non-recurring events, such as capital expenditures and material property
acquisitions and dispositions occurring during the month. On an ongoing basis, the Adviser will adjust the accruals
179
to reflect actual operating results and the outstanding receivable, payable and other account balances resulting from
the accumulation of monthly accruals for which financial information is available.
The Adviser advanced all of our organization and offering expenses on our behalf (other than upfront selling
commissions, dealer manager fees and stockholder servicing fees) from our inception through July 5, 2023 subject to
the following reimbursement terms: (1) we reimburse the Adviser for all such advanced expenses paid through July
5, 2022 ratably over the 60 months following July 6, 2022; and (2) we reimburse the Adviser for all such advanced
expenses paid from July 6, 2022 through July 6, 2023 ratably over the 60 months following July 6, 2023. Following
July 6, 2023, we reimburse the Adviser for any organization and offering expenses that it incurs on our behalf and
on behalf of feeder vehicles primarily created to hold our shares as and when incurred. Our organization and
offering expenses include the organization and offering expenses and management and operating expenses of feeder
vehicles primarily created to hold our shares, as well as certain other expenses. For purposes of calculating our
NAV, organization and offering expenses advanced by the Adviser will not be recognized as expenses or as a
component of equity reflected in our NAV until we reimburse the Adviser for these costs.
Following the aggregation of the net asset values of our investments, the addition of any other assets (such as
cash on hand) and the deduction of any other liabilities, State Street will incorporate any class-specific adjustments
to our NAV, including additional issuances and repurchases of our common stock and accruals of class-specific
stockholder servicing fees, management fees and performance fees. For each applicable class of shares, the
stockholder servicing fee will be calculated as a percentage of the aggregate NAV for such class of shares. The
declaration of distributions will reduce the NAV for each class of our common stock in an amount equal to the
accrual of our liability to pay any such distribution to our stockholders of record of each class. NAV per share for
each class is calculated by dividing such class’s NAV at the end of each month by the number of shares outstanding
for that class at the end of such month.
The combination of the Class T NAV, Class S NAV, Class D NAV, Class C NAV, Class E NAV and Class I
NAV, equals the aggregate net asset value of our assets, which will consist almost entirely of the value of our
interest in the Operating Partnership, less our liabilities, including liabilities related to class-specific fees. The value
of our interest in the Operating Partnership is equal to the excess of the aggregate NAV of the Operating Partnership
over the portion thereof that would be distributed to any limited partners other than us if the Operating Partnership
were liquidated. The aggregate NAV of the Operating Partnership is the excess of the value of the Operating
Partnership’s assets over its liabilities.
Relationship between NAV and Our Transaction Price
Generally, our transaction price will equal our prior month’s NAV. The transaction price will be the price at
which we repurchase shares and the price, together with applicable upfront selling commissions and dealer manager
fees, at which we offer shares. Although the transaction price will generally be based on our prior month’s NAV per
share, such prior month’s NAV may be significantly different from the current NAV per share of the applicable
class of stock as of the date on which your purchase or repurchase occurs.
In addition, we may, but are not obligated to, offer shares at a price that we believe reflects the NAV per share
of such stock more appropriately than the prior month’s NAV per share (including by updating a previously
disclosed offering price) or suspend our offering or our share repurchase plan in cases where we believe there has
been a material change (positive or negative) to our NAV per share since the end of the prior month. In cases where
our transaction price is not based on the prior month’s NAV per share, the offering price and repurchase price will
not equal our NAV per share as of any time. See “Net Asset Value Calculation and Valuation Guidelines—
Valuation of Investments” for examples of valuation adjustment events that may cause a material change to our
NAV per share.
Limits on the Calculation of Our NAV Per Share
The overarching principle of our valuation guidelines is to produce reasonable estimates of fair value for each of
our investments (and other assets and liabilities), or the price that would be received for that investment in orderly
transactions between market participants. However, the majority of our assets will consist of real estate properties
and, as with any real estate valuation protocol and as described above, the valuation of our properties (and other
180
assets and liabilities) will be based on a number of judgments, assumptions and opinions about future events that
may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in a
different estimate of the fair value of our real estate properties (and other assets and liabilities). Any resulting
potential disparity in our NAV per share may be in favor of stockholders whose shares are repurchased, existing
stockholders or new purchasers of our common stock, as the case may be, depending on the circumstances at the
time (for cases in which our transaction price is based on NAV). See “Risk Factors— Valuations and appraisals of
our properties and real estate-related debt investments are estimates of fair value and may not necessarily correspond
to realizable value,” “—Our NAV per share amounts may change materially if the appraised values of our properties
materially change from prior appraisals or the actual operating results for a particular month differ from what we
originally budgeted for that month” and “—It may be difficult to reflect, fully and accurately, material events that
may impact our monthly NAV.”
Additionally, while the methodologies contained in our valuation guidelines are designed to operate reliably
within a wide variety of circumstances, it is possible that in certain unanticipated situations or after the occurrence of
certain extraordinary events (such as a significant disruption in relevant markets, a terrorist attack or an act of
nature), our ability to calculate NAV may be impaired or delayed, including, without limitation, circumstances
where there is a delay in accessing or receiving information from vendors or other reporting agents upon which we
may rely upon in determining the monthly value of our NAV. In these circumstances, a more accurate valuation of
our NAV could be obtained by using different assumptions or methodologies. Accordingly, in special situations
when, in the Adviser’s reasonable judgment, the administration of the valuation guidelines would result in a
valuation that does not represent a fair and accurate estimate of the value of our investment, alternative
methodologies may be applied, provided that the Adviser must notify our board of directors at the next scheduled
board meeting of any alternative methodologies utilized and their impact on the overall valuation of our investment.
Notwithstanding the foregoing, our board of directors may suspend this offering or our share repurchase plan if it
determines that the calculation of NAV is materially incorrect or unreliable or there is a condition that restricts the
valuation of a material portion of our assets.
We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on your
ability to sell shares under our share repurchase plan and our ability to modify or suspend our share repurchase plan
at any time. Our NAV generally does not consider exit costs (e.g., selling costs and commissions and debt
prepayment penalties related to the sale of a property) that would likely be incurred if our assets and liabilities were
liquidated or sold. While we may use market pricing concepts to value individual components of our NAV, our per
share NAV is not derived from the market pricing information of open-end real estate funds listed on stock
exchanges.
Our NAV per share does not represent the amount of our assets less our liabilities in accordance with GAAP.
We do not represent, warrant or guarantee that:
•a stockholder would be able to realize the NAV per share for the class of shares a stockholder owns if the
stockholder attempts to sell its shares;
•a stockholder would ultimately realize distributions per share equal to the NAV per share for the class of
shares it owns upon liquidation of our assets and settlement of our liabilities or a sale of our company;
•shares of our common stock would trade at their NAV per share on a national securities exchange;
•a third party would offer the NAV per share for each class of shares in an arm’s-length transaction to
purchase all or substantially all of our shares; or
•the NAV per share would equate to a market price of an open-ended real estate fund.
181
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of shares of our common stock as
of March 14, 2025 by (1) each person known to us to beneficially own more than 5% of our outstanding common
stock, (2) each of our directors and named executive officers and (3) all of our directors and executive officers as a
group. Beneficial ownership is determined in accordance with the rules of the SEC. The percentage ownership of
our voting securities is based on 92,115,027 outstanding shares of our common stock as of March 16, 2026.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Common Stock Outstanding | ||
5% Stockholder: | ||||
Brookfield Affiliates (1) ............................................................................................. | 30,749,621 | 33.38% | ||
Regents of the University of California(2) ................................................................ | 18,977,313 | 20.60% | ||
Directors and Named Executive Officers: | ||||
Lori-Ann Beausoleil(3)(4) ........................................................................................... | 28,941 | * | ||
Richard W. Eaddy(3)(4) .............................................................................................. | 24,949 | * | ||
K. Alexander Elawadi(4) ........................................................................................... | — | —% | ||
Thomas F. Farley(3)(4) ................................................................................................ | 61,809 | * | ||
Theodore C. Hanno(4) ............................................................................................... | 5,440 | * | ||
Brian W. Kingston(4) ................................................................................................. | — | — | ||
Dana E. Petitto(4) ....................................................................................................... | 20,749 | * | ||
Robert L. Stelzl(3)(4) ................................................................................................... | 24,949 | * | ||
Elisabeth (Lis) S. Wigmore(3)(4) ................................................................................ | 24,949 | * | ||
Directors and named executive officers as a group (nine persons) ................... | 191,786 | 0.21% |
__________________
*Less than 1%
(1)Based on a Schedule 13D/A filed with the SEC on December 12, 2025 and other records provided to us. Includes 30,249,212 shares of
common stock held by BUSI II-C L.P. (“BUSI II-C”); 73,759 shares of common stock held by BIM Capital LLC (“BIM”); and 426,650
shares of common stock held by the Adviser. Brookfield Corporation is a holder of common shares of Brookfield Holdings Canada Inc.
(“BHC”), common shares of Brookfield Asset Management ULC (“BAM-ULC”) and special tracking preferred shares and Class B senior
preferred shares of Brookfield US Holdings Inc. (“BUSHI”). BHC is the sole shareholder of Brookfield Corporate Treasury Ltd. (“BCT”),
and BCT is a holder of Class A units of Oaktree Capital Group, LLC (“OCG LLC”). OCG NTR Holdings, LLC (“OGC NTR”) is the
managing member of BUSI II GP-C LLC (“BUSI II GP-C”) and a limited partner of BUSI II-C. BUSI II GP-C is the general partner of
BUSI II-C. BUSI II-C is an equity holder of us and Operating Partnership. Oaktree Capital Group Holdings GP, LLC (“OCGH GP”) is the
indirect owner of the class B units of OCG LLC. BAM is a holder of common shares of BAM-ULC, and BAM-ULC is the holder of Class
B common shares of BUSHI. BUSHI is the holder of Class A common shares and Class C preferred shares of BUSI. BUSI is the managing
member of each of Brookfield Public Securities Group Holdings LLC (“PSG Holdings”) and Brookfield Property Master Holdings LLC
(“BPM Holdings”). BPM Holdings is the sole member of Brookfield Property Group LLC (“BPG”), and BPG is the managing member of
the Adviser. PSG Holdings is the managing member of both PSG and BIM. Each of the Adviser, PSG and BIM is an equity holder of us. In
such capacities, each of the aforementioned entities may also be deemed to be the beneficial owners having shared voting power and shared
investment power with respect to the shares held by BUSI II-C, the Adviser, PSG and BIM. The principal business address of each of
Brookfield Corporation, BHC, BCT, BAM, BAM-ULC, and BUSHI is Brookfield Place, 181 Bay Street, Suite 100, Toronto, Ontario,
Canada M5J 2T3. The principal business address of each of BUSI II GP-C, BUSI II-C, BUSI, BPM Holdings, BPG, PSG Holdings, PSG,
BIM and the Adviser is Brookfield Place, 225 Liberty Street, 8th Floor, New York, New York 10280. The principal business address of
each of OCG LLC, OCG NTR and OCGH GP is c/o Oaktree Capital Group, LLC, 333 South Grand Avenue, 28th Floor, Los Angeles,
California 90071.
(2)Based on a Schedule 13G/A filed with the SEC on December 12, 2025 and other records provided to us. The address for Regents of the
University of California is 1111 Franklin Street, Oakland, California 94607.
(3)Beneficial ownership number includes unvested restricted shares granted as director compensation for the year ending December 31, 2025.
(4)The address for each of the persons indicated is in care of our principal executive offices at Brookfield Place, 225 Liberty Street, 8th Floor,
New York, New York 10280.
182
DESCRIPTION OF CAPITAL STOCK
We were formed under the laws of the State of Maryland. The rights of our stockholders are governed by
Maryland law as well as our charter and bylaws. The following summary of the terms of our stock is a summary of
the material provisions concerning our stock and you should refer to the MGCL and our charter and bylaws for a full
description. The following summary is qualified in its entirety by the more detailed information contained in our
charter and bylaws. Copies of our charter and bylaws are filed as exhibits to the registration statement of which this
prospectus is a part. You can obtain copies of our charter and bylaws and every other exhibit to our registration
statement. See the “Where You Can Find More Information; Incorporation by Reference” section below.
Under our charter, we have authority to issue a total of 1,050,000,000 shares of capital stock. Of the total shares
of stock authorized, 1,000,000,000 shares are classified as common stock (of which 225,000,000 are classified as
Class T shares, par value $0.01 per share, 225,000,000 are classified as Class S shares, par value $0.01 per share,
100,000,000 are classified as Class D shares, par value $0.01 per share, 250,000,000 are classified as Class I shares,
par value $0.01 per share, 100,000,000 shares are classified as Class C shares, no par value per share, and
100,000,000 shares are classified as Class E shares, no par value per share) and 50,000,000 shares are classified as
preferred stock with a par value $0.01 per share. In addition, our board of directors may amend our charter from
time to time, without stockholder approval, to increase or decrease the aggregate number of shares of stock or the
number of shares of stock of any class or series that we have authority to issue.
Common Stock
Subject to the restrictions on ownership and transfer of stock set forth in our charter and except as may
otherwise be specified in our charter, the holders of common stock are entitled to one vote per share on all matters
voted on by stockholders, including election of our directors. The holders of common stock vote together as a single
class on all actions to be taken by the stockholders; provided, however, that with respect to (i) any amendment of the
charter that would materially and adversely affect the rights, preferences and privileges of only a particular class of
common stock or (ii) any matter submitted to stockholders that relates solely to a particular class of common stock,
only the affirmative vote of the holders of a majority of such affected class of common stock, with no other class of
common stock voting except such affected class of common stock voting as a separate class, is required. Our charter
does not provide for cumulative voting in the election of our directors. Therefore, the holders of a majority of the
outstanding shares of our common stock can elect our entire board of directors. Subject to any preferential rights of
any outstanding class or series of shares of stock and to the provisions in our charter regarding the restriction on
ownership and transfer of stock, the holders of common stock are entitled to such distributions as may be authorized
from time to time by our board of directors (or a duly authorized committee of our board of directors) and declared
by us out of legally available funds and, upon liquidation, are entitled to receive all assets available for distribution
to our stockholders. Upon issuance for full payment in accordance with the terms of this offering, all shares of our
common stock issued in the offering will be validly issued, fully paid and non-assessable. Holders of common stock
will not have preemptive rights, which means that you will not have an automatic option to purchase any new shares
of stock that we issue.
Our charter also contains a provision permitting our board of directors, without any action by our stockholders,
to classify or reclassify any unissued common stock into one or more classes or series by setting or changing the
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms or conditions of repurchase of any new class or series of shares of stock.
We will generally not issue certificates for shares of our common stock. Shares of our common stock will be
held in “uncertificated” form, which will eliminate the physical handling and safekeeping responsibilities inherent in
owning transferable stock certificates and eliminate the need to return a duly executed stock certificate to effect a
transfer. SS&C GIDS, Inc. acts as our registrar and as the transfer agent for our shares. Transfers can be effected
simply by mailing to our transfer agent a transfer and assignment form, which we will provide to you at no charge
upon written request.
183
Class T Shares
Each Class T share issued in the primary offering will be subject to an upfront selling commission of up to
3.0%, and an upfront dealer manager fee of 0.5%, of the transaction price of each Class T share sold in the offering
on the date of the purchase; provided, however, that such amounts may vary at certain participating broker-dealers
provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager anticipates that all of the
upfront selling commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating
broker-dealers.
We will pay the Dealer Manager selling commissions over time as a stockholder servicing fee with respect to
our outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class T shares.
For each Class T share, this stockholder serving fee consists of an advisor stockholder servicing fee and a dealer
stockholder servicing fee. We expect that generally the advisor stockholder servicing fee will equal 0.65% per
annum and the dealer stockholder servicing fee will equal 0.20% per annum, of the aggregate NAV for the Class T
shares. However, with respect to Class T shares sold through certain participating broker-dealers, the advisor
stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of
such fees will always equal 0.85% per annum of the NAV of such shares. The stockholder servicing fees will be
paid monthly in arrears. The Dealer Manager will reallow (pay) all of the stockholder servicing fees to participating
broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers.
The upfront selling commission and dealer manager fee will not be payable in respect of any Class T shares sold
pursuant to our distribution reinvestment plan, but such shares will be charged the stockholder servicing fee payable
with respect to all our outstanding Class T shares.
We will cease paying the stockholder servicing fee with respect to any Class T share held in a stockholder’s
account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that
total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares
held by such stockholder within such account would exceed, in the aggregate, 8.75% (or a lower limit as set forth in
any applicable agreement between the Dealer Manager and a participating broker-dealer at the time such Class T
share was issued) of the sum of gross proceeds from the sale of such shares. At the end of such month, such Class T
shares held in such stockholder’s account will convert into a number of Class I shares with an equivalent aggregate
NAV as such shares. Although we cannot predict the length of time over which the stockholder servicing fee will be
paid due to potential changes in the NAV of our shares, this fee would be paid with respect to a Class T share held in
a stockholder’s account over approximately 6.5 years from the date of purchase, assuming a limit of 8.75% of gross
proceeds, payment of the full upfront selling commissions and dealer manager fees (as applicable) and a constant
NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for this time period, this
fee with respect to a Class T share would total approximately $0.56.
In addition, we will cease paying the stockholder servicing fee on the Class T shares on the earlier to occur of
the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we
are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a
transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof,
or (iii) the end of the month following the completion of this offering in which we, with the assistance of the Dealer
Manager, determine that, in the aggregate, underwriting compensation paid or incurred from all sources in
connection with this offering, determined pursuant to the rules and guidance of FINRA, including upfront selling
commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross
proceeds from our primary offering.
Class T shares are subject to class-specific advisory and performance fees as described in “Compensation.”
Class S Shares
Each Class S share issued in the primary offering will be subject to an upfront selling commission of up to 3.5%
of the transaction price of each Class S share sold in the offering on the date of the purchase. The Dealer Manager
anticipates that all of the upfront selling commissions will be retained by, or reallowed (paid) to, participating
broker-dealers.
184
We will pay the Dealer Manager selling commissions over time as a stockholder servicing fee with respect to
our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares.
The stockholder servicing fees will be paid monthly in arrears. The Dealer Manager will reallow (pay) all of the
stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder
services performed by such broker-dealers.
The upfront selling commission will not be payable in respect of any Class S shares sold pursuant to our
distribution reinvestment plan, but such shares will be charged the stockholder servicing fee payable with respect to
all our outstanding Class S shares.
We will cease paying the stockholder servicing fee with respect to any Class S share held in a stockholder’s
account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that
total upfront selling commissions and stockholder servicing fees paid with respect to the shares held by such
stockholder within such account would exceed, in the aggregate, 8.75% of the sum of the gross proceeds from the
sale of such shares. At the end of such month, such Class S share will convert into a number of Class I shares with
an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the
stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with
respect to a Class S share over approximately 6.5 years from the date of purchase, assuming a limit of 8.75% of
gross proceeds, payment of the full upfront selling commissions, opting out of the distribution reinvestment plan and
a constant NAV of $10.00 per share. Under these assumptions, if a stockholder holds his or her shares for this time
period, this fee with respect to a Class S share would total approximately $0.56.
In addition, we will cease paying the stockholder servicing fee on the Class S shares on the earlier to occur of
the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we
are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a
transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof,
or (iii) the end of the month following the completion of this offering in which we, with the assistance of the Dealer
Manager, determine that, in the aggregate, underwriting compensation paid or incurred from all sources in
connection with this offering, determined pursuant to the rules and guidance of FINRA, including upfront selling
commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross
proceeds from our primary offering.
Class S shares are subject to class-specific advisory and performance fees as described in “Compensation.”
Class D Shares
Each Class D share issued in the primary offering will be subject to an upfront selling commission of up to
1.5% of the transaction price of each Class D share sold in the offering on the date of the purchase. The Dealer
Manager anticipates that all of the upfront selling commissions will be retained by, or reallowed (paid) to,
participating broker-dealers.
We will pay the Dealer Manager selling commissions over time as a stockholder servicing fee with respect to
our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of all our outstanding Class D
shares, including any Class D shares sold pursuant to our distribution reinvestment plan. The stockholder servicing
fees will be paid monthly in arrears. The Dealer Manager will reallow (pay) all of the stockholder servicing fees to
participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such
broker-dealers.
Class D shares are available for purchase in this offering only (1) through fee-based programs, also known as
wrap accounts, that provide access to Class D shares, (2) through participating broker-dealers that have alternative
fee arrangements with their clients to provide access to Class D shares, (3) through certain registered investment
advisers, (4) through bank trust departments or any other organization or person authorized to act in a fiduciary
capacity for its clients or customers or (5) by other categories of investors that we name in an amendment or
supplement to this prospectus.
185
We will cease paying the stockholder servicing fee with respect to any Class D share held in a stockholder’s
account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that
total upfront selling commissions and stockholder servicing fees paid with respect to the shares held by such
stockholder within such account would exceed, in the aggregate, 8.75% of the sum of the gross proceeds from the
sale of such shares. At the end of such month, such Class D shares held in such stockholder’s account will convert
into a number of Class I shares with an equivalent aggregate NAV as such shares. Although we cannot predict the
length of time over which the stockholder servicing fee will be paid due to potential changes in the NAV of our
shares, this fee would be paid with respect to a Class D share over approximately 29.5 years from the date of
purchase, assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions, opting out
of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under these assumptions, if a
stockholder holds his or her shares for this time period, this fee with respect to a Class D share would total
approximately $0.74.
In addition, we will cease paying the stockholder servicing fee on the Class D shares on the earlier to occur of
the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity in which we
are not the surviving entity, or the sale or other disposition of all or substantially all of our assets, in each case in a
transaction in which our stockholders receive cash, securities listed on a national exchange or a combination thereof,
or (iii) the end of the month following the completion of this offering in which we, with the assistance of the Dealer
Manager, determine that, in the aggregate, underwriting compensation paid or incurred from all sources in
connection with this offering, determined pursuant to the rules and guidance of FINRA, including upfront selling
commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross
proceeds from our primary offering.
Class D shares are subject to class-specific advisory and performance fees as described in “Compensation.”
Class I Shares
No upfront selling commissions or stockholder servicing fees are paid for sales of any Class I shares.
Class I shares are available for purchase in this offering only (1) through fee-based programs, also known as
wrap accounts, that provide access to Class I shares, (2) by endowments, foundations, pension funds and other
institutional investors, (3) through participating broker-dealers that have alternative fee arrangements with their
clients to provide access to Class I shares, (4) by our executive officers and directors and their immediate family
members, as well as officers and employees of the Adviser, Brookfield, the Sub-Adviser, Oaktree or other affiliates
and their immediate family members, and, if approved by our board of directors, joint venture partners, consultants
and other service providers or (5) by other categories of investors that we name in an amendment or supplement to
this prospectus.
In addition, we are conducting a private offering of Class I shares to a feeder vehicle primarily created to hold
our Class I shares, which in turn will offer interests in itself to investors. This offering is conducted pursuant to an
exemption from registration under the Securities Act and not as a part of this offering.
Class I shares are subject to class-specific advisory and performance fees as described in “Compensation.”
Class C Shares
We are conducting a private offering of Class C shares to a feeder vehicle primarily created to hold our Class C
shares, which in turn will offer interests in itself to investors. This offering is conducted pursuant to an exemption
from registration under the Securities Act. No selling commissions, dealer manager fees or stockholder servicing
fees are charged to purchasers in connection with the sale of any Class C shares. The Class C shares are not being
offered pursuant to this prospectus.
Class C shares are subject to class-specific advisory and performance fees as described in “Compensation.”
186
Class E Shares
The Adviser may elect to receive all or a portion of its management fee in Class E shares, and we may also issue
Class E shares to Brookfield and its affiliates and certain of Brookfield’s and Oaktree’s employees and our
independent directors in one or more private placements. We will conduct such private placements pursuant to
exemptions to registration under the Securities Act. No selling commissions, dealer manager fees or stockholder
servicing fees are charged to purchasers in connection with the sale of any Class E shares. The Class E shares do not
pay a management or performance fee and are not being offered pursuant to this prospectus.
Other Terms of Common Stock
If not already converted into Class I shares upon a determination that total upfront selling commissions, dealer
manager fees and stockholder servicing fees paid with respect to such shares would exceed the applicable limit as
described in the “—Class T Shares,” “—Class S Shares” and “—Class D Shares” sections above, each Class T
share, Class S share, Class D share, Class C share and Class E share held in a stockholder’s account will
automatically and without any action on the part of the holder thereof convert into a number of Class I shares with
an equivalent NAV as such share on the earliest of (i) a listing of Class I shares, (ii) our merger or consolidation
with or into another entity in which we are not the surviving entity or the sale or other disposition of all or
substantially all of our assets, in each case in a transaction in which our stockholders receive cash or securities listed
on a national securities exchange or (iii) with respect to Class T shares, Class S shares and Class D shares, the end of
the month following termination of the primary portion of the offering in which such Class T shares, Class S shares
and Class D shares were sold in which we, with the assistance of the Dealer Manager, determine that, in the
aggregate, underwriting compensation paid or incurred from all sources in connection with the offering, determined
pursuant to the rules and guidance of FINRA, including upfront selling commissions, the stockholder servicing fee
and other underwriting compensation, is equal to 10% of the gross proceeds of the primary portion of the offering.
In addition, immediately before any liquidation, dissolution or winding up, each Class T share, Class S share, Class
D share, Class C share and Class E share will automatically convert into a number of Class I shares with an
equivalent NAV as such share.
Brookfield Investor Subscriptions
From time to time, the Brookfield Investor may subscribe for shares of our common stock or units of the
Operating Partnership. Each issuance is made at the same transaction price and subject to the same fees as shares or
units sold in our applicable offering. On January 3, 2022, the Brookfield Investor subscribed for $38.0 million of
Class E units of the Operating Partnership. On April 3, 2023 and May 1, 2023, the Brookfield Investor subscribed
for $10.0 million and $8.0 million, respectively, of Class I shares. The shares and units held by the Brookfield
Investor related to these subscriptions are not subject to the Brookfield Repurchase Arrangement, but the Brookfield
Investor may request that we or the Operating Partnership repurchase its shares or units, in whole or in part, subject
to the terms and conditions of our share repurchase plan. On December 31, 2024, the Brookfield Investor submitted
a repurchase request for $7.1 million through our share repurchase plan, which was paid in January 2025.
On November 13, 2025, we, the Operating Partnership and the Brookfield Investor entered into an agreement
pursuant to which all of the Brookfield Investor’s Class E OP units and Class I-1 OP units were redeemed and
converted to Class E and I shares, respectively, in a non-cash transaction. As the shares and units are at the same
price, the units were redeemed and converted for the same number of shares. The Class I shares held by the
Brookfield Investor in connection with the Brookfield Subscription Agreement 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.
Investment from an Institutional Investor
On December 16, 2024, an institutional investor (the “Investor”) subscribed for $200,000,000 in shares of our
Class I common stock, which were issued on January 1, 2025. The issuance was made at the same transaction price
as Class I shares sold through the Offering as of January 1, 2025, with fees consistent with existing Class I
stockholders. This issuance was made pursuant to Section 4(a)(2) of the Securities Act. Brookfield entered into a
separate agreement with the Investor pursuant to which Brookfield will support a specified total annual return on the
187
Investor’s investment in our Class I shares in the form of periodic cash payments, subject to certain limits. In
exchange, the Investor has agreed not to request the repurchase of its shares, subject to limited exceptions, for a
period of five years from the issuance date, at which point the Investor may request that we repurchase its shares
through our share repurchase plan ratably over a two-year period.
Preferred Stock
Our charter authorizes our board of directors to designate and issue one or more classes or series of preferred
stock without stockholder approval, and to establish the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions, qualifications and terms or conditions of repurchase
of each class or series of preferred stock so issued. Because our board of directors has the power to establish the
preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of
preferred stock preferences, powers and rights senior to the rights of holders of common stock.
However, the voting rights per share of any series or class of preferred stock sold in a private offering may not
exceed voting rights which bear the same relationship to the voting rights of a publicly held share as the
consideration paid to us for each privately-held preferred share bears to the book value of each outstanding publicly
held share. If we issue preferred stock with a distribution preference over common stock, payment of any
distribution preferences of outstanding preferred stock would reduce the amount of funds available for the payment
of distributions on the common stock. Further, holders of preferred stock are normally entitled to receive a
liquidation preference in the event we liquidate, dissolve or wind up before any payment is made to the common
stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence.
In addition, under certain circumstances, the issuance of preferred stock may render more difficult or tend to
discourage a merger, offer or proxy contest, the assumption of control by a holder of a large block of our securities,
or the removal of incumbent management. We have no present plans to issue any preferred stock, but we may do so
at any time in the future without stockholder approval.
Meetings and Special Voting Requirements
An annual meeting of the stockholders will be held each year, upon reasonable notice to our stockholders, but
no sooner than 30 days after delivery of our annual report to stockholders. Special meetings of stockholders may be
called only upon the request of a majority of our directors, a majority of our independent directors or our chief
executive officer, president or chairman of the board of directors and must be called by our secretary to act on any
matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled
to cast at least 10% of the votes entitled to be cast on such matter at the meeting. Upon receipt of a written request
stating the purpose of any such special meeting, our secretary must provide a written notice to our stockholders
within 10 days of receipt of such written request, stating the purpose of the meeting and setting a meeting date not
less than 15 nor more than 60 days after the distribution of such notice. The presence either in person or by proxy of
stockholders entitled to cast at least 50% of all the votes entitled to be cast on such matter at the meeting on any
matter will constitute a quorum. Generally, the affirmative vote of a majority of all votes cast is necessary to take
stockholder action, except as described in the next paragraph and except that a majority of the votes represented in
person or by proxy at a meeting at which a quorum is present is required to elect a director.
Under the MGCL and our charter, stockholders generally are entitled to vote at a duly held meeting at which a
quorum is present on (1) amendments to our charter, (2) our liquidation and dissolution, (3) a merger, consolidation,
conversion, statutory share exchange or sale or other disposition of all or substantially all of our assets, and (4)
election or removal of our directors. Except with respect to the election of directors or as otherwise provided in our
charter, the vote of stockholders entitled to cast a majority of all the votes entitled to be cast is required to approve
any such action, and no such action can be taken by our board of directors without such majority vote of our
stockholders. In addition, although the NASAA REIT Guidelines indicate that stockholders are permitted to amend
our charter or dissolve us without the necessity for concurrence by our board of directors, we are required to comply
with the MGCL, which provides that any amendment to our charter or any dissolution of our company must first be
declared advisable by our board of directors. Therefore, except with respect to the election or removal of our
directors, prior to a stockholder vote, our board of directors must first adopt a resolution that the proposed action is
advisable and directing the matter to be submitted to the stockholders. Accordingly, the only proposals to amend our
188
charter or to dissolve our company that will be presented to our stockholders will be those that have been declared
advisable by our board of directors and also require approval by our stockholders. Stockholders are not entitled to
exercise any of the rights of an objecting stockholder provided for in Title 3, Subtitle 2 of the MGCL unless our
board of directors, upon the affirmative vote of a majority of our board of directors, determines that such rights
apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of the
determination in connection with which stockholders would otherwise be entitled to exercise such rights.
Stockholders have the power, without the concurrence of the directors, to remove a director from our board of
directors with or without cause, by the affirmative vote of stockholders entitled to cast a majority of the votes
entitled to be cast generally in the election of directors.
Stockholders are entitled to receive a copy of our stockholder list upon request. The list provided by us will
include each stockholder’s name, address and telephone number and number of shares of stock owned by each
stockholder and will be sent within 10 days of our receipt of the request. The stockholder list must be maintained as
part of our books and records and shall be available for inspection by any stockholder or the stockholder’s
designated agent at our corporate offices upon the request of a stockholder. The stockholder list will be updated at
least quarterly to reflect changes in the information contained therein. The copy of the stockholder list will be
printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than ten-point
type). We may impose a reasonable charge for expenses incurred in the reproduction of such list, including the costs
of postage and duplication. The purposes for which a stockholder may request a copy of the stockholder list include,
but are not limited to, matters relating to stockholders’ voting rights, the exercise of stockholder rights under federal
proxy laws and any other proper purpose. If the Adviser or our board of directors neglects or refuses to exhibit,
produce or mail a copy of our stockholder list as requested, the Adviser or our board of directors, as the case may be,
will be liable to any stockholder requesting our stockholder list for the costs, including reasonable attorneys’ fees,
incurred by that stockholder for compelling the production of our stockholder list, and for actual damages suffered
by any such stockholder by reason of such refusal or neglect. It will be a defense that the actual purpose and reason
for the requests for inspection or for a copy of our stockholder list is to secure such list or other information for the
purpose of selling our stockholder list or copies thereof, or of using the same for a commercial purpose other than in
the interest of the applicant as a stockholder relative to our affairs. We have the right to request that a requesting
stockholder represent to us that the list will not be used to pursue commercial interests unrelated to such
stockholder’s interest in us. The remedies provided by our charter to stockholders requesting copies of our
stockholder list are in addition to, and will not in any way limit, other remedies available to stockholders under
federal law, or the laws of any state.
In addition to the foregoing, stockholders have rights under Rule 14a-7 under the Exchange Act, which provides
that, upon the request of a stockholder and the payment of the expenses of the distribution, we are required to
distribute specific materials to stockholders in the context of the solicitation of proxies by a stockholder for voting
on matters presented to stockholders or, at our option, provide requesting stockholders with a copy of the list of
stockholders so that the requesting stockholder may make the distribution of such materials.
Furthermore, pursuant to our charter, any stockholder and any designated representative thereof will be
permitted access to our corporate records to which such stockholder is entitled under applicable law at all reasonable
times, and may inspect and copy any of them for a reasonable charge. Under Maryland law, stockholders are entitled
to inspect and copy only our bylaws, minutes of stockholder proceedings, annual statements of affairs, voting trust
agreements and statements of stock and securities issued by us during the period specified by the requesting
stockholder, which period may not be longer than 12 months prior to the date of the stockholder’s request. Because
our stockholders are entitled to inspect only those corporate records that stockholders are entitled to inspect and
copy under Maryland law, our stockholders will not be entitled to inspect and copy the minutes of the meetings of
our board of directors, which are records that certain states other than Maryland allow corporate stockholders to
inspect and copy. Requests to inspect or copy our corporate records must be made in writing to: Brookfield Real
Estate Income Trust Inc., Brookfield Place, 225 Liberty Street, 8th Floor, New York, New York 10281. It is the
policy of our board of directors to comply with all proper requests for access to our corporate records in conformity
with our charter and Maryland law.
189
Restrictions on Ownership and Transfer
Our charter contains restrictions on the number of shares of our stock that a person or group may own. No
person or group may acquire or hold, directly or indirectly through application of constructive ownership rules, in
excess of 9.9% in value or number of shares, whichever is more restrictive, of the outstanding shares of our common
stock or 9.9% in value or number of shares, whichever is more restrictive, of our outstanding stock of all classes or
series unless they receive an exemption from our board of directors.
Subject to certain limitations, our board of directors, in its sole discretion, may exempt a person prospectively or
retroactively from, or modify, these limits, subject to such terms, conditions, representations and undertakings as it
may determine. Our charter provides for, and our board of directors may grant, limited exemptions to certain persons
who directly or indirectly own our stock, including directors, officers and stockholders controlled by them or trusts
for the benefit of their families.
Our charter further prohibits any person from beneficially or constructively owning shares of our stock that
would result in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as
a REIT and any person from transferring shares of our stock if the transfer would result in our stock being
beneficially owned by fewer than 100 persons. Any person who acquires or attempts or intends to acquire shares of
our stock that may violate any of these restrictions, or who is the intended transferee of shares of our stock which are
transferred to the trust, as described below, is required to give us immediate written notice, or in the case of a
proposed or attempted transaction, give at least 15 days prior written notice, and provide us with such information as
we may request in order to determine the effect of the transfer on our status as a REIT. The above restrictions will
not apply if our board of directors determines that it is no longer in our best interests to continue to qualify as a
REIT or that compliance with such restrictions is no longer required for us to qualify as a REIT.
Any attempted transfer of our stock which, if effective, would result in violation of the above limitations, except
for a transfer which results in shares being beneficially owned by fewer than 100 persons, in which case such
transfer will be void and of no force and effect and the intended transferee shall acquire no rights in such shares, will
cause the number of shares causing the violation, rounded to the nearest whole share, to be automatically transferred
to a trust for the exclusive benefit of one or more charitable beneficiaries designated by us and the proposed
transferee will not acquire any rights in the shares. The automatic transfer will be deemed to be effective as of the
close of business on the business day, as defined in our charter, prior to the date of the transfer. Shares of our stock
held in the trust will be issued and outstanding shares. The proposed transferee will not benefit economically from
ownership of any shares of stock held in the trust, will have no rights to dividends or other distributions and no
rights to vote or other rights attributable to the shares of stock held in the trust. The trustee of the trust will have all
voting rights and rights to dividends or other distributions with respect to shares held in the trust. These rights will
be exercised for the exclusive benefit of the charitable beneficiaries. Any dividend or other distribution paid prior to
our discovery that shares of stock have been transferred to the trust will be paid by the recipient to the trustee upon
demand. Any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend
or other distribution paid to the trustee will be held in trust for the charitable beneficiaries. Subject to Maryland law,
the trustee will have the authority to rescind as void any vote cast by the proposed transferee prior to our discovery
that the shares have been transferred to the trust and to recast the vote in accordance with the desires of the trustee
acting for the benefit of the charitable beneficiaries. However, if we have already taken irreversible corporate action,
then the trustee will not have the authority to rescind and recast the vote.
Within 20 days of receiving notice from us that shares of our stock have been transferred to the trust, the trustee
will sell the shares to a person designated by the trustee, whose ownership of the shares will not violate the above
ownership limitations. Upon the sale, the interest of the charitable beneficiaries in the shares sold will terminate and
the trustee will distribute the net proceeds of the sale to the proposed transferee and to the charitable beneficiaries as
follows. The proposed transferee will receive the lesser of (i) the price paid by the proposed transferee for the shares
or, if the proposed transferee did not give value for the shares in connection with the event causing the shares to be
held in the trust, such as a gift, devise or other similar transaction, the market price, as defined in our charter, of the
shares on the day of the event causing the shares to be held in the trust and (ii) the price per share received by the
trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares. The
trustee may reduce the amount payable to the proposed transferee by the amount of dividends and other distributions
190
which have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. Any net sale
proceeds in excess of the amount payable per share to the proposed transferee will be paid immediately to the
charitable beneficiaries. If, prior to our discovery that shares of our stock have been transferred to the trust, the
shares are sold by the proposed transferee, then the shares shall be deemed to have been sold on behalf of the trust
and, to the extent that the proposed transferee received an amount for the shares that exceeds the amount he was
entitled to receive, the excess shall be paid to the trustee upon demand.
In addition, shares of our stock held in the trust will be deemed to have been offered for sale to us, or our
designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in the
transfer to the trust, or, in the case of a devise or gift, the market price at the time of the devise or gift and (ii) the
market price on the date we, or our designee, accept the offer. We will have the right to accept the offer until the
trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiaries in the shares sold will
terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee. We may reduce the
amount payable to the proposed transferee by the amount of dividends or other distributions which have been paid to
the proposed transferee and are owed by the proposed transferee to the trustee. We may pay the amount of such
reduction to the trustee for the benefit of the charitable beneficiary.
If the transfer to the trust as described above is not automatically effective for any reason to prevent violation of
the above limitations or our failing to qualify as a REIT, then the transfer of the number of shares that otherwise
cause any person to violate the above limitations will be void and the intended transferee shall acquire no rights in
such shares.
All certificates, if any, representing shares of our stock issued in the future will bear a legend referring to the
restrictions described above.
Every owner of more than 5% of the outstanding shares of our stock during any taxable year, or such lower
percentage as required by the Code or the regulations promulgated thereunder or as otherwise required by our board
of directors, within 30 days after the end of each taxable year, is required to give us written notice, stating his or her
name and address, the number of shares of each class and series of our stock which he or she beneficially owns and
a description of the manner in which the shares are held. Each such owner shall provide us with such additional
information as we may request in order to determine the effect, if any, of its beneficial ownership on our status as a
REIT and to ensure compliance with the ownership limits. In addition, each stockholder must, upon demand,
provide us with such information as we may request in order to determine our status as a REIT and to comply with
the requirements of any taxing authority or governmental authority or to determine such compliance.
Distribution Policy
We have declared, and intend to continue to declare, monthly distributions as authorized by our board of
directors (or a duly authorized committee of the board of directors) and have paid, and intend to continue to pay,
such distributions to stockholders of record on a monthly basis. We commenced paying distributions in December
2019 and have paid distributions each month since such date.
Our distribution policy will be set by our board of directors and is subject to change based on available cash
flows, among other factors. We cannot guarantee the amount of distributions paid, if any. You will not be entitled to
receive a distribution if your shares are repurchased prior to the applicable record date. In connection with a
distribution to our stockholders, our board of directors approves a monthly distribution for a certain dollar amount
per share for each class of our common stock. We then calculate each stockholder’s specific distribution amount for
the month using applicable record and declaration dates, and your distributions begin to accrue on the date you are
admitted as a stockholder.
Distributions will be made on all classes of our common stock at the same time. The per share amount of
distributions on our various classes of common stock sold in this offering will likely differ because of different
allocations of class-specific stockholder servicing fees, management fees and performance fees. We currently use
the “record share” method of determining the per share amount of distributions on our various classes of common
stock sold in this offering, although our board of directors may choose any other method. The “record share” method
is one of several distribution calculation methods for multiple-class funds recommended, but not required, by the
191
American Institute of Certified Public Accountants. Under this method, the amount to be distributed on our common
stock will be increased by the sum of all class-specific stockholder servicing fees, management fees and
performance fees for such period. Such amount will be divided by the number of our common shares outstanding on
the record date. Such per share amount will be reduced for each class of common stock by the per share amount of
any class-specific stockholder servicing fees, management fees and performance fees allocable to such class.
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. See the
“Material U.S. Federal Income Tax Considerations—Taxation of REITs in General—Requirements for
Qualification as a REIT” and “Material U.S. Federal Income Tax Considerations—Annual Distribution
Requirements Applicable to REITs” sections of this prospectus. 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.
Distributions will be authorized at the discretion of our board of directors, in accordance with our earnings, cash
flows and general financial condition. Our board of directors’ discretion will be directed, in substantial part, by its
obligation to cause us to comply with the REIT requirements. Because we may receive income from interest or rents
at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution
period but may be made in anticipation of cash flows which we expect to receive during a later quarter and may be
made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. Due to these
timing differences, we may be required to borrow money, use proceeds from the issuance of securities (in this
offering or subsequent offerings, if any) or sell assets in order to distribute amounts sufficient to satisfy the
requirement that we distribute at least 90% of our REIT taxable income in order to qualify as a REIT. We have not
established any limit on the amount of proceeds from this offering that may be used to fund distributions other than
those limits imposed by our organizational documents and Maryland law. See the “Material U.S. Federal Income
Tax Considerations” section of this prospectus for information concerning the U.S. federal income tax consequences
of distributions paid by us.
There is no assurance we will pay distributions in any particular amount, if at all. We may fund any
distributions from sources other than cash flows from operations, and we have no limits on the amounts we may pay
from such sources. The extent to which we pay distributions from sources other than cash flows from operations
depends on various factors, including the level of participation in our distribution reinvestment plan, the extent to
which the Adviser elects to receive its management fee or performance fee in Class E or Class I shares or Class E or
Class I units of the Operating Partnership, how quickly we invest the proceeds from this and any future offering and
the performance of our investments along with tax and Investment Company Act considerations relating thereto.
Funding distributions from the sales of assets, borrowings, return of capital or proceeds of this offering will result in
us having less funds available to acquire properties or other real estate-related investments. As a result, the return
you realize on your investment may be reduced. Doing so may also negatively impact our ability to generate cash
flows. Likewise, funding distributions from the sale of additional securities will dilute your interest in us on a
percentage basis and may impact the value of your investment especially if we sell these securities at prices less than
the price you paid for your shares.
Under the MGCL, our board of directors may delegate to a duly authorized committee of directors the power to
fix the amount and other terms of a distribution. In addition, if our board of directors gives general authorization for
a distribution and provides for or establishes a method or procedure for determining the maximum amount of the
distribution, our board of directors may delegate to one of our officers the power, in accordance with the general
authorization, to fix the amount and other terms of the distribution.
Distributions in kind will not be permitted, except for distributions of readily marketable securities, distributions
of beneficial interests in a liquidating trust established for our dissolution and the liquidation of our assets in
accordance with the terms of our charter or distributions in which (a) our board of directors advises each stockholder
of the risks associated with direct ownership of the property, (b) our board of directors offers each stockholder the
election of receiving such in-kind distributions, and (c) in-kind distributions are made only to those stockholders that
192
accept such offer. Our stockholders who receive distributions in kind of marketable securities may incur transaction
expenses in liquidating the securities.
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan whereby stockholders (other than Alabama, California, Idaho,
Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon,
Tennessee, Texas, Vermont and Washington investors and clients of certain participating broker-dealers that do not
permit automatic enrollment in our distribution reinvestment plan) will have their cash distributions automatically
reinvested in additional shares of our common stock unless they elect to receive their distributions in cash. Alabama,
California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina,
Ohio, Oregon, Tennessee, Texas, Vermont and Washington investors and clients of certain participating broker-
dealers that do not permit automatic enrollment in our distribution reinvestment plan will automatically receive their
distributions in cash unless they elect to have their cash distributions reinvested in additional shares of our common
stock. Any cash distributions attributable to the class or classes of shares owned by participants in the distribution
reinvestment plan will be immediately reinvested in our shares on behalf of the participants on the business day such
distribution would have been paid to such stockholder. See the “Material U.S. Federal Income Tax Considerations”
section of this prospectus for information concerning the U.S. federal income tax consequences of participating in
the distribution reinvestment plan.
The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to
the transaction price for such shares at the time the distribution is payable. Stockholders will not pay upfront selling
commissions when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees
with respect to our Class T shares, Class S shares and Class D shares are calculated based on our 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. Shares
acquired under the distribution reinvestment plan will entitle the participant to the same rights and be treated in the
same manner as shares of that class purchased in this offering.
We reserve the right to amend any aspect of our distribution reinvestment plan without the consent of our
stockholders, provided that notice of any material amendment is sent to participants at least ten business days prior
to the effective date of that amendment. In addition, we may suspend or terminate the distribution reinvestment plan
for any reason at any time upon ten business days’ prior written notice to participants. A stockholder’s participation
in the plan will be terminated to the extent that a reinvestment of such stockholder’s distributions in our shares
would cause the percentage ownership or other limitations contained in our charter to be violated. Participants may
terminate their participation in the distribution reinvestment plan with ten business days’ prior written notice to us.
Account Statements
Our transfer agent will provide on a quarterly basis to each participant in the distribution reinvestment plan a
statement of account describing, as to such participant, (1) the distributions reinvested during the quarter, (2) the
number of shares purchased during the quarter, (3) the per share purchase price for such shares and (4) the total
number of shares purchased on behalf of the participant under the plan. On an annual basis, tax information with
respect to income earned on shares under the plan for the calendar year will be provided to each applicable
participant.
Restrictions on Roll-Up Transactions
In connection with any proposed transaction considered a “Roll-up Transaction” involving us and the issuance
of securities of an entity that would be created or would survive after the successful completion of the Roll-up
Transaction, an appraisal of all of our assets must be obtained from a competent independent appraiser. If the
appraisal will be included in a prospectus used to offer the securities of the roll-up entity, the appraisal must be filed
with the SEC and the states as an exhibit to the registration statement for the offering. The assets will be appraised
on a consistent basis, and the appraisal will be based on the evaluation of all relevant information and shall indicate
the value of the assets as of a date immediately prior to the announcement of the proposed Roll-up Transaction. The
appraisal will assume an orderly liquidation of assets over a 12-month period. The terms of the engagement of the
193
independent appraiser must clearly state that the engagement is for our benefit and the benefit of our stockholders. A
summary of the appraisal, indicating all material assumptions underlying the appraisal, will be included in a report
to stockholders in connection with any proposed Roll-up Transaction.
A “Roll-up Transaction” is a transaction involving the acquisition, merger, conversion or consolidation, directly
or indirectly, of us and the issuance of securities of another entity, or a “Roll-up Entity,” to the holders of shares of
our common stock that would be created or would survive after the successful completion of such transaction. The
term Roll-up Transaction does not include:
•a transaction involving our securities that have been for at least 12 months listed on a national securities
exchange; or
•a transaction involving our conversion to a corporate, trust, or association form if, as a consequence of the
transaction, there will be no significant adverse change in any of the following: voting rights of the holders
of common stock; the term of our existence; compensation to the Adviser or our sponsor; or our investment
objectives.
In connection with a proposed Roll-up Transaction, the person sponsoring the Roll-up Transaction must offer to
common stockholders who vote “no” on the proposal the choice of:
•accepting the securities of a Roll-up Entity offered in the proposed Roll-up Transaction; or
•one of the following:
•remaining as holders of our stock and preserving their interests therein on the same terms and
conditions as existed previously; or
•receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of our
net assets.
We are prohibited from participating in any proposed Roll-up Transaction:
•that would result in the common stockholders having democracy rights in a Roll-up Entity that are less than
those provided in our charter and described elsewhere in this prospectus, including rights with respect to
certain voting rights, annual reports, annual and special meetings, and stockholder liability;
•that includes provisions that would operate to materially impede or frustrate the accumulation of shares of
stock by any purchaser of the securities of the Roll-up Entity, except to the minimum extent necessary to
preserve the tax status of the Roll-up Entity, or which would limit the ability of an investor to exercise the
voting rights of its securities of the Roll-up Entity on the basis of the number of shares of stock held by that
investor;
•in which investor’s rights to access of records of the Roll-up Entity will be less than those provided in our
charter as described in the “—Meetings and Special Voting Requirements” section above; or
•in which any of the costs of the Roll-up Transaction would be borne by us if the Roll-up Transaction is
rejected by our common stockholders.
194
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS
The following description of the terms of certain provisions of Maryland law and our charter and bylaws is only
a summary. For a complete description, we refer you to the MGCL, our charter and our bylaws. We have filed our
charter and bylaws as exhibits to the registration statement of which this prospectus forms a part.
Business Combinations
Under the MGCL, business combinations between a Maryland corporation and an interested stockholder or an
affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested
stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share
exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity
securities. An interested stockholder is defined as:
•any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the
corporation’s outstanding voting stock; or
•an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in
question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then
outstanding stock of the corporation.
A person is not an interested stockholder under the statute if the board of directors approved in advance the
transaction by which he or she otherwise would have become an interested stockholder. However, in approving a
transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of
approval, with any terms and conditions determined by the board of directors.
After the five-year prohibition, any business combination between the Maryland corporation and an interested
stockholder generally must be recommended by the board of directors of the corporation and approved by the
affirmative vote of at least:
•80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
•two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of
stock held by the interested stockholder with whom or with whose affiliate the business combination is to
be effected or held by an affiliate or associate of the interested stockholder.
These super-majority vote requirements do not apply if the corporation’s common stockholders receive a
minimum price, as defined under Maryland law, for their shares of our common stock in the form of cash or other
consideration in the same form as previously paid by the interested stockholder for its shares of our common stock.
The statute permits various exemptions from its provisions, including business combinations that are exempted
by the board of directors before the time that the interested stockholder becomes an interested stockholder. Our
board of directors has adopted a resolution providing that any business combination between us and any other
person is exempted from this statute, provided that such business combination is first approved by our board of
directors. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution is
repealed or our board of directors fails to first approve the business combination, the statute may discourage others
from trying to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
The MGCL provides that a holder of control shares of a Maryland corporation acquired in a control share
acquisition has no voting rights except to the extent approved by a vote of stockholders entitled to cast two-thirds of
the votes entitled to be cast on the matter. Shares of stock owned by the acquiror, by officers or by employees who
are directors of the corporation are excluded from shares of stock entitled to vote on the matter. Control shares are
voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of
which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable
195
proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges
of voting power:
•one-tenth or more but less than one-third;
•one-third or more but less than a majority; or
•a majority or more of all voting power.
Control shares do not include shares of stock the acquiring person is then entitled to vote as a result of having
previously obtained stockholder approval or shares acquired directly from the corporation. A control share
acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition may compel our board of directors to
call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares
of stock. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions,
including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation
may itself present the question at any stockholders’ meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person
statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares,
except those for which voting rights have previously been approved. The right of the corporation to redeem control
shares is subject to certain conditions and limitations. Fair value is determined, without regard to the absence of
voting rights for the control shares, as of the date of any meeting of stockholders at which the voting rights of the
shares of stock are considered and not approved or, if no such meeting is held, as of the date of the last control share
acquisition by the acquiror. If voting rights for control shares are approved at a stockholders’ meeting and the
acquiror becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may
exercise appraisal rights. The fair value of the shares of stock as determined for purposes of appraisal rights may not
be less than the highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (1) to shares of stock acquired in a merger, consolidation or
share exchange if the corporation is a party to the transaction, or (2) to acquisitions approved or exempted by the
charter or bylaws of the corporation.
Our bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions of
our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time
in the future.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered
under the Exchange Act, and at least three independent directors to elect to be subject, by provision in its charter or
bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws,
to any or all of five provisions:
•a classified board of directors;
•a two-thirds vote requirement for removing a director;
•a requirement that the number of directors be fixed only by vote of the directors;
•a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the
remainder of the full term of the class of directors in which the vacancy occurred; and
•a majority requirement for the calling of a stockholder-requested special meeting of stockholders.
In our charter, we have elected that vacancies on our board of directors be filled only by the remaining directors
and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our
196
charter and bylaws unrelated to Subtitle 8, we vest in our board of directors the exclusive power to fix the number of
directorships, provided that the number is not less than three. We have not elected to be subject to any of the other
provisions of Subtitle 8.
Vacancies on Board of Directors; Removal of Directors
Except as may be provided by the board of directors in setting the terms of any class or series of preferred stock,
a vacancy on the board of directors may be filled only by a vote of a majority of the remaining directors, even if the
remaining directors do not constitute a quorum. Any director elected to fill a vacancy will serve for the remainder of
the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies.
Our independent directors will nominate replacements to fill vacancies in our independent director positions. For so
long as the Advisory Agreement is in effect, our board of directors must also consult with the Adviser in connection
with filling any vacancies on the board of directors.
Any director may resign at any time and may be removed with or without cause by our stockholders upon the
affirmative vote of at least a majority of all the votes entitled to be cast generally in the election of directors. The
notice of any special meeting called for the purpose of the proposed removal must indicate that the purpose, or one
of the purposes, of the meeting is to determine if the director shall be removed.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for
election to the board of directors and the proposal of business to be considered by our stockholders may be made
only (1) pursuant to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a
stockholder who is a stockholder of record both at the time of giving the advance notice required by the bylaws and
at the time of the meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in
the election of each individual nominated or on such other business and who has complied with the advance notice
procedures of the bylaws. With respect to special meetings of stockholders, only the business specified in our notice
of the meeting may be brought before the meeting. Nominations of individuals for election to our board of directors
at a special meeting may be made only (1) by or at the direction of our board of directors or (2) provided that the
meeting has been called for the purpose of electing directors, by a stockholder who is a stockholder of record at the
record date set by our board of directors for the purpose of determining stockholders entitled to vote at the special
meeting, at the time of giving the advance notice required by the bylaws and at the time of the meeting (and any
postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual
nominated and who has complied with the advance notice provisions of the bylaws. In addition, for so long as the
Advisory Agreement is in effect, (i) the Adviser has the right to designate for nomination, subject to the approval of
such nomination by our board of directors, up to four directors to the slate of directors to be voted on by the
stockholders at our annual meeting of stockholders; provided, however, that such number of director nominees shall
be reduced as necessary by a number that will result in a majority of directors being independent directors, (ii) our
board of directors must consult with the Adviser before nominating individuals for the remaining directorships and
(iii) only individuals nominated in accordance with clauses (i) and (ii) of this sentence or our bylaws will be eligible
for election as directors.
Tender Offers
Our charter provides that any tender offer made by any person, including any “mini-tender” offer, must comply
with the provisions of Regulation 14D of the Exchange Act, including the notice and disclosure requirements.
Among other things, the offeror must provide us notice of such tender offer at least ten business days before
initiating the tender offer. If a person makes a tender offer that does not comply with such provisions, we may elect,
among other things, to grant tendering stockholders a rescission right with respect to their tendered shares. In
addition, unless waived by us, the non-complying offeror will be responsible for all of our expenses in connection
with that offeror’s noncompliance.
197
Anti-takeover Effect of Certain Provisions of Maryland Law and of our Charter and Bylaws
The business combination provisions and the control share acquisition provisions of Maryland law, the
provision of our charter electing to be subject to a provision of Subtitle 8, and the advance notice provisions of our
bylaws could delay, defer or prevent a transaction or a change in control of our company that might involve a
premium price for stockholders or otherwise be in their best interest.
198
SUMMARY OF THE OPERATING PARTNERSHIP AGREEMENT
We have summarized the material terms and provisions of the limited partnership agreement of Brookfield REIT
Operating Partnership LP, which we refer to as the “partnership agreement.”
Management of the Operating Partnership
Brookfield REIT Operating Partnership LP was formed on August 9, 2018 to acquire and hold assets on our
behalf. Currently, Brookfield REIT OP GP LLC, our wholly owned subsidiary, is the sole general partner of the
Operating Partnership. As of the date of this prospectus, the limited partners of the Operating Partnership consist of
us and the holders of Class E units.
We hold and intend to continue to hold substantially all of our assets in the Operating Partnership or in
subsidiary entities in which the Operating Partnership owns an interest. For purposes of satisfying the asset and
gross income tests for qualification as a REIT for U.S. federal income tax purposes, our proportionate share of the
assets and income of the Operating Partnership will be deemed to be our assets and income.
As the sole member of the general partner of the Operating Partnership, we have the exclusive power to manage
and conduct the business of the Operating Partnership. No limited partner of the Operating Partnership may transact
business for the Operating Partnership, or participate in management activities or decisions, except as provided in
the partnership agreement and as required by applicable law. The general partner may not be removed by the limited
partners. Our board of directors will at all times have oversight and policy-making authority, including responsibility
for governance, financial controls, compliance and disclosure with respect to the Operating Partnership. However,
pursuant to the Advisory Agreement, we have delegated to the Adviser authority to make decisions related to the
acquisition, management, financing and disposition of our and the Operating Partnership’s assets in accordance with
the Investment Guidelines and subject to oversight by our board of directors.
A general partner is accountable to a limited partnership as a fiduciary and consequently has a duty of loyalty
and good faith in handling partnership affairs. Neither we, as the sole member of the general partner, nor our board
of directors is under any obligation to give priority to the separate interests of the Operating Partnership’s limited
partners or our stockholders in deciding whether to cause the Operating Partnership to take or decline to take any
actions. If there is a conflict between the interests of our stockholders on the one hand and the Operating
Partnership’s limited partners on the other, we will endeavor in good faith to resolve the conflict in a manner not
adverse to either our stockholders or the Operating Partnership’s limited partners, provided, however, that for so
long as we own a controlling interest in the Operating Partnership, any conflict that cannot be resolved in a manner
not adverse to either our stockholders or the Operating Partnership’s limited partners will be resolved in favor of our
stockholders. The general partner is not liable under the partnership agreement to the Operating Partnership or to any
of its limited partners for monetary damages for losses sustained, liabilities incurred or benefits not derived by such
limited partners in connection with such decisions, provided that the general partner has acted in good faith.
The partnership agreement requires that the Operating Partnership be operated in a manner that will enable us to
(1) satisfy the requirements for qualification as a REIT for U.S. federal income tax purposes, unless we otherwise
cease to qualify as a REIT, (2) avoid any U.S. federal income or excise tax liability and (3) ensure that the Operating
Partnership will not be classified as a “publicly traded partnership” that is taxable as a corporation. See “Material
U.S. Federal Income Tax Considerations.”
Capital Contributions
We contribute the net proceeds from this offering, after payment of fees and expenses attributable to our
offering and operations, to the Operating Partnership as capital contributions.
However, we will be deemed to have made capital contributions in the amount of the gross offering proceeds
received from investors, and the Operating Partnership will be deemed to have simultaneously paid the fees,
commissions and other costs associated with our offering and our operations.
199
If the Operating Partnership requires additional funds at any time in excess of capital contributions made by us,
the Operating Partnership may borrow funds from a financial institution or other lenders or we, the Adviser or any of
its affiliates may provide such additional funds through loans, purchase of additional partnership interests or
otherwise (which we, the Adviser or its affiliates will have the option, but not the obligation, of providing). In
addition, the Operating Partnership may admit additional limited partners whose investments may be subject to a
different management fee and repurchase terms if our board of directors concludes in good faith that such
admittance is in our best interest.
Operating Partnership Units
Operating Partnership units represent an interest as a limited partner in the Operating Partnership. The
Operating Partnership may issue additional partnership units and classes of partnership units with rights different
from, and superior to, those of partnership units of any class, without the consent of the limited partners. Holders of
limited partnership units do not have any preemptive rights with respect to the issuance of additional units.
Limited partners of any class do not have the right to participate in the management of the Operating
Partnership. Limited partners of any class who do not participate in the management of the Operating Partnership,
by virtue of their status as limited partners, generally are not liable for the debts and liabilities of the Operating
Partnership beyond the amount of their capital contributions. The voting rights of the limited partners of any class
are generally limited to approval of specific types of amendments to the partnership agreement.
Partnership interests in the Operating Partnership, other than the general partner interest, are currently divided
into ten classes of units: Class C units, Class D units, Class D-1 units, Class E units, Class I-1 units, Class S units,
Class S-1 units, Class T units and Class T-1 units, which in general are intended to correspond on a one-for-one
basis with our Class C shares, Class D shares, Class E shares, Class I shares, Class S shares and Class T shares (with
Class D-1 units corresponding on a one-for-one basis with our Class D shares, Class I-1 units corresponding on a
one-for-one basis with our Class I shares, Class S-1 units corresponding on a one-for-one basis with our Class S
shares and Class T-1 units corresponding on a one-for-one basis with our Class T shares). When we receive
proceeds from the sale of shares of our common stock, we will contribute such proceeds to the Operating
Partnership and receive Operating Partnership units that correspond to the classes of our shares sold.
The partnership agreement authorizes the Operating Partnership to issue Operating Partnership units in the form
of Class I-1 units or one of three classes of Operating Partnership units, specifically Class T-1 units, Class S-1 units
and Class D-1 units, in exchange for DST Interests in connection with the FMV Option, with the class of Operating
Partnership units to be received by an investor to be set forth set forth in the applicable agreement between the
Dealer Manager and the participating distribution agent that sold such DST Interests in a DST Offering.
In general, each Class C unit, Class D unit, Class D-1 unit, Class I unit, Class I-1 unit, Class S unit, Class S-1
unit, and Class T unit and Class T-1 unit will share in distributions from the Operating Partnership when such
distributions are declared by us, as the sole member of the general partner, which decision is made in our sole
discretion. Upon the Operating Partnership’s liquidation, Class C units, Class D units, Class D-1 units, Class I-1
units, Class S units, Class S-1 units, and Class T units and Class T-1 units will automatically convert to Class I units,
in each case in proportion to the NAV per unit of each class, and the resulting Class I units will share on a unit-by-
unit basis in the assets of the Operating Partnership that are available for distribution, after payment of all liabilities,
establishment of reserves. In addition, a portion of the items of income, gain, loss and deduction of the Operating
Partnership for U.S. federal income tax purposes is allocated to each Operating Partnership unit, regardless of
whether any distributions are made by the Operating Partnership.
For each Class C unit, Class D unit, Class D-1 unit, Class I unit, Class I-1 unit, Class S unit, Class S-1 unit,
Class T unit and Class T-1 unit, investors generally are required to contribute money or property to the Operating
Partnership with a net equity value mutually agreed by the general partner and such investor. Holders of Operating
Partnership units are not obligated to make additional capital contributions to the Operating Partnership. Further,
these holders do not have the right to make additional capital contributions to the Operating Partnership or to
purchase additional Operating Partnership units without our consent as the sole member of the general partner.
200
The partnership agreement further provides that any such Class T-1 units, Class S-1 units and Class D-1 units
received in exchange for DST Interests in connection with the exercise of the FMV Option will automatically
convert to Class I-1 units in the event the aggregate selling commissions, dealer manager fees, and investor servicing
fees paid with respect to such Class T-1 units, Class S-1 units or Class D-1 units and the DST Interests for which
such Operating Partnership units were exchanged reach a fee limit (if any) set forth in the applicable agreement
between the Dealer Manager and the participating distribution agent that sold such DST Interests in a DST Offering.
Pursuant to the partnership agreement, the investor servicing fee payable with respect to a particular class of
Operating Partnership units will be specially allocated to that class of Operating Partnership units. Unless otherwise
provided in the applicable agreement between the Dealer Manager and the applicable participating distribution
agent, the amount of the ongoing investor servicing fee for a Class T-1 unit shall equal 0.85% of the NAV of such
outstanding Class T-1 unit, the amount of the ongoing investor servicing fee for a Class S-1 unit shall equal 0.85%
of the NAV of such outstanding Class S-1 unit, and the amount of the ongoing investor servicing fee for a Class D-1
unit shall equal 0.25% per annum of the NAV of such outstanding Class D-1 unit.
Pursuant to the partnership agreement, limited partners who hold Operating Partnership units may, after a one-
year holding period, request that the Operating Partnership redeem all or a portion of their Operating Partnership
units for, at the sole discretion of the general partner of the Operating Partnership, shares of our common stock,
cash, or a combination of both. Other than Operating Partnership units held by Brookfield, the Adviser and their
affiliates, the Operating Partnership is not obligated to redeem any Operating Partnership units and may choose to
redeem only some, or even none, of such units in the sole discretion of the general partner of the Operating
Partnership.
Class E Units
The Brookfield Investor was issued shares of our common stock and Class E units in connection with its
contribution of the Brookfield Portfolio. Pursuant to the Brookfield Repurchase Arrangement, we or the Operating
Partnership will offer to repurchase shares of our common stock or Class E units, as applicable, from the Brookfield
Investor at a price per unit equal to the most recently determined NAV per Class E unit immediately prior to each
repurchase. The Brookfield Investor has agreed not to seek repurchase of the Class E 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. The Brookfield
Investor may cause us to repurchase its shares and Operating Partnership 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 (subject to potential carry-over capacity and
measured based on net repurchases during a month or quarter, as applicable) 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 the share
repurchase plan is not repurchased. The Brookfield Repurchase Arrangement will not apply to shares of our
common stock or units of the Operating Partnership held by affiliates of Brookfield that are feeder vehicles
primarily created to hold our Class I and Class C shares that offer interests in such feeder vehicles to non-U.S.
persons.
For the year ended December 31, 2025, we and the Operating Partnership did not repurchase any shares or
Operating Partnership units from the Brookfield Investor as part of the Brookfield Repurchase Arrangement.
Issuance of Additional Operating Partnership Interests
In our role as the sole member of the general partner of the Operating Partnership, we will have the ability to
cause the Operating Partnership to issue additional Operating Partnership interests (including Operating Partnership
units), preferred partnership interests or convertible securities.
The Operating Partnership allows us to be organized as an UPREIT. A transfer of property directly with a REIT
for REIT stock is generally a taxable transaction to the transferring property owner. In an UPREIT structure, an
owner of appreciated property who desires to defer taxable gain on the transfer of such property may, subject to
meeting applicable tax requirements, transfer the property to the Operating Partnership in exchange for limited
201
partnership interests on a tax-free basis. Being able to offer a seller the opportunity to defer taxation of gain until the
seller disposes of its interest in the Operating Partnership may give us a competitive advantage in acquiring desired
properties relative to buyers who cannot offer this opportunity.
In addition, investing in the Operating Partnership, rather than in shares of our common stock, may be more
attractive to certain institutional or other investors due to their business or tax structure.
Transferability of Interests
We may not transfer all or any portion of our interest in the Operating Partnership or cause the general partner
to withdraw as general partner of the Operating Partnership except as provided, or in connection with a transaction
contemplated, by the partnership agreement. Except as otherwise provided in the partnership agreement, we may not
engage in any merger, consolidation or other combination with or into another person or sale of all or substantially
all of our assets (other than in connection with a change in our state of incorporation or organizational form), in each
case which results in a change of control of us, unless: (1) the consent of limited partners of the Operating
Partnership holding more than 50% of the “percentage interests” (as defined below) of the limited partners is
obtained; (2) the transaction in which such merger, consolidation or other combination occurs results in the limited
partners of the Operating Partnership receiving or having the right to receive an amount of cash, securities or other
property equal in value to the amount they would have received if they had exercised their exchange rights
immediately prior to such transaction; or (3) the successor entity contributes substantially all of its assets to the
Operating Partnership in return for an interest in the Operating Partnership and agrees to assume all obligations of
the general partner of the Operating Partnership. “Percentage interest” is the percentage determined by dividing (i)
the Operating Partnership units owned by a partner by (ii) the total number of Operating Partnership units then
outstanding.
Notwithstanding the foregoing, the general partner may transfer all or any portion of its general partner interest
in the Operating Partnership to us or to any person or entity controlled by us, and following a transfer of all of the
general partner’s interest in the Operating Partnership, the general partner may withdraw as general partner of the
Operating Partnership.
The limited partners may not transfer their interests in the Operating Partnership, in whole or in part, without
the written consent of the general partner except in certain limited situations (e.g., transfer to certain relatives)
provided in the partnership agreement, provided that no transfer will be permitted if such transfer would result in
certain adverse tax or regulatory consequences described in the partnership agreement.
Redemption Right
After a one-year holding period (or such shorter period as consented to by us in our sole discretion), each
limited partner (other than us) generally has a right to cause the Operating Partnership to redeem all or a portion of
its Operating Partnership units for, at the sole discretion of the general partner, of which we are the sole member,
shares of our common stock, cash or a combination of both. Any redemption of Operating Partnership units will
occur at a price based on the NAV of the Operating Partnership units on the date of redemption. In the event the
general partner of the Operating Partnership, of which we are the sole member, elects for the holder of such
Operating Partnership units to be paid in shares of our common stock, we or the general partner will pay such holder
a number of shares of our common stock with an aggregate NAV on the date of redemption equal to the aggregate
NAV of the Operating Partnership units being redeemed. See “Class E Units” above for information on the terms of
the Brookfield Repurchase Arrangement.
Exculpation
The general partner will not be liable to the Operating Partnership or its limited partners for errors in judgment
or other acts or omissions not amounting to willful misconduct or gross negligence since provision has been made in
the partnership agreement for exculpation of the general partner. Therefore, purchasers of interests in the Operating
Partnership have a more limited right of action than they would have absent the limitation in the partnership
agreement.
202
Indemnification
The partnership agreement provides for the indemnification of the general partner by the Operating Partnership
for liabilities the general partner incurs in dealings with third parties on behalf of the Operating Partnership. To the
extent that the indemnification provisions purport to include indemnification of liabilities arising under the
Securities Act, in the opinion of the SEC, such indemnification is contrary to public policy and therefore
unenforceable.
Tax Matters
The general partner will act as or appoint the Operating Partnership’s partnership representative, for purposes of
IRS examinations of the Operating Partnership. Accordingly, as the sole member of the general partner of the
Operating Partnership, we have the authority to act as or appoint the partnership representative and make tax
elections under the Code on the Operating Partnership’s behalf.
203
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain material U.S. federal income tax considerations relating to the
ownership of our common stock as of the date hereof by U.S. holders and non-U.S. holders, each as defined below.
Except where noted, this summary deals only with common stock held as a capital asset and does not deal with
special situations, such as those of dealers in securities or currencies, financial institutions, regulated investment
companies, tax-exempt entities (except as described in “—Taxation of Tax-Exempt Holders of Our Common Stock”
below), insurance companies, persons holding common stock as a part of a hedging, integrated, conversion or
constructive sale transaction or a straddle, traders in securities that elect to use a mark-to-market method of
accounting for their securities holdings, persons liable for alternative minimum tax, investors in pass-through entities
or U.S. holders of common stock whose “functional currency” is not the U.S. dollar.
The discussion below is based upon the provisions of the Code and regulations, rulings and judicial decisions
thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, possibly with
retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. On
July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act was signed into law and included a
number of changes to the Code. Further changes to the tax laws are possible. This summary does not address any
U.S. federal non-income tax or state, local or non-U.S. tax considerations.
No ruling on the U.S. federal, state, or local tax considerations relevant to our operation or to the purchase,
ownership or disposition of our common stock has been requested from the IRS or other tax authority. No assurance
can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax
consequences described below. The summary is also based upon the assumption that we and our subsidiaries and
affiliated entities will operate in accordance with our and their applicable organizational documents.
The U.S. federal income tax treatment of holders of our common stock depends in some instances on
determinations of fact and interpretations of complex provisions of U.S. federal income tax law for which no clear
precedent or authority may be available. In addition, the tax consequences to any particular stockholder of holding
our common stock will depend on the stockholder’s particular tax circumstances. You are urged to consult your own
tax advisors concerning the U.S. federal income tax consequences in light of your particular situation as well as
consequences arising under U.S. federal non-income tax laws and the laws of any other taxing jurisdiction.
Our Taxation as a REIT
We elected to be taxed as a REIT beginning with our taxable year ended December 31, 2019. We believe that
we have been organized and have operated and will continue to operate in such a manner so as to maintain our
qualification for taxation as a REIT under the applicable provisions of the Code so long as our board of directors
determines that REIT qualification remains in our best interest.
In connection with this offering, Alston & Bird LLP rendered an opinion that, commencing with our taxable
year ended December 31, 2019, we have been organized in conformity with the requirements for qualification as a
REIT under the Code, and our actual and proposed method of operation has enabled us to and will continue to
enable us to meet the requirements for qualification and taxation as a REIT under the Code. Investors should be
aware that the opinion of Alston & Bird LLP was based upon customary assumptions, was conditioned upon certain
representations made by us as to factual matters, including representations regarding the nature of our assets,
income, organizational documents, stockholder ownership, and the present and future conduct of our business and
will not be binding upon the IRS or any court. In addition, the opinion of Alston & Bird LLP was based on U.S.
federal income tax law governing qualification as a REIT in effect as of the date thereof, which is subject to change
either prospectively or retroactively. Moreover, our qualification and taxation as a REIT depend upon our ability to
meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the U.S.
federal tax laws. Those qualification tests involve the percentage of gross income that we earn from specified
sources, the percentage of our assets that falls within specified categories, the diversity of the ownership of our
shares, and the percentage of our taxable income that we distribute. Alston & Bird LLP will not review our
compliance with those tests on a continuing basis.
204
Accordingly, no assurance can be given that our actual results of operations for any particular taxable year will
satisfy such requirements. We have not received, and do not intend to seek, any rulings from the IRS regarding our
status as a REIT or our satisfaction of the REIT requirements. The IRS may challenge our status as a REIT, and a
court could sustain any such challenge. For a discussion of the tax consequences of our failure to qualify as a REIT,
see “—Failure to Qualify.”
The sections of the Code and the corresponding regulations that govern the U.S. federal income tax treatment of
a REIT and its stockholders are highly technical and complex. The following discussion is qualified in its entirety by
the applicable Code provisions, rules and regulations promulgated thereunder, and administrative interpretations
thereof.
Taxation of REITs in General
As indicated above, our qualification and taxation as a REIT depend upon our ability to meet, on a continuing
basis, various qualification requirements imposed upon REITs by the Code. The material qualification requirements
are summarized below under “—Requirements for Qualification as a REIT.” While we intend to operate so that we
qualify as a REIT, no assurance can be given that the IRS will not challenge our qualification, or that we will be able
to operate in accordance with the REIT requirements in the future. See “—Failure to Qualify.”
Provided that we qualify as a REIT, generally we will be entitled to a deduction for dividends that we pay and
therefore will not be subject to U.S. federal corporate income tax on our taxable income that is currently distributed
to our stockholders. This treatment substantially eliminates the “double taxation” at the corporate and stockholder
levels that generally results from an investment in a C corporation (i.e., a corporation generally subject to U.S.
federal corporate income tax). Double taxation means taxation once at the corporate level when income is earned
and once again at the stockholder level when the income is distributed. In general, the income that we generate, to
the extent declared as a dividend and subsequently paid to our stockholders, is taxed only at the stockholder level.
If we qualify as a REIT, we will nonetheless be subject to U.S. federal tax in the following circumstances:
•We will pay U.S. federal income tax on our taxable income, including net capital gain, that we do not
distribute to stockholders during, or within a specified time after, the calendar year in which the income is
earned.
•If we have net income from “prohibited transactions,” which are, in general, sales or other dispositions of
property held primarily for sale to customers in the ordinary course of business, other than foreclosure
property, such income will be subject to a 100% tax unless we qualify for a safe harbor exception.
•If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or from
certain leasehold terminations as “foreclosure property,” (a) we may thereby avoid the 100% tax on gain
from a resale of that property (if the sale would otherwise constitute a prohibited transaction) and
(b) any income from such property will be treated as qualifying for purposes of the REIT gross income tests
discussed below, but the income from the sale or operation of the property that would not otherwise be
qualifying income for purposes of the gross income test may be subject to U.S. corporate income tax at the
highest applicable rate.
•If, due to reasonable cause and not willful neglect, we fail to satisfy either the 75% gross income test or the
95% gross income test discussed below, but nonetheless maintain our qualification as a REIT because other
requirements are met, we will be subject to a 100% tax on the greater of the amount by which we fail the
75% gross income test or the 95% gross income test, multiplied in either case by a fraction intended to
reflect our profitability.
•If (i) we fail to satisfy the asset tests (other than a de minimis failure of the 5% asset test or the 10% vote or
value test, as described below under “—Asset Tests”) due to reasonable cause and not to willful neglect, (ii)
we dispose of the assets or otherwise comply with such asset tests within six months after the last day of the
quarter in which we identify such failure and (iii) we file a schedule with the IRS describing the assets that
205
caused such failure, we will pay a tax equal to the greater of $50,000 or the net income from the
nonqualifying assets during the period in which we failed to satisfy such asset tests multiplied by the
highest corporate tax rate.
•If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and
the asset tests, and the failure was due to reasonable cause and not to willful neglect, we will be required to
pay a penalty of $50,000 (or more, in certain cases) for each such failure.
•We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to
meet recordkeeping requirements intended to monitor our compliance with rules relating to the composition
of a REIT’s stockholders, as described below in “—Requirements for Qualification as a REIT.”
•If we fail to distribute during each calendar year at least the sum of:
•85% of our ordinary income for such calendar year;
•95% of our capital gain net income for such calendar year; and
•any undistributed taxable income from prior taxable years,
we will pay a 4% nondeductible excise tax on the excess of the required distribution over the amount we
actually distributed, plus any retained amounts on which income tax has been paid at the corporate level.
•We may elect to retain and pay income tax on our net long-term capital gain. In that case, a U.S. holder
would include its proportionate share of our undistributed long-term capital gain (to the extent we make a
timely designation of such gain to the stockholder) in its income, and would receive a credit or a refund for
its proportionate share of the tax we paid.
•We will be subject to a 100% excise tax on amounts received by us from a taxable REIT subsidiary (or on
certain expenses deducted by a taxable REIT subsidiary) if certain arrangements between us and a taxable
REIT subsidiary of ours, as further described below, are not comparable to similar arrangements among
unrelated parties.
•If we acquire any assets in a carry-over basis transaction from a non-REIT C corporation that does not elect
to recognize its “built-in gain” in such assets, i.e., the excess of the fair market value of such assets over the
adjusted tax basis at the time we acquire such assets, we would be subject to tax at the highest regular
corporate tax rate on the built-in gain during the five-year period following acquisition.
In addition, notwithstanding our status as a REIT, we may also have to pay certain state and local income taxes,
because not all states and localities treat REITs in the same manner that they are treated for U.S. federal income tax
purposes. Moreover, as further described below, any domestic taxable REIT subsidiary in which we own an interest
will be subject to U.S. federal corporate income tax on its net income.
Requirements for Qualification as a REIT. The Code defines a REIT as a corporation, trust or association:
1.that is managed by one or more trustees or directors;
2.the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of
beneficial interest;
3.that would be taxable as a domestic corporation, but for its election to be subject to tax as a REIT;
4.that is neither a financial institution nor an insurance company subject to certain provisions of the Code;
5.the beneficial ownership of which is held by 100 or more persons;
6.of which not more than 50% in value of the outstanding shares are owned, directly or indirectly, by five or
fewer individuals (as defined in the Code to include certain entities) after applying certain attribution rules;
206
7.that makes an election to be a REIT for the current taxable year or has made such an election for a previous
taxable year, which has not been terminated or revoked; and
8.that meets other tests described below regarding the nature of its income and assets.
Conditions (1) through (4), inclusive, must be met during the entire taxable year. Condition (5) must be met
during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than
12 months. Condition (6) must be met during the last half of each taxable year, but neither condition (5) nor
condition (6) applies to the first taxable year for which an election to become a REIT is made. We believe that we
will maintain sufficient diversity of ownership to allow us to satisfy conditions (5) and (6) above. In addition, our
charter contains restrictions regarding the ownership and transfer of our stock that are intended to assist us in
continuing to satisfy the share ownership requirements described in (5) and (6) above. The provisions of our charter
restricting the ownership and transfer of our stock are described in “Description of Capital Stock— Restrictions on
Ownership and Transfer.” These restrictions, however, may not ensure that we will be able to satisfy these share
ownership requirements. If we fail to satisfy these share ownership requirements, we will fail to qualify as a REIT.
If we comply with regulatory rules pursuant to which we are required to send annual letters to holders of our
stock requesting information regarding the actual ownership of our stock (as discussed below), and we do not know,
or exercising reasonable diligence would not have known, whether we failed to meet requirement (6) above, we will
be treated as having met the requirement.
To monitor compliance with the share ownership requirements, we generally are required to maintain records
regarding the actual ownership of our shares. To do so, we must demand written statements each year from the
record holders of specified percentages of our stock pursuant to which the record holders must disclose the actual
owners of the shares (i.e., the persons required to include our dividends in their gross income). We must maintain a
list of those persons failing or refusing to comply with this demand as part of our records. We could be subject to
monetary penalties if we fail to comply with these record-keeping requirements. If you fail or refuse to comply with
the demands, you will be required by Treasury regulations to submit a statement with your tax return disclosing your
actual ownership of our shares and other information. In addition, we must satisfy all relevant filing and other
administrative requirements established by the IRS to elect and maintain REIT status, use a calendar year for U.S.
federal income tax purposes, and comply with the recordkeeping requirements of the Code and regulations
promulgated thereunder.
Ownership of Partnership Interests. In the case of a REIT that is a partner in an entity that is treated as a
partnership for U.S. federal income tax purposes (for purposes of this discussion, references to “partnership” include
a limited liability company or other entity treated as a partnership for U.S. federal income tax purposes, and
references to a partner include a member in such limited liability company or other entity), Treasury regulations
provide that the REIT is deemed to own its proportionate share of the partnership’s assets and to earn its
proportionate share of the partnership’s gross income based on its pro rata share of capital interests in the partnership
for purposes of the asset and gross income tests applicable to REITs, as described below. However, solely for
purposes of the 10% value test described below (see “—Asset Tests”), the determination of a REIT’s interest in a
partnership’s assets will be based on the REIT’s proportionate interest in any securities issued by the partnership,
excluding for these purposes, certain excluded securities as described in the Code. In addition, the assets and gross
income of the partnership generally are deemed to retain the same character in the hands of the REIT. Thus, our
proportionate share of the assets and items of income of partnerships in which we own an equity interest, including
the Operating Partnership, is treated as assets and items of income of our company for purposes of applying the
REIT requirements described below. Consequently, to the extent our investments include a preferred or other equity
interest in a partnership, the partnership’s assets and operations may affect our ability to qualify as a REIT, even
though we may have no control or only limited influence over the partnership.
Tax liability is imposed on a partnership (rather than its partners) for adjustments to reported partnership taxable
income resulting from audits or other tax proceedings. The liability can include an imputed underpayment of tax,
calculated by using the highest marginal U.S. federal income tax rate, as well as interest and penalties on such
imputed underpayment of tax. Using certain rules, partnerships may be able to transfer these liabilities to their
partners. In the event any adjustments are imposed by the IRS on the taxable income reported by any partnership in
207
which we own an interest, we intend to utilize certain rules to the extent possible to allow us to transfer any liability
with respect to such adjustments to the partners of the partnership who should properly bear such liability. However,
there is no assurance that we will qualify under those rules or that we will have the authority to use those rules under
the operating agreements for certain of the partnerships in which we hold interests.
Disregarded Subsidiaries. If a REIT owns a corporate subsidiary that is a “qualified REIT subsidiary,” the
separate existence of that subsidiary is disregarded for U.S. federal income tax purposes. Generally, a qualified
REIT subsidiary is a corporation (or other entity treated as a corporation for U.S. federal income tax purposes), other
than a taxable REIT subsidiary, all of the stock of which is owned directly or indirectly by the REIT. Other entities
that are wholly owned by us, including single member limited liability companies that have not elected to be taxed
as corporations for U.S. federal income tax purposes, are also generally disregarded as separate entities for U.S.
federal income tax purposes, including for purposes of the gross income and asset tests. All assets, liabilities and
items of income, deduction and credit of qualified REIT subsidiaries and disregarded subsidiaries will be treated as
assets, liabilities and items of income, deduction and credit of the REIT itself. A qualified REIT subsidiary of ours is
not subject to U.S. federal corporate income taxation, although it may be subject to state and local taxation in some
states.
In the event that a qualified REIT subsidiary or a disregarded subsidiary ceases to be wholly owned by us (for
example, if any equity interest in the subsidiary is acquired by a person other than us or another disregarded
subsidiary of us), the subsidiary’s separate existence would no longer be disregarded for U.S. federal income tax
purposes. Instead, it would have multiple owners and would be treated as either a partnership or a taxable
corporation. Such an event could, depending on the circumstances, adversely affect our ability to satisfy the various
asset and gross income tests applicable to REITs, including the requirement that REITs generally may not own,
directly or indirectly, more than 10% of the value or voting power of the outstanding securities of another
corporation. See “—Asset Tests” and “—Gross Income Tests.”
Taxable REIT Subsidiaries. A “taxable REIT subsidiary” or “TRS” is an entity that is taxable as a corporation in
which we directly or indirectly own stock and that elects with us to be treated as a taxable REIT subsidiary. The
separate existence of a taxable REIT subsidiary is not ignored for U.S. federal income tax purposes. Accordingly, a
domestic taxable REIT subsidiary generally is subject to U.S. federal corporate income tax on its earnings, which
may reduce the cash flow that we and our subsidiaries generate in the aggregate, and may reduce our ability to make
distributions to our stockholders. In addition, if a taxable REIT subsidiary owns, directly or indirectly, securities
representing 35% or more of the vote or value of a subsidiary corporation, that subsidiary will also be treated as a
taxable REIT subsidiary. However, an entity will not qualify as a taxable REIT subsidiary if it directly or indirectly
operates or manages a lodging or health care facility or, generally, provides to another person, under a franchise,
license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated.
We generally may not own more than 10%, as measured by voting power or value, of the securities of a corporation
that is not a qualified REIT subsidiary unless we and such corporation elect to treat such corporation as a taxable
REIT subsidiary. Overall, for taxable years beginning after December 31, 2025, no more than 25% of the value of a
REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries.
Income earned by a taxable REIT subsidiary is not attributable to the REIT. Rather, the stock issued by a
taxable REIT subsidiary to us is an asset in our hands for purposes of the asset tests, and we treat dividends paid to
us from such taxable REIT subsidiary, if any, as income for purposes of the gross income tests, as described below.
As a result, income that might not be qualifying income for purposes of the gross income tests applicable to REITs
could be earned by a taxable REIT subsidiary without affecting our status as a REIT. For example, we may use
taxable REIT subsidiaries to perform services or conduct activities that give rise to certain categories of income such
as management fees, or to conduct activities that, if conducted by us directly, would be treated in our hands as
prohibited transactions.
Several provisions of the Code regarding the arrangements between a REIT and its taxable REIT subsidiaries
ensure that a taxable REIT subsidiary will be subject to an appropriate level of U.S. federal income taxation. For
example, a taxable REIT subsidiary is limited in its ability to deduct interest payments made to affiliated REITs. In
addition, we would be obligated to pay a 100% penalty tax on any payments that we receive from, or on certain
expenses deducted by, a taxable REIT subsidiary if the IRS were to assert successfully that the economic
208
arrangements between us and a taxable REIT subsidiary are not comparable to similar arrangements among
unrelated parties.
Deductions are disallowed for business interest expense (even if paid to third parties) in excess of the sum of a
taxpayer’s business interest income and 30% of the adjusted taxable income of the business, which is its taxable
income computed without regard to business interest income or expense, depreciation, amortization or depletion, net
operating losses or the pass-through income deduction. Such limitations may also impact the amount of U.S. federal
income tax paid by any of our taxable REIT subsidiaries. This limitation does not apply to any part of its business
that the REIT has elected to treat as an “electing real property trade or business” under Section 163(j)(7)(B) of the
Code.
REIT Subsidiaries. We expect to own interests in one or more subsidiaries that will elect to be taxed as REITs
and will be subject to substantially the same REIT qualification requirements that apply to us.
Gross Income Tests
To qualify as a REIT, we must satisfy two gross income requirements, each of which is applied on an annual
basis. First, at least 75% of our gross income, excluding gross income from prohibited transactions and certain
hedging and foreign currency transactions, for each taxable year generally must be derived directly or indirectly
from:
•rents from real property;
•interest on debt secured by mortgages on real property or on interests in real property;
•dividends or other distributions on, and gain from the sale of, stock in other REITs;
•gain from the sale of real property or mortgage loans;
•abatements and refunds of taxes on real property;
•income and gain derived from foreclosure property (as described below);
•amounts (other than amounts the determination of which depends in whole or in part on the income or
profits of any person) received or accrued as consideration for entering into agreements (i) to make loans
secured by mortgages on real property or on interests in real property or (ii) to purchase or lease real
property (including interests in real property and interests in mortgages on real property); and
•interest or dividend income from investments in stock or debt instruments attributable to the temporary
investment of new capital during the one-year period following our receipt of new capital that we raise
through equity offerings (but not our distribution reinvestment plan) or public offerings of debt obligations
with at least a five-year term.
Second, at least 95% of our gross income, excluding gross income from prohibited transactions and certain
hedging transactions, for each taxable year must be derived from sources that qualify for purposes of the 75% gross
income test, and from (i) dividends, (ii) interest and (iii) gain from the sale or disposition of stock or securities,
which need not have any relation to real property.
If we fail to satisfy one or both of the 75% and 95% gross income tests for any taxable year, we may
nevertheless qualify as a REIT for that year if our failure to meet the tests is due to reasonable cause and not due to
willful neglect, and we attach a schedule of the sources of our income to our U.S. federal income tax return. It is not
possible, however, to state whether in all circumstances we would be entitled to the benefit of these relief provisions.
For example, if we fail to satisfy the gross income tests because nonqualifying income that we intentionally
recognize exceeds the limits on nonqualifying income, the IRS could conclude that the failure to satisfy the tests was
not due to reasonable cause. If these relief provisions are inapplicable to a particular set of circumstances, we will
fail to qualify as a REIT. Even if these relief provisions apply, a penalty tax would be imposed based on the amount
of nonqualifying income. See “—Taxation of REITs in General.”
209
Gross income from a prohibited transaction, i.e., our sale of property that we hold primarily for sale to
customers in the ordinary course of business and that does not satisfy a safe harbor under the Code, is excluded from
both the numerator and the denominator in both gross income tests. In addition, certain hedging income and foreign
currency gains will be excluded from gross income for purposes of one or both of the gross income tests. We will
monitor the amount of our nonqualifying income, and we intend to manage our portfolio to comply at all times with
the gross income tests. The following paragraphs discuss some of the specific applications of the gross income tests
to us.
Dividends. We may directly or indirectly receive distributions from taxable REIT subsidiaries or other
corporations that are not REITs or qualified REIT subsidiaries. These distributions generally are treated as dividend
income to the extent of earnings and profits of the distributing corporation. Our dividend income from stock in any
corporation (other than any REIT), including any taxable REIT subsidiary, will be qualifying income for purposes of
the 95% gross income test, but not the 75% gross income test. Dividends that we receive from any REITs in which
we own stock and our gain on the sale of the stock in those REITs will be qualifying income for purposes of both
gross income tests. However, if a REIT in which we own stock fails to qualify as a REIT in any year, our income
from such REIT would be qualifying income for purposes of the 95% gross income test, but not the 75% gross
income test.
Interest. The term “interest,” as defined for purposes of both gross income tests, generally excludes any amount
that is based in whole or in part on the income or profits of any person; however, it generally includes the following:
(i) an amount that is received or accrued based on a fixed percentage or percentages of receipts or sales and (ii) an
amount that is based on the income or profits of a debtor, as long as the debtor derives substantially all of its income
from the real property securing the debt by leasing substantially all of its interest in the property, and only to the
extent that the amounts received by the debtor would be qualifying “rents from real property” if received directly by
a REIT.
Interest on debt secured by mortgages on real property or on interests in real property (including, for this
purpose, prepayment penalties, loan assumption fees and late payment charges that are not compensation for
services) generally is qualifying income for purposes of the 75% gross income test. However, if we receive interest
income with respect to a mortgage loan that is secured by both real property and personal property, the value of the
personal property securing the loan exceeds 15% of the value of all property securing the loan, and the highest
principal amount of a loan outstanding during a taxable year exceeds the fair market value of the real property
securing the loan as of the date we agreed to originate or acquire the loan, the interest income will be apportioned
between the real property and the other collateral, and interest will qualify for purposes of the 75% gross income test
only to the extent that it is allocable to the real property. Even if a loan is not secured by real property or is under
secured, the interest income that it generates may nonetheless qualify for purposes of the 95% gross income test.
We expect that any CMBS and RMBS in which we invest generally will be treated either as interests in a
grantor trust or as interests in a real estate mortgage investment conduit (“REMIC”) for U.S. federal income tax
purposes and that all interest income from such CMBS and RMBS will be qualifying income for the 95% gross
income test. In the case of CMBS and RMBS treated as interests in grantor trusts, we would be treated as owning an
undivided beneficial ownership interest in the mortgage loans held by the grantor trust. The interest on such
mortgage loans would be qualifying income for purposes of the 75% gross income test to the extent that the
obligation is secured by real property, as discussed above. In the case of CMBS and RMBS treated as interests in a
REMIC, income derived from REMIC interests will generally be treated as qualifying income for purposes of the
75% and 95% gross income tests. If less than 95% of the assets of the REMIC are real estate assets, however, then
only a proportionate part of our interest in the REMIC and income derived from the interest will qualify for purposes
of the 75% gross income test. In addition, some REMIC securitizations include embedded interest swap or cap
contracts or other derivative instruments that potentially could produce nonqualifying income for the holder of the
related REMIC securities.
Interest, original issue discount and market discount income that we receive or accrue from mortgage-related
assets generally will be qualifying income for purposes of both gross income tests.
210
Hedging Transactions. We and our subsidiaries may enter into hedging transactions with respect to one or more
of our assets or liabilities. Hedging transactions could take a variety of forms, including interest rate swap
agreements, interest rate cap agreements, options, futures contracts, forward rate agreements or similar financial
instruments. Except to the extent provided by Treasury regulations, any income from a hedging transaction to
manage risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made,
or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets, or to hedge existing hedging
positions after a portion of the hedged indebtedness or property is disposed of, which is clearly identified as a hedge
along with the risk that it hedges within prescribed time periods specified in Treasury regulations, will be
disregarded for purposes of both the 75% and 95% gross income tests. To the extent that we enter into other types of
hedging transactions, the income from those transactions is likely to be treated as nonqualifying income for purposes
of both of the 75% and 95% gross income tests. Moreover, to the extent that a position in a hedging transaction has
positive value at any particular point in time, it may be treated as an asset that does not qualify for purposes of the
asset tests described below. We intend to structure any hedging transactions in a manner that does not jeopardize our
qualification as a REIT. No assurance can be given, however, that our hedging activities will not give rise to income
or assets that do not qualify for purposes of the REIT tests, or that our hedging will not adversely affect our ability to
satisfy the REIT qualification requirements.
We may conduct some or all of our hedging activities through a taxable REIT subsidiary or other corporate
entity, the income of which may be subject to U.S. federal income tax, rather than by participating in the
arrangements directly or through pass-through subsidiaries.
Fee Income. Any fee income that we earn will generally not be qualifying income for purposes of either gross
income test. Any fees earned by a taxable REIT subsidiary will not be included for purposes of the gross income
tests.
Rents from Real Property. Rents we receive will qualify as “rents from real property” in satisfying the gross
income requirements for a REIT described above only if several conditions described below are met. These
conditions relate to the identity of the tenant, the computation of the rent payable, and the nature of the property
leased and any services provided in connection with the property. First, the amount of rent must not be based in
whole or in part on the income or profits of any person. However, an amount received or accrued generally will not
be excluded from rents from real property solely by reason of being based on a fixed percentage or percentages of
receipts or sales. Second, rents we receive from a “related party tenant” will not qualify as rents from real property
in satisfying the gross income tests unless the tenant is a taxable REIT subsidiary, at least 90% of the property is
leased to unrelated tenants, the rent paid by the taxable REIT subsidiary is substantially comparable to the rent paid
by the unrelated tenants for comparable space and the rent is not attributable to an increase in rent due to a
modification of a lease with a “controlled taxable REIT subsidiary” (i.e., a taxable REIT subsidiary in which we
own directly or indirectly more than 50% of the voting power or value of the stock). A tenant is a related party
tenant if the REIT, or an actual or constructive owner of 10% or more of the REIT, actually or constructively owns
10% or more of the tenant. Whether rents paid by a taxable REIT subsidiary are substantially comparable to rents
paid by other tenants is determined at the time the lease with the taxable REIT subsidiary is entered into, extended,
or modified, if such modification increases the rents due under such lease. Third, if rent attributable to personal
property leased in connection with a lease of real property is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to the personal property will not qualify as rents from real property.
Finally, for rents to qualify as “rents from real property” for purposes of the gross income tests, we are only allowed
to provide services that are both usually or “customarily rendered” in connection with the rental of real property and
not otherwise considered “rendered to the occupant” of the property. Examples of these permitted services include
the provision of light, heat, or other utilities, trash removal and general maintenance of common areas. We may,
however, render services to our tenants through an “independent contractor” who is adequately compensated and
from whom we do not derive revenue if certain requirements are satisfied. We may also own an interest in one or
more taxable REIT subsidiaries which provide non-customary services to tenants without tainting our rental income
from the related properties.
Even if a REIT directly furnishes or renders services that are non-customary with respect to a property or to a
tenant, if the greater of (i) the amounts received or accrued, directly or indirectly, or deemed received by the REIT
with respect to such services, or (ii) 150% of our direct cost in furnishing or rendering the services during a taxable
211
year is not more than 1% of all amounts received or accrued, directly or indirectly, by the REIT with respect to the
property during the same taxable year, then only the amounts with respect to such non-customary services are not
treated as rent for purposes of the gross income tests.
We intend to cause any services that are not usually or “customarily rendered,” or that are for the benefit of a
particular tenant in connection with the rental of real property, to be provided through a taxable REIT subsidiary or
through an “independent contractor” who is adequately compensated and from which we do not derive revenue, and
which meets certain other requirements. However, no assurance can be given that the IRS will concur with our
determination as to whether a particular service is usual or customary, or otherwise in this regard.
Prohibited Transactions Tax. A REIT will incur a 100% tax on the net income derived from any sale or other
disposition of property, other than foreclosure property, that the REIT holds primarily for sale to customers in the
ordinary course of a trade or business. Whether a REIT holds an asset primarily for sale to customers in the ordinary
course of a trade or business depends, however, on the facts and circumstances in effect from time to time, including
those related to a particular asset. Nevertheless, we intend to conduct our operations so that no asset that we own (or
are treated as owning) will be treated as, or as having been, held for sale to customers in the ordinary course of our
business. We cannot assure you that we will comply with certain safe harbor provisions in the Code or that we will
avoid owning property that may be characterized as property that we hold primarily for sale to customers in the
ordinary course of a trade or business. The 100% tax will not apply to gains from the sale of property that is held
through a taxable REIT subsidiary or other taxable corporation, although such income will be subject to tax in the
hands of such corporation at regular corporate income tax rates. We intend to structure our activities to avoid
prohibited transaction characterization.
Foreclosure Property. Foreclosure property is any real property, including interests in real property, and any
personal property incident to such real property:
•that is acquired by a REIT as the result of the REIT having bid in such property at foreclosure, or having
otherwise reduced such property to ownership or possession by agreement or process of law, after there
was a default or default was imminent on a lease of such property or on indebtedness that such property
secured;
•for which the related loan was acquired by the REIT at a time when the default was not imminent or
anticipated; and
•for which the REIT makes a proper election to treat the property as foreclosure property.
However, a REIT will not be considered to have foreclosed on a property where the REIT takes control of the
property as a mortgagee-in-possession and cannot receive any profit or sustain any loss except as a creditor of the
mortgagor.
Property generally ceases to be foreclosure property at the end of the third taxable year following the taxable
year in which the REIT acquired the property, or longer if an extension is granted by the Secretary of the Treasury.
This grace period terminates and foreclosure property ceases to be foreclosure property on the first day:
•on which a lease is entered into for the property that, by its terms, will give rise to income that does not
qualify for purposes of the 75% gross income test, or any amount is received or accrued, directly or
indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not
qualify for purposes of the 75% gross income test;
•on which any construction takes place on the property, other than completion of a building or any other
improvement, if more than 10% of the construction was completed before default became imminent; or
•which is more than 90 days after the day on which the REIT acquired the property and the property is used
in a trade or business that is conducted by the REIT, other than through an independent contractor from
whom the REIT itself does not derive or receive any income.
212
We will be subject to tax at the maximum corporate income tax rate on any income from foreclosure property,
including gain from the disposition of the foreclosure property, other than income that otherwise would be
qualifying income for purposes of the 75% gross income test, less expenses directly connected with the production
of that income. However, net income from foreclosure property, including gain from the sale of foreclosure property
held for sale in the ordinary course of a trade or business, will qualify for purposes of the 75% and 95% gross
income tests. Any gain from the sale of property for which a foreclosure property election has been made will not be
subject to the 100% tax on gains from prohibited transactions described above, even if the property would otherwise
constitute inventory or dealer property.
Phantom Income. Due to the nature of the assets in which we will invest, we may be required to recognize
taxable income from certain assets in advance of our receipt of cash flows from or proceeds from dispositions of
such assets and may be required to report taxable income that exceeds the economic income ultimately realized on
such assets.
We may acquire debt instruments in the secondary market for less than their face amount. The amount of such
discount generally will be treated as “market discount” for U.S. federal income tax purposes. Accrued market
discount is reported as income when, and to the extent that, any payment of principal of the debt instrument is made,
unless we elect to include accrued market discount in income as it accrues. Principal payments on certain debt
instruments may be made monthly, and consequently accrued market discount may have to be included in income
each month as if the debt instrument were assured of ultimately being collected in full. If we collect less on the debt
instrument than our purchase price plus the market discount we had previously reported as income, we may not be
able to benefit from any offsetting loss deductions.
The terms of the debt instruments that we hold may be modified under certain circumstances. These
modifications may be considered “significant modifications” for U.S. federal income tax purposes that give rise to a
deemed debt-for-debt exchange upon which we may recognize taxable income or gain without a corresponding
receipt of cash.
Some of the debt securities that we acquire may have been issued with original issue discount. In general, we
will be required to accrue non-de minimis original issue discount based on the constant yield to maturity of such
debt securities, and to treat it as taxable income in accordance with applicable U.S. federal income tax rules even
though such yield may exceed cash payments, if any, received on such debt instrument.
In addition, in the event that any debt instruments or debt securities acquired by us are delinquent as to
mandatory principal and interest payments, or in the event payments with respect to a particular debt instrument are
not made when due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income.
Similarly, we may be required to accrue interest income with respect to subordinated mortgage-backed securities at
the stated rate regardless of whether corresponding cash payments are received.
Finally, we may be required under the terms of indebtedness that we incur to use cash received from interest
payments to make principal payments on that indebtedness, with the effect of recognizing income but not having a
corresponding amount of cash available for distribution to our stockholders. We generally will be required to take
certain amounts into income no later than the time they are reflected on certain financial statements.
As a result of each of these potential timing differences between income recognition or expense deduction and
cash receipts or disbursements, there is a risk that we may have taxable income in excess of cash available for
distribution. In that event, we may need to borrow funds or take other action to satisfy the REIT distribution
requirements for the taxable year in which this “phantom income” is recognized. See “—Annual Distribution
Requirements Applicable to REITs.”
213
Asset Tests
At the close of each quarter of our taxable year, we must satisfy the following tests relating to the nature of our
assets.
•At least 75% of the value of our total assets must be represented by the following:
•interests in real property, including leaseholds and options to acquire real property and leaseholds;
•interests in mortgages on real property;
•interests in personal property that generates rents from real property;
•stock in other REITs and debt instruments issued by publicly offered REITs;
•cash and cash items (including certain receivables);
•government securities;
•investments in stock or debt instruments attributable to the temporary investment of new capital during
the one-year period following our receipt of new capital that we raise through equity offerings (but not
our distribution reinvestment plan) or public offerings of debt obligations with at least a five-year term;
and
•regular or residual interests in a REMIC. However, if less than 95% of the assets of a REMIC consists
of assets that are qualifying real estate-related assets under U.S. federal income tax laws, determined as
if we held such assets directly, we will be treated as holding directly our proportionate share of the
assets of such REMIC.
•Not more than 25% of our total assets may be represented by securities, other than those in the 75%
asset class described above.
•Except for securities in taxable REIT subsidiaries and the securities in the 75% asset class described in
the first bullet point above, the value of any one issuer’s securities owned by us may not exceed 5% of
the value of our total assets.
•Except for securities in taxable REIT subsidiaries and the securities in the 75% asset class described in
the first bullet point above, we may not own more than 10% of any one issuer’s outstanding voting
securities.
•Except for securities of taxable REIT subsidiaries and the securities in the 75% asset class described in
the first bullet point above, we may not own more than 10% of the total value of the outstanding
securities of any one issuer, other than securities that qualify for the “straight debt” exception or other
exceptions discussed below.
•For taxable years beginning after December 31, 2025, not more than 25% of the value of our total
assets may be represented by the securities of one or more taxable REIT subsidiaries.
•Not more than 25% of the value of our total assets may be represented by “nonqualified publicly
offered REIT debt instruments.”
A debt obligation secured by a mortgage on both real and personal property is treated as a real estate asset for
purposes of the 75% asset test, and interest thereon is treated as interest on an obligation secured by real property, if
the fair market value of the personal property does not exceed 15% of the fair market value of all property securing
the debt even if the loan is not fully secured by real property. If the fair market value of personal property securing
the debt exceeds 15% of the fair market value of all property securing the debt and the fair market value of the real
property does not equal or exceed the “loan amount” at the time the REIT commits to make or acquire the loan, then
a portion of such loan will not be a qualifying real estate asset.
214
Notwithstanding the general rule, as noted above, that for purposes of the gross income and asset tests we are
treated as owning our proportionate share of the underlying assets of a subsidiary partnership, if we hold
indebtedness issued by a partnership, the indebtedness will be subject to, and may cause a violation of, the asset tests
unless the indebtedness is a qualifying mortgage asset or other conditions are met. Similarly, although stock of
another REIT is a qualifying asset for purposes of the asset tests, any non-mortgage debt that is issued by another
REIT may not so qualify (although such debt will not be treated as “securities” for purposes of the 10% value test, as
explained below) unless such REIT is a publicly offered REIT—that is, a REIT that is required to file annual and
periodic reports with the SEC under the Securities Exchange Act of 1934. Securities, for purposes of the asset tests,
may include debt we hold from other issuers. However, debt we hold in an issuer that does not qualify for purposes
of the 75% asset test will not be taken into account for purposes of the 10% value test if the debt securities meet the
straight debt safe harbor. Subject to certain exceptions, debt will meet the “straight debt” safe harbor if the debt is a
written unconditional promise to pay on demand or on a specified date a sum certain in money, the debt is not
convertible, directly or indirectly, into stock, and the interest rate and the interest payment dates of the debt are not
contingent on the profits of any person, the borrower’s discretion or similar factors. In the case of an issuer that is a
corporation or a partnership, securities that otherwise would be considered straight debt will not be so considered if
we, and any of our “controlled taxable REIT subsidiaries” as defined in the Code, hold any securities of the
corporate or partnership issuer that (a) are not straight debt or other excluded securities (prior to the application of
this rule), and (b) have an aggregate value greater than 1% of the issuer’s outstanding securities (including, in the
case of a partnership issuer, our interest as a partner in the partnership).
In addition to straight debt, the Code provides that certain other securities will not violate the 10% asset value
test. Such securities include (i) any loan made to an individual or an estate, (ii) certain rental agreements pursuant to
which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain
persons related to the REIT under attribution rules), (iii) any obligation to pay rents from real property, (iv)
securities issued by governmental entities that are not dependent in whole or in part on the profits of (or payments
made by) a non-governmental entity, (v) any security (including debt securities) issued by another REIT and (vi) any
debt instrument issued by a partnership if the partnership’s income is of such a nature that the partnership would
satisfy the 75% gross income test described above under “—Gross Income Tests.” In applying the 10% asset value
test, a debt security issued by a partnership (other than straight debt or any other excluded security) is not taken into
account to the extent, if any, of the REIT’s proportionate interest as a partner in that partnership.
Any stock that we hold or acquire in other REITs will be a qualifying asset for purposes of the 75% asset test.
However, if a REIT in which we own stock fails to qualify as a REIT in any year, the stock in such REIT will not be
a qualifying asset for purposes of the 75% asset test. Instead, we would be subject to the second, third, fourth, and
fifth asset tests described above with respect to our investment in such a disqualified REIT. We will also be subject
to those asset tests with respect to our investments in any non-REIT C corporations for which we do not make a
taxable REIT subsidiary election.
We will monitor the status of our assets for purposes of the various asset tests and will seek to manage our
portfolio to comply at all times with such tests. There can be no assurances, however, that we will be successful in
this effort. Independent appraisals may not have been obtained to support our conclusions as to the value of our total
assets or the value of any particular security or securities. Moreover, the values of some assets may not be
susceptible to a precise determination, and values are subject to change in the future. Furthermore, the proper
classification of an instrument as debt or equity for U.S. federal income tax purposes may be uncertain in some
circumstances, which could affect the application of the asset test requirements. Accordingly, there can be no
assurance that the IRS will not contend that our interests in our subsidiaries or in the securities of other issuers will
not cause a violation of the asset tests.
However, certain relief provisions are available to allow REITs to satisfy the asset requirements or to maintain
REIT qualification notwithstanding certain violations of the asset and other requirements. For example, if we failed
to satisfy the asset tests at the end of a calendar quarter, such a failure would not cause us to lose our REIT
qualification if (i) we satisfied the asset tests at the close of the preceding calendar quarter and (ii) the discrepancy
between the value of our assets and the asset requirements was not wholly or partly caused by an acquisition of
nonqualifying assets, but instead arose from changes in the relative market values of our assets. If the condition
described in (ii) were not satisfied, we could nevertheless avoid disqualification by eliminating any discrepancy
215
within 30 days after the close of the calendar quarter in which it arose or by making use of the relief provisions
described above.
In the case of de minimis violations of the 10% and 5% asset tests, a REIT may maintain its qualification
despite a violation of such requirements if (i) the value of the assets causing the violation does not exceed the lesser
of 1% of the REIT’s total assets and $10,000,000 and (ii) the REIT either disposes of the assets causing the failure
within six months after the last day of the quarter in which it identifies the failure, or the relevant tests are otherwise
satisfied within that time frame.
Even if we did not qualify for the foregoing relief provisions, one additional provision allows a REIT which
fails one or more of the asset requirements for a particular quarter to nevertheless maintain its REIT qualification if
(i) the REIT provides the IRS with a description of each asset causing the failure, (ii) the failure is due to reasonable
cause and not willful neglect, (iii) the REIT pays a tax equal to the greater of (a) $50,000 per failure and (b) the
product of the net income generated by the assets that caused the failure multiplied by the highest applicable
corporate tax rate and (iv) the REIT either disposes of the assets causing the failure within six months after the last
day of the quarter in which it identifies the failure, or otherwise satisfies the relevant asset tests within that time
frame.
Annual Distribution Requirements Applicable to REITs
To qualify for taxation as a REIT, we generally must distribute dividends (other than capital gain dividends) to
our stockholders in an amount at least equal to:
•the sum of (i) 90% of our REIT taxable income, computed without regard to the dividends-paid deduction
and our net capital gain and (ii) 90% of our net income after tax, if any, from foreclosure property; minus
•the excess of the sum of specified items of non-cash income (including original issue discount on our
mortgage loans) over 5% of our REIT taxable income, computed without regard to the dividends-paid
deduction and our net capital gain.
Distributions generally must be made during the taxable year to which they relate. Distributions may be made in
the following year in two circumstances. First, if we declare a dividend in October, November or December of any
year with a record date in one of these months and pay the dividend in January of the following year, we will be
treated as having paid the dividend on December 31 of the year in which the dividend was declared. Second,
distributions may be made in the following year if the dividends are declared before we timely file our tax return for
the year and if made before the first regular dividend payment made after such declaration. These distributions are
taxable to our stockholders in the year in which paid, even though the distributions relate to our prior taxable year
for purposes of the 90% distribution requirement. To the extent that we do not distribute all of our net capital gain or
we distribute at least 90%, but less than 100% of our REIT taxable income, as adjusted, we will be subject to tax on
the undistributed amount at regular corporate tax rates.
If in the future we have available net operating losses carried forward from prior tax years, such losses may
reduce the amount of distributions that we must make in order to comply with the REIT distribution requirements.
Such losses, however, will generally not affect the tax treatment to our stockholders of any distributions that are
actually made.
If we fail to distribute during a calendar year (or, in the case of distributions with declaration and record dates
falling in the last three months of the calendar year, by the end of January following such calendar year) at least the
sum of (i) 85% of our ordinary income for such year, (ii) 95% of our capital gain net income for such year and (iii)
any undistributed taxable income from prior years, we will be subject to a 4% excise tax on the excess of such
required distribution over the sum of (x) the amounts actually distributed (taking into account excess distributions
from prior years) and (y) the amounts of income retained on which we have paid corporate income tax.
Although several types of non-cash income are excluded in determining the annual distribution requirement, we
will incur corporate income tax and the 4% nondeductible excise tax with respect to those non-cash income items if
we do not distribute those items on a current basis. As a result of the foregoing, we may not have sufficient cash to
216
distribute all of our taxable income and thereby avoid corporate income tax and the excise tax imposed on certain
undistributed income. In such a situation, we may need to borrow funds or issue additional stock.
We may elect to retain rather than distribute all or a portion of our net capital gain and pay the tax on the gain.
In that case, we may elect to have our stockholders include their proportionate share of the undistributed net capital
gains in income as long-term capital gain and receive a credit for their share of the tax paid by us. Our stockholders
would then increase the adjusted basis of their stock by the difference between (i) the amounts of capital gain
dividends that we designated and they include in their taxable income, minus (ii) the tax that we paid on their behalf
with respect to that income. For purposes of the 4% excise tax described above, any retained amounts for which we
elect this treatment would be treated as having been distributed.
We intend to make timely distributions sufficient to satisfy the distribution requirements. However, it is possible
that, from time to time, we may not have sufficient cash or other liquid assets to meet the distribution requirements
due to timing differences between the actual receipt of income and actual payment of deductible expenses, and the
inclusion of items of income and deduction of expenses by us for U.S. federal income tax purposes. In addition, we
may decide to retain our cash, rather than distribute it, in order to repay debt, acquire assets or for other reasons. In
the event that such timing differences occur, and in other circumstances, it may be necessary in order to satisfy the
distribution requirements to arrange for short-term, or possibly long-term, borrowings, or to pay the dividends in the
form of other property (including, for example, shares of our own stock).
If our taxable income for a particular year is subsequently determined to have been understated, under some
circumstances we may be able to rectify a failure to meet the distribution requirement for a year by paying
deficiency dividends to stockholders in a later year, which may be included in our deduction for dividends paid for
the earlier year. Thus, we may be able to avoid being taxed on amounts distributed as deficiency dividends.
However, we will be required to pay interest based upon the amount of any deduction taken for deficiency
dividends.
We may have to accrue certain items of income before they would otherwise be taken into income under the
Code if they are taken into account in our applicable financial statements. Additionally, the Code limits business
interest deductions for businesses, whether in corporate or pass-through form, to the sum of the entity’s business
interest income for the tax year and 30% of the entity’s adjusted taxable income for the tax year. Treasury
regulations define interest expansively to cover various amounts not otherwise treated as interest. This limitation on
business interest deductions does not apply to an “electing real property trade or business.” One consequence of
electing to be an “electing real property trade or business” is that the accelerated expensing rules will not apply to
property used in an electing real property trade or business. In the case of an electing real property trade or business,
real property and “qualified improvement property” are depreciated under the alternative depreciation system. In
addition, under Section 172 of the Code, our deduction for any net operating loss carryforwards arising from losses
we incur is limited to 80% of our annual REIT taxable income (determined without regard to the deduction for
dividends paid), and any unused portion of such losses may not be carried back but may be carried forward
indefinitely.
Like-Kind Exchanges
We may dispose of properties in transactions intended to qualify as like-kind exchanges under the Code. Such
like-kind exchanges are intended to result in the deferral of gain for U.S. federal income tax purposes. The failure of
any such transaction to qualify as a like-kind exchange could require us to pay U.S. federal income tax, possibly
including the 100% prohibited transaction tax, depending on the facts and circumstances surrounding the particular
transaction.
Penalty Tax
Any redetermined rents, redetermined deductions, excess interest or redetermined taxable REIT subsidiary
service income we generate will be subject to a 100% penalty tax. In general, redetermined rents are rents from real
property that are overstated as a result of any services furnished to any of our tenants by a taxable REIT subsidiary,
and redetermined deductions and excess interest represent any amounts that are deducted by a taxable REIT
subsidiary for amounts paid to us that are in excess of the amounts that would have been deducted based on arm’s-
217
length negotiations. Rents that we receive will not constitute redetermined rents if they qualify for certain safe
harbor provisions contained in the Code. Redetermined taxable REIT subsidiary service income is income earned by
a taxable REIT subsidiary that is attributable to services provided to us, or on our behalf to any of our tenants, that is
less than the amounts that would have been charged based upon arm’s-length negotiations.
Recordkeeping Requirements
We are required to comply with applicable recordkeeping requirements. Failure to comply could result in
monetary fines. For example, we must request on an annual basis information from our stockholders designed to
disclose the actual ownership of our outstanding common stock.
Failure to Qualify
If we fail to satisfy one or more requirements of REIT qualification, other than the gross income tests or asset
tests, then we may still retain REIT qualification if the failure is due to reasonable cause and not willful neglect, and
we pay a penalty of $50,000 for each failure.
If we fail to qualify for taxation as a REIT in any taxable year and the relief provisions do not apply, we will be
subject to tax on our taxable income as a corporation. This would significantly reduce both our cash available for
distribution to our stockholders and our earnings. If we fail to qualify as a REIT, we will not be required to make
any distributions to stockholders and any distributions that are made will not be deductible by us. Moreover, all
distributions to stockholders would be taxable as dividends to the extent of our current and accumulated earnings
and profits, whether or not attributable to capital gains of ours. Furthermore, subject to certain limitations in the
Code, corporate distributees may be eligible for the dividends-received deduction with respect to those distributions,
and individual, trust and estate distributees may be eligible for reduced U.S. federal income tax rates on such
dividends. Unless we are entitled to relief under specific statutory provisions, we also will be disqualified from
taxation as a REIT for the four taxable years following the year during which qualification was lost.
Tax Aspects of the Operating Partnership any Subsidiary Partnerships
General. All or substantially all of our assets will be held through the Operating Partnership. In addition, the
Operating Partnership may hold certain investments indirectly through subsidiary partnerships and limited liability
companies which are treated as partnerships or disregarded entities for U.S. federal income tax purposes. In general,
entities that are treated as partnerships or disregarded entities for U.S. federal income tax purposes are “pass-
through” entities which are not required to pay U.S. federal income tax. Rather, partners or members of such entities
are allocated their shares of the items of income, gain, loss, deduction and credit of the partnership or limited
liability company, and are potentially required to pay tax on this income, without regard to whether they receive a
distribution from the partnership or limited liability company. A partner in such entities that is a REIT will include
in its income its share of these partnership and limited liability company items for purposes of the various gross
income tests, the computation of its REIT taxable income, and the REIT distribution requirements. Pursuant to these
rules, for purposes of the asset tests, we will include our pro rata share of assets held by any subsidiary partnerships
and limited liability companies, based on our capital interest in each such entity.
Entity Classification. Our interests in the Operating Partnership and any subsidiary partnerships and limited
liability companies involve special tax considerations, including the possibility that the IRS might challenge the
status of these entities as partnerships (or disregarded entities), as opposed to associations taxable as corporations for
U.S. federal income tax purposes. For example, an entity that would otherwise be classified as a partnership for U.S.
federal income tax purposes may nonetheless be taxable as a corporation if it is a “publicly traded partnership” and
certain other requirements are met. A partnership or limited liability company would be treated as a publicly traded
partnership if its interests are traded on an established securities market or are readily tradable on a secondary
market or a substantial equivalent thereof, within the meaning of applicable Treasury regulations. If the Operating
Partnership or a subsidiary partnership or limited liability company were treated as an association rather than as a
partnership, it would be taxable as a corporation and would be required to pay corporate tax on its income. In this
situation, the character of our assets and items of gross income would change and could prevent us from qualifying
as a REIT. See “—Failure to Qualify” for a discussion of the effects of our failure to meet the asset and gross
income tests. In addition, a change in the tax status of the Operating Partnership or a subsidiary partnership or
218
limited liability company might be treated as a taxable event. If so, we might incur a tax liability without any related
cash distributions. We do not anticipate that the Operating Partnership or any subsidiary partnership or limited
liability company will be treated as a publicly traded partnership which is taxable as a corporation.
Under the rules for U.S. federal income tax audits of partnerships, audits will be conducted at the entity level,
but unless such entity qualifies for and affirmatively elects an alternative procedure, any adjustments to the amount
of tax due (including interest and penalties) will be payable by the entity itself. Under the alternative procedure, if
elected, a partnership would issue information returns to persons who were partners in the audited year, who would
then be required to take the adjustments into account in calculating their own tax liability, and the partnership would
not be liable for the adjustments. If any of the Operating Partnership or our subsidiary partnerships or limited
liability companies is able to and in fact elects the alternative procedure for a given adjustment, the amount of taxes
for which such persons will be liable will be increased by any applicable penalties and a special interest charge.
There can be no assurance that any such entities will be eligible to make such an election or that it will, in fact, make
such an election for any given adjustment.
Allocations of Income, Gain, Loss and Deduction. A partnership agreement (or, in the case of a limited liability
company treated as a partnership for U.S. federal income tax purposes, the limited liability company agreement) will
generally determine the allocation of partnership income and loss among partners. Generally, Section 704(b) of the
Code and the Treasury regulations thereunder require that partnership allocations respect the economic arrangement
of the partners. If an allocation of partnership income or loss does not comply with the requirements of Section
704(b) of the Code and the Treasury regulations thereunder, the item subject to the allocation may be reallocated in
accordance with the partners’ interests in the partnership. This reallocation will be determined by taking into account
all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item. The
Operating Partnership’s allocations of taxable income and loss are intended to comply with the requirements of
Section 704(b) of the Code and the regulations thereunder.
Tax Allocations with Respect to the Properties. Under Section 704(c) of the Code, income, gain, loss and
deduction attributable to appreciated or depreciated property that is contributed to a partnership (including a limited
liability company treated as a partnership for U.S. federal income tax purposes) in exchange for an interest in the
partnership must be allocated in a manner so that the contributing partner is charged with the unrealized gain, or
benefits from the unrealized loss, associated with the property at the time of the contribution, as adjusted from time
to time. The amount of the unrealized gain or unrealized loss generally is equal to the difference between the fair
market value or book value and the adjusted tax basis of the contributed property at the time of contribution (this
difference is referred to as a book-tax difference), as adjusted from time to time. These allocations are solely for
U.S. federal income tax purposes and do not affect the book capital accounts or other economic or legal
arrangements among the partners.
Appreciated property may be contributed to the Operating Partnership or a subsidiary partnership or limited
liability company in exchange for equity in such partnership or limited liability company in connection with future
acquisitions. The partnership agreement requires that allocations be made in a manner consistent with Section 704(c)
of the Code. Treasury regulations issued under Section 704(c) of the Code provide partnerships with a choice of
several methods of accounting for book-tax differences. Any book-tax differences will be accounted for using a
method approved under Section 704(c) of the Code and the applicable Treasury regulations as chosen by the general
partner under the partnership agreement. Except as otherwise agreed to between the general partner and any
contributor of property to the Operating Partnership, the Operating Partnership will elect to use the traditional
method with curative allocations of gain on sale pursuant to Regulations Section 1.704-3(c).
Any property acquired by the Operating Partnership or a subsidiary partnership or limited liability company in a
taxable transaction will initially have a tax basis equal to its fair market value, and Section 704(c) of the Code will
not apply.
219
Taxation of U.S. Holders of Our Common Stock
U.S. Holder. As used in the remainder of this discussion, the term “U.S. holder” means a beneficial owner of
our common stock that is for U.S. federal income tax purposes:
•a citizen or resident of the United States;
•a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or
organized in or under the laws of the United States, any State thereof or the District of Columbia;
•an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•a trust if it (i) is subject to the primary supervision of a court within the United States and one or more U.S.
persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect
under applicable Treasury regulations to be treated as a U.S. person.
If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds our common
stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding common stock, you should consult your advisors. A “non-
U.S. holder” is a beneficial owner of our common stock that is neither a U.S. holder nor a partnership (or an entity
treated as a partnership for U.S. federal income tax purposes).
Distributions Generally. As long as we qualify as a REIT, distributions made by us to our taxable U.S. holders
out of our current or accumulated earnings and profits that are not designated as capital gain dividends or qualified
dividend income will be taken into account by them as ordinary income taxable at ordinary income tax rates and will
not qualify for the reduced capital gains rates that currently generally apply to qualified dividend distributions by
non-REIT C corporations to certain non-corporate U.S. holders. Corporate stockholders will not be eligible for the
dividends received deduction with respect to these distributions. However, non-corporate U.S. holders will be
entitled to deduct up to 20% of “qualified REIT dividends” (i.e., dividends other than capital gain dividends and
qualified dividend income) they receive. The amount of the deduction may be up to 20% of the amount of the non-
corporate U.S. holder’s aggregate qualified dividend income, but may be less than 20% of the amount of the U.S.
holder’s qualified REIT dividends if the U.S. holder has losses from publicly traded partnerships or the U.S. holder’s
taxable income, not taking into account net capital gain, is less than the amount of the U.S. holder’s qualified REIT
dividends. In addition, Treasury regulations under section 199A of the Code impose a minimum holding period for
the 20% deduction that was not set forth in the Code. Under the Treasury regulations, in order for a REIT dividend
with respect to a share of REIT stock to be treated as a qualified REIT dividend, the U.S. holder (i) must have held
the share for more than 45 days during the 91-day period beginning on the date which is 45 days before the date on
which such share becomes ex-dividend with respect to such dividend and (ii) cannot have been under an obligation
to make related payments with respect to positions in substantially similar or related property, e.g., pursuant to a
short sale.
In determining the extent to which a distribution constitutes a dividend for tax purposes, our earnings and
profits will be allocated first to distributions with respect to our preferred stock, if any, and then to our common
stock. Distributions in excess of both current and accumulated earnings and profits will not be taxable to a U.S.
holder to the extent that the distributions do not exceed the adjusted basis of the holder’s stock. Rather, such
distributions will reduce the adjusted basis of the stock. To the extent that distributions exceed the adjusted basis of a
U.S. holder’s stock, the U.S. holder generally must include such distributions in income as long-term capital gain if
the shares have been held for more than one year, or short-term capital gain if the shares have been held for one year
or less.
Distributions will generally be taxable, if at all, in the year of the distribution. However, if we declare a
dividend in October, November or December of any year with a record date in one of these months and pay the
dividend on or before January 31 of the following year, we will be treated as having paid the dividend, and the U.S.
holder will be treated as having received the dividend, on December 31 of the year in which the dividend was
declared. We will be treated as having sufficient earnings and profits to treat as a dividend any distribution we pay
up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed above.
220
Moreover, any “deficiency dividend” will be treated as an ordinary or capital gain dividend, as the case may be,
regardless of our earnings and profits. As a result, U.S. holders may be required to treat certain distributions that
would otherwise result in a tax-free return of capital as taxable dividends.
Capital Gain Dividends. We may elect to designate distributions of our net capital gain as “capital gain
dividends” to the extent that such distributions do not exceed our actual net capital gain for the taxable year. Capital
gain dividends are taxed to U.S. holders of our stock as gain from the sale or exchange of a capital asset held for
more than one year. This tax treatment applies regardless of the period during which the stockholders have held their
stock. If we designate any portion of a dividend as a capital gain dividend, the amount that will be taxable to the
stockholder as capital gain will be indicated to U.S. holders on IRS Form 1099-DIV. Corporate stockholders,
however, may be required to treat up to 20% of capital gain dividends as ordinary income. Capital gain dividends
are not eligible for the dividends-received deduction for corporations.
Instead of paying capital gain dividends, we may elect to require stockholders to include our undistributed net
capital gain in their income. If we make such an election, U.S. holders (i) will include in their income as long-term
capital gains their proportionate share of such undistributed capital gain and (ii) will be deemed to have paid their
proportionate share of the tax paid by us on such undistributed capital gain and thereby receive a credit or refund to
the extent that the tax paid by us exceeds the U.S. holder’s tax liability on the undistributed capital gain. A U.S.
holder of our stock will increase the basis in its stock by the difference between the amount of capital gain included
in its income and the amount of tax it is deemed to have paid. A U.S. holder that is a corporation will appropriately
adjust its earnings and profits for the retained capital gain in accordance with Treasury regulations to be prescribed
by the IRS. Our earnings and profits will be adjusted appropriately. Alternatively, we could pay tax on such long-
term capital gain and not adopt the credit regime discussed herein.
We must classify portions of our designated capital gain dividend into the following categories:
•a 20% gain distribution, which would be taxable to non-corporate U.S. holders of our stock at a federal rate
of up to 20%; or
•an unrecaptured Section 1250 gain distribution, which would be taxable to non-corporate U.S. holders of
our stock at a maximum rate of 25%.
We must determine the maximum amounts that we may designate as 20% and 25% capital gain dividends by
performing the computation required by the Code as if the REIT were an individual whose ordinary income were
subject to a marginal tax rate of at least 28%. The IRS currently requires that distributions made to different classes
of stock be comprised proportionately of dividends of a particular type.
Passive Activity Loss, Excess Business Loss, and Investment Interest Limitation. Distributions that we make and
gains arising from the disposition of our common stock by a U.S. holder will not be treated as passive activity
income, and therefore U.S. holders will not be able to apply any “passive activity losses” against such income.
Similarly, non-corporate U.S. holders cannot apply “excess business losses” against dividends that we distribute or
gains arising from the disposition of our common stock. Distributions paid by us, to the extent they do not constitute
a return of capital, will generally be treated as investment income for purposes of the investment income limitation
on the deduction of the investment interest.
Qualified Dividend Income. Distributions that are treated as dividends may be taxed at capital gain rates, rather
than ordinary income rates, if they are distributed to an individual, trust or estate, are properly designated by us as
qualified dividend income and certain other requirements are satisfied. Dividends are eligible to be designated by us
as qualified dividend income up to an amount equal to the sum of the qualified dividend income received by us
during the year of the distribution from other C corporations such as taxable REIT subsidiaries, our “undistributed”
REIT taxable income from the immediately preceding year, and any income attributable to the sale of a built-in gain
asset from the immediately preceding year (reduced by any U.S. federal income taxes that we paid with respect to
such REIT taxable income and built-in gain).
Dividends that we receive will be treated as qualified dividend income to us if certain criteria are met. The
dividends must be received from a domestic corporation (other than a REIT or a regulated investment company) or a
221
qualifying foreign corporation. A foreign corporation generally will be a qualifying foreign corporation if it is
incorporated in a possession of the United States, the corporation is eligible for benefits of an income tax treaty with
the United States which the Secretary of Treasury determines is satisfactory, or the stock on which the dividend is
paid is readily tradable on an established securities market in the United States. However, if a foreign corporation is
a foreign personal holding company, a foreign investment company or a passive foreign investment company, then it
will not be treated as a qualifying foreign corporation, and the dividends we receive from such an entity would not
constitute qualified dividend income.
Furthermore, certain exceptions and special rules apply to determine whether dividends may be treated as
qualified dividend income to us. These rules include certain holding requirements that we would have to satisfy with
respect to the stock on which the dividend is paid, and special rules with regard to dividends received from regulated
investment companies and other REITs.
In addition, even if we designate certain dividends as qualified dividend income to our stockholders, the U.S.
holder will have to meet certain other requirements for the dividend to qualify for taxation at capital gains rates. For
example, the U.S. holder will only be eligible to treat the dividend as qualifying dividend income if the U.S. holder
is taxed at individual rates and meets certain holding requirements. In general, in order to treat a particular dividend
as qualified dividend income, a U.S. holder will be required to hold our stock for more than 60 days during the 121-
day period beginning on the date which is 60 days before the date on which the stock becomes ex-dividend.
Other Tax Considerations. To the extent that we have available net operating losses and capital losses carried
forward from prior tax years, such losses may reduce the amount of distributions that we must make in order to
comply with the REIT distribution requirements. Such losses, however, are not passed through to stockholders and
do not offset income of stockholders from other sources, nor would such losses affect the character or tax treatment
of any distributions that we make, which are generally subject to tax in the hands of stockholders to the extent that
we have current or accumulated earnings and profits.
Sales of Our Common Stock. Upon any taxable sale or other disposition of our common stock (except pursuant
to a repurchase by us, as described below), a U.S. holder of our common stock will recognize gain or loss for U.S.
federal income tax purposes in an amount equal to the difference between:
•the amount of cash and the fair market value of any property received on such disposition; and
•the U.S. holder’s adjusted basis in such common stock for tax purposes.
Gain or loss will be capital gain or loss if the common stock has been held by the U.S. holder as a capital asset.
The applicable tax rate will depend on the holder’s holding period in the asset (generally, if an asset has been held
for more than one year, it will produce long-term capital gain) and the holder’s tax bracket.
In general, any loss upon a sale or exchange of our common stock by a U.S. holder who has held such stock for
six months or less (after applying certain holding period rules) will be treated as a long-term capital loss, but only to
the extent of distributions from us received by such U.S. holder that are required to be treated by such U.S. holder as
long-term capital gains.
Repurchases of Our Common Stock. A repurchase of our common stock will be treated as a distribution in
exchange for the repurchased shares and taxed in the same manner as any other taxable sale or other disposition of
our common stock discussed above, provided that the repurchase satisfies one of the tests enabling the repurchase to
be treated as a sale or exchange. A repurchase will generally be treated as a sale or exchange if it (i) results in a
complete termination of the holder’s interest in our common stock, (ii) results in a substantially disproportionate
redemption with respect to the holder, or (iii) is not essentially equivalent to a dividend with respect to the holder. In
determining whether any of these tests has been met, common stock actually owned, as well as common stock
considered to be owned by the holder by reason of certain constructive ownership rules set forth in Section 318 of
the Code, generally must be taken into account. The sale of common stock pursuant to a repurchase generally will
result in a “substantially disproportionate” redemption with respect to a holder if the percentage of our then
outstanding voting stock owned by the holder immediately after the sale is less than 80% of the percentage of our
voting stock owned by the holder determined immediately before the sale. The sale of common stock pursuant to a
222
repurchase generally will be treated as not “essentially equivalent to a dividend” with respect to a holder if the
reduction in the holder’s proportionate interest in our stock as a result of our repurchase constitutes a “meaningful
reduction” of such holder’s interest.
A repurchase that does not qualify as an exchange under such tests will constitute a dividend equivalent
repurchase that is treated as a taxable distribution and taxed in the same manner as regular distributions, as described
above under “—Distributions Generally.” In addition, although guidance is sparse, the IRS could take the position
that a holder who does not participate in any repurchase treated as a dividend should be treated as receiving a
constructive distribution of our common stock taxable as a dividend in the amount of their increased percentage
ownership of our common stock as a result of the repurchase, even though the holder did not actually receive cash or
other property as a result of the repurchase.
Net Investment Income Tax. Certain U.S. holders, including individuals and estates and trusts, are subject to an
additional 3.8% tax on all or a portion of their “net investment income,” which includes net gain from a sale or
exchange of common stock and income from dividends paid on common stock. U.S. holders are urged to consult
their own tax advisors regarding the “net investment income” tax.
Taxation of Non-U.S. Holders of Our Common Stock
The rules governing the U.S. federal income taxation of non-U.S. holders are complex. This section is only a
summary of such rules. Please consult your tax advisor regarding the application and impact of such rules.
We urge non-U.S. holders to consult their own tax advisors to determine the impact of federal, state and local
income tax laws on ownership of our common stock, including any reporting requirements.
Distributions. Distributions by us to a non-U.S. holder of our common stock that are neither attributable to gain
from sales or exchanges by us of “United States real property interests” (“USRPIs”) nor designated by us as capital
gain dividends will be treated as dividends of ordinary income to the extent that they are made out of our current or
accumulated earnings and profits. These distributions generally will be subject to U.S. federal withholding tax on a
gross basis at a rate of 30%, or a lower rate as may be specified under an applicable income tax treaty, unless the
dividends are treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within
the United States. Under some treaties, however, lower rates generally applicable to dividends do not apply to
dividends from REITs or apply to dividends from REITs only in certain circumstances. Further, reduced treaty rates
are not available to the extent the income allocated to the non-U.S. holder is excess inclusion income. Dividends that
are effectively connected with the non-U.S. holder’s conduct of a trade or business within the United States (and, if
required by an applicable income tax treaty, are attributable to a U.S. permanent establishment) will be subject to
U.S. federal income tax on a net basis, that is, after allowance for deductions, at graduated rates, in the same manner
as U.S. holders are taxed, and are generally not subject to withholding. Applicable certification and disclosure
requirements must be satisfied to be exempt from withholding under the effectively connected income exception.
Any dividends received by a corporate non-U.S. holder that is engaged in a trade or business within the United
States may also be subject to an additional branch profits tax at a 30% rate, or lower applicable treaty rate.
A non-U.S. holder of our common stock who wishes to claim the benefit of an applicable treaty rate and avoid
backup withholding, as discussed below, for our ordinary dividends will be required (i) to complete the applicable
IRS Form W-8 and certify under penalty of perjury that such holder is not a U.S. person as defined under the Code
and is eligible for treaty benefits or (ii) if our common stock is held through certain foreign intermediaries, to satisfy
the relevant certification requirements of applicable Treasury regulations. Special certification and other
requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.
A non-U.S. holder of our common stock eligible for a reduced rate of U.S. withholding tax pursuant to an
income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for
refund with the IRS.
Distributions that are neither attributable to gain from sales or exchanges by us of USRPIs nor designated by us
as capital gain dividends and that are in excess of our current or accumulated earnings and profits that do not exceed
the adjusted basis of the non-U.S. holder in its common stock will reduce the non-U.S. holder’s adjusted basis in its
223
common stock and will not be subject to U.S. federal income tax. Distributions that are neither attributable to gain
from sales or exchanges by us of USRPIs nor designated by us as capital gains dividends and that are in excess of
current and accumulated earnings and profits that do exceed the adjusted basis of the non-U.S. holder in its common
stock will be treated as gain from the sale of its stock, the tax treatment of which is described below under “—Sales
of Our Common Stock.” Because we generally cannot determine at the time we make a distribution whether or not
the distribution will exceed our current and accumulated earnings and profits, we may withhold tax on the entire
amount of any distribution at the same rate as we would withhold on a dividend.
We would be required to withhold at least 15% of any distribution to a non-U.S. holder in excess of our current
and accumulated earnings and profits if our common stock constitutes a USRPI with respect to such non-U.S.
holder, as described below under “—Sales of Our Common Stock.” This withholding would apply even if a lower
treaty rate otherwise applies or the non-U.S. holder is not liable for tax on the receipt of that distribution. However, a
non-U.S. holder may seek a refund of these amounts from the IRS if the non-U.S. holder’s U.S. tax liability with
respect to the distribution is less than the amount withheld.
Distributions to a non-U.S. holder that are designated by us at the time of the distribution as capital gain
dividends, other than those arising from the disposition of a USRPI, generally should not be subject to U.S. federal
income taxation unless:
•The investment in the common stock is effectively connected with the non-U.S. holder’s conduct of a trade
or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S.
permanent establishment of the non-U.S. holder), in which case the non-U.S. holder will generally be
subject to the same treatment as U.S. holders with respect to any gain, except that a holder that is a foreign
corporation also may be subject to the 30% branch profits tax, as discussed above; or
•The non-U.S. holder is an individual who is present in the United States for 183 days or more during the
taxable year of the distribution and has a “tax home” in the United States, in which case the individual will
be subject to a 30% tax on the individual’s capital gains.
Under FIRPTA, distributions to a non-U.S. holder that are attributable to gain from sales or exchanges by us of
USRPIs, whether or not designated as capital gain dividends, will cause the non-U.S. holder to be treated as
recognizing gain that is income effectively connected with the conduct of a trade or business in the United States.
Non-U.S. holders will be taxed on this gain at the same rates applicable to U.S. holders, subject to a special
alternative minimum tax in the case of nonresident alien individuals. Also, this gain may be subject to a 30% (or
lower applicable treaty rate) branch profits tax in the hands of a non-U.S. holder that is a corporation. A distribution
is not attributable to a USRPI if we held an interest in the underlying asset solely as a creditor.
We will be required to withhold and remit to the IRS the highest rate of U.S. federal income tax applicable to
each non-U.S. holder, based on the status of such holder, of any distributions to non-U.S. holders that are designated
as capital gain dividends with respect to dispositions of USRPIs, or, if greater, the highest rate of U.S. federal
income tax applicable to each non-U.S. holder, based on the status of such holder, of a distribution that could have
been designated as a capital gain dividend, whether or not attributable to sales of USRPIs. Distributions can be
designated as capital gain dividends to the extent of our net capital gain for the taxable year of the distribution. The
amount withheld, which for individual non-U.S. holders may exceed the actual tax liability, is creditable against the
non-U.S. holder’s U.S. federal income tax liability.
However, FIRPTA withholding tax will not apply to any capital gain dividend with respect to (i) any class of
our stock which is “regularly traded” on an established securities market located in the United States if the non-U.S.
holder did not own more than 10% of such class of stock at any time during the one-year period ending on the date
of such dividend or (ii) a “qualified shareholder” or a “qualified foreign pension fund”. Instead, any such capital
gain dividend will be treated as a distribution subject to the rules discussed above with respect to ordinary dividends.
Also, the branch profits tax would not apply to such a distribution. However, it is not anticipated that our common
stock will be “regularly traded” on an established securities market.
Although the law is not clear on the matter, it appears that amounts we designate as undistributed capital gain in
respect of the stock held by U.S. holders generally should be treated with respect to non-U.S. holders in the same
224
manner as actual distributions by us of capital gain dividends. Under that approach, the non-U.S. holders would be
able to offset as a credit against their U.S. federal income tax liability resulting therefrom their proportionate share
of the tax paid by us on the undistributed capital gain, and to receive from the IRS a refund to the extent that their
proportionate share of this tax paid by us were to exceed their actual U.S. federal income tax liability. If we were to
designate a portion of our net capital gain as undistributed capital gain, a non-U.S. holder is urged to consult its tax
advisor regarding the taxation of such undistributed capital gain.
Sales of Our Common Stock. Subject to the discussion below under “—Repurchases of Our Common Stock,”
gain recognized by a non-U.S. holder upon the sale or exchange of our stock generally would not be subject to U.S.
taxation unless:
•the investment in our common stock is effectively connected with the non-U.S. holder’s conduct of a trade
or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S.
permanent establishment of the non-U.S. holder), in which case the non-U.S. holder will be subject to the
same treatment as domestic holders with respect to any gain;
•the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or
more during the taxable year and has a tax home in the United States, in which case the nonresident alien
individual will be subject to a 30% tax on the individual’s net capital gains for the taxable year; or
•the non-U.S. holder is not a “qualified shareholder” or a “qualified foreign pension fund” (each as defined
below) and our common stock constitutes a USRPI within the meaning of FIRPTA, as described below.
We anticipate that our common stock will constitute a USRPI within the meaning of FIRPTA unless we are a
domestically-controlled REIT. We will be a domestically-controlled REIT if, at all times during a specified testing
period, less than 50% in value of our stock is held directly or indirectly by non-U.S. holders. No assurance can be
given, however, that we are or will be a domestically-controlled REIT.
Final Treasury regulations that are effective as of April 25, 2024 (the “Final Regulations”), modified prior tax
guidance relating to the determination of whether we are a domestically controlled REIT by providing a look-
through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated
investment companies, or non-public domestic C corporations owned more than 50% directly or indirectly by
foreign persons (“foreign-controlled domestic corporations”) and by treating “qualified foreign pension funds” as
foreign persons. Recently released proposed Treasury regulations (the “Proposed Regulations”) eliminated the look-
through rules from the Final Regulations and have stated that taxpayers can choose to apply the Proposed
Regulations to transactions occurring on or after April 25, 2024.
Even if we were not a domestically-controlled REIT, a sale of common stock by a non-U.S. holder would
nevertheless not be subject to taxation under FIRPTA as a sale of a USRPI if:
•our common stock were “regularly traded” on an established securities market within the meaning of
applicable Treasury regulations; and
•the non-U.S. holder did not actually, or constructively under specified attribution rules under the Code, own
more than 10% of our common stock at any time during the shorter of the five-year period preceding the
disposition or the holder’s holding period.
However, it is not anticipated that our common stock will be “regularly traded” on an established securities
market. If gain on the sale or exchange of our common stock were subject to taxation under FIRPTA, the non-U.S.
holder would be subject to regular U.S. income tax with respect to any gain in the same manner as a taxable U.S.
holder, subject to any applicable alternative minimum tax and special alternative minimum tax in the case of
nonresident alien individuals. In such a case, under FIRPTA, the purchaser of common stock (including us, in the
case of a repurchase) may be required to withhold 15% of the purchase price and remit this amount to the IRS.
Qualified Shareholders. Subject to the exception discussed below, a qualified stockholder who holds our
common stock directly or indirectly (through one or more partnerships) will not be subject to FIRPTA on
225
distributions by us or dispositions of our common stock. While a qualified shareholder will not be subject to
FIRPTA on distributions by us or dispositions of our common stock, a distribution to a qualified shareholder that
otherwise would have been taxable under FIRPTA will be treated as an ordinary dividend, and certain investors in a
qualified shareholder (i.e., a non-U.S. person who hold interests other than solely as a creditor in the qualified
shareholder, and also holds more than 10% of our common stock, whether or not by reason of the investor’s
ownership in the qualified shareholder) may be subject to FIRPTA and FIRPTA withholding.
Qualified Foreign Pension Funds. A qualified foreign pension fund (or an entity all of the interests of which are
held by a qualified foreign pension fund) that holds our common stock directly or indirectly (through one or more
partnerships) will not be subject to tax under FIRPTA or to FIRPTA withholding on distributions by us or
dispositions of our common stock.
We urge non-U.S. holders to consult their own tax advisers to determine their eligibility for exemption from
FIRPTA withholding and their qualification as a qualified shareholder or a qualified foreign pension fund.
Repurchases of Our Common Stock. A repurchase of our common stock that is not treated as a sale or exchange
will be taxed in the same manner as a regular distribution under the rules described above. See “—Taxation of U.S.
Holders of Our Common Stock—Repurchases of Our Common Stock” for a discussion of when a redemption will
be treated as a sale or exchange and related matters.
A repurchase of our common stock generally will be subject to tax under FIRPTA to the extent our common
stock is a USRPI and the non-U.S. holder recognizes gain or the distribution made to repurchase our common stock
is attributable to gains from our dispositions of USRPIs. To the extent the distribution made to repurchase our
common stock is attributable to gains from our dispositions of USRPIs, the excess of the amount of money received
in the repurchase over the non-U.S. holder’s basis in the repurchased shares will be treated in the manner described
above under “—Sales of Our Common Stock.” The IRS has released an official notice stating that repurchase
payments may be attributable to gains from dispositions of USRPIs (except when the 10% publicly traded exception
would apply), but has not provided any guidance to determine when and what portion of a repurchase payment is a
distribution that is attributable to gains from our dispositions of USRPIs. Due to the uncertainty, we may withhold at
the highest rate of U.S. federal income tax applicable to a non-U.S. holder, based on the status of such holder, from
all or a portion of repurchase payments to non-U.S. holders other than qualified shareholders or qualified foreign
pension funds. To the extent the amount of tax we withhold exceeds the amount of a non-U.S. holder’s U.S. federal
income tax liability, the non-U.S. holder may file a U.S. federal income tax return and claim a refund.
U.S. Federal Income Tax Returns. If a non-U.S. holder is subject to taxation under FIRPTA on proceeds from
the sale of our common stock or on distributions we make, the non-U.S. holder will be required to file a U.S. federal
income tax return. Prospective non-U.S. holders are urged to consult their tax advisors to determine the impact of
U.S. federal, state, local and foreign income tax laws on their ownership of our common stock, including any
reporting requirements.
Taxation of Tax-Exempt Holders of Our Common Stock
Provided that a tax-exempt holder has not held its common stock as “debt-financed property” within the
meaning of the Code and our shares of stock are not being used in an unrelated trade or business, dividend income
from us generally will not be unrelated business taxable income (“UBTI”) to a tax-exempt holder. Similarly, income
from the sale of our common stock will not constitute UBTI unless the tax-exempt holder has held its common stock
as debt-financed property within the meaning of the Code or has used the common stock in an unrelated trade or
business.
Further, for a tax-exempt holder that is a social club, voluntary employee benefit association, supplemental
unemployment benefit trust or qualified group legal services plan exempt from U.S. federal income taxation under
Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code, respectively, or a single parent title-holding corporation
exempt under Section 501(c)(2) the income of which is payable to any of the aforementioned tax-exempt
organizations, income from an investment in our common stock will constitute UBTI unless the organization
properly sets aside or reserves such amounts for purposes specified in the Code. These tax-exempt holders should
consult their own tax advisors concerning these “set aside” and reserve requirements.
226
Notwithstanding the above, however, a portion of the dividends paid by a “pension-held REIT” are treated as
UBTI as to any trust which is described in Section 401(a) of the Code, is tax-exempt under Section 501(a) of the
Code, and holds more than 10%, by value, of the interests in the REIT. Tax-exempt pension funds that are described
in Section 401(a) of the Code are referred to below as “pension trusts.”
A REIT is a “pension-held REIT” if it meets the following two tests:
•it would not have qualified as a REIT but for Section 856(h)(3) of the Code, which provides that stock
owned by pension trusts will be treated, for purposes of determining whether the REIT is closely held, as
owned by the beneficiaries of the trust rather than by the trust itself; and
•either (i) at least one pension trust holds more than 25% of the value of the interests in the REIT, or (ii) a
group of pension trusts each individually holding more than 10% of the value of the REIT’s stock,
collectively owns more than 50% of the value of the REIT’s stock.
The percentage of any REIT dividend from a “pension-held REIT” that is treated as UBTI is equal to the ratio
of the UBTI earned by the REIT, treating the REIT as if it were a pension trust and therefore subject to tax on UBTI,
to the total gross income of the REIT. An exception applies where the percentage is less than 5% for any year, in
which case none of the dividends would be treated as UBTI. The provisions requiring pension trusts to treat a
portion of REIT distributions as UBTI will not apply if the REIT is not a “pension-held REIT” (for example, if the
REIT is able to satisfy the “not closely held requirement” without relying on the “look through” exception with
respect to pension trusts). Because of our charter’s restrictions on the number of shares of our stock that a person
may own, we do not anticipate that we will become a “pension-held REIT.”
Distribution Reinvestment Plan
Holders who participate in the distribution reinvestment plan will recognize taxable income in the amount they
would have received had they elected not to participate, even though they receive no cash. These deemed
distributions will be treated as actual distributions from us to the participating holders and will retain the character
and U.S. federal income tax consequences applicable to all distributions. Stock received under the plan will have a
holding period beginning with the day after purchase, and a U.S. federal income tax basis equal to its cost, which is
the gross amount of the deemed distribution.
Backup Withholding Tax and Information Reporting
U.S. Holders of Common Stock. In general, information-reporting requirements will apply to payments of
dividends and proceeds of the sale of our common stock held by U.S. holders, unless such U.S. holder is an exempt
recipient. A backup withholding tax may apply to such payments if such U.S. holder fails to provide a taxpayer
identification number or certification of other exempt status or fails to report in full dividend or interest income. In
addition, we may be required to withhold a portion of capital gain distributions to any U.S. holders who fail to
certify their U.S. status to us. Any amounts withheld under the backup withholding rules will be allowed as a credit
against your U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
Brokers that are required to report the gross proceeds from a sale of our common stock on IRS Form 1099-B
will also be required to report the customer’s adjusted basis in the common stock sold and whether any gain or loss
with respect to such stock is long-term or short-term. In some cases, there may be alternative methods of
determining the basis in the common stock sold, in which case your broker will apply a default method of its
choosing if you do not indicate which method you choose to have applied. U.S. holders should consult their own tax
advisors regarding these reporting requirements and their election options.
Non-U.S. Holders of Our Common Stock. We must report annually to the IRS and to each non-U.S. holder the
amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether
withholding was required. Copies of the information returns reporting such dividends and withholding may also be
made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an
applicable income tax treaty.
227
A non-U.S. holder will be subject to backup withholding for dividends paid to such holder unless such holder
certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or
reason to know that such holder is a “United States person” as defined under the Code), or such holder otherwise
establishes an exemption.
Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a
sale of our common stock within the United States or conducted through certain U.S.-related financial
intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the
payor does not have actual knowledge or reason to know that the beneficial owner is a “United States person” as
defined under the Code), or such owner otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-
U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
Legislative or Other Actions Affecting REITs
The present U.S. federal income tax treatment of REITs may be modified, possibly with retroactive effect, by
legislative, judicial or administrative action at any time. The REIT rules are constantly under review by persons
involved in the legislative process and by the IRS and the Treasury, which may result in statutory changes as well as
revisions to regulations and interpretations. Changes to the U.S. federal income tax laws and interpretations thereof
could adversely affect an investment in our common stock.
State and Local Taxes
We and our stockholders may be subject to state or local taxation in various state or local jurisdictions,
including those in which we or they transact business or reside. Our state and local tax treatment and that of our
stockholders may not conform to the U.S. federal income tax treatment discussed above. Consequently, prospective
stockholders should consult their own tax advisors regarding the effect of state and local tax laws on an investment
in our common stock.
Tax Shelter Reporting
If a stockholder recognizes a loss with respect to stock of $2.0 million or more for an individual stockholder or
$10.0 million or more for a corporate stockholder, the stockholder must file a disclosure statement with the IRS on
Form 8886. Direct stockholders of portfolio securities are in many cases exempt from this reporting requirement, but
stockholders of a REIT currently are not excepted. The fact that a loss is reportable under these regulations does not
affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Stockholders should consult
their tax advisors to determine the applicability of these regulations in light of their individual circumstances.
Foreign Account Tax Compliance Act
Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), a 30% U.S.
federal withholding tax may apply to any ordinary dividends and other distributions that we pay to (i) a “foreign
financial institution” (as specifically defined in the Code) which does not provide sufficient documentation, typically
on IRS Form W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed
compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental
agreement with the United States) in a manner that avoids withholding, or (ii) a “non-financial foreign entity” (as
specifically defined in the Code) which does not provide sufficient documentation, typically on IRS Form W-8BEN-
E, evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial U.S.
beneficial owners of such entity (if any). If a dividend payment is both subject to withholding under FATCA and
subject to withholding tax discussed above, the withholding under FATCA may be credited against, and therefore
reduce, such other withholding tax. While withholding under FATCA would also have applied to payments of gross
proceeds from the disposition of stock after December 31, 2018, proposed Treasury regulations eliminate FATCA
withholding on gross proceeds payments. Taxpayers generally may rely on these proposed Treasury regulations until
final Treasury regulations are issued. Non-U.S. holders should consult their tax advisors to determine the
applicability of this legislation in light of their individual circumstances.
228
CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the purchase and holding of any class of
our shares of common stock by (i) ERISA Plans (including “Keogh” plans and “individual retirement accounts”),
(ii) plans and other arrangements that are subject to provisions under any federal, state, local, non-U.S. or other laws
or regulations that are similar to the provisions of Title I of ERISA or Section 4975 of the Code (collectively,
“Similar Laws”), and (iii) entities whose underlying assets are considered to include “plan assets” of any such plan
or arrangement described in clause (ii) (each of the foregoing described in clauses (i), (ii) and (iii) being referred to
as a “Plan”).
General Fiduciary Matters
ERISA and the Code impose certain duties on persons who are fiduciaries of an ERISA Plan and prohibit
certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under
ERISA and the Code, any person who exercises any discretionary authority or control over the administration of
such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders
investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary
of the ERISA Plan.
In considering an investment in any class of our shares of common stock of a portion of the assets of any Plan, a
fiduciary should consider whether an investment in the shares is appropriate for the Plan, taking into account the
provisions of the Plan documents, the overall investment policy of the Plan and the composition of the Plan’s
investment portfolio, as there are imposed on Plan fiduciaries certain fiduciary requirements, including those of
investment prudence and diversification and the requirement that a Plan’s investments be made in accordance with
the documents governing the Plan. Further, a fiduciary should consider that in the future there may be no market in
which such Plan would be able to sell or otherwise dispose of the shares.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified
transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of
ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code, unless an exemption is available.
A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to
excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA
Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under
ERISA and the Code. The fiduciary of an ERISA Plan that proposes to purchase or hold any shares should consider,
among other things, whether such purchase and holding may involve the sale or exchange of any property between
an ERISA Plan and a party in interest or disqualified person, or the transfer to, or use by or for the benefit of, a party
in interest or disqualified person, of any ERISA plan assets. Depending on the satisfaction of certain conditions
which may include the identity of the ERISA Plan fiduciary making the decision to acquire or hold the shares on
behalf of an ERISA Plan, Prohibited Transaction Class Exemption (“PTCE”) 91-38 (relating to investments by bank
collective investment funds), PTCE 84-14 (relating to transactions effected by a “qualified professional asset
manager”), PTCE 95-60 (relating to investments by an insurance company general account), PTCE 96-23 (relating
to transactions directed by an in-house asset manager) or PTCE 90-1 (relating to investments by insurance company
pooled separate accounts) could provide an exemption from the prohibited transaction provisions of ERISA and
Section 4975 of the Code. However, there can be no assurance that any of the foregoing exemptions or any other
class, administrative or statutory exemption will be available with respect to any particular transaction involving the
shares. It is also possible that one of these exemptions could apply to some aspect of the acquisition or holding of
such shares, but not apply to some other aspect of such acquisition or holding. Each of the above-noted exemptions
contains conditions and limitations on its application. Fiduciaries of ERISA Plans considering acquiring or holding
our shares in reliance on these or any other exemption should carefully review the exemption to assure it is
applicable. There can be no assurance that all of the conditions of any such exemptions will be satisfied.
229
Plan Assets Issues
An additional issue concerns the extent to which we or all or a portion of our assets could themselves be treated
as subject to ERISA. ERISA and the United States Department of Labor regulations, as modified by Section 3(42) of
ERISA (the “Plan Assets Regulation”) concerns the definition of what constitutes the assets of an ERISA Plan for
purposes of the fiduciary responsibility and prohibited transaction provisions of Title I of ERISA and the prohibited
transaction provisions of Section 4975 of the Code.
Under ERISA and the Plan Assets Regulation, generally when an ERISA Plan acquires an “equity interest” in
an entity that is neither a “publicly offered security” nor a security issued by an investment company registered
under the Investment Company Act, the ERISA Plan’s assets include both the equity interest and an undivided
interest in each of the underlying assets of the entity, unless it is established either that less than 25% of the total
value of each class of equity interest in the entity is held by “benefit plan investors” as defined in Section 3(42) of
ERISA (the “25% Test”) or that the entity is an “operating company” as defined in the Plan Assets Regulation. For
purposes of the 25% Test, the assets of an entity will not be treated as “plan assets” if, immediately after the most
recent acquisition of any equity interest in the entity, less than 25% of the total value of each class of equity interest
in the entity is held by “benefit plan investors,” excluding equity interests held by persons (other than benefit plan
investors) with discretionary authority or control over the assets of the entity or who provide investment advice for a
fee (direct or indirect) with respect to such assets, and any affiliates thereof. The term “benefit plan investors” is
generally defined to include employee benefit plans subject to Title I of ERISA or Section 4975 of the Code
(including “Keogh” plans and IRAs), as well as any entity whose underlying assets include plan assets by reason of
a plan’s investment in such entity (e.g., an entity of which 25% or more of the value of any class of equity interests
is held by benefit plan investors and which does not satisfy another exception under ERISA).
We will not be an investment company under the Investment Company Act and there can be no assurance that
benefit plan investors will hold less than 25% of the total value of each class of our common stock at the completion
of this offering or thereafter, and no monitoring or other measures will be undertaken with respect to the level of
such ownership with respect to any class of our shares of common stock.
Publicly Offered Securities
For purposes of the Plan Assets Regulation, a “publicly offered security” is a security that is (a) “freely
transferable,” (b) part of a class of securities that is “widely held,” and (c) (i) sold to the plan as part of an offering of
securities to the public pursuant to an effective registration statement under the Securities Act and is part of a class
of securities that is registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer
during which the offering of such securities to the public has occurred, or (ii) is part of a class of securities that is
registered under Section 12 of the Exchange Act.
Operating Company
Under the Plan Assets Regulation, an entity is an “operating company” if it is primarily engaged, directly or
through a majority-owned subsidiary or subsidiaries, in the production or sale of a product or service other than the
investment of capital. In addition, the Plan Assets Regulation provides that the term operating company includes an
entity qualifying as a real estate operating company (“REOC”). An entity is a REOC if (i) on its “initial valuation
date” and on at least one day within each “annual valuation period,” at least 50% of the entity’s assets, valued at cost
(other than short-term investments pending long-term commitment or distribution to investors) are invested in real
estate that is managed or developed and with respect to which such entity has the right to substantially participate
directly in management or development activities; and (ii) such entity in the ordinary course of its business is
engaged directly in the management and development of real estate during specified periods. The “initial valuation
date” is the date on which an entity first makes an investment that is not a short-term investment of funds pending
long-term commitment. An entity’s “annual valuation period” is a pre-established period not exceeding 90 days in
duration, which begins no later than the anniversary of the entity’s initial valuation date.
It is anticipated that, from and after the date we make our first investment, either (i) our shares of common stock
will qualify for the exception for a “publicly offered security” or (ii) the terms and conditions of our investments,
230
and the rights obtained and exercised with respect to such investments, will enable us to qualify as a REOC within
the meaning of the Plan Assets Regulation. However, no assurance can be given that this will be the case.
If our assets are deemed to constitute ERISA “plan assets” (i.e., if we fail to qualify as a REOC as of our initial
valuation date, or during any subsequent annual valuation period, and one or more of our classes of common stock
fail to qualify as a “publicly offered security”), certain transactions that we might enter into, or may have entered
into, in the ordinary course of our business may constitute non-exempt “prohibited transactions” under Section 406
of ERISA or Section 4975 of the Code, may have to be rescinded and may give rise to prohibited transaction excise
taxes and fiduciary liability, as described above. In addition, if our assets are deemed to be “plan assets” of an
ERISA Plan, our management, as well as various providers of fiduciary or other services to us, and any other parties
with authority or control with respect to us or our assets, may be considered fiduciaries under ERISA and Section
4975 of the Code, or otherwise parties in interest or disqualified persons by virtue of their provision of such services
(and there could be an improper delegation of authority to such providers).
In addition, ERISA generally provides that discretionary authority with respect to the management and
disposition of the assets of an ERISA Plan may be delegated to certain “investment managers” who acknowledge
that they are fiduciaries of the ERISA Plan. In such case, an ERISA Plan fiduciary who has appointed an investment
manager will generally not be liable for the acts of such investment manager. We do not expect to be an “investment
manager” within the meaning of ERISA. Consequently, if our assets are deemed to constitute “plan assets” of any
stockholder which is an ERISA Plan, the fiduciary of any such ERISA Plan would not be protected from liability
resulting from our decisions. Moreover, if our underlying assets were deemed to be assets constituting “plan assets,”
there are several other provisions of ERISA that could be implicated for an ERISA Plan if it were to acquire or hold
shares either directly or by investing in an entity whose underlying assets are deemed to be assets of the ERISA
Plan.
Representations
By acceptance of any Class T, Class S, Class D and Class I shares, each purchaser and subsequent transferee of
a share will be deemed to have represented and warranted that either (i) no portion of the assets used by such
purchaser or transferee to acquire or hold the shares constitutes assets of any Plan or (ii) the purchase and holding of
the shares by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws.
The sale of shares of our common stock to an ERISA Plan is in no respect a representation by us or any other
person associated with the offering of our common stock that such an investment meets all relevant legal
requirements with respect to investments by Plans generally or any particular Plan, or that such an investment is
appropriate for Plans generally or any particular Plan.
The preceding discussion is only a summary of certain ERISA implications of an investment in the securities
and does not purport to be complete. Prospective investors should consult with their own legal, tax, financial and
other advisors prior to investing to review these implications in light of such investor’s particular circumstances.
Each purchaser or transferee that is or is acting on behalf of a Plan should consult with its legal advisor
concerning the potential consequences to the Plan under ERISA, Section 4975 of the Code or applicable
Similar Law of an investment in any class of our shares.
By acceptance of any class of our shares of our common stock, each Plan investor also will be deemed to have
acknowledged and represented (which acknowledgment and representation shall be deemed repeated and reaffirmed
on each day the Plan holds any shares of our common stock):
1)Neither we, the Adviser, the Dealer Manager, Brookfield Real Estate, Brookfield, or any of our or their
respective affiliates (collectively, the “Brookfield Entities”) has been relied upon for any advice with
respect to the Plan’s decision to purchase or hold any shares of our common stock and none of the
Brookfield Entities shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to
purchase, continue to hold, transfer, vote or provide any consent with respect to any such shares;
231
2)The Plan is aware of and acknowledges that (a) none of the Brookfield Entities is undertaking to provide
impartial investment advice, or to give advice in a fiduciary capacity, in connection with the Plan’s
investment in the shares of common stock, (b) the Brookfield Entities have a financial interest in the Plan’s
investment in the shares of common stock on account of the fees and other compensation they expect to
receive from us and their other relationships with us, as disclosed in this prospectus and (c) any such fees
received by the Brookfield Entities do not constitute fees rendered for the provision of investment advice to
the Plan; and
3)The Plan’s decision to invest in our shares of common stock has been made at the recommendation or
direction of a fiduciary (an “Independent Fiduciary”) who:
a.is independent of the Brookfield Entities;
b.is capable of evaluating investment risks independently, both in general and with respect to particular
transactions and investment strategies contemplated in this prospectus; and
c.is a fiduciary in connection with the Plan’s investment in us and any related transactions and is
responsible for exercising independent judgment in evaluating the Plan’s investment in us and any
related transactions.
Notwithstanding the foregoing, any ERISA Plan investor that is an individual retirement account that is not
represented by an Independent Fiduciary shall not be deemed to have made the representation in paragraph (3)
above.
Each Plan investor is advised to contact its own financial advisor or other fiduciary unrelated to the
Brookfield Entities about whether an investment in our shares of common stock, or any decision to continue
to hold, transfer, vote or provide any consent with respect to any such shares, may be appropriate for the
Plan’s circumstances.
232
PLAN OF DISTRIBUTION
We are offering up to $7,500,000,000 in shares of our common stock pursuant to this prospectus on a “best
efforts” basis through Brookfield Private Wealth LLC, the Dealer Manager, a registered broker-dealer and an
affiliate of the Adviser. Because this is a “best efforts” offering, the Dealer Manager must only use its best efforts to
sell the shares, which means that no underwriter, broker-dealer or other person will be obligated to purchase any
shares. Our offering consists of up to $6,000,000,000 in shares in our primary offering and up to $1,500,000,000 in
shares pursuant to our distribution reinvestment plan. We reserve the right to reallocate shares of common stock
between our primary offering and our distribution reinvestment plan.
We are offering to the public four classes of shares of our common stock pursuant to this prospectus: Class T
shares, Class S shares, Class D shares and Class I shares. We are offering to sell any combination of share classes
with a dollar value up to the maximum offering amount. All investors must meet the suitability standards discussed
in the section of this prospectus entitled “Suitability Standards.” The share classes have different upfront selling
commissions and different ongoing stockholder servicing fees.
Class T and Class S shares are available through brokerage and transactional-based accounts. Class D shares are
generally available for purchase in this offering only (1) through fee-based programs, also known as wrap accounts,
that provide access to Class D shares, (2) through participating broker-dealers that have alternative fee arrangements
with their clients to provide access to Class D shares, (3) through certain registered investment advisers, (4) through
bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or
customers or (5) by other categories of investors that we name in an amendment or supplement to this prospectus.
Class I shares are generally available for purchase in this offering only (1) through fee-based programs, also known
as wrap accounts, that provide access to Class I shares, (2) by endowments, foundations, pension funds and other
institutional investors, (3) through participating broker-dealers that have alternative fee arrangements with their
clients to provide access to Class I shares, (4) by our executive officers and directors and their immediate family
members, as well as officers and employees of the Adviser, Brookfield or other affiliates and their immediate family
members, and, if approved by our board of directors, joint venture partners, consultants and other service providers
or (5) by other categories of investors that we name in an amendment or supplement to this prospectus. We also
offer Class I shares and Class C shares to certain feeder vehicles primarily created to hold our Class I shares or Class
C shares, which in turn offer interests in themselves to investors; we conduct such offerings pursuant to exemptions
to registration under the Securities Act and not as a part of this offering. We may also offer Class I shares or Class C
shares to other investment vehicles. Such feeder vehicles may have additional costs and expenses, which would be
disclosed in connection with the offering of their interests. If you are eligible to purchase all four classes of shares
being offered pursuant to this prospectus, you should consider, among other things, the amount of your investment,
the length of time you intend to hold the shares and the upfront selling commissions, dealer manager fees and
stockholder servicing fees attributable to the Class T, Class S or Class D shares. Before making your investment
decision, consult with your investment adviser regarding your account type and the classes of common stock you
may be eligible to purchase. Neither the Dealer Manager nor its affiliates will directly or indirectly compensate any
person engaged as an investment advisor or bank trust department by a potential investor as an inducement for such
investment advisor or bank trust department to advise favorably for an investment in us.
The number of shares we have registered pursuant to the registration statement of which this prospectus forms a
part is the number that we reasonably expect to be offered and sold within two years from the initial effective date of
the registration statement. Under applicable SEC rules, we may extend this offering one additional year if all of the
shares we have registered are not yet sold within two years. With the filing of a registration statement for a
subsequent offering, we may also be able to extend this offering beyond three years until the follow-on registration
statement is declared effective. Pursuant to this prospectus, we are offering to the public all of the shares that we
have registered. Although we have registered a fixed dollar amount of our shares, we intend effectively to conduct a
continuous offering of an unlimited number of shares of our common stock over an unlimited time period by filing a
new registration statement prior to the end of the three-year period described in Rule 415. In certain states, the
registration of our offering may continue for only one year following the initial clearance by applicable state
authorities, after which we will renew the offering period for additional one-year periods (or longer, if permitted by
the laws of each particular state).
233
We reserve the right to terminate this offering at any time and to extend our offering term to the extent
permissible under applicable law.
Purchase Price
Shares will generally be sold at the prior month’s NAV per share of the class of share being purchased, plus any
applicable upfront selling commissions and dealer manager fees. Although the price you pay for shares of our
common stock will generally be based on the prior month’s NAV per share, the NAV per share of such stock as of
the date on which your purchase is settled may be significantly different. We may, but are not obligated to, offer
shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month’s
NAV per share (including by updating a previously disclosed offering price) or suspend our offering or our share
repurchase plan in cases where we believe there has been a material change (positive or negative) to our NAV per
share since the end of the prior month. See “Net Asset Value Calculation and Valuation Guidelines—Valuation of
Investments” for examples of valuation adjustment events that may cause a material change to our NAV per share.
Each class of shares may have a different NAV per share. See “Net Asset Value Calculation and Valuation
Guidelines” for more information about the calculation of NAV per share.
If you participate in our distribution reinvestment plan, the cash distributions attributable to the class of shares
that you purchase in our primary offering will be automatically invested in additional shares of the same class. The
per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the
transaction price for such shares at the time the distribution is payable, which will generally be equal to our prior
month’s NAV per share for that share class.
Underwriting Compensation
We entered into a Dealer Manager Agreement with the Dealer Manager, pursuant to which the Dealer Manager
agreed to, among other things, manage our relationships with third-party broker-dealers engaged by the Dealer
Manager to participate in the distribution of shares of our common stock, which we refer to as “participating broker-
dealers,” and financial advisors. The Dealer Manager also coordinates our marketing and distribution efforts with
participating broker-dealers and their registered representatives with respect to communications related to the terms
of the offering, our investment strategies, material aspects of our operations and subscription procedures. We will
not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of
our shares.
Summary
The following table shows the upfront selling commissions and dealer manager fees payable at the time you
subscribe for shares for Class T, Class S, Class D or Class I shares.
Maximum Upfront Selling Commissions as a % of Transaction Price | Maximum Upfront Dealer Manager Fees as a % of Transaction Price | ||
Class T shares ............................................................................................................ | up to 3.0% | 0.5% | |
Class S shares ............................................................................................................ | up to 3.5% | None | |
Class D shares ............................................................................................................ | up to 1.5% | None | |
Class I shares ............................................................................................................. | None | None |
234
The following table shows the stockholder servicing fees we will pay the Dealer Manager with respect to the
Class T, Class S, Class D and Class I shares on an annualized basis as a percentage of our NAV for such class. The
stockholder servicing fees will be paid monthly in arrears.
Stockholder Servicing Fee as a % of NAV | ||
Class T shares ....................................................................................................................................... | 0.85% | (1) |
Class S shares ........................................................................................................................................ | 0.85% | |
Class D shares ....................................................................................................................................... | 0.25% | |
Class I Shares ........................................................................................................................................ | None | |
__________________
(1)Consists of an advisor stockholder servicing fee of 0.65% per annum and a dealer stockholder servicing fee of 0.20% per annum.
Upfront Selling Commissions and Dealer Manager Fees
Class T, Class S and Class D Shares. Subject to any discounts described below, the Dealer Manager is entitled
to receive upfront selling commissions of up to 3.0% and upfront dealer manager fees of 0.5%, of the transaction
price of each Class T share sold in the primary offering; provided, however, that such amounts may vary at certain
participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. Subject to any
discounts described below, the Dealer Manager is entitled to receive upfront selling commissions of up to 3.5% of
the transaction price of each Class S share sold in the primary offering. Subject to any discounts described below,
the Dealer Manager is entitled to receive upfront selling commissions of up to 1.5% of the transaction price of each
Class D share sold in the primary offering. The Dealer Manager anticipates that all of the upfront selling
commissions and dealer manager fees will be retained by, or reallowed (paid) to, participating broker-dealers.
Investors who purchase $150,000 or more in Class T or Class S shares from the same broker-dealer, whether in
a single purchase or as the result of multiple purchases, may be eligible, depending on the policies of their
participating broker-dealer, for volume discounts on the upfront selling commissions. The Dealer Manager and any
participating broker-dealers that offer volume discounts to their clients and their registered representatives will be
responsible for implementing the volume discounts. The net offering proceeds we receive will not be affected by any
reduction of upfront selling commissions. Certain participating broker-dealers may elect not to offer volume
discounts to their clients.
The following table illustrates the various discount levels that may be offered for Class T or Class S shares
purchased in the primary offering.
Your Investment | Upfront Selling Commissions as a % of Transaction Price of Class T Share | Upfront Selling Commissions as a % of Transaction Price of Class S Share | ||
Up to $149,999.99 .................................................................................................... | 3.00% | 3.50% | ||
$150,000 to $499,999.99 .......................................................................................... | 2.50% | 3.00% | ||
$500,000 to $999,999.99 .......................................................................................... | 2.00% | 2.50% | ||
$1,000,000 and up .................................................................................................... | 1.50% | 2.00% |
If you qualify for a volume discount as the result of multiple purchases of our Class T or Class S shares, you
will receive the benefit of the applicable volume discount for the individual purchase which qualified you for the
volume discount, but you will not be entitled to the benefit for prior purchases. Additionally, once you qualify for a
volume discount, you will receive the benefit for subsequent purchases through the same participating broker-dealer.
For this purpose, if you purchase Class T or Class S shares issued and sold in this offering you will receive the
benefit of such Class T or Class S share purchases in connection with qualifying for volume discounts in our
subsequent offerings through the same participating broker-dealer.
235
For purposes of qualifying for a volume discount as the result of multiple purchases of shares, only an
individual or entity with the same social security number or taxpayer identification number, as applicable may
combine their purchases as a “single purchaser”; provided that, certain participating broker-dealers may also
combine purchases by an individual investor and his or her spouse living in the same household as a “single
purchaser” for purposes of determining the applicable volume discount.
Requests to combine purchase orders of Class T or Class S shares as a part of a combined order for the purpose
of qualifying for discounts or fee waivers must be made in writing by the broker-dealer, and any resulting reduction
in upfront selling commissions will be prorated among the separate subscribers. As with discounts provided to other
purchasers, the net proceeds we receive from the sale of shares will not be affected by discounts provided as a result
of a combined order.
Your ability to receive a discount or fee waiver based on combining orders or otherwise may depend on the
financial advisor or broker-dealer through which you purchase your Class T or Class S shares. An investor
qualifying for a discount will receive a higher percentage return on his or her investment than investors who do not
qualify for such discount. Accordingly, you should consult with your financial advisor about the ability to receive
such discounts or fee waivers before purchasing Class T or Class S shares.
Class I Shares. No upfront selling commissions are paid with respect to Class I shares sold in this offering.
Stockholder Servicing Fees—Class T, Class S and Class D Shares
Subject to FINRA limitations on underwriting compensation and certain other limitations described below, we
pay the Dealer Manager selling commissions over time as a stockholder servicing fee (i) with respect to our
outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class T shares,
consisting of an advisor stockholder servicing fee of 0.65% per annum, and a dealer stockholder servicing fee of
0.20% per annum, of the aggregate NAV for the Class T shares; however, with respect to Class T shares sold
through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder
servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the
NAV of such shares, (ii) with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate
NAV of our outstanding Class S shares and (iii) with respect to our outstanding Class D shares equal to 0.25% per
annum of the aggregate NAV of our outstanding Class D shares. We do not pay a stockholder servicing fee with
respect to our outstanding Class I shares.
The stockholder servicing fees will be paid monthly in arrears. The Dealer Manager will reallow (pay) the
stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder
services performed by such broker-dealers. The stockholder servicing fee is similar to a selling commission in that
the expenses borne by such participating broker-dealers with respect to such services may be different from (and
may be substantially less than) the amount of stockholder servicing fees charged. Stockholder servicing fees are paid
on Class T, Class S and Class D shares issued under our distribution reinvestment plan. Because the stockholder
servicing fees with respect to Class T shares, Class S shares and Class D shares are calculated based on the
aggregate NAV for all of the outstanding shares of each such class, it reduces the NAV with respect to all shares of
each such class, including shares issued under our distribution reinvestment plan.
We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D
share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the
transfer agent determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees
paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75%
(or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the
applicable dealer agreement between the Dealer Manager and a participating broker-dealer at the time such shares
were issued) of the sum of the gross proceeds from the sale of such shares. At the end of such month, any Class T
share, Class S share or Class D share held in such stockholder’s account will convert into a number of Class I shares
with an equivalent aggregate NAV as such shares. Although we cannot predict the length of time over which the
stockholder servicing fee will be paid due to potential changes in the NAV of our shares, this fee would be paid with
respect to a Class T share or Class S share over approximately 6.5 years from the date of purchase and with respect
236
to a Class D share held in a stockholder’s account over approximately 29.5 years from the date of purchase,
assuming a limit of 8.75% of gross proceeds, payment of the full upfront selling commissions and dealer manager
fees (as applicable), opting out of the distribution reinvestment plan and a constant NAV of $10.00 per share. Under
these assumptions, if a stockholder holds his or her shares for these time periods, this fee with respect to a Class T
share or Class S share would total approximately $0.56 and with respect to a Class D share would total
approximately $0.74.
Eligibility to receive the stockholder servicing fee is conditioned on a broker-dealer providing the following
ongoing services with respect to the Class T, Class S or Class D shares: assistance with recordkeeping, answering
investor inquiries regarding us, including regarding distribution payments and reinvestments, helping investors
understand their investments upon their request, and assistance with share repurchase requests. The stockholder
servicing fees are ongoing fees that are not paid at the time of purchase.
Other Compensation
We or the Adviser may also pay directly, or reimburse the Dealer Manager if the Dealer Manager pays on our
behalf, any organization and offering expenses (other than upfront selling commissions and stockholder servicing
fees).
Payments to Financial Intermediaries
The Adviser, out of its own resources and without additional cost to us or our stockholders, may provide
additional cash payments to certain broker-dealers, for the sale of shares and related services. These payments are in
addition to stockholder service fees paid by us, if any. Payments are generally made to broker-dealers that provide
stockholder servicing, marketing and related sales support or access to sales meetings, sales representatives and
management representatives of the broker-dealer. Payments may also be paid to intermediaries for inclusion of us on
a sales list, including a preferred or select sales list or in other sales programs. The level of such payments may be
substantial and may be different for different broker-dealers. These payments may create incentives on the part of a
broker-dealer to view us favorably compared with other investment products that do not make these payments, or
that make smaller payments.
Limitations on Underwriting Compensation
In addition to the conversion feature described above in “—Stockholder Servicing Fees—Class T, Class S and
Class D Shares,” we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class
D shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with
or into another entity in which we are not the surviving entity, or the sale or other disposition of all or substantially
all of our assets, in each case in a transaction in which our stockholders receive cash, securities listed on a national
exchange or a combination thereof, or (iii) the end of the month following the completion of this offering in which
we, with the assistance of the Dealer Manager, determine that, in the aggregate, underwriting compensation paid or
incurred from all sources in connection with this offering, determined pursuant to the rules and guidance of FINRA,
including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal
to 10% of the gross proceeds from our primary offering. If not already converted as described above in “—
Stockholder Servicing Fees—Class T, Class S and Class D Shares,” on the earliest of the foregoing, each Class T,
Class S and Class D share held in a stockholder’s account will convert into a number of Class I shares with an
equivalent aggregate NAV as such share. The Dealer Manager will monitor the aggregate amount of underwriting
compensation that we and the Adviser pay in connection with this offering in order to ensure we comply with the
underwriting compensation limits of applicable FINRA rules. FINRA rules and the NASAA REIT Guidelines also
limit our total organization and offering expenses (including upfront selling commissions, bona fide due diligence
expenses and other underwriting compensation) to 15% of our gross offering proceeds from this offering. After the
termination of the primary offering and again after termination of the offering under our distribution reinvestment
plan, the Adviser has agreed to reimburse us to the extent that organization and offering expenses that we incur
exceed 15% of our gross proceeds from the applicable offering.
In order to show the maximum amount of compensation that may be paid in connection with this offering, the
following table assumes that (1) we sell all of the shares offered by this prospectus, (2) all shares sold in the offering
237
are Class S shares, (3) no shares are reallocated between the primary offering and the distribution reinvestment plan,
(4) all Class S shares are sold with the highest possible upfront selling commissions and (5) NAV per share remains
$10.00. The following table also assumes that we will cease paying stockholder servicing fees with respect to any
Class S share held in a stockholder’s account at the end of the month in which the Dealer Manager in conjunction
with the transfer agent determines that total upfront selling commissions and stockholder servicing fees paid with
respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% of the
sum of the gross proceeds from the sale of such shares.
Maximum Estimated Underwriting Fees and Expenses At Maximum Primary Offering of $6,000,000,000 | |||
Upfront selling commissions and dealer manager fees ............................................. | $202,898,551 | 3.38% | |
Stockholder servicing fees (1) ..................................................................................... | $322,101,449 | 5.37% | |
Other costs and reimbursement of wholesaling activities(2) ...................................... | $10,400,000 | 0.17% | |
Other payments to financial intermediaries (3) ........................................................... | $500,000 | 0.01% | |
Legal expenses of the Dealer Manager ...................................................................... | $200,000 | 0.00% | |
Total ........................................................................................................................... | $536,100,000 | 8.94% | |
__________________
(1)We will pay the Dealer Manager a stockholder servicing fee with respect to our outstanding Class S shares equal to 0.85% per annum of the
aggregate NAV of our outstanding Class S shares. The numbers presented reflect that stockholder servicing fees are paid over a number of
years, and as a result, will cumulatively increase above 0.85% over time. The Dealer Manager will reallow (pay) the stockholder servicing
fee to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers.
(2)Other costs and reimbursement of wholesaling activities consists primarily of (a) actual costs incurred for fees to attend retail seminars
sponsored by participating broker-dealers and due diligence expenses not accompanied by a detailed and itemized invoice, (b) amounts used
to reimburse participating broker-dealers for the actual costs incurred by registered representatives for travel, meals and lodging in
connection with attending bona fide training and education meetings, (c) non-transaction based compensation paid to registered persons
associated with the Dealer Manager in connection with the wholesaling of our offering and (d) certain expense reimbursements for actual
costs incurred by registered representatives of the Dealer Manager in the performance of wholesaling activities. Except for the expenses in
(c) above, which will be paid by the Adviser or its affiliates without reimbursement by us, we will reimburse the Dealer Manager or its
affiliates for the expenses set forth above, in each case, to the extent permissible under applicable FINRA rules.
(3)The Adviser, out of its own resources and without additional cost to us or our stockholders, may provide additional cash payments to certain
broker-dealers for the sale of shares and related services.
.
Term of the Dealer Manager Agreement
Either party may terminate the Dealer Manager Agreement upon 60 days’ written notice to the other party or
immediately upon notice to the other party in the event such other party failed to comply with a material provision of
the Dealer Manager Agreement. Our obligations under the Dealer Manager Agreement to pay the stockholder
servicing fees with respect to the Class T, Class S and Class D shares distributed in this offering as described therein
shall survive termination of the agreement until such shares are no longer outstanding (including such shares that
have been converted into Class I shares, as described above in “—Stockholder Servicing Fees—Class T, Class S and
Class D Shares”).
Indemnification
To the extent permitted by law and our charter, we will indemnify the participating broker-dealers and the
Dealer Manager against some civil liabilities, including certain liabilities under the Securities Act, and liabilities
arising from an untrue statement of material fact contained in, or omission to state a material fact in, this prospectus
or the registration statement of which this prospectus is a part, blue sky applications or approved sales literature.
238
HOW TO SUBSCRIBE
You may buy or request that we repurchase shares of our common stock through your financial advisor, a
participating broker-dealer or other financial intermediary that has a selling agreement with the Dealer Manager.
Because an investment in our common stock involves many considerations, your financial advisor or other financial
intermediary may help you with this decision. Due to the illiquid nature of investments in real estate, our shares of
common stock are only suitable as a long-term investment. Because there is no public market for our shares,
stockholders may have difficulty selling their shares if we choose to repurchase only some, or even none, of the
shares that have been requested to be repurchased in any particular month, in our discretion, or if our board of
directors modifies or suspends the share repurchase plan.
Investors who meet the suitability standards described herein may purchase shares of our common stock. See
“Suitability Standards” in this prospectus. Investors seeking to purchase shares of our common stock must proceed
as follows:
•Read this entire prospectus and any appendices and supplements accompanying this prospectus.
•Complete the execution copy of the subscription agreement. A specimen copy of the subscription
agreement, including instructions for completing it, is included in this prospectus as Appendix B.
Subscription agreements may be executed manually or by electronic signature except where the use of such
electronic signature has not been approved. Should you execute the subscription agreement electronically,
your electronic signature, whether digital or encrypted, included in the subscription agreement is intended
to authenticate the subscription agreement and to have the same force and effect as a manual signature.
•Deliver a check, submit a wire transfer, instruct your broker to make payment from your brokerage account
or otherwise deliver funds for the full purchase price of the shares of our common stock being subscribed
for along with the completed subscription agreement to the participating broker-dealer. Checks should be
made payable, or wire transfers directed, to “Brookfield Real Estate Income Trust Inc.” For Class T, Class
S and Class D shares, after you have satisfied the applicable minimum purchase requirement of $2,500,
additional purchases must be in increments of $500. For Class I shares, after you have satisfied the
applicable minimum purchase requirement of $1,000,000, additional purchases must be in increments of
$500, unless such minimums are waived by the Dealer Manager. The minimum subsequent investment
does not apply to purchases made under our distribution reinvestment plan.
•By executing the subscription agreement and paying the total purchase price for the shares of our common
stock subscribed for, each investor attests that he or she meets the suitability standards as stated in the
subscription agreement and agrees to be bound by all of its terms. Certain participating broker-dealers may
require additional documentation.
A sale of the shares to a subscriber may not be completed until at least five business days after the subscriber
receives our final prospectus. Subscriptions to purchase our common stock may be made on an ongoing basis, but
investors may only purchase our common stock pursuant to accepted subscription orders as of the first calendar day
of each month (based on the prior month’s transaction price), and to be accepted, a subscription request must be
made with a completed and executed subscription agreement in good order and payment of the full purchase price of
our common stock being subscribed at least five business days prior to the first calendar day of the month (unless
waived by the Dealer Manager or otherwise agreed to between the Dealer Manager and the applicable participating
broker-dealer).
For example, if you wish to subscribe for shares of our common stock in October, your subscription request
must be received in good order at least five business days before November 1. Generally, the offering price will
equal the NAV per share of the applicable class as of the last calendar day of September, plus any applicable upfront
selling commissions and dealer manager fees. If accepted, your subscription will be effective on the first calendar
day of November.
Completed subscription requests will not be accepted by us before the later of (i) two business days before the
first calendar day of each month and (ii) three business days after we make the transaction price (including any
239
subsequent revised transaction price in the circumstances described below) publicly available by posting it on our
website at www.brookfieldREIT.com and filing a prospectus supplement with the SEC (or in certain cases after we
have delivered notice of such price directly to subscribers as discussed below). Subscribers are not committed to
purchase shares at the time their subscription orders are submitted and any subscription may be canceled at any time
before the time it has been accepted as described in the previous sentence. As a result, you will have a minimum of
three business days after the transaction price for that month has been disclosed to withdraw your request before you
are committed to purchase the shares. Generally, you will not be provided with direct notice of the transaction price
when it becomes available. Therefore, if you wish to know the transaction price prior to your subscription being
accepted you must check our website or our filings with the SEC prior to the time your subscription is accepted.
However, if the transaction price is not made available on or before the eighth business day before the first
calendar day of the month (which is six business days before the earliest date we may accept subscriptions), or a
previously disclosed transaction price for that month is changed, then we will provide notice of such transaction
price (and the first day on which we may accept subscriptions) directly to subscribing investors when such
transaction price is made available. In such cases, you will have at least three business days from delivery of such
notice before your subscription is accepted.
If for any reason we reject the subscription, or if the subscription request is canceled before it is accepted or
withdrawn as described below, we will return the subscription agreement and the related funds, without interest or
deduction, within ten business days after such rejection, cancellation or withdrawal.
Shares of our common stock purchased by a fiduciary or custodial account will be registered in the name of the
fiduciary account and not in the name of the beneficiary. If you place an order to buy shares and your payment is not
received and collected, your purchase may be canceled and you could be liable for any losses or fees we have
incurred.
You have the option of placing a transfer on death (“TOD”), designation on your shares purchased in this
offering. A TOD designation transfers the ownership of the shares to your designated beneficiary upon your death.
This designation may only be made by individuals, not entities, who are the sole or joint owners with right to
survivorship of the shares. If you would like to place a TOD designation on your shares, you must check the TOD
box on the subscription agreement and you must complete and return a TOD form, which you may obtain from your
financial advisor, in order to effect the designation.
Purchase Price
Shares will generally be sold at the prior month’s NAV per share of the class of share being purchased, plus any
applicable upfront selling commissions and dealer manager fees. Although the price you pay for shares of our
common stock will generally be based on the prior month’s NAV per share, the NAV per share of such stock for the
month in which you make your purchase may be significantly different. We may, but are not obligated to, offer
shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month’s
NAV per share (including by updating a previously disclosed offering price) or suspend our offering in cases where
we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior
month. See “Net Asset Value Calculation and Valuation Guidelines—Valuation of Investments” for examples of
valuation adjustment events that may cause a material change to our NAV per share. Each class of shares may have
a different NAV per share because stockholder servicing fees are charged differently with respect to each class. See
“Net Asset Value Calculation and Valuation Guidelines” for more information about the calculation of NAV per
share.
If you participate in our distribution reinvestment plan, the cash distributions attributable to the class of shares
that you purchase in our primary offering will be automatically invested in additional shares of the same class.
Shares are offered pursuant to our distribution reinvestment plan at the transaction price for such shares at the
time the distribution is payable, which will generally be equal to our prior month’s NAV per share for that share
class.
240
We will generally adhere to the following procedures relating to purchases of shares of our common stock in
this continuous offering:
•On each business day, our transfer agent will collect purchase orders. Notwithstanding the submission of an
initial purchase order, we can reject purchase orders for any reason, even if a prospective investor meets the
minimum suitability requirements outlined in our prospectus. Investors may only purchase our common
stock pursuant to accepted subscription orders as of the first calendar day of each month (based on the prior
month’s transaction price), and to be accepted, a subscription request must be made with a completed and
executed subscription agreement in good order and payment of the full purchase price of our common stock
being subscribed at least five business days prior to the first calendar day of the month. If a purchase order
is received less than five business days prior to the first calendar day of the month, unless waived by the
Dealer Manager, the purchase order will be executed in the next month’s closing at the transaction price
applicable to that month, plus any applicable upfront selling commissions and dealer manager fees. As a
result of this process, the price per share at which your order is executed may be different than the price per
share for the month in which you submitted your purchase order.
•Generally, within 15 days after the last calendar day of each month, we will determine our NAV per share
for each share class as of the last calendar day of the prior month, which will generally be the transaction
price for the then-current month for such share class.
•Completed subscription requests will not be accepted by us before the later of (i) two business days before
the first calendar day of each month and (ii) three business days after we make the transaction price
(including any subsequent revised transaction price in the circumstances described below) publicly
available by posting it on our website and filing a prospectus supplement with the SEC.
•Subscribers are not committed to purchase shares at the time their subscription orders are submitted and
any subscription may be canceled at any time before the time it has been accepted as described in the
previous sentence. You may withdraw your purchase request by notifying the transfer agent, through your
financial intermediary or directly on our toll-free, automated telephone line, (833) 625-7348.
•You will receive a confirmation statement of each new transaction in your account as soon as practicable
but generally not later than seven business days after the stockholder transactions are settled. The
confirmation statement will include information on how to obtain information we have filed with the SEC
and made publicly available on our website, www.brookfieldREIT.com, including supplements to the
prospectus.
Our transaction price will generally be based on our prior month’s NAV. Our NAV may vary significantly from
one month to the next. Through our website at www.brookfieldREIT.com and prospectus supplement filings, you
will have information about the transaction price and NAV per share. We may set a transaction price that we believe
reflects the NAV per share of our stock more appropriately than the prior month’s NAV per share (including by
updating a previously disclosed offering price) or suspend our offering in cases where we believe there has been a
material change (positive or negative) to our NAV per share since the end of the prior month. See “Net Asset Value
Calculation and Valuation Guidelines—Valuation of Investments” for examples of valuation adjustment events that
may cause a material change to our NAV per share. If the transaction price is not made available on or before the
eighth business day before the first calendar day of the month (which is six business days before the earliest date we
may accept subscriptions), or a previously disclosed transaction price for that month is changed, then we will
provide notice of such transaction price (and the first day on which we may accept subscriptions) directly to
subscribing investors when such transaction price is made available.
In contrast to securities traded on an exchange or over the counter, where the price often fluctuates as a result of,
among other things, the supply and demand of securities in the trading market, our NAV will be calculated once
monthly using our valuation methodology, and the price at which we sell new shares and repurchase outstanding
shares will not change depending on the level of demand by investors or the volume of requests for repurchases.
241
SHARE REPURCHASES
General
While you should view your investment as long-term with limited liquidity, 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.
Due to the illiquid nature of investments in real estate, we may not have sufficient liquid resources to fund
repurchase requests. In addition, we have established limitations on the amount of funds we may use for repurchases
during any calendar month and quarter. See “—Repurchase Limitations” below.
You may request that we repurchase shares of our common stock through your financial advisor or directly with
our transfer agent. The procedures relating to the repurchase of shares of our common stock are as follows:
•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. To have your shares
repurchased, your repurchase request and required documentation must be received in good order by 4:00
p.m. (Eastern time) on the second to last business day of the applicable month. Settlements of share
repurchases will be made within three business days of the Repurchase Date; provided that settlements for
non-U.S. accounts may take up to five business days. Repurchase requests received and processed by our
transfer agent will be effected at a repurchase price equal to the transaction price on the applicable
Repurchase Date (which will generally be equal to our prior month’s NAV per share), subject to any Early
Repurchase Deduction.
•A stockholder may withdraw his or her repurchase request by notifying the transfer agent, directly or
through the stockholder’s financial intermediary, on our toll-free, automated telephone line, (833)
625-7348. The line is open on each business day between the hours of 9:00 a.m. and 6:00 p.m. (Eastern
time). Repurchase requests must be cancelled before 4:00 p.m. (Eastern time) on the last business day of
the applicable month.
•If a repurchase request is received after 4:00 p.m. (Eastern time) on the second to last business day of the
applicable month, the purchase order will be executed, if at all, on the next month’s Repurchase Date at the
transaction price applicable to that month (subject to any Early Repurchase Deduction), unless such request
is withdrawn prior to the repurchase. Repurchase requests received and processed by our transfer agent on a
business day, but after the close of business on that day or on a day that is not a business day, will be
deemed received on the next business day.
•Repurchase requests may be made by mail or by contacting your financial intermediary, both subject to
certain conditions described in this prospectus and our share repurchase plan. If making a repurchase
request by contacting your financial intermediary, your financial intermediary may require you to provide
certain documentation or information. If making a repurchase request by mail to the transfer agent, you
must complete and sign a repurchase authorization form, which can be found in our share repurchase plan.
Written requests should be sent to the transfer agent at the following address:
SS&C GIDS, Inc.
P.O. Box 219663
Kansas City, MO 64121
Overnight Address:
SS&C GIDS, Inc.
801 Pennsylvania Ave
Suite 219663
Kansas City, MO 64105-1407
Toll Free Number: (833) 625-7348
242
Corporate investors and other non-individual entities must have an appropriate certification on file authorizing
repurchases. A signature guarantee may be required.
•For processed repurchases, stockholders may request that repurchase proceeds are to be paid by mailed
check provided that the amount is less than $100,000 and the check is mailed to an address on file with the
transfer agent for at least 30 days.
•Processed repurchases of more than $100,000 will be paid only via wire transfer. For this reason,
stockholders who own more than $100,000 of our common stock must provide wiring instructions for their
brokerage account or designated U.S. bank account. Stockholders who own less than $100,000 of our
common stock may also receive repurchase proceeds via wire transfer, provided the payment amount is at
least $2,500. For all repurchases paid via wire transfer, the funds will be wired to the account on file with
the transfer agent or, upon instruction, to another financial institution provided that the stockholder has
made the necessary funds transfer arrangements. The customer service representative can provide detailed
instructions on establishing funding arrangements and designating your bank or brokerage account on file.
Funds will be wired only to U.S. financial institutions (ACH network members).
•A medallion signature guarantee will be required in certain circumstances. The medallion signature process
protects stockholders by verifying the authenticity of a signature and limiting unauthorized fraudulent
transactions. A medallion signature guarantee may be obtained from a domestic bank or trust company,
broker-dealer, clearing agency, savings association or other financial institution which participates in a
medallion program recognized by the Securities Transfer Association. The three recognized medallion
programs are the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program
and the New York Stock Exchange, Inc. Medallion Signature Program. Signature guarantees from financial
institutions which are not participating in any of these medallion programs will not be accepted. A notary
public cannot provide signature guarantees. We reserve the right to amend, waive or discontinue this policy
at any time and establish other criteria for verifying the authenticity of any repurchase or transaction
request. We may require a medallion signature guarantee if, among other reasons: (1) the amount of the
repurchase request is over $500,000; (2) you wish to have repurchase proceeds transferred by wire to an
account other than the designated bank or brokerage account on file for at least 30 days or sent to an
address other than your address of record for the past 30 days; or (3) our transfer agent cannot confirm your
identity or suspects fraudulent activity.
•If a stockholder has made multiple purchases of shares of our common stock, any repurchase request will
be processed on a first in/first out basis unless otherwise requested in the repurchase request.
Minimum Account Repurchases
In the event that any stockholder fails to maintain the minimum balance of $500 of shares of our common stock,
we may repurchase all of the shares held by that stockholder at the repurchase price in effect on the date we
determine that the stockholder has failed to meet the minimum balance, less any Early Repurchase Deduction.
Minimum account repurchases will apply even in the event that the failure to meet the minimum balance is caused
solely by a decline in our NAV. Minimum account repurchases are subject to Early Repurchase Deduction.
Sources of Funds for Repurchases
We may fund repurchase requests from sources other than cash flow from operations, and we have no limits on
the amounts we may pay from such sources.
In an effort to have adequate cash available to support our share repurchase plan, we may reserve borrowing
capacity under the line of credit we obtained pursuant to the Affiliate Line of Credit. We could then elect to borrow
against this line of credit in part to repurchase shares presented for repurchase during periods when we do not have
sufficient proceeds from operating cash flows or the sale of shares to fund all repurchase requests. We expect that
our line of credit under the Affiliate Line of Credit will afford us borrowing availability to fund repurchases. As our
assets increase, however, it may not be commercially feasible to repurchases under such line of credit, and we may
243
not be able to secure another line of credit of sufficient size. Moreover, actual availability may be reduced at any
given time if we use borrowings under the line of credit to fund repurchases or for other corporate purposes.
Repurchase Limitations
We may repurchase fewer shares than have been requested in any particular month to be repurchased under our
share repurchase plan, or none at all, in our discretion at any time. In addition, the total amount of aggregate
repurchases of shares of our common stock will be limited to no more than 2% of our aggregate NAV attributable to
our stockholders per month (measured using the aggregate NAV attributable to our stockholders 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 attributable to our stockholders as of the end of the
immediately preceding quarter) (the “2% and 5% limits”).
With respect to the 2% and 5% limits described above, (i) provided that the share repurchase plan has been
operating and not suspended for the first month of a given quarter and that all properly submitted repurchase
requests were satisfied, any unused capacity for that month will carry over to the second month, and (ii) provided
that the share repurchase plan has been operating and not suspended for the first two months of a given quarter and
that all properly submitted repurchase requests were satisfied, any unused capacity for those two months will carry
over to the third month. In no event will such carry-over capacity permit the repurchase of shares with aggregate
value (based on the repurchase price per share for the month the repurchase is effected) in excess of 5% of the
aggregate NAV attributable to our stockholders as of the last calendar day of the previous calendar quarter (provided
that for these purposes repurchases may be measured on a net basis as described in the paragraph below).
We measure the foregoing repurchase limitations based on net repurchases during a month or quarter, as
applicable, and as described below. The term “net repurchases” means, during the applicable period, the excess of
our capital outflows over our capital inflows. The term “capital outflows” means share repurchases under our share
repurchase plan in a given period. The term “capital inflows” means proceeds from share subscriptions received in a
given period that are accepted as of the first calendar day of the next month, plus purchases pursuant to our
distribution reinvestment plan. Thus, for any given calendar quarter, the maximum amount of repurchases during
that quarter will be equal to (1) 5% of the aggregate NAV attributable to our stockholders as of the last calendar day
of the previous calendar quarter, plus (2) capital inflows during such calendar quarter. The same would apply for a
given month, except that repurchases in a month would be subject to the 2% limit described above (subject to
potential carry-over capacity), and netting would be measured on a monthly basis.
With respect to future periods, our board of directors may choose whether the limitations will be applied to
“gross repurchases” rather than to net repurchases. If repurchases for a given month or quarter are measured on a
gross basis rather than on a net basis, the repurchase limitations would limit the amount of shares repurchased in a
given month or quarter without regard to any capital inflows for that month or quarter. In order for our board of
directors to change the application of the limitations from net repurchases to gross repurchases or vice versa, we will
provide notice to stockholders in a prospectus supplement or special or periodic report filed by us, as well as in a
press release or on our website, at least 10 days before the first business day of the quarter for which the new test
will apply. The determination to measure repurchases on a gross basis or net basis will only be made for an entire
quarter, and not particular months within a quarter.
If the transaction price for the applicable month is not made available by the tenth business day prior to the last
business day of the month (or is changed after such date), then no repurchase requests will be accepted for such
month and stockholders who wish to have their shares repurchased the following month must resubmit their
repurchase requests.
Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our
operations or risk having an adverse impact on us as a whole, or should we otherwise determine that investing our
liquid assets in real properties or other illiquid investments rather than repurchasing our shares is in the best interests
of us as a whole, we may choose to repurchase fewer shares in any particular month than have been requested to be
repurchased, or none at all. Furthermore, our board of directors may agree for the benefit of one or more of our
stockholders to restrict repurchases in a manner that is intended to permit us to be treated as a “domestically
244
controlled” REIT within the meaning of Section 897(h)(4)(B) of the Code. In addition, 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 submitted for repurchase during such month will be repurchased on a pro rata basis based on the
number of shares requested to be repurchased in such month after we have repurchased all shares for which
repurchase has been requested due to death, disability or divorce and other limited exceptions. 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.
Material modifications, including any amendment to the 2% monthly or 5% quarterly limitations on repurchases
(the “Standard Repurchase Limits”), to and suspensions of the share repurchase plan will be promptly disclosed to
stockholders in a prospectus supplement (or post-effective amendment if required by the Securities Act) or special or
periodic report filed by us. Material modifications will also be disclosed on our website. In addition, we may
determine to suspend the share repurchase plan due to regulatory changes, changes in law or if we become aware of
undisclosed material information that we believe should be publicly disclosed before shares are repurchased. Once
the share repurchase plan is suspended, our board of directors must affirmatively authorize the recommencement of
the plan before stockholder requests will be considered again. Upon a suspension of our share repurchase plan, our
board of directors will consider at least quarterly whether the continued suspension of our share repurchase plan
remains in our best interest and the best interest of our stockholders. However, our board of directors is not required
to authorize the recommencement of our share repurchase plan within any specified period of time. If our board of
directors were to modify the share repurchase plan to lower the monthly and quarterly limitations on repurchases
below the Standard Repurchase Limits or if we were to choose to repurchase fewer shares than were requested to be
repurchased below the Standard Repurchase Limits, our board of directors would consider at least quarterly whether
to increase share repurchases to the Standard Repurchase Limits. Our board of directors may also determine to
terminate our share repurchase plan if required by applicable law or in connection with a transaction in which our
stockholders receive liquidity for their shares of our common stock, such as a sale or merger of our company or
listing of our shares on a national securities exchange.
Early Repurchase Deduction
There is no minimum holding period for shares of our common stock and stockholders can request that we
repurchase their shares at any time. However, subject to limited exceptions, shares that have not been outstanding
for at least one year will be repurchased at 98% of the transaction price. This Early Repurchase Deduction will also
generally apply to minimum account repurchases. The one-year holding period for the early repurchase deduction
payable with respect to shares that have not been outstanding for at least one year will be measured as of the
subscription closing date immediately following the prospective 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 fee or to shares issued to the Brookfield Investor in exchange for Class
E units of the Operating Partnership units issued to Brookfield in connection with the contribution of the Brookfield
Portfolio.
The Early Repurchase Deduction will inure indirectly to the benefit of our remaining stockholders and is
intended to offset the trading costs, market impact and other costs associated with short-term trading in our common
stock. We may, from time to time, waive the Early Repurchase Deduction in the following circumstances:
•repurchases resulting from death, qualifying disability or divorce; or
•in the event that a stockholder’s shares are repurchased because the stockholder has failed to maintain the
$500 minimum account balance.
As set forth above, we may waive the Early Repurchase Deduction in respect of repurchase of shares resulting
from the death of a stockholder who is a natural person, subject to the conditions and limitations described above,
including shares held by such stockholder through a revocable grantor trust or an IRA or other retirement or profit-
sharing plan, after receiving written notice from the estate of the stockholder, the recipient of the shares through
245
bequest or inheritance, or, in the case of a revocable grantor trust, the trustee of such trust, who shall have the sole
ability to request repurchase on behalf of the trust. We must receive the written repurchase request within 12 months
after the death of the stockholder in order for the requesting party to rely on any of the special treatment described
above that may be afforded in the event of the death of a stockholder. Such a written request must be accompanied
by a certified copy of the official death certificate of the stockholder. If spouses are joint registered holders of
shares, the request to have the shares repurchased may be made if either of the registered holders dies. If the
stockholder is not a natural person, such as certain trusts or a partnership, corporation or other similar entity, the
right of repurchase upon death does not apply.
Furthermore, as set forth above, we may waive the Early Repurchase Deduction in respect of repurchase of
shares held by a stockholder who is a natural person who is deemed to have a qualifying disability (as such term is
defined in Section 72(m)(7) of the Code), subject to the conditions and limitations described above, including shares
held by such stockholder through a revocable grantor trust, or an IRA or other retirement or profit-sharing plan, after
receiving written notice from such stockholder, provided that the condition causing the qualifying disability was not
pre-existing on the date that the stockholder became a stockholder. We must receive the written repurchase request
within 12 months of the initial determination of the stockholder’s disability in order for the stockholder to rely on
any of the waivers described above that may be granted in the event of the disability of a stockholder. If spouses are
joint registered holders of shares, the request to have the shares repurchased may be made if either of the registered
holders acquires a qualifying disability. If the stockholder is not a natural person, such as certain trusts or a
partnership, corporation or other similar entity, the right of repurchase upon disability does not apply.
In addition, as set forth above, we may waive the Early Repurchase Deduction in respect of repurchase of shares
resulting from the divorce of a stockholder who is a natural person, subject to the conditions and limitations
described above, including shares held by such stockholder through a revocable grantor trust or an IRA or other
retirement or profit-sharing plan, after receiving written notice from the stockholder of the divorce and the
stockholder’s instructions to effect a transfer of the shares (through the repurchase of the shares by us and the
subsequent purchase by the stockholder) to a different account held by the stockholder (including trust or an
individual retirement account or other retirement or profit-sharing plan). We must receive the written repurchase
request within 12 months after the divorce of the stockholder in order for the requesting party to rely on any of the
special treatment described above that may be afforded in the event of the divorce of a stockholder. If the
stockholder is not a natural person, such as certain trusts or a partnership, corporation or other similar entity, the
right of repurchase upon divorce does not apply.
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.
Items of Note
When you make a request to have shares repurchased, you should note the following:
•if you are requesting that some but not all of your shares be repurchased, keep your balance above $500 to
avoid minimum account repurchase, if applicable;
•you will not receive interest on amounts represented by uncashed repurchase checks;
•under applicable anti-money laundering regulations and other federal regulations, repurchase requests may
be suspended, restricted or canceled and the proceeds may be withheld; and
•all shares of our common stock requested to be repurchased must be beneficially owned by the stockholder
of record making the request or his or her estate, heir or beneficiary, or the party requesting the repurchase
must be authorized to do so by the stockholder of record of the shares or his or her estate, heir or
beneficiary, and such shares of common stock must be fully transferable and not subject to any liens or
encumbrances. In certain cases, we may ask the requesting party to provide evidence satisfactory to us that
246
the shares requested for repurchase are not subject to any liens or encumbrances. If we determine that a lien
exists against the shares, we will not be obligated to repurchase any shares subject to the lien.
IRS regulations require us to determine and disclose on Form 1099-B the adjusted cost basis for shares of our
stock sold or repurchased. Although there are several available methods for determining the adjusted cost basis,
unless you elect otherwise, which you may do by checking the appropriate box on the subscription agreement or
calling our customer service number at (833) 625-7348, we will utilize the first-in-first-out method.
Frequent Trading and Other Policies
We may reject for any reason, or cancel as permitted or required by law, any purchase orders for shares of our
common stock. For example, we may reject any purchase orders from market timers or investors that, in our opinion,
may be disruptive to our operations. Frequent purchases and sales of our shares can harm stockholders in various
ways, including reducing the returns to long-term stockholders by increasing our costs, disrupting portfolio
management strategies and diluting the value of the shares of long-term stockholders.
In general, stockholders may request that we repurchase their shares of our common stock once every 30 days.
However, we prohibit frequent trading. We define frequent trading as follows:
•any stockholder who requests that we repurchase its shares of our common stock within 30 calendar days of
the purchase of such shares;
•transactions deemed harmful or excessive by us (including, but not limited to, patterns of purchases and
repurchases), in our sole discretion; and
•transactions initiated by financial advisors, among multiple stockholder accounts, that in the aggregate are
deemed harmful or excessive.
The following are excluded when determining whether transactions are excessive:
•purchases and requests for repurchase of our shares in the amount of $2,500 or less;
•purchases or repurchases initiated by us; and
•transactions subject to the trading policy of an intermediary that we deem materially similar to our policy.
At our discretion, upon the first violation of the policy in a calendar year, purchase and repurchase privileges
may be suspended for 90 days. Upon a second violation in a calendar year, purchase and repurchase privileges may
be suspended for 180 days. On the next business day following the end of the 90 or 180 day suspension, any
transaction restrictions placed on a stockholder may be removed.
Mail and Telephone Instructions
We and our transfer agent will not be responsible for the authenticity of mail or phone instructions or losses, if
any, resulting from unauthorized stockholder transactions if they reasonably believe that such instructions were
genuine. We and our transfer agent have established reasonable procedures to confirm that instructions are genuine
including requiring the stockholder to provide certain specific identifying information on file and sending written
confirmation to stockholders of record no later than five days following execution of the instruction. Stockholders,
or their designated custodian or fiduciary, should carefully review such correspondence to ensure that the
instructions were properly acted upon. If any discrepancies are noted, the stockholder, or its agent, should contact
his, her or its financial advisor as well as our transfer agent in a timely manner, but in no event more than 60 days
from receipt of such correspondence. Failure by the stockholder or its agent to notify such entities in a timely
manner will relieve us, our transfer agent and the financial advisor of any liability with respect to the discrepancy.
247
SUPPLEMENTAL SALES MATERIAL
In addition to this prospectus, we will use sales material in connection with the offering of shares, although only
when accompanied by or preceded by the delivery of this prospectus. Some or all of the sales material may not be
available in certain jurisdictions. This sales material may include information relating to this offering, the past
performance of the Adviser and its affiliates, property brochures and articles and publications concerning real estate.
In addition, the sales material may contain quotes from various publications without obtaining the consent of the
author or the publication for use of the quoted material in the sales material.
We are offering shares only by means of this prospectus. Although the information contained in the sales
material will not conflict with any of the information contained in this prospectus, the sales material does not purport
to be complete and should not be considered as a part of this prospectus or the registration statement of which this
prospectus is a part, or as incorporated by reference in this prospectus or the registration statement, or as forming the
basis of the offering of the shares of our common stock.
REPORTS TO STOCKHOLDERS
We will cause to be prepared and mailed or delivered to each stockholder, as of a record date after the end of the
fiscal year, and to each holder of our other publicly held securities, within 120 days after the end of the fiscal year to
which it relates, an annual report for each fiscal year. The annual reports will contain the following:
•financial statements that are prepared in accordance with GAAP and are audited by our independent
registered public accounting firm;
•the ratio of the costs of raising capital during the year to the capital raised;
•the aggregate amount of the management fee and any other fees paid to the Adviser and any affiliate of the
Adviser by us or third parties doing business with us during the year;
•our Total Operating Expenses for the year, stated as a percentage of our Average Invested Assets and as a
percentage of our Net Income;
•a report from the independent directors that our policies are in the best interest of our stockholders and the
basis for such determination; and
•a separate report containing full disclosure of all material terms, factors and circumstances surrounding any
and all transactions involving us and the Adviser, a director or any affiliate thereof during the year, which
report the independent directors are specifically charged with a duty to examine and to comment on
regarding the fairness of the transactions.
Alternatively, such information may be provided in a proxy statement delivered with the annual report. We will
make available to you on our website, www.brookfieldREIT.com, or, at our discretion, via email, our quarterly and
annual reports, proxy statements and other reports and documents concerning your investment. To the extent
required by law or regulation, or, in our discretion, we may also make certain of this information available to you via
U.S. mail or other courier. You may always receive a paper copy upon request.
Our tax accountants will prepare our federal tax return (and any applicable state income tax returns). Generally
we will provide appropriate tax information to our stockholders within 31 days following the end of each fiscal year.
Our fiscal year is the calendar year.
248
LEGAL MATTERS
The validity of the shares of our common stock being offered hereby has been passed upon for us by Venable
LLP, Baltimore, Maryland. Alston & Bird LLP has reviewed the statements relating to certain U.S. federal income
tax matters that are likely to be material to U.S. holders and non-U.S. holders of our common stock under the
caption “Material U.S. Federal Income Tax Considerations” and has passed upon the accuracy of those statements.
EXPERTS
The financial statements of Brookfield Real Estate Income Trust Inc. as of December 31, 2025 and 2024, and
for each of the three years in the period ended December 31, 2025, incorporated by reference in this Prospectus by
reference to Brookfield Real Estate Income Trust Inc.’s annual report on Form 10-K for the year ended December
31, 2025, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated
in their report. Such financial statements are incorporated by reference in reliance upon the report of such firm given
their authority as experts in accounting and auditing.
The statements included in this prospectus under the captions “Net Asset Value Calculation and Valuation
Guidelines—Our Independent Valuation Advisor” and “Net Asset Value Calculation and Valuation Guidelines—
Valuation of Investments,” relating to the role of our independent valuation advisor, have been reviewed by Altus
Group U.S. Inc., an independent valuation firm, and are included in this prospectus given the authority of such firm
as experts in property valuations and appraisals. Altus Group does not admit that it is in the category of persons
whose consent is required under Section 7 of the Securities Act.
PRIVACY NOTICE
To help you understand how we protect your personal information, we have included our Privacy Policy as
Appendix C to this prospectus. This appendix describes our current privacy policy and practices. Should you decide
to establish or continue a stockholder relationship with us, we will advise you of our policy and practices as required
by law.
249
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
We have filed a registration statement on Form S-11 with the SEC with respect to the shares of our common
stock to be issued in this offering. This prospectus is a part of that registration statement and, as permitted by SEC
rules, does not include all of the information you can find in the registration statement or the exhibits to the
registration statement. For additional information relating to us, we refer you to the registration statement and the
exhibits to the registration statement. Statements contained in this prospectus as to the contents of any contract or
document are necessarily summaries of such contract or document and in each instance, if we have filed the contract
or document as an exhibit to the registration statement, we refer you to the copy of the contract or document filed as
an exhibit to the registration statement.
The SEC allows us to “incorporate by reference” certain information we have filed with the SEC, which means
that we can disclose important information to you by referring you to those filed documents. The information
incorporated by reference is considered to be part of this prospectus. The following documents, which have been
filed with the SEC, are incorporated by reference except for any document or portion thereof deemed to be
“furnished” and not filed in accordance with SEC rules:
•our Annual Report on Form 10-K for the year ended December 31, 2025 filed on March 17, 2026;
•our Current Reports on Form 8-K filed on January 26, 2026, February 24, 2026 and March 26, 2026; and
•our definitive Proxy Statement on Schedule 14A filed on April 3, 2026.
We will file annual, quarterly and special reports, proxy statements and other information with the SEC. The
registration statement is, and any of these future filings with the SEC will be, available to the public over the internet
at the SEC’s website at www.sec.gov.
Website Disclosure
Our website at www.brookfieldREIT.com contains additional information about our business, but the contents of
the website are not incorporated by reference in or otherwise a part of this prospectus. From time to time, we may
use our website as a distribution channel for material company information. Financial and other important
information regarding us will be routinely accessible thorough and posted on our website at
www.brookfieldREIT.com.
A-1
APPENDIX A: DISTRIBUTION REINVESTMENT PLAN
This Distribution Reinvestment Plan (the “Plan”) is adopted by Brookfield Real Estate Income Trust Inc. (the
“Company”) pursuant to its Articles of Amendment and Restatement (as amended, restated or otherwise modified
from time to time, the “Charter”). Unless otherwise defined herein, capitalized terms shall have the same meaning as
set forth in the Charter.
1. Distribution Reinvestment. As agent for the stockholders (the “Stockholders”) of the Company who
purchase shares of the Company’s common stock (collectively, the “Shares”) pursuant to (i) the Company’s
continuous public offering (the “Public Offering”), (ii) any unregistered private offering of Shares (a “Private
Offering”) pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended (the
“Securities Act”), or (iii) any future public offering of Shares by the Company (a “Future Public Offering”), and
who do not opt out of participating in the Plan or who affirmatively elect to participate in the Plan, as applicable (as
set forth in Section 3 below) (the “Participants”), the Company will apply all dividends and other distributions
declared and paid in respect of the Shares held by each Participant and attributable to the class of Shares held by
such Participant (the “Distributions”), including Distributions paid with respect to any full or fractional Shares
acquired under the Plan, to the purchase of additional Shares of the same class for such Participant.
2. Effective Date. The effective date of this Plan shall be June 1, 2025.
3. Procedure for Participation. Any Stockholder who has received a prospectus (the “Prospectus”), as
contained in the Company’s registration statement filed with the Securities and Exchange Commission (the “SEC”)
with respect to the Public Offering or any Future Public Offering, as applicable, will automatically become a
Participant unless they elect not to become a Participant by noting such election on their subscription agreement;
provided, however that any Stockholder who (i) resides in a state or jurisdiction that requires affirmative enrollment
in the Plan (as disclosed in the Prospectus) or (ii) is a client of a participating broker-dealer that requires affirmative
enrollment in the Plan will only become a Participant if they elect to become a Participant by noting such election on
their subscription agreement. Any Stockholder who has received a copy of the private placement memorandum with
respect to any Private Offering will become a Participant by completing and executing a subscription agreement,
enrollment form or any other appropriate form as may be provided by the Company, the Company’s transfer agent,
the dealer manager for the applicable Private Offering or any soliciting dealer or registered investment advisor
participating in the distribution of Shares for such Private Offering. If any Stockholder initially elects not to be a
Participant, they may later become a Participant by subsequently completing and executing an enrollment form or
any appropriate authorization form as may be available from the Company, the Company’s transfer agent, the dealer
manager for the Public Offering or any soliciting dealer participating in the distribution of Shares for the Public
Offering. Participation in the Plan will begin with the next Distribution payable after acceptance of a Participant’s
subscription, enrollment or authorization. Shares will be purchased under the Plan on the date that Distributions are
paid by the Company.
4. Suitability. Each Participant is requested to promptly notify the Company in writing if the Participant
experiences a material change in his or her financial condition, including the failure to meet the income, net worth,
investment concentration, status as an “accredited investor” as defined by Regulation D of the Securities Act (solely
with respect to purchasers in a Private Offering), or other investment suitability standards imposed by such
Participant’s state of residence or the Company and set forth in the Company’s most recent Prospectus or the private
placement memorandum with respect to a Private Offering, as applicable. For the avoidance of doubt, this request in
no way shifts to the Participant the responsibility of the Company’s sponsor, or any other person selling Shares on
behalf of the Company to the Participant, to make every reasonable effort to determine that the purchase of Shares
by stockholders who purchased Shares in the Public Offering is a suitable and appropriate investment based on
information provided by such Participant.
5. Purchase of Shares.
1.Participants will acquire Shares from the Company (including Shares purchased by the Company for the
Plan in a secondary market (if available) or on a stock exchange (if listed)) under the Plan at a price equal to the
most recently disclosed transaction price per Share applicable to the class of Shares held by the Participant on the
A-2
date that the Distribution is payable (calculated as of the most recent month end). No upfront selling commissions
will be payable with respect to Shares purchased pursuant to the Plan, but such shares may be subject to ongoing
stockholder servicing fees. Participants may purchase fractional Shares so that 100% of the Distributions will be
used to acquire Shares. However, a Participant will not be able to acquire Shares and such Participant’s participation
in the Plan will be terminated to the extent that a reinvestment of such Participant’s Distributions in Shares would
cause the percentage ownership or other limitations contained in the Charter to be violated.
2.Shares to be distributed by the Company in connection with the Plan may (but are not required to) be
supplied from: (i) the Shares registered with the SEC in connection with the Public Offering, (ii) Class E shares
issued by the Company pursuant to an applicable exemption from registration under the Securities Act, or (iii)
Shares to be registered with the SEC in a Future Public Offering for use in the Plan.
6. Taxes. THE REINVESTMENT OF DISTRIBUTIONS DOES NOT RELIEVE A PARTICIPANT OF ANY
INCOME TAX LIABILITY THAT MAY BE PAYABLE IN RESPECT OF THE DISTRIBUTIONS.
INFORMATION REGARDING POTENTIAL TAX INCOME LIABILITY OF PARTICIPANTS MAY BE
FOUND IN THE PUBLIC FILINGS MADE BY THE COMPANY WITH THE SEC OR THE PRIVATE
PLACEMENT MEMORANDUM WITH RESPECT TO A PRIVATE OFFERING, AS APPLICABLE.
7. Share Certificates. The ownership of the Shares purchased through the Plan will be in book-entry form
unless and until the Company issues certificates for its outstanding Shares.
8. Reports. On a quarterly basis, the Company shall provide each Participant a statement of account describing,
as to such Participant: (i) the Distributions reinvested during the quarter; (ii) the number and class of Shares
purchased pursuant to the Plan during the quarter; (iii) the per share purchase price for such Shares; and (iv) the total
number of Shares purchased on behalf of the Participant under the Plan. On an annual basis, tax information with
respect to income earned on Shares under the Plan for the calendar year will be provided to each applicable
Participant.
9. Termination by Participant. A Participant may terminate participation in the Plan at any time, without
penalty, by delivering 10 days’ prior written notice to the Company. This notice must be received by the Company
prior to the last day of a month in order for a Participant’s termination to be effective for such month (i.e., a timely
termination notice will be effective as of the last day of a month in which it is timely received and will not affect
participation in the Plan for any prior month). Any transfer of Shares by a Participant to a non-Participant will
terminate participation in the Plan with respect to the transferred Shares. If a Participant requests that the Company
repurchase a portion of, but fewer than all, the Participant’s Shares, the Participant will continue to participate in the
Plan with respect to the Participant’s Shares for which repurchase was requested but that were not repurchased. If a
Participant requests that the Company repurchase all the Participant’s Shares, the Participant’s participation in the
Plan will automatically terminate and any distributions paid following such repurchase request will be paid in cash.
If a Participant terminates Plan participation, the Company may, at its option, ensure that the terminating
Participant’s account will reflect the whole number of Shares in such Participant’s account and provide a check for
the cash value of any fractional Share in such account. Upon termination of Plan participation for any reason, future
Distributions will be distributed to the Stockholder in cash.
10. Amendment, Suspension or Termination by the Company. The Board of Directors may by majority vote
amend any aspect of the Plan; provided, however that the Plan cannot be amended to eliminate a Participant’s right
to terminate participation in the Plan and that notice of any material amendment must be provided to Participants at
least 10 days prior to the effective date of that amendment. The Board of Directors may by majority vote suspend or
terminate the Plan for any reason upon written notice to the Participants. Any public disclosure of an amendment,
suspension or termination of the Plan by the Company in a filing with the SEC shall constitute notice under this
Section 10.
11. Liability of the Company. The Company shall not be liable for any act done in good faith, or for any good
faith omission to act, including, without limitation, any claims or liability (i) arising out of failure to terminate a
Participant’s account upon such Participant’s death prior to timely receipt of notice in writing of such death or (ii)
with respect to the time and the prices at which Shares are purchased or sold for a Participant’s account. To the
A-3
extent that indemnification may apply to liabilities arising under the Securities Act, or the securities laws of a
particular state, the Company has been advised that, in the opinion of the SEC and certain state securities
commissioners, such indemnification is contrary to public policy and, therefore, unenforceable.
C-1
APPENDIX C: PRIVACY NOTICE
FACTS | WHAT DOES BROOKFIELD DO WITH YOUR PERSONAL INFORMATION? | ||
WHY? | Financial companies choose how they share your personal information. U.S. federal law gives consumers the right to limit some but not all sharing. U.S. federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | ||
WHAT? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: •Social Security number and income •Account balances and wire transfer instructions •Account transactions and assets When you are no longer our customer, we continue to share your information as described in this notice. | ||
HOW? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Brookfield chooses to share; and whether you can limit this sharing. | ||
Reasons we can share your personal information | Does Brookfield share? | Can you limit this sharing? | |
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No | |
For our marketing purposes — to offer our products and services to you | Yes | No | |
For joint marketing with other financial companies | No | We don’t share | |
For our affiliates’ everyday business purposes — information about your transactions and experiences | No | We don’t share | |
For our affiliates’ everyday business purposes — information about your creditworthiness | No | We don’t share | |
For our affiliates to market to you | No | We don’t share | |
For nonaffiliates to market to you | No | We don’t share | |
QUESTIONS? | Contact Ronald Fisher-Dayn by phone at (212) 978-1763 or via email at Ronald.Fisher- Dayn@Brookfield.com | ||
C-2
Who we are | |
Who is providing this notice? | The Brookfield entity that is party to your subscription agreement. |
What we do | |
How does Brookfield protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
How does Brookfield collect my personal information? | We collect your personal information, for example, when you •open an account or provide account information •give us your contact information or enter into an investment advisory contract •make a wire transfer |
Why can’t I limit all sharing? | U.S. federal law gives you the right to limit only •sharing for affiliates’ everyday business purposes - information about your creditworthiness •affiliates from using your information to market to you •sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
Definitions | |
Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. Our affiliates include entities that are wholly owned by Brookfield Asset Management Ltd. Brookfield Asset Management Ltd does not share with our affiliates information about your transactions, experiences, or creditworthiness or information they may use to market to you. |
Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. Brookfield does not share with nonaffiliates so they can market to you. |
Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you. Brookfield does not jointly market. |
Other important information | |
N/A | |
Brookfield Real Estate Income Trust Inc.
Maximum Offering of $7,500,000,000
Common Stock
Prospectus
April 10, 2026
You should rely only on the information contained in this prospectus. No dealer, salesperson or other
person is authorized to make any representations other than those contained in the prospectus and
supplemental literature authorized by Brookfield Real Estate Income Trust Inc. and referred to in this
prospectus, and, if given or made, such information and representations must not be relied upon. This
prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities. You should
not assume that the delivery of this prospectus or that any sale made pursuant to this prospectus implies that
the information contained in this prospectus will remain fully accurate and correct as of any time subsequent
to the date of this prospectus.
II-1
PART II
Information Not Required in the Prospectus
Item 31. Other Expenses of Issuance and Distribution.
The following table itemizes the expenses incurred by the registrant (other than selling commissions, dealer
manager fees, stockholder servicing fees and other underwriting compensation) in connection with the issuance and
registration of the securities being registered hereunder. All amounts shown are estimates except the SEC
registration fee and the FINRA filing fee.
SEC registration fee .............................................................................................................................. | $168,411 |
FINRA filing fee ................................................................................................................................... | $165,500 |
Legal fees and expenses ........................................................................................................................ | $3,500,000 |
Printing and mailing .............................................................................................................................. | $400,000 |
Accounting and tax fees and expenses .................................................................................................. | $1,000,000 |
Blue sky fees and expenses ................................................................................................................... | $300,000 |
Advertising and sales expenses ............................................................................................................. | $300,000 |
Due diligence ........................................................................................................................................ | $800,000 |
Transfer agent fees and expenses .......................................................................................................... | $1,000,000 |
Promotional items expenses .................................................................................................................. | $400,000 |
Technology expenses ............................................................................................................................ | $850,000 |
Issuer costs related to training and education meetings and retail conferences .................................... | $500,000 |
Total ...................................................................................................................................................... | $9,383,911 |
Item 32. Sales to Special Parties.
None.
Item 33. Recent Sales of Unregistered Securities.
The Adviser is entitled to a per annum management fee payable monthly in cash or shares of common stock, at
the Adviser’s election. These offers and sales were exempt from the registration provisions of the Securities Act by
virtue of Section 4(a)(2) thereunder. We also issued unregistered Class I common stock pursuant to our distribution
reinvestment plan to the Adviser. These issuances were made pursuant to Section 4(a)(2) of the Securities Act. The
below shows the total issuances of Class I shares by us to the Adviser over the past three years.
Date of Unregistered Sale | Amount of Class I Common Shares Issued to the Adviser | Consideration | ||
April 20, 2023 ........................................................................................................... | 4,286 | $56,652 | ||
May 1, 2023 .............................................................................................................. | 93,867 | $1,215,281 | ||
May 19, 2023 ............................................................................................................ | 1,306 | $16,913 | ||
June 1, 2023 .............................................................................................................. | 92,867 | $1,202,297 | ||
June 20, 2023 ............................................................................................................ | 1,746 | $22,604 | ||
July 1, 2023 .............................................................................................................. | 90,722 | $1,161,255 | ||
July 20, 2023 ............................................................................................................ | 2,208 | $28,262 | ||
August 1, 2023 ......................................................................................................... | 91,263 | $1,146,289 | ||
August 21, 2023 ....................................................................................................... | 1,357 | $17,043 | ||
September 1, 2023 .................................................................................................... | 90,505 | $1,131,877 | ||
September 20, 2023 .................................................................................................. | 1,827 | $22,582 |
II-2
October 1, 2023 ........................................................................................................ | 90,532 | $1,118,949 | ||
October 20, 2023 ...................................................................................................... | 2,274 | $28,103 | ||
November 1, 2023 .................................................................................................... | 89,681 | $1,108,911 | ||
November 20, 2023 .................................................................................................. | 1,361 | $16,823 | ||
December 1, 2023 ..................................................................................................... | 88,142 | $1,085,359 | ||
December 20, 2023 ................................................................................................... | 1,808 | $22,268 | ||
January 1, 2024 ......................................................................................................... | 86,646 | $1,046,193 | ||
January 19 , 2024 ...................................................................................................... | 2,290 | $27,647 | ||
February 1, 2024 ....................................................................................................... | 87,695 | $1,032,537 | ||
February 20, 2024 ..................................................................................................... | 1,389 | $16,359 | ||
March 1, 2024 ........................................................................................................... | 84,538 | $993,379 | ||
March 20, 2024 ......................................................................................................... | 1,846 | $21,686 | ||
April 1, 2024 ............................................................................................................. | 84,684 | $969,042 | ||
April 19, 2024 ........................................................................................................... | 936 | $10,711 | ||
May 1, 2024 .............................................................................................................. | 85,013 | $962,128 | ||
May 20, 2024 ............................................................................................................ | 1,399 | $15,831 | ||
June 1, 2024 .............................................................................................................. | 83,407 | $943,404 | ||
June 20, 2024 ............................................................................................................ | 1,857 | $20,999 | ||
July 1, 2024 .............................................................................................................. | 82,325 | $927,786 | ||
July 19, 2024 ............................................................................................................ | 2,316 | $26,098 | ||
August 1, 2024 ......................................................................................................... | 81,759 | $916,764 | ||
August 20, 2024 ....................................................................................................... | 1,379 | $15,465 | ||
September 1, 2024 .................................................................................................... | 80,557 | $899,542 | ||
September 20, 2024 .................................................................................................. | 1,830 | $20,437 | ||
October 1, 2024 ........................................................................................................ | 81,599 | $899,041 | ||
October 21, 2024 ...................................................................................................... | 2,302 | $25,364 | ||
November 1, 2024 .................................................................................................... | 80,347 | $890,322 | ||
November 20, 2024 .................................................................................................. | 1,366 | $15,136 | ||
December 1, 2024 ..................................................................................................... | 79,925 | $882,247 | ||
December 20, 2024 ................................................................................................... | 1,814 | $20,022 | ||
January 1, 2025 ......................................................................................................... | 78,892 | $867,178 | ||
January 20, 2025 ....................................................................................................... | 2,266 | $24,910 | ||
February 1, 2025 ....................................................................................................... | 97,177 | $1,068,621 | ||
February 20, 2025 ..................................................................................................... | 1,350 | $14,847 | ||
March 1, 2025 ........................................................................................................... | 98,651 | $1,079,770 | ||
March 20, 2025 ......................................................................................................... | 1,895 | $20,739 | ||
April 1, 2025 ............................................................................................................. | 97,500 | $1,042,160 | ||
April 21, 2025 ........................................................................................................... | 2,503 | $26,751 | ||
May 1, 2025 .............................................................................................................. | 97,617 | $1,032,627 | ||
May 20, 2025 ............................................................................................................ | 1,711 | $18,102 | ||
June 1, 2025 .............................................................................................................. | 98,177 | $1,035,493 | ||
June 20, 2025 ............................................................................................................ | 2,279 | $24,042 | ||
July 1, 2025 .............................................................................................................. | 97,845 | $1,031,174 | ||
July 21, 2025 ............................................................................................................ | 2,851 | $30,049 | ||
August 1, 2025 ......................................................................................................... | 99,514 | $1,046,320 |
II-3
August 20, 2025 ....................................................................................................... | 1,731 | $18,200 | ||
September 1, 2025 .................................................................................................... | 100,040 | $1,051,150 | ||
September 19, 2025 .................................................................................................. | 2,308 | $24,254 | ||
October 1, 2025 ........................................................................................................ | 107,159 | $1,123,253 | ||
October 20, 2025 ...................................................................................................... | 2,898 | $30,375 | ||
November 1, 2025 .................................................................................................... | 100,627 | $1,055,213 | ||
November 19, 2025 .................................................................................................. | 1,813 | $19,008 | ||
December 1, 2025 ..................................................................................................... | 102,536 | $1,072,366 | ||
December 19, 2025 ................................................................................................... | 2,403 | $25,134 | ||
January 1, 2026 ......................................................................................................... | 104,268 | $1,087,620 | ||
January 21, 2026 ....................................................................................................... | 3,011 | $31,409 | ||
February 1, 2026 ....................................................................................................... | 105,895 | $1,098,956 | ||
February 20, 2026 ..................................................................................................... | 1,838 | $19,072 | ||
March 1, 2026 ........................................................................................................... | 106,210 | $1,100,359 | ||
March 20, 2026 ......................................................................................................... | 2,463 | $25,514 |
We have sold unregistered shares of our Class C common stock and Class I common stock to feeder vehicles
that in turn offer interests in themselves to non-U.S. persons. These offers and sales were exempt from the
registration provisions of the Securities Act by virtue of Section 4(a)(2) and Regulation S thereunder. We also issued
unregistered Class C and Class I common stock pursuant to our distribution reinvestment plan to these feeder
II-4
vehicles. These issuances were made pursuant to Section 4(a)(2) of the Securities Act. The below shows the total
issuances of Class C common stock and Class I common stock by us to feeder vehicles over the past three years.
Date of Unregistered Sale | Amount of Class C Common Shares Issued to Feeder Vehicles | Consideration | Amount of Class I Common Shares Issued to Feeder Vehicles | Consideration | ||||
April 20, 2023 .................................................................. | — | $— | 29,546 | $382,524 | ||||
May 1, 2023 ..................................................................... | — | $— | 38,620 | $500,000 | ||||
May 19, 2023 ................................................................... | — | $— | 28,123 | $364,089 | ||||
June 20, 2023 ................................................................... | 88,186 | $1,116,586 | 28,540 | $365,322 | ||||
July 1, 2023 ..................................................................... | — | $— | 183,117 | $2,300,000 | ||||
July 20, 2023 ................................................................... | — | $— | 26,379 | $331,328 | ||||
August 21, 2023 .............................................................. | — | $— | 20,925 | $261,693 | ||||
September 20, 2023 ......................................................... | — | $— | 20,455 | $252,823 | ||||
October 1, 2023 ............................................................... | — | $— | 194,095 | $2,400,000 | ||||
October 20, 2023 ............................................................. | — | $— | 19,936 | $246,505 | ||||
November 20, 2023 ......................................................... | — | $— | 18,912 | $232,875 | ||||
December 20, 2023 .......................................................... | — | $— | 19,188 | $231,679 | ||||
January 19, 2024 .............................................................. | — | $— | 19,557 | $230,264 | ||||
February 20, 2024 ............................................................ | — | $— | 18,371 | $215,867 | ||||
March 20, 2024 ................................................................ | — | $— | 18,195 | $208,207 | ||||
April 19, 2024 .................................................................. | — | $— | 17,732 | $200,677 | ||||
May 20, 2024 ................................................................... | — | $— | 18,469 | $208,898 | ||||
June 20, 2024 ................................................................... | — | $— | 18,348 | $206,780 | ||||
July 19, 2024 ................................................................... | — | $— | 17,980 | $201,608 | ||||
August 20, 2024 .............................................................. | — | $— | 17,418 | $194,499 | ||||
September 20, 2024 ......................................................... | — | $— | 17,090 | $188,292 | ||||
October 1, 2024 ............................................................... | — | $— | 27,164 | $301,000 | ||||
October 21, 2024 ............................................................. | — | $— | 15,136 | $167,719 | ||||
November 20, 2024 ......................................................... | — | $— | 15,247 | $168,309 | ||||
December 20, 2024 .......................................................... | 3,689 | $39,683 | 13,040 | $143,337 | ||||
January 20, 2025 .............................................................. | — | $— | 12,647 | $139,080 | ||||
February 20, 2025 ............................................................ | — | $— | 12,367 | $135,362 | ||||
March 20, 2025 ................................................................ | — | $— | 12,733 | $136,102 | ||||
April 21, 2025 .................................................................. | — | $— | 12,890 | $136,351 | ||||
May 20, 2025 ................................................................... | — | $— | 12,247 | $129,169 | ||||
June 1, 2025 ..................................................................... | 99,640 | $1,021,487 | — | $— | ||||
June 20, 2025 ................................................................... | — | $— | 11,444 | $120,608 | ||||
July 21, 2025 ................................................................... | — | $— | 10,919 | $114,806 | ||||
August 1, 2025 ................................................................ | 73,419 | $750,000 | — | $— | ||||
August 20, 2025 .............................................................. | — | $— | 10,398 | $109,256 | ||||
September 19, 2025 ......................................................... | — | $— | 10,303 | $107,998 | ||||
October 1, 2025 ............................................................... | 171,921 | $1,750,000 | — | $— | ||||
October 20, 2025 ............................................................. | — | $— | 10,061 | $105,507 | ||||
November 19, 2025 ......................................................... | — | $— | 10,146 | $106,109 | ||||
December 19, 2025 .......................................................... | — | $— | 10,103 | $105,386 | ||||
January 21, 2026 .............................................................. | — | $— | 9,913 | $102,878 | ||||
February 20, 2026 ............................................................ | — | $— | 9,960 | $103,184 | ||||
March 2, 2026 .................................................................. | 24,886 | $250,000 | — | $— | ||||
March 20, 2026 ................................................................ | — | $— | 9,755 | $101,184 |
We have also sold unregistered shares of our Class E and Class I common stock to Brookfield and its affiliates
and certain of Brookfield’s and Oaktree’s employees and our independent directors in one or more private
placements. These offers and sales were exempt from the registration provisions of the Securities Act by virtue of
II-5
Section 4(a)(2) thereunder. We also issued unregistered Class E and Class I common stock pursuant to our
distribution reinvestment plan to Brookfield and its affiliates and certain of Brookfield’s and Oaktree’s employees
and our independent directors. These issuances were made pursuant to Section 4(a)(2) of the Securities Act. The
below shows the total issuances of Class I common stock and Class E common stock by us over the past three years.
Date of Unregistered Sale | Amount of Class I Common Shares Issued to Brookfield and affiliates | Consideration | Amount of Class E Common Shares Issued to Brookfield and affiliates | Consideration | ||||
April 20, 2023 .................................................... | 96,734 | $1,278,745 | 17,865 | $235,682 | ||||
May 1, 2023 ....................................................... | 617,909 | $8,000,000 | — | $— | ||||
May 19, 2023 ..................................................... | 102,709 | $1,329,767 | 16,098 | $208,009 | ||||
June 20, 2023 ..................................................... | 106,041 | $1,372,860 | 16,205 | $209,189 | ||||
July 20, 2023 ...................................................... | 107,748 | $1,379,201 | 16,440 | $209,972 | ||||
August 1, 2023 ................................................... | — | $— | 5,186 | $65,000 | ||||
August 21, 2023 ................................................. | 110,319 | $1,385,644 | 207,027 | $16,517 | ||||
September 20, 2023 ........................................... | 111,323 | $1,392,242 | 16,661 | $207,945 | ||||
October 20, 2023 ................................................ | 112,644 | $1,392,242 | 16,681 | $205,767 | ||||
November 20, 2023 ............................................ | 113,680 | $1,405,667 | 16,773 | $206,980 | ||||
December 20, 2023 ............................................ | 114,706 | $1,412,465 | 16,919 | $207,913 | ||||
January 20, 2024 ................................................ | 117,549 | $1,419,324 | 17,300 | $208,418 | ||||
February 1, 2024 ................................................ | — | $— | 42,545 | $500,000 | ||||
February 20, 2024 .............................................. | 121,142 | $1,426,354 | 17,787 | $238,366 | ||||
March 20, 2024 .................................................. | 122,001 | $1,433,598 | 17,727 | $207,886 | ||||
April 1, 2024 ...................................................... | — | $— | 28,426 | $324,955 | ||||
April 19, 2024 .................................................... | 125,918 | $1,440,894 | 18,164 | $207,644 | ||||
May 20, 2024 ..................................................... | 127,982 | $1,448,424 | 18,601 | $210,326 | ||||
June 20, 2024 ..................................................... | 128,732 | $1,456,077 | 18,761 | $211,962 | ||||
July 19, 2024 ...................................................... | 129,885 | $1,463,775 | 18,922 | $213,014 | ||||
August 1, 2024 ................................................... | 633,194 | $7,100,000 | — | $— | ||||
August 20, 2024 ................................................. | 131,235 | $1,471,542 | 19,138 | $214,366 | ||||
September 20, 2024 ........................................... | 135,062 | $1,508,168 | 19,314 | $215,433 | ||||
October 21, 2024 ................................................ | 138,447 | $1,525,381 | 19,671 | $216,508 | ||||
November 20, 2024 ............................................ | 138,406 | $1,533,660 | 19,689 | $217,911 | ||||
December 1, 2024 .............................................. | — | $— | 45,340 | $499,980 | ||||
December 20, 2024 ............................................ | 98 | $1,079 | 5,835 | $64,343 | ||||
January 20, 2025 ................................................ | 99 | $1,085 | 5,756 | $63,207 | ||||
February 1, 2025 ................................................ | — | $— | 11,834 | $130,000 | ||||
February 20, 2025 .............................................. | 99 | $1,091 | 5,671 | $62,297 | ||||
March 1, 2025 .................................................... | — | $— | 6,858 | $75,000 | ||||
March 20, 2025 .................................................. | 100 | $1,097 | 5,785 | $63,261 | ||||
April 1, 2025 ...................................................... | — | $— | 124,204 | $1,325,091 | ||||
April 21, 2025 .................................................... | 103 | $1,103 | 5,839 | $62,294 | ||||
May 20, 2025 ..................................................... | 105 | $1,109 | 6,094 | $64,359 | ||||
June 20, 2025 ..................................................... | 106 | $1,115 | 6,151 | $64,791 | ||||
July 21, 2025 ...................................................... | 107 | $1,122 | 6,197 | $65,226 | ||||
August 20, 2025 ................................................. | 107 | $1,128 | 6,147 | $64,553 |
II-6
September 19, 2025 ........................................... | 108 | $1,135 | 6,184 | $64,897 | ||||
October 20, 2025 ................................................ | 109 | $1,141 | 6,178 | $64,680 | ||||
November 24, 2025 ............................................ | 26,862,938 | $280,943,347 | 2,353,305 | $24,589,682 | ||||
November 19, 2025 ............................................ | 109 | $1,148 | 6,216 | $65,117 | ||||
December 1, 2025 .............................................. | — | $— | 71,775 | $749,980 | ||||
December 19, 2025 ............................................ | 153,709 | $1,607,551 | 22,479 | $234,887 | ||||
January 21, 2026 ................................................ | 154,995 | $1,616,750 | 22,758 | $237,157 | ||||
February 20, 2026 .............................................. | 156,682 | $1,626,018 | 23,030 | $238,791 | ||||
March 20, 2026 .................................................. | 157,853 | $1,635,388 | 23,239 | $240,560 |
Other Transactions
On December 16, 2024, an institutional investor subscribed for $200,000,000 in shares of our Class I common
stock, which were issued on January 1, 2025. The issuance was made at the same transaction price as Class I shares
sold through our public offering as of January 1, 2025, with fees consistent with existing Class I stockholders. The
offer and sale was exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2)
thereunder.
On June 27, 2025, an institutional investor subscribed for $8,244,178 in shares of the our Class I common stock,
which were issued on July 1, 2025. The issuance was made at the same transaction price as Class I shares sold
through our public offering as of July 1, 2025, with fees consistent with existing Class I stockholders. The offer and
sale was exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) thereunder.
On November 24, 2025, we issued 26,862,938 shares of our Class I common stock and 2,353,305 shares of our
Class E common stock to BUSI II-C L.P., an affiliate of the Adviser, in exchange for the redemption of 26,862,938
Class I-1 OP Units and 2,353,305 Class E OP Units, respectively. The offer and sale was exempt from the
registration provisions of the Securities Act by virtue of Section 4(a)(2) thereunder.
We have used and continue to intend to use the net proceeds from all such sales for the purposes set forth in the
prospectus for this offering and in a manner within the investment guidelines approved by our board of directors,
who serve as fiduciaries to our stockholders.
Item 34. Indemnification of Directors, Officers and Others.
Our organizational documents generally limit the personal liability of our stockholders, directors and officers
for monetary damages and require us to indemnify and advance expenses to our directors, officers and the Adviser
and its affiliates subject to the limitations of the NASAA REIT Guidelines and Maryland law. Maryland law permits
a corporation to include in its charter a provision limiting the liability of directors and officers to the corporation and
its stockholders for money damages, except for liability resulting from actual receipt of an improper benefit or profit
in money, property or services or active and deliberate dishonesty established by a final judgment and which is
material to the cause of action. The Maryland General Corporation Law (the “MGCL”) requires a corporation
(unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to
be made a party by reason of his or her service in that capacity. The MGCL allows directors and officers to be
indemnified against judgments, penalties, fines, settlements and reasonable expenses actually incurred in connection
with a proceeding unless the following can be established:
•an act or omission of the director or officer was material to the cause of action adjudicated in the
proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty;
•the director or officer actually received an improper personal benefit in money, property or services; or
•with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act
or omission was unlawful.
II-7
A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to
indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged
liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment
in a suit by the corporation or in its right, or for a judgment of liability on the basis that personal benefit was
improperly received, is limited to expenses. The MGCL permits a corporation to advance reasonable expenses to a
director or officer upon receipt of a written affirmation by the director or officer of his or her good faith belief that
he or she has met the standard of conduct necessary for indemnification and a written undertaking by him or her or
on his or her behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct
was not met.
In addition to the above limitations of the MGCL, our charter provides that our directors, the Adviser and its
affiliates may be indemnified for losses or liability suffered by them or held harmless for losses or liability suffered
by us only if all of the following conditions are met:
•the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was
in our best interest;
•the indemnitee was acting on our behalf or performing services for us;
•in the case of affiliated directors, the Adviser or its affiliates, the liability or loss was not the result of
negligence or misconduct by the party seeking indemnification; and
•in the case of our independent directors, the liability or loss was not the result of gross negligence or willful
misconduct by the party seeking indemnification.
In addition, any indemnification or any agreement to hold harmless is recoverable only out of our net assets and
not from our stockholders.
Our charter also provides that we may not provide indemnification to a director, the Adviser or any affiliate of
the Adviser for any loss, liability or expense arising from or out of an alleged violation of federal or state securities
laws by such party unless one or more of the following conditions are met:
•there has been a successful adjudication on the merits of each count involving alleged securities law
violations as to the party seeking indemnification;
•such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to
such party; or
•a court of competent jurisdiction approves a settlement of the claims against such party and finds that
indemnification of the settlement and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the SEC and of the published position of any
state securities regulatory authority in which our securities were offered or sold as to indemnification for
violations of securities laws.
Finally, our charter provides that we may pay or reimburse reasonable legal expenses and other costs incurred
by our directors, the Adviser and its affiliates in advance of final disposition of a proceeding only if all of the
following are satisfied:
•the proceeding relates to acts or omissions with respect to the performance of duties or services on our
behalf;
•the indemnitee provides us with written affirmation of his or her good faith belief that he or she has met the
standard of conduct necessary for indemnification;
•the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in
his or her capacity as such, a court of competent jurisdiction approves such advancement; and
II-8
•the indemnitee provides us with a written agreement to repay the amount paid or reimbursed, together with
the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with
the requisite standard of conduct and is not entitled to indemnification.
We have entered into indemnification agreements with certain of our directors and executive officers. Pursuant
to the terms of these indemnification agreements, we would indemnify and advance expenses and costs incurred by
these directors and executive officers in connection with any claims, suits or proceedings brought against such
directors and executive officers as a result of his or her service. However, our indemnification obligation is subject
to the limitations set forth in the indemnification agreements and in our charter. We also maintain a directors and
officers insurance policy that is applicable to our directors and officers.
The general effect to investors of any arrangement under which any of our controlling persons, directors or
officers are insured or indemnified against liability is a potential reduction in distributions resulting from our
payment of premiums, deductibles and other costs associated with such insurance or, to the extent any such loss is
not covered by insurance, our payment of indemnified losses. In addition, indemnification could reduce the legal
remedies available to us and our stockholders against the indemnified individuals; however, this provision does not
reduce the exposure of our directors and officers to liability under federal or state securities laws, nor does it limit
our stockholder’s ability to obtain injunctive relief or other equitable remedies for a violation of a director’s or an
officer’s duties to us or our stockholders, although the equitable remedies may not be an effective remedy in some
circumstances.
Item 35. Treatment of Proceeds from Shares Being Registered.
Not applicable.
Item 36. Financial Statements and Exhibits.
1. Financial Statements.
The following financial statements are incorporated into this registration statement by reference:
•The consolidated financial statements of the Company included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2025 filed with the SEC on March 17, 2026.
2. Exhibits. See the Exhibit Index on the page immediately preceding the signature page hereto for a list of exhibits
filed as part of this registration statement on Form S-11, which Exhibit Index is incorporated herein by reference.
Item 37. Undertakings.
(i)The undersigned registrant hereby undertakes:
(A)To file, during any period in which offers or sales are being made, a post-effective amendment to this
registration statement:
(1)To include any prospectus required by section 10(a)(3) of the Securities Act.
(2)To reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration statement.
II-9
(3)To include any material information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the registration statement.
(B)That, for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(C)To remove from registration by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(D)That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus
filed pursuant to Rule 424(b) as part of the registration statement relating to the offering, other than a
registration statement relying on Rule 430B or other than a prospectus filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(E)That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in
the initial distribution of the securities, in a primary offering of securities pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such
purchaser:
(1)any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to Rule 424;
(2)any free writing prospectus relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned registrant;
(3)the portion of any other free writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant;
and
(4)any other communication that is an offer in the offering made by the undersigned registrant to the
purchaser.
(F)To send to each stockholder, at least on an annual basis, a detailed statement of any transactions with the
Adviser or its affiliates, and of fees, commissions, compensation and other benefits paid or accrued to the
Adviser or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient
and the services performed.
(ii)The registrant undertakes to provide to the stockholders the financial statements required by Form 10-K for
the first full fiscal year of operations of the registrant.
(iii)The registrant undertakes to file a sticker supplement pursuant to Rule 424(c) under the Securities Act
during the distribution period describing each significant property not identified in the prospectus at such
time as there arises a reasonable probability that such property will be acquired and to consolidate all such
stickers into a post-effective amendment filed at least once every three months, with the information
contained in such amendment provided simultaneously to the existing stockholders. Each sticker
supplement should disclose all compensation and fees received by the Adviser and its affiliates in
connection with any such acquisition. The post-effective amendment shall include or incorporate by
II-10
reference audited financial statements meeting the requirements of Rule 3-14 of Regulation S-X that have
been filed or should have been filed on Form 8-K for all significant properties acquired during the
distribution period.
(iv)The registrant undertakes to file, after the end of the distribution period, a current report on Form 8-K
containing the financial statements and any additional information required by Rule 3-14 of Regulation S-
X, for each significant property acquired and to provide the information contained in such report to the
stockholders at least once each quarter after the distribution period of the offering has ended.
(v)Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions and otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in connection with securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by the final adjudication of
such issue.
II-11
Exhibit Index
Exhibit Number | Description | |
1.1 | ||
1.2 | ||
1.3 | ||
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
3.7 | ||
3.8 | ||
3.9 | ||
4.1* | ||
4.2 | ||
5.1 | ||
8.1 | ||
10.1 | ||
10.2 | ||
10.3 |
II-12
Exhibit Number | Description | |
10.4 | ||
10.5 | ||
10.6** | ||
10.7** | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | ||
10.12 | ||
10.13 | ||
10.14* | ||
21.1 | ||
23.3 | ||
23.4 | ||
24.1 | ||
107 |
__________________
*Filed herewith.
**Denotes management contract or compensation plan or agreement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form S-11 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on April 10, 2026.
Brookfield Real Estate Income Trust Inc. | |
By: | /s/ Brian W. Kingston |
Brian W. Kingston | |
Chief Executive Officer and Chairman of the Board | |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Form S-11 Registration Statement
has been signed by the following persons in the following capacities on April 10, 2026.
Signature | Title | |
/s/Brian W. Kingston | Brian W. Kingston Chief Executive Officer and Chairman of the Board (Principal Executive Officer) | |
Brian W. Kingston | ||
/s/ Theodore C. Hanno | Theodore C. Hanno Chief Financial Officer (Principal Financial and Accounting Officer) | |
Theodore C. Hanno | ||
* | Lori-Ann Beausoleil Director | |
Lori-Ann Beausoleil | ||
* | Richard W. Eaddy Director | |
Richard W. Eaddy | ||
* | Thomas F. Farley Director | |
Thomas F. Farley | ||
* | Robert L. Stelzl Director | |
Robert L. Stelzl | ||
* | Elisabeth (Lis) S. Wigmore Director | |
Elisabeth (Lis) S. Wigmore | ||
* By: | /s/ Michelle L. Campbell |
Michelle L. Campbell | |
Attorney-in-fact |