FS Credit Real Estate Income Trust
Seeks to deliver an alternative source of income by investing in private commercial real estate debt
Strong performance since inception
FS Credit REIT has historically generated a steady level of income with a low level of volatility since inception.
FS Credit REIT seeks to provide:
Income
Seeks to deliver an attractive level of current income
7.64%
annualized distribution rate for Class I1
6.52%
annualized distribution rate for Class S1
Preservation
Focuses on capital preservation and delivering returns with low volatility
97.5%
months with positive total return (Class I)2
-0.27%
largest monthly drawdown (Class I)3
-0.34%
largest monthly drawdown (Class S)3
Diversification
Complements a traditional
fixed income portfolio
0.15
modified duration (years)4
91.2%
invested in private real estate debt
As with any investment, investors should make sure they consider the key risks before investing. In the case of commercial mortgages, loans are subject to illiquidity risk and default risk. There is also no assurance that commercial real estate investments will provide regular, stable distributions.
Why commercial real estate debt investing?
Investors in commercial real estate debt serve as lenders to property owners to help purchase, renovate or repurpose a property. An investor’s return is largely driven by the interest income paid on the loan (or other form of debt) and retains a degree of insulation. That is, commercial real estate debt investors are paid ahead of property owners, which is important if there is a change in the amount of income a property generates or the value of a property.
FS Credit REIT provides a differentiated way to invest in a $5.9T commercial real estate debt market opportunity by investing primarily in floating rate senior loans secured by commercial real estate properties across the U.S.*
What it means to be a senior lender
Senior lenders are the first to be paid from a property’s rental income and the last to absorb losses if property values decline. This seniority may help preserve income and principal.
What happens if property values decline?
What happens if rental income falls?
Tax advantaged distributions
REIT tax advantages allow FS Credit REIT investors to realize attractive, consistent and tax-advantaged distributions.
Annualized distribution rate comparison
Assumes a 37% tax bracket as of June 30, 2024
FS Credit REIT’s failure to qualify or remain qualified to be taxed as a REIT would adversely affect the NAV and the amount of cash available for distribution to stockholders.
- Dividends that are not declared as capital gain dividends or qualified dividend income.
- Tax-equivalent distribution rate reflects the distribution rate required under the prior tax law in order for an investor to receive the same after-tax income under the new tax law. For example, a REIT’s annualized distribution rate would need to be 8.5% under the prior tax law in order for investors to receive the same amount of after-tax income as a REIT with an annualized distribution rate of 7.6% under the new tax law.
FS Credit REIT seeks to deliver an alternative source of income by investing in private commercial real estate debt
Industry-leading managers
FS Investments has extensive experience designing and managing institutional-quality funds for the broader investing public, and Rialto provides a distinct competitive advantage as a leading real estate investment manager.
Rialto Capital Management is a real estate investment and asset management company with a competitive advantage through its access to information.
A diversified portfolio of commercial real estate debt
FS Credit REIT invests primarily in private floating rate senior loans secured by commercial real estate properties across the U.S.
Investment type
Portfolio characteristics1,2,3,4
Property types5
Geography6
Representative loans
1 | New York state self-storage portfolio | Various, NY |
2 | Industrial warehouse portfolio | Various |
3 | Nashville luxury resort | Nashville, TN |
4 | East Nashville multifamily | Nashville, TN |
5 | Delaware distribution center | Middletown, DE |
6 | Brickell Bay high-rise office building | Miami, FL |
7 | Florida multifamily portfolio | Various, FL |
8 | Pinehurst apartment complex | Pinehurst, NC |
9 | Miami Design District retail portfolio | Miami, FL |
10 | Los Angeles County mixed-use complex (paid in full) | Hawthorne, CA |
All portfolio data as of 9/30/2024. Unless otherwise stated.
1 Largest monthly drawdown for Class I and Class S occurred March 2020.
2 Duration is a measure of how sensitive a fixed income investment’s price is to a change in interest rates and is expressed as a number of years.
3 79 months with positive total returns since inception out of 81 months (based on Class I).
4 Total assets are comprised of the sum of loans receivable, investment in real estate, mortgage-backed securities held-to-maturity, mortgage-backed securities (at fair value), cash and cash equivalents, restricted cash, receivables for investments sold, repaid interest receivables and other assets.
5 Represents holdings with multiple property types.
6 Represents holdings across multiple geographic regions.