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Overview

Overview

FS Credit Real Estate Income Trust

Seeks to deliver an alternative source of income by investing in private commercial real estate debt

Share classes

Class I   |  Class S

Strong performance since inception

FS Credit REIT has historically generated a steady level of income with a low level of volatility since inception.

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Past performance is not indicative of future results. An investment in FS Credit REIT is not a direct investment in real estate and has material differences from a direct investment in real estate, including those related to fees and expenses, liquidity and tax treatment.

Source: Bloomberg. FS Credit REIT is not traded on an exchange. The beginning value of Class I is the NAV per share as of the share class’s inception date on January 5, 2018. The ending value is the transaction price as of November 1, 2024 (which generally equals the prior month’s NAV). The S&P 500 Total Return Index is a widely used barometer of U.S. stock market performance. The key applicable risk of the S&P 500 Total Return Index is the volatility that comes with exposure to the stock market. The S&P 500 Total Return Index is a float-adjusted market cap-weighted index. The S&P 500 Total Return Index is calculated by taking the sum of the adjusted market capitalization of all S&P 500 stocks and then dividing it with an index divisor, which is a proprietary figure developed by Standard & Poor’s. The Bloomberg U.S. Aggregate Bond Index is weighted according to market capitalization. The Bloomberg U.S. Aggregate Bond Index is the most commonly used benchmark for determining the relative performance of bond or fixed income portfolios. The Bloomberg U.S. Aggregate Bond Index is also a major indicator for the overall health of the fixed income investing market. An investment cannot be made directly in an index. The illustration assumes reinvestment of distributions pursuant to FS Credit REIT’s share repurchase program. Indexes are shown for illustrative purposes only. Indexes are meant to illustrate general market performance. Each asset class is suitable for specific investor objectives, which vary greatly.

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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.

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  • The annualized distribution rate shown is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the most recent monthly cash distribution per share as of the date indicated, without compounding), divided by the net asset value per share. For the nine months ended September 30, 2024, 100% of FS Credit REIT’s distributions were funded through net income.
  • 79 months with positive total returns since inception out of 81 months (based on Class I).
  • Largest monthly drawdown for Class I and Class S occurred March 2020.
  • 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.

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.*

Diagram showing a scale where investors tend to be paid first with senior secured loans, then mezzanine loans (unsecured debt), and will usually be paid last for equity

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* U.S. Federal Reserve, as of June 30, 2024. Commercial mortgage loans are illiquid and may not have a secondary market. Consider the key risks before investing. While commercial loans are secured by a first-priority mortgage, they are subject to the risk of default. Although senior loans may be prioritized in payment, as represented in the image, there is no assurance that the valuation of the property that is collateral will be correct, thus, there is risk in investing in senior secured loans.

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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?

Diagram showing the monetary results of mortgage and equity as property value declines by 15% (from a $100m purchase price to $85m after the decline). The mortgage value is shown to remain the same at $70m, but the equity value decreased from $30m to $15m.

What happens if rental income falls?

A diagram depicting what happens to expenses, mortgage, and equity if rental income falls. The diagram shows that if at purchase the rental income is at $10m, it will become $8.5 after a 15% decline. As a result, the portion of expenses ($4.0m) and mortgage ($3.5) remain the same but equity decreases from $2.5m to $1.0m.

Tax advantaged distributions

REIT tax advantages allow FS Credit REIT investors to realize attractive, consistent and tax-advantaged distributions.

Annualized distribution rate comparison

A diagram with two sets of of dual. bar graphs titled '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 logo

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 logo

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.

Top 5 states

Los Angeles, CA  |  Mixed use

Los Angeles County mixed-use complex (paid in full)

Nashville, TN  |  Multifamily

East Nashville multifamily

Various  |  Industrial

Industrial warehouse portfolio

View loan profiles brochure

Literature

Fact sheet
Historical NAV
Brochure
Loan profiles brochure
Subscription agreement
See all literature  

See more details on FS Credit Real Estate Income Trust  

Share classes

Class I   |  Class S

View important disclosures

Investing in FS Credit REIT involves significant risk, including the risk of a substantial loss of investment. The following are some of the risks an investment in FS Credit REIT’s common stock involves; however, you should carefully consider all of the information found in the section of FS Credit REIT’s prospectus entitled “Risk Factors” before deciding to invest in shares of FS Credit REIT’s common stock.

  • Since there is no public trading market for shares of FS Credit REIT’s common stock, repurchase of shares by FS Credit REIT will likely be the only way to dispose of your shares. FS Credit REIT’s share repurchase plan will provide stockholders with the opportunity to request that FS Credit REIT repurchase their shares on a monthly basis, subject to certain limitation. Further, FS Credit REIT’s 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 stockholders. Finally, FS Credit REIT is not obligated by its charter or otherwise to effect a liquidity event at any time. As a result, shares should be considered as having only limited liquidity and at times may be illiquid.
  • The purchase and repurchase price for shares of FS Credit REIT’s common stock will be based on NAV and will not be based on any public trading market. Because the valuation of FS Credit REIT’s investments is inherently subjective, the NAV of FS Credit REIT’s common stock may not accurately reflect the actual price at which assets could be liquidated on any given day.
  • Valuations and appraisals of real estate-related debt and investments are estimates of fair value and may not necessarily correspond to realizable value, which could adversely affect the value of an investment.
  • FS Credit REIT’s business and operations are currently dependent on the commercial real estate industry. Adverse conditions in the commercial real estate industry can have a significant negative effect on FS Credit REIT’s business and financial condition.
  • FS Credit REIT cannot guarantee that it will make distributions, and if it does such distributions may be funded from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and there are no limits on the amounts that may be paid from such sources.
  • FS Credit REIT has no employees and is dependent on its adviser and sub-adviser to conduct operations. FS Credit REIT’s adviser and sub-adviser will face conflicts of interest as a result of, among other things, the obligation to allocate investment opportunities among FS Credit REIT and other investment vehicles, the allocation of time of their investment professionals and the substantial fees and expenses that we will pay to the adviser and its affiliates.
  • There are limits on the ownership and transferability of FS Credit REIT’s shares.
  • 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.
Overview

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Class I

Class S

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An investment in any fund sponsored by FS Investments involves a high degree of risk and may be considered speculative. Investors are advised to consider the investment objectives, risks, and charges and expenses of the applicable fund carefully before investing. For funds offering shares to new investors, the applicable fund’s prospectus contains this and other information. Investors may obtain a copy of the applicable fund’s prospectus free of charge at www.fsinvestments.com or by contacting FS Investments at 201 Rouse Boulevard, Philadelphia, PA 19112 or by phone at 877-628-8575. Investors should read and carefully consider all information found in the applicable fund’s prospectus and other reports filed with the U.S. Securities and Exchange Commission (SEC) before investing.

This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. An offering is made only by a prospectus, which must be made available to you in connection with any offering. No offering is made to New York investors except by a prospectus filed with the Department of Law of the State of New York.

Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in any of the funds sponsored by FS Investments may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.

FS Investment Solutions, LLC | 201 Rouse Boulevard | Philadelphia, PA 19112

877-628-8575 | Member FINRA/SIPC

© 2024 FS Investments

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This site and the materials herein are directed only to certain types of investors and to persons in jurisdictions where FS Credit REIT is authorized for distribution.

Complete information about investing in shares of FS Credit REIT is available in the prospectus.

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