FS Credit Real Estate Income Trust
Seeks to deliver an alternative source of income by investing in commercial real estate debt
Since inception, FS Credit Real Estate Income Trust has served as a source of preservation in a traditional portfolio by generating a steady level of income with a low level of volatility.
FS Credit Real Estate Income Trust seeks to provide:
Invests in commercial real estate debt with a primary objective to generate income
Alternative source of income
Annualized distribution rate for Class I1
Focuses on commercial real estate debt with the goal to manage volatility and preserve capital
Complements a traditional fixed income portfolio
Invested in private debt
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 Real Estate Income Trust provides a differentiated way to invest in a $5.1T commercial real estate debt market opportunity by investing primarily in floating rate senior loans secured by commercial real estate properties across the U.S.*
The Tax Cuts and Jobs Act of 2017 introduced a change to the taxation of ordinary REIT dividends.1 REITs are generally not taxed at the corporate level to the extent they distribute all of their taxable income as dividends. The tax law provided a 20% deduction on ordinary REIT dividends. As a result, REIT investors may receive higher after-tax income compared to the prior tax law.
Hypothetical REIT distributions under new tax law:
Tax-equivalent distribution rate2
Assumes a 37% tax bracket
The information displayed in this section has not been approved for use by the state of New Jersey and Ohio.
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 6.7% 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 6.0% under the new tax law.
FS Credit Real Estate Income Trust seeks to deliver an alternative source of income by investing in commercial real estate debt
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.
A diversified portfolio of commercial real estate debt
Investing in commercial real estate debt may offer a differentiated way to invest in real estate and provide an alternative source of income and diversification at a time when both are hard to find.
|Private mezzanine loans||2.3|
|Private senior floating rate loans||91.4|
|Modified duration (years)||0.21|
|Number of private loans||129|
|Total gross AUM||$7.13B|
|1||New York state self-storage portfolio||Various, NY|
|2||South Carolina industrial portfolio||Various, SC|
|3||Memphis office park||Memphis, TN|
|4||Newark area industrial building||Newark, NJ|
|5||East Nashville multifamily||Nashville, TN|
|6||Oakland mixed-use property||Oakland, CA|
|7||Downtown Austin office building||Austin, TX|
|8||Tallahassee multifamily portfolio||Tallahassee, FL|
|9||Los Angeles County mixed-use complex (paid in full)||Hawthorne, CA|
|10||Jersey City apartment complex (paid in full)||Jersey City, NJ|
All portfolio data as of 4/30/2022.
Top 5 states