Oaktree Capital Management Files New $2 Billion NTR Registration
February 20, 2018 | James Sprow | Blue Vault
Following other large alternative investment management firms that have filed public offerings for new nontraded REIT programs, Oaktree Capital Management LP has filed a registration statement with the SEC for a $2 billion nontraded REIT named Oaktree Real Estate Income Trust, Inc. Oaktree Capital Management LP currently has over $100 billion in assets under management, consisting of corporate debt (43%), convertible securities (5%), distressed debt (24%), control investing (15%), real estate (9%) and listed equities (5%). The new REIT plans to invest in a portfolio of income-producing real estate and real estate-related debt investments.
The REIT expects that 65-95 percent of its portfolio will be invested in office, multi-family and industrial assets, while the remainder will consist of private loans and traded securities.
In 2016, Blackstone filed a $5 billion offering for Blackstone Real Estate Income Trust, which has raised over $2 billion in Class S, Class T, Class D and Class I shares, accounting for over 50% of all new equity raised in the nontraded REIT sector since its debut. In October 2017, Starwood Capital Group Holdings filed its $5 billion offering for Starwood Real Estate Income Trust, with similar features to Blackstone’s offering. Both REITs offer monthly NAV pricing and monthly share repurchase plans. In December 2017, Nuveen/TIAA introduced Nuveen Global Cities REIT, Inc., a $5 billion offering with, again, similar features. Cantor Fitzgerald’s Rodin Global Property Trust, Inc., commenced its $1.25 billion offering in March 2017, with three classes of common stock and quarterly NAV valuations. That REIT has raised just $28.5 million as of February 12, 2018.
Each of these new nontraded REIT programs represents a move by large alternative investment managers into the space in search of new sources of capital, using wirehouses as a primary channel to reach high-net-worth investors.
The Oaktree offering consists of four classes of common stock, including Class T, Class S, Class D and Class I shares. During the escrow period, the shares will be priced at $10.00 each with different selling commissions, dealer manager fees and ongoing stockholder servicing fees that will not exceed 8.75%.
Class T shares, available through brokerage and transactional-based accounts, are priced at $10.35 and include a 3.0% selling commission, a 0.5% dealer manager fee, and an annual 0.85% stockholder servicing fee comprised of a 0.65% advisor fee and a 0.20% dealer fee.
Class S shares, available through brokerage and transactional-based accounts, are priced at $10.35 each and include a 3.5% selling commission, no dealer manager fee, and an annual 0.85% stockholder servicing fee.
Class D shares, available through fee-based programs, are priced at $10.05 each and include a 0.5% selling commission, no dealer manager fee, and an annual 0.25% stockholder servicing fee.
Class I shares, available to institutional investors, are priced at $10.00 and have no selling commissions, dealer manager fees, or stockholder servicing fees.
There is a $2,500 minimum initial investment for Class T, Class S and Class D shares, and a $1 million minimum initial investment for Class I shares.
Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.