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.