FS Credit Real Estate Income Trust (FSREI) 424B3 Prospectus supplement

Filed pursuant to Rule 424(b)(3)
File No. 333-264628

FS CREDIT REAL ESTATE INCOME TRUST, INC.

Supplement dated May 16, 2024

to

Prospectus dated April 12, 2024

This supplement (“Supplement”) contains information which amends, supplements or modifies certain information contained in the Prospectus of FS Credit Real Estate Income Trust, Inc. dated April 12, 2024 (as so supplemented and amended, the “Prospectus”). Capitalized and/or defined terms used in this Supplement have the same meanings as in the Prospectus, unless otherwise stated herein.

You should carefully consider the “Risk Factors” beginning on page 35 of the Prospectus before you decide to invest in shares of our common stock.

The purposes of this Supplement are as follows:

• to disclose the transaction price for each class of our common stock as of June 1, 2024;

• to disclose the calculation of our April 30, 2024 net asset value (“NAV”) per share for all share classes;

• to disclose an unregistered sale of equity securities;

• to provide a market update;

• to provide updates to our portfolio and our business;

• to disclose certain updates to our Prospectus;

• to provide an update regarding our financing arrangements;

• to disclose the approval by our board of directors of a one-time capital markets fee payable to an affiliate of the adviser;

• to disclose the appointment of William P. Hankowsky to our board of directors;

• to provide an update to the status of our current public offering; and

• to include our Quarterly Report on form 10-Q for the quarter ended March 31, 2024.

June 1, 2024 Transaction Price

The transaction price for each share class of our common stock for subscriptions accepted as of June 1, 2024 (and repurchases as of May 31, 2024) is as follows:

	Transaction Price (per share)
Class S		$	25.0681
Class T		$	24.8300
Class D		$	24.8801
Class M		$	24.9312
Class I		$	24.1772
Class F*		$	25.2783
Class Y*		$	24.1415

* We are offering Class F and Class Y shares in this offering only pursuant to our distribution reinvestment plan.

The June 1, 2024 transaction price for each of our share classes is equal to such class’s NAV per share as of April 30, 2024. A detailed calculation of the NAV per share is set forth below. No transactions or events have occurred since April 30, 2024 that would have a material impact on our NAV per share. The purchase price of our common stock for each share class equals the transaction price of such class, plus applicable upfront selling commissions and dealer manager fees.

April 30, 2024 NAV per Share

Our adviser calculates the NAV per share in accordance with the valuation guidelines approved by our board of directors for the purposes of establishing a price for shares sold in our public offering as well as establishing a repurchase price for shares repurchased pursuant to our share repurchase plan. Our NAV per share, which is updated as of the last calendar day of each month, is posted on our website at www.fsinvestments.com and is made available on our toll-free telephone line at 877-628-8575. Please refer to “Net Asset Value Calculation and Valuation Guidelines” in the Prospectus for how our NAV is determined. We have included a breakdown of the components of total NAV and NAV per share for April 30, 2024.

The following table provides a breakdown of the major components of our total NAV as of April 30, 2024 (dollar amounts in thousands):

Components of NAV	April 30, 2024
Loans receivable	$	7,896,724
Investment in real estate		181,061
Mortgage-backed securities held-to-maturity		125,446
Mortgage-backed securities, at fair value		342,755
Cash and cash equivalents		143,176
Restricted cash		25,129
Other assets		56,596
Collateralized loan obligation, net of deferred financing costs		(4,197,986	)
Repurchase agreements payable, net of deferred financing costs		(363,355	)
Credit facility payable, net of deferred financing costs		(911,669	)
Mortgage note, net of deferred financing costs		(123,894	)
Accrued stockholder servicing fees(1)		(1,510	)
Other liabilities		(120,570	)
Net asset value	$	3,051,903
Number of outstanding shares		123,610,895

(1) Stockholder servicing fees only apply to Class S, Class T, Class D and Class M shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a daily basis as such fee is accrued. Under U.S. generally accepted accounting principles (“GAAP”), we accrue future stockholder servicing fees in an amount equal to our best estimate of fees payable to the dealer manager at the time such shares are sold. As of April 30, 2024, we accrued under GAAP $107,979 of stockholder servicing fees payable to the dealer manager. As a result, the estimated liability for the future stockholder servicing fees, which are accrued at the time each share is sold, will have no effect on the NAV of any class. The dealer manager does not retain any of these stockholder servicing fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers.

The following table provides a breakdown of our total NAV and NAV per share by share class as of April 30, 2024 (dollar amounts in thousands, except per share data):

NAV Per Share	Class S Shares		Class T Shares		Class D Shares		Class M Shares		Class I Shares		Class F Shares		Class Y Shares		Total
Net asset value	$	1,620,599	$	25,408	$	12,591	$	129,972	$	1,222,682	$	18,763	$	21,888	$	3,051,903
Number of outstanding shares		64,647,768		1,023,298		506,053		5,213,211		50,571,677		742,240		906,648		123,610,895
NAV per Share as of April 30, 2024	$	25.0681	$	24.8300	$	24.8801	$	24.9312	$	24.1772	$	25.2783	$	24.1415

Unregistered Sale of Equity Securities

On January 28, 2022, our board of directors approved the issuance of up to $50,000,000 in shares of our Class I common stock in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933 (the “Private Placement”). On April 26, 2024, we accepted a subscription from an institutional investor to purchase $1,400,000 in Class I shares in the Private Placement. On May 1, 2024, we sold and issued to such institutional investor approximately 57,909 Class I shares at the per share purchase price of $24.1759, which is equal to the NAV per Class I share as of March 31, 2024.

Market Update

Treasury yields spiked in April 2024 as investors repriced rate expectations amid persistently hotter-than-expected inflation reports. The 2-year yield breached the 5% mark, rising 41bps to 5.03% while the 10-year yield climbed 48bps, to 4.68%. Against this backdrop, the Bloomberg U.S. Aggregate declined -2.53% in April and has returned -3.28% year to date and -0.16% over the past five years.

Commercial real estate (CRE) deal volume and pricing declined year-over-year as buyers and sellers continued to adjust to the higher rate environment. Despite the declines, we are seeing signs of markets normalizing to the current market environment.

• Deal volume totaled approximately $79 billion during Q1 2024, down -16% from a year earlier.¹ Volume has steadily improved in recent quarters from its depths of -60% in Q4 2022.¹

• Property price declines have slowed but may not have reached a trough. Appraisal-based metrics show prices down -20% from their peak, while those based on transactions suggest declines have been a more modest -7%.^1,2

Broad sentiment among market participants took a turn for the better in Q1 2024. The Real Estate Roundtable and the CRE Finance Council survey data both turned notably more positive on their outlooks in recent quarters while commercial mortgage-backed securities (CMBS) spreads have tightened meaningfully year to date.

CRE fundamentals outside of office have remained resilient and lent support to the market as strong fundamentals have allowed property owners to offset some of the impact of higher interest rates and have been the primary reason for the market’s resilience. Rent growth in the Industrial and Multifamily sectors has slowed in recent quarters though that can be linked almost exclusively to an increase in new construction rather than a decrease in demand. Crucially, this supply headwind is fading—while we expect deliveries in these sectors to remain elevated this year, a plunge in new construction starts portends a more favorable 2025 and beyond.

Office remains the clear outlier, with net operating income having declined over the past year as the vacancy rate steadily rises.¹ Even within Office, however, the gap between central business district (CBD) Office and suburban Office has widened over the past year.

¹  RCA Real Capital Analytics, as of March 31, 2024, latest data available.

²  Green Street Commercial Property Price Index, as of March 31, 2024.

Ultimately, we expect transaction and lending activity to pick up in the coming quarters but believe the outlook for property values is much foggier. The implications of such a scenario should be mixed for property owners and lenders.

• Equity investors’ performance could improve as price declines become less steep, yet the upside could continue to be limited by the elevated cost of financing.

• Conversely, the outlook for CRE debt appears significantly more promising. Not only are yields likely to remain elevated as lending activity improves, but lenders are in a unique position to drive terms that protect downside, including requiring more equity in deals.

Against this backdrop, we continue to view 2024 as the beginning of the next phase of a multiyear CRE correction, during which debt should remain broadly attractive relative to equity.

Performance Update

We generated positive total returns across all share classes in April 2024 driven by distributions paid during the month and stability in our net asset value (NAV).

• The current annualized distribution rate is 7.64% for Class I shares, 7.12% for Class D shares, 7.11% for Class M shares, 6.52% for Class S shares and 6.58% for Class T shares, based on the June 1, 2024 transaction price.

• The tax equivalent distribution rate is 8.54% for Class I shares, 7.97% for Class D shares, 7.95% for Class M shares, 7.29% for Class S shares and 7.36% for Class T shares, based on the June 1, 2024 transaction price.³

We offer a high level of excess income over short-term rates on both a nominal and real basis. Based on the Class I share, our annualized distribution rate of 7.64% is 225 basis points above 3-month Treasury bills (T-bills) on a nominal and real yield basis.⁴ Furthermore, our tax-equivalent annualized distribution rate is 315 bps over 3-month T-bills, or 2.7x higher compared to T-bills when comparing real yields/distribution rates. We met 100% of repurchase requests in April 2024.

Portfolio Highlights

• As of April 30, 2024, the portfolio was weighted to Multifamily (56%) followed by Hospitality (13%) and Industrial (11%).

• The portfolio’s allocation reflects our view that these sectors are well-positioned to benefit from long-term structural trends such as the record-high cost of homeownership (Multifamily), return of business and leisure travel (Hospitality), and continued demand for technologically advanced warehouse space (Industrial).

• We remained disciplined in our underwriting approach. Year-to-date originations have been underwritten at loan-to-value ratios, which we believe were appropriate based on our deep, bottom-up underwriting of the property, geography and borrower, and provide a strong equity cushion beneath our loans.

• Office is not a core focus in the current environment and Office exposure represented just 9.1% of the portfolio as of April 30, 2024.

³  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 8.54% 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 7.64% under the new tax law. The distribution rates quoted assume a 37% tax bracket.

⁴  Three-month T-bill yield as of April 15, 2023.

• 97.19% of the portfolio is comprised of performing assets as of April 30, 2024, while non-accruals represented 2.81% of the portfolio.

We believe the portfolio is well-positioned to deliver an attractive, high level of income and preserve capital driven by the:

• Debt-focused nature of our strategy, as we believe forward returns in commercial real estate will largely be driven by income generation and property cash flows compared to price appreciation.

• Deep experience of FS Investments and Rialto managing through commercial real estate market cycles: We continue to monitor the portfolio and are proactively engaged with our borrowers. In certain cases, we may modify or extend the maturity of our loans if we believe it is in the best interest of the portfolio and our shareholders. Modifications or extensions typically require additional “skin in the game” from the borrower through a combination of extension fees, additional equity commitments, a partial paydown of the loan or additional contribution to interest reserves.

• Continued strong performance of portfolio. We have generated positive total returns in 74 out of 76 months; our largest monthly drawdown was just -0.27% in March 2020.

• High level of equity cushion beneath our loans. As a senior lender, the loans in our portfolio receive priority. They are first to be paid from rental income and are last to absorb losses if property values decline.

• Geographically diversified composition of our $8.7 billion portfolio, weighted to multifamily properties.

• The long-term nature of our borrowings, as approximately 94% of our borrowings are financed through match-term, non-mark-to-market facilities.

• Positive impact of elevated interest rates for our floating rate loan portfolio, which represented approximately 96% of the portfolio as of April 30, 2024.

• Requirement of nearly all borrowers to purchase rate caps to help protect against rising borrowing costs.

• Available liquidity for new investments. We have maintained a strong liquidity profile which, when combined with continued net inflows, allows us to remain a capital provider when many traditional lenders and peers are more constrained in making new loans. As always, we remain disciplined in our underwriting standards as markets seek a new pricing equilibrium.

Prospectus Updates

The first four paragraphs under the section of the Prospectus entitled “Material U.S. Federal Income Tax Considerations—Taxation of Non-U.S. Stockholders—Dispositions of Our Common Stock” are hereby deleted and replaced in their entirety with the following:

Dispositions of Our Common Stock

A non-U.S. stockholder generally will not incur tax under FIRPTA with respect to gain realized upon a disposition (other than a repurchase by us, as described below) of our common stock as long as: (i) we are not a “United States real property holding corporation” during a specified testing period and certain procedural requirements are satisfied; or (ii) we are a domestically controlled REIT. A “United States real property holding corporation” is a U.S. corporation that at any time during the applicable testing period owned U.S. real property interests that exceeded in value 50% of the value of the corporation’s U.S. real property interests, interests in real property located outside the United States and other assets used in the corporation’s trade or business. We do not expect that 50% or more of our assets will consist of United States real property interests.

Even if shares of our common stock otherwise would be a USRPI under the foregoing test, shares of our common stock will not constitute a USRPI if we are a “domestically controlled REIT.” A domestically controlled REIT is a REIT in which, at all times during a specified testing period (generally the lesser of the five-year period ending on the date of disposition of the REIT’s shares of common stock or the period of the REIT’s existence), less than 50% in value of its outstanding shares of common stock is held directly or indirectly by non-U.S. stockholders. We believe we will be a domestically controlled REIT and, therefore, the sale of our common stock should not be subject to taxation under FIRPTA. However, because our stock will be widely held and freely transferable, we cannot assure our investors that we will be or that we will remain a domestically controlled REIT. Final Treasury regulations that are effective as of April 25, 2024 (the “Final Regulations”), modify prior tax guidance relating to the manner in which we determine whether we are a domestically controlled REIT. The Final Regulations provide a look-through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment companies, or non-public domestic C corporations owned more than 50% directly or indirectly by foreign persons (“foreign-controlled domestic corporations”) and treat “qualified foreign pension funds” as foreign persons. The look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will not apply to a REIT for a period of up to ten years if it is able to satisfy certain requirements, including not undergoing a significant change in its ownership and not acquiring a significant amount of new USRPIs, in each case since April 24, 2024, the date the Final Regulations were issued. If a REIT fails to satisfy such requirements during the ten-year period, then the look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will apply to such REIT beginning on the day immediately following the date of such failure. While we cannot predict when we will commence being subject to such look-through rule in the Final Regulations, we may not be able to satisfy the applicable requirements for the duration of the ten-year period. Prospective investors are urged to consult with their tax advisors regarding the application and impact of these rules. Even if we do not qualify as a domestically controlled REIT, a non-U.S. stockholder’s sale of our common stock nonetheless will generally not be subject to tax under FIRPTA as a sale of a USRPI, provided that (1) our common stock owned is of a class that is “regularly traded,” as defined by the applicable Treasury regulation, on an established securities market, and (2) the selling non-U.S. stockholder owned, actually or constructively, 10% or less of our outstanding stock of that class at all times during a specified testing period. Our common stock is not currently regularly traded on an established securities market in the United States and we do not expect that our common stock will be regularly traded on an established securities market in the United States at any future date.

If gain on the sale of our common stock were subject to taxation under FIRPTA, the non-U.S. stockholder would be subject to the same treatment as a U.S. stockholder with respect to such gain, subject to a special alternative minimum tax in the case of nonresident alien individuals, and the purchaser of the stock could be required to withhold 15% of the purchase price and remit such amount to the IRS.

Gain from the sale of our common stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. stockholder in two cases: (1) if the non-U.S. stockholder’s investment in our common stock is effectively connected with a U.S. trade or business conducted by such non-U.S. stockholder, the non-U.S. stockholder will be subject to the same treatment as a U.S. stockholder with respect to such gain, or (2) if the non-U.S. stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, the nonresident alien individual will be subject to a 30% tax on the individual’s net capital gain.

Prospectus Updates

SS&C Technologies, Inc.’s contact information set forth in the “Description of Shares” section and the “Share Repurchases” section of the Prospectus is hereby deleted and replaced with the following:

FS Credit REIT

c/o SS&C Technologies, Inc.

PO Box 219095

Kansas City, MO 64121-9095

Overnight Address: FS Credit REIT

c/o SS&C Technologies, Inc.

430 W 7th St.

Kansas City, MO 64105

Toll Free Number: 877-628-8575

The Form of Subscription Agreement set forth in Appendix A of the Prospectus is hereby deleted and replaced with the Form of Subscription Agreement attached to this Supplement as Appendix A.

Revolving Credit Facilities

MM-1 Facility

On April 23, 2024, FS CREIT Finance MM-1 LLC, one of our indirect wholly owned special purpose financing subsidiaries, as borrower, entered into a second amendment to the amended and restated loan and servicing agreement, originally dated as of April 27, 2022, with Wells Fargo Bank, National Association, as administrative agent, Massachusetts Mutual Life Insurance Company and C.M. Life Insurance Company, as lenders, and the other parties thereto. The amendment, among other things, (a) increases the applicable spread over the one-month Term SOFR benchmark rate from (i) 2.025% plus a credit spread adjustment of 0.11% to (ii) 2.30%, (b) extends the end of the availability period from September 20, 2024, to September 20, 2026, and (c) extends the scheduled maturity date from September 20, 2029, to September 20, 2031.

Barclays Facility

On April 24, 2024, we, as borrower, entered into an amended and restated credit agreement with Barclays Bank PLC, as administrative agent and as a lender, certain other lenders, and the other parties thereto. The amended and restated credit agreement, among other things, (a) increases the lenders’ aggregate commitments from $310 million to $425 million, and (b) extends the revolving credit termination date in respect of $400 million of the lenders’ commitments from August 1, 2025, to April 24, 2027, while the revolving credit termination date of the remaining $25 million commitment remains August 1, 2025.

Capital Markets Fee

On April 23, 2024, our board of directors, including a majority of independent directors, not otherwise interested in the transaction, approved the one-time payment to an affiliate of the adviser of a capital markets fee in connection with the revolving credit facility with Massachusetts Mutual Life Insurance Company (further described under the section heading “Revolving Credit Facility” above) in the amount of $3,000,000.

Management

Effective May 13, 2024, our board of directors increased the size of the board by one and appointed William P. Hankowsky as a new director, such that our board of directors consists of ten directors. Mr. Hankowsky serves as one of our independent directors.

The section of the Prospectus entitled “Management—Board of Directors and Executive Officers” is hereby amended to state that our board of directors consists of ten directors, seven of whom are considered independent directors, to identify Mr. Hankowsky as an independent director, and to include his biography below:

William P. Hankowsky, age 73, has been a member of our board of directors since May 2024. Since 2020, Mr. Hankowsky has served as Senior Advisor to Alterra Industrial Outdoor Storage and President of Wayne Avenue Enterprises. Since 2023, Mr. Hankowsky has served as an investment committee member of High Real Estate Group. Mr. Hankowsky served as Chairman, President and Chief Executive Officer of Liberty Property Trust (“Liberty”) until its acquisition by Prologis in February 2020 for $13 billion. He joined Liberty in 2001 as Chief Investment Officer, was named President in 2002 and was named Chief Executive Officer and Chairman in 2003. Prior to joining Liberty, Mr. Hankowsky served as President of the Philadelphia Industrial Development Corporation for 11 years. Mr. Hankowsky also served on the board of Essential Utilities (NYSE: WTRG) from 2004-2019. He also served as the City of Philadelphia’s Commerce Director where he worked on several noteworthy transactions, including the Pennsylvania Convention Center, the Wells Fargo Center, the Navy Base, and new stadiums for the Philadelphia Phillies and Eagles. Mr. Hankowsky also had work experience with the Reading Company, Amtrak, and the City of Camden, New Jersey. Mr. Hankowsky currently serves on the boards of Citizens Financial Group Inc. (NYSE:CFG), the Greater Philadelphia Chamber of Commerce, Delaware River Waterfront Corporation, Philadelphia Convention and Visitors Bureau, Philadelphia Shipyard Development Corporation, the Wetlands Institute, the Parkway Land Fund, the Pennsylvania Academy of Fine Arts and the Philadelphia Foundation. Mr. Hankowsky received his B.A. in Economics from Brown University. Our board of directors has determined that Mr. Hankowsky should serve as a director in light of his leadership and real estate experience.

Status of our Offering

We are currently offering on a continuous basis up to $2.75 billion in shares of common stock, consisting of up to $2.5 billion in shares in our primary offering and up to $250 million in shares pursuant to our distribution reinvestment plan. As of the date of this Supplement, we had issued and sold in the Offering (i) 43,900,903 shares of our common stock (consisting of 20,582,986 Class S shares, 21,411,557 Class I shares, 187,120 Class T shares, 194,969 Class D shares, and 1,524,271 Class M shares) in the primary offering for total proceeds of $1.087 billion and (ii) 5,750,508 shares of our common stock (consisting of 3,030,601 Class S shares, 2,469,356 Class I shares, 59,641 Class T shares, 23,438 Class D shares, and 167,472 Class M shares) pursuant to our distribution reinvestment plan for a total value of $142.09 million.

Quarterly Report on Form 10-Q

The Prospectus is hereby supplemented with our Quarterly Report on Form 10-Q, excluding exhibits, for the quarter ended March 31, 2024 that was filed with the SEC on May 15, 2024, a copy of which is attached to this Supplement as Appendix A.

Appendix A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM      TO      

COMMISSION FILE NUMBER: 000-56163

FS Credit Real Estate Income Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	81-4446064
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

201 Rouse Boulevard
Philadelphia, Pennsylvania	19112
(Address of principal executive offices)	(Zip Code)

(215) 495-1150

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act: None.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

As of May 9, 2024, there were 742,240 outstanding shares of Class F common stock, 906,648 outstanding shares of Class Y common stock, 986,834 outstanding shares of Class T common stock, 65,254,088 outstanding shares of Class S common stock, 470,749 outstanding shares of Class D common stock, 5,298,071 outstanding shares of Class M common stock and 51,343,868 outstanding shares of Class I common stock.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023		3
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023		4
	Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023		5
	Unaudited Consolidated Statements of Changes in Equity for the three months ended March 31, 2024 and 2023		6
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023		8
	Notes to Unaudited Consolidated Financial Statements		10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		50
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		65
ITEM 4.	CONTROLS AND PROCEDURES		66
PART II—OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		67
ITEM 1A.	RISK FACTORS		67
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		67
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		68
ITEM 4.	MINE SAFETY DISCLOSURES		68
ITEM 5.	OTHER INFORMATION		68
ITEM 6.	EXHIBITS		68
	SIGNATURES		70

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FS Credit Real Estate Income Trust, Inc.

Consolidated Balance Sheets

(in thousands, except share amounts)

	March 31, 2024 (Unaudited)			December 31, 2023
Assets
Cash and cash equivalents	$	98,502		$	147,035
Restricted cash		16,979			108,966
Loans receivable, held-for-investment, net of credit loss allowances of $119,800 and $79,851		7,785,803			7,702,368
Mortgage-backed securities held-to-maturity, net of credit loss allowances of $155 and $71		75,866			75,238
Mortgage-backed securities, at fair value, credit loss allowances of $16,688 and $17,582		234,636			235,235
Investment in real estate, net		181,507			183,341
Receivable for investments sold and repaid		57,596			8,180
Interest receivable		46,307			42,292
Other assets		14,279			13,071
Mortgage loans held in securitization trusts, at fair value		956,033			950,972
Total assets(1)	$	9,467,508		$	9,466,698
Liabilities
Collateralized loan obligations, net	$	4,202,544		$	4,301,970
Repurchase agreements payable, net		311,764			256,730
Credit facilities payable, net		939,294			910,197
Mortgage note payable, net		123,835			123,657
Due to related party		109,570			113,501
Interest payable		30,132			30,593
Payable for shares repurchased		39,317			27,397
Other liabilities		35,496			32,146
Mortgage obligations issued by securitization trusts, at fair value		883,044			878,545
Total liabilities(1)		6,674,996			6,674,736
Commitments and contingencies (See Note 11)
Stockholders’ equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 125 and 125 issued and outstanding, respectively		—			—
Class F common stock, $0.01 par value, 125,000,000 shares authorized, 739,847 and 734,184 issued and outstanding, respectively		7			7
Class Y common stock, $0.01 par value, 125,000,000 shares authorized, 906,648 and 906,648 issued and outstanding, respectively		9			9
Class T common stock, $0.01 par value, 125,000,000 shares authorized, 1,068,818 and 1,312,367 issued and outstanding, respectively		11			13
Class S common stock, $0.01 par value, 125,000,000 shares authorized, 64,139,732 and 64,584,819 issued and outstanding, respectively		641			646
Class D common stock, $0.01 par value, 125,000,000 shares authorized, 535,739 and 646,101 issued and outstanding, respectively		5			6
Class M common stock, $0.01 par value, 125,000,000 shares authorized, 5,156,054 and 4,939,668 issued and outstanding, respectively		52			49
Class I common stock, $0.01 par value, 300,000,000 shares authorized, 49,408,227 and 47,503,635 issued and outstanding, respectively		494			475
Additional paid-in capital		2,907,715			2,869,801
Accumulated other comprehensive income (loss)		(6,340	)		(6,986	)
Retained earnings (accumulated deficit)		(110,082	)		(72,058	)
Total stockholders’ equity		2,792,512			2,791,962
Total liabilities and stockholders’ equity	$	9,467,508		$	9,466,698

(1) The March 31, 2024 and December 31, 2023 consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of the VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse to FS Credit Real Estate Income Trust, Inc. As of March 31, 2024 and December 31, 2023, assets of the VIEs totaled $6,418,597 and $6,509,285, respectively, and liabilities of the VIEs totaled $5,098,739 and $5,194,011, respectively. See Note 10 to our consolidated financial statements included herein for further details.

See notes to unaudited consolidated financial statements.

3

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2024			2023
Net interest income
Interest income	$	191,726		$	173,803
Less: Interest expense		(110,182	)		(99,814	)
Interest income on mortgage loans held in securitization trusts		16,424			3,687
Less: Interest expense on mortgage obligations issued by securitization trusts		(14,530	)		(3,023	)
Net interest income		83,438			74,653
Other expenses
Management fee		9,393			7,876
Performance fee		6,165			5,611
General and administrative expenses		11,264			9,777
Real estate operating expenses		1,379			—
Depreciation and amortization		1,835			—
Interest expense on real estate		2,357			—
Less: Expense limitation		—			(87	)
Net other expenses		32,393			23,177
Other income (loss)
Credit loss expense, net		(39,960	)		(1,286	)
Real estate operating income		4,883			—
Net change in unrealized gain on interest rate cap		(784	)		(988	)
Net realized gain (loss) on mortgage-backed securities, fair value option		333			—
Net realized gain (loss) on extinguishment of debt		174			—
Net change in unrealized gain (loss) on mortgage-backed securities, fair value option		77			—
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net		532			6
Other income (loss), net		—			(81	)
Total other income (loss)		(34,745	)		(2,349	)
Net income before income taxes		16,300			49,127
Income tax expense		(480	)		(550	)
Net income		15,820			48,577
Preferred stock dividends		(4	)		(4	)
Net income attributable to FS Credit Real Estate Income Trust, Inc.	$	15,816		$	48,573
Per share information—basic and diluted
Net income per share of common stock - basic and diluted	$	0.13		$	0.46
Weighted average common stock outstanding - basic and diluted		122,749,486			104,482,396

See notes to unaudited consolidated financial statements.

4

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Comprehensive Income

(in thousands)

	Three Months Ended March 31,
	2024		2023
Net income	$	15,820	$	48,577
Other comprehensive income
Net change in unrealized gain (loss) on mortgage-backed securities available-for-sale		646		(1,289	)
Total other comprehensive income (loss)		646		(1,289	)
Comprehensive income	$	16,466	$	47,288

See notes to unaudited consolidated financial statements.

5

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Changes in Equity

(in thousands)

	Par Value
	Common Stock Class F		Common Stock Class Y		Common Stock Class T			Common Stock Class S			Common Stock Class D			Common Stock Class M		Common Stock Class I			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)(1)			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity
Three Months Ended March 31, 2024
Balance as of December 31, 2023	$	7	$	9	$	13		$	646		$	6		$	49	$	475		$	2,869,801		$	(6,986	)	$	(72,058	)	$	2,791,962
Common stock issued		—		—		—			23			—			3		27			122,253			—			—			122,306
Distributions declared		—		—		—			—			—			—		—			—			—			(53,840	)		(53,840	)
Proceeds from distribution reinvestment plan		—		—		—			5			—			—		6			26,741			—			—			26,752
Repurchases of common stock		—		—		(2	)		(33	)		(1	)		—		(14	)		(118,037	)		—			—			(118,087	)
Stockholder servicing fees		—		—		—			—			—			—		—			322			—			—			322
Offering costs		—		—		—			—			—			—		—			(927	)		—			—			(927	)
Restricted stock units issued		—		—		—			—			—			—		—			7,562			—			—			7,562
Net income		—		—		—			—			—			—		—			—			—			15,820			15,820
Dividends on preferred stock		—		—		—			—			—			—		—			—			—			(4	)		(4	)
Other comprehensive income		—		—		—			—			—			—		—			—			646			—			646
Balance as of March 31, 2024	$	7	$	9	$	11		$	641		$	5		$	52	$	494		$	2,907,715		$	(6,340	)	$	(110,082	)	$	2,792,512

6

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Changes in Equity

(in thousands)

	Par Value
	Common Stock Class F			Common Stock Class Y		Common Stock Class T		Common Stock Class S			Common Stock Class D		Common Stock Class M		Common Stock Class I			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)(1)			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity
Three Months Ended March 31, 2023
Balance as of December 31, 2022	$	9		$	9	$	16	$	549		$	7	$	46	$	340		$	2,314,639		$	(11,906	)	$	13,448		$	2,317,157
Common stock issued		—			—		—		43			—		2		58			248,353			—			—			248,456
Distributions declared		—			—		—		—			—		—		—			—			—			(42,523	)		(42,523	)
Proceeds from distribution reinvestment plan		—			—		—		5			—		—		3			20,620			—			—			20,628
Repurchases of common stock		(1	)		—		—		(18	)		—		—		(13	)		(78,803	)		—			—			(78,835	)
Stockholder servicing fees		—			—		—		—			—		—		—			(6,107	)		—			—			(6,107	)
Offering costs		—			—		—		—			—		—		—			(1,869	)		—			—			(1,869	)
Restricted stock units issued		—			—		—		—			—		—		—			6,392			—			—			6,392
Net income		—			—		—		—			—		—		—			—			—			48,577			48,577
Dividends on preferred stock		—			—		—		—			—		—		—			—			—			(4	)		(4	)
Other comprehensive loss		—			—		—		—			—		—		—			—			(1,289	)		—			(1,289	)
Adoption of ASU 2016-13, see Note 2		—			—		—		—			—		—		—			—			—			(41,521	)		(41,521	)
Balance as of March 31, 2023	$	8		$	9	$	16	$	579		$	7	$	48	$	388		$	2,503,225		$	(13,195	)	$	(22,023	)	$	2,469,062

(1) Comprised solely of unrealized gain (loss) on mortgage-backed securities, available for sale.

See notes to unaudited consolidated financial statements.

7

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities
Net income	$	15,820		$	48,577
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Restricted stock units		7,562			6,392
Amortization of deferred fees on loans and debt securities		(2,761	)		(6,292	)
Amortization of deferred financing costs and discount		5,441			4,902
Credit loss expense, net		39,960			1,286
Net unrealized (gain) loss on valuation of interest rate cap		784			988
Net realized (gain) loss on sale of mortgage-backed securities, fair value option		(333	)		—
Real estate depreciation and amortization		1,835			1,831
Net unrealized (gain) loss on mortgage-backed securities, fair value option		(77	)		—
Net unrealized (gain) loss on mortgage loans and obligations held in securitization trusts		(532	)		(6	)
Changes in assets and liabilities
Reimbursement due from (due to) sponsor		—			518
Interest receivable		(4,015	)		(2,232	)
Other assets		(1,992	)		(4,921	)
Due to related party		(1	)		—
Interest payable		(461	)		3,174
Other liabilities		2,459			(413	)
Net cash provided by (used in) operating activities		63,689			53,804
Cash flows used in investing activities
Origination and fundings of loans receivable		(268,648	)		(483,905	)
Principal collections from loans receivable, held-for-investment		96,813			30,421
Exit and extension fees received on loans receivable, held-for-investment		722			120
Purchases of mortgage-backed securities, at fair value		(4,489	)		—
Principal repayments of mortgage-backed securities, at fair value		7,356			28
Capital improvements to real estate		—			(7	)
Net cash provided by (used in) investing activities		(168,246	)		(453,343	)
Cash flows from financing activities
Issuance of common stock		122,306			248,456
Repurchases of common stock		(106,167	)		(107,053	)
Stockholder distributions paid		(27,022	)		(21,043	)
Stockholder servicing fees paid		(3,595	)		(3,165	)
Offering costs paid		(927	)		(1,869	)
Borrowings under repurchase agreements		85,486			16,649
Repayments under repurchase agreements		(29,607	)		(348,750	)
Borrowings under credit facilities		173,850			677,018
Repayments under credit facilities		(145,500	)		(138,000	)
Repayment of collateralized loan obligations		(102,623	)		(362	)
Payment of deferred financing costs		(2,164	)		(1,403	)
Net cash provided by (used in) financing activities		(35,963	)		320,478
Total increase (decrease) in cash, cash equivalents and restricted cash		(140,520	)		(79,061	)
Cash, cash equivalents and restricted cash at beginning of period		256,001			201,618
Cash, cash equivalents and restricted cash at end of period	$	115,481		$	122,557

8

FS Credit Real Estate Income Trust, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended March 31,
	2024			2023
Supplemental disclosure of cash flow information and non-cash financial activities
Payments of interest	$	105,202		$	91,738
Accrued stockholder servicing fee	$	(3,917	)	$	2,942
Distributions payable	$	8,834		$	7,669
Reinvestment of stockholder distributions	$	26,752		$	20,628
Payable for shares repurchased	$	39,317		$	32,270
Loan principal payments held by servicer	$	57,596		$	25,423
Mortgage obligations issued by securitization trusts, at fair value	$	883,044		$	291,818

See notes to unaudited consolidated financial statements.

9

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements

(in thousands, except share and per share amounts)

Note 1. Principal Business and Organization

FS Credit Real Estate Income Trust, Inc., (the “Company”), was incorporated under the general corporation laws of the State of Maryland on November 7, 2016 and formally commenced investment operations on September 13, 2017. The Company is managed by FS Real Estate Advisor, LLC, (“FS Real Estate Advisor” or the “adviser”), a subsidiary of the Company’s sponsor, Franklin Square Holdings, L.P., which does business as FS Investments (“FS Investments”), a national sponsor of alternative investment funds designed for the individual investor. FS Real Estate Advisor has engaged Rialto Capital Management, LLC, (“Rialto” or the “sub-adviser”) to act as its sub-adviser. The Company is currently conducting a public offering of up to $2,750,000 of its Class T, Class S, Class D, Class M and Class I shares of common stock pursuant to a registration statement on Form S-11 filed with the Securities and Exchange Commission (the“SEC”), consisting of up to $2,500,000 in shares in its primary offering and up to $250,000 in shares pursuant to its distribution reinvestment plan. The Company is also conducting a private offering of its Class I common stock to certain accredited investors.

The Company has elected to be taxed as a real estate investment trust (“REIT”), for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2017. The Company intends to be an investment vehicle of indefinite duration focused on real estate debt investments and other real estate-related assets. The shares of common stock are generally intended to be sold and repurchased by the Company on a continuous basis. The Company intends to conduct its operations so that it is not required to register under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Company’s primary investment objectives are to: provide current income in the form of regular, stable cash distributions to achieve an attractive dividend yield; preserve and protect invested capital; realize appreciation in net asset value (“NAV”) from proactive investment management and asset management; and provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate debt with lower volatility than public real estate companies.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited consolidated financial statements include both the Company’s accounts and the accounts of its wholly owned subsidiaries and variable interest entities (“VIEs”), of which the Company is the primary beneficiary, as of March 31, 2024. All significant intercompany transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The Company has evaluated the impact of subsequent events through the date the unaudited consolidated financial statements were issued.

Use of Estimates: The preparation of the unaudited consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

10

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

Principles of Consolidation: Financial Accounting Standards Board (“FASB”), Accounting Standards Codification Topic 810—Consolidation, or ASC Topic 810, provides guidance on the identification of a VIE (an entity for which control is achieved through means other than voting rights) and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis. For the Company’s consolidated securitization VIEs, the third party ownership interests are reflected as liabilities in the Company’s consolidated balance sheet because the beneficial interests payable to these third parties are legally issued in the form of debt. The Company’s presentation of net income attributes earnings to controlling and non-controlling interests. Refer to Note 10 for additional discussion of the Company’s VIEs.

Cash, Cash Equivalents and Restricted Cash: The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s uninvested cash is maintained with high credit quality financial institutions, which are members of the Federal Deposit Insurance Corporation. The Company’s cash is held with major financial institutions and generally exceed federally insured limits. Restricted cash primarily represents cash held in an account to fund additional collateral interests within the Company’s collateralized loan obligations.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s unaudited consolidated balance sheets to the total amount shown in the Company’s unaudited consolidated statements of cash flows:

	March 31,
	2024		2023
Cash and cash equivalents	$	98,502	$	87,938
Restricted cash		16,979		34,619
Total cash, cash equivalents and restricted cash	$	115,481	$	122,557

Loans Receivable: The Company originates and purchases commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. Loans that the Company originates or purchases that the Company is unable to hold, or intends to sell or otherwise dispose of, in the foreseeable future are classified as held-for-sale and are carried at the lower of amortized cost or fair value. The Company’s held-for-sale securities are subject to ASU 2016-13, as discussed below.

11

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

Mortgage-backed Securities: Mortgage-backed securities are classified as held-to-maturity or available-for-sale or accounted for under the fair value option. The Company determines the appropriate classification of its securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. Mortgage-backed securities are classified as held-to-maturity when the Company intends to, and has the ability to hold until maturity. Held-to-maturity securities are stated at amortized cost on the consolidated balance sheets. The Company’s remaining mortgage-backed securities are classified as either available-for-sale or accounted for under the fair value option and are reported at fair value on the consolidated balance sheets as components of Mortgage-backed securities, at fair value. The Company elected the fair value option for all mortgage-backed securities acquired during the three months ended March 31, 2024. Changes in fair value for mortgage-backed securities accounted for under the fair value option are recorded in the consolidated statements of operations as a component of Net change in unrealized gain (loss) on mortgage-backed securities, fair value option. The Company chose to elect the fair value option in order to simplify the accounting treatment for its investment securities. The fair value option provides an option to elect fair value as an alternative measurement for selected financial instruments. The fair value option may be elected only upon the occurrence of certain specified events, including when the Company enters into an eligible firm commitment, at initial recognition of the financial instrument, as well as upon a business combination or consolidation of a subsidiary. The election is irrevocable unless a new election event occurs. Prior to the quarter ended June 30, 2023, all mortgage-backed securities acquired that were not classified as held-to-maturity were classified as available-for-sale, stated at fair value and the changes in fair value are recorded in other comprehensive income. The Company’s held-to-maturity and available-for-sale securities were subject to the adoption of ASU 2016-13, as discussed below.

Credit Losses: ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), or ASU 2016-13, became effective for the Company on January 1, 2023. ASU 2016-13 significantly changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaced the previous incurred loss model with a current expected credit loss (“CECL”) model for instruments measured at amortized cost. The CECL model applies to the Company’s loans receivable, held-for-investment and its mortgage-backed securities held-to-maturity which are carried at amortized cost, including future funding commitments and accrued interest receivable related to those loans and securities. However, as permitted by ASC Topic 326, the Company has elected not to measure an allowance for credit losses on accrued interest receivable (which is classified separately on its consolidated balance sheets), but rather write off in a timely manner by reversing interest income and/or cease accruing interest that would likely be uncollectible.

CECL requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. Considering the lack of historical company data related to any realized loan losses since its inception, the Company elected to estimate its general CECL reserve by using a probability-weighted analytical model that considers the likelihood of default and loss-given-default for each individual loan. The credit loss model utilizes historical loss rates derived from a third party commercial real estate loan database with historical loan loss data beginning in 1998. The Company provides specific loan-level inputs which include loan-to-value (“LTV”), principal balances, property type, location, coupon, origination year, term, subordination, expected repayment dates and property net operating income. The Company also considers qualitative and environmental factors, including, but not limited to, reasonable and supportable macroeconomic forecasts, business conditions and trends, concentration of credit and changes in the level of such

12

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

concentrations. The reasonable and supportable forecast period is followed by an immediate reversion period back to historical loss rates.

The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan, which future funding commitments are also subject to the CECL model. The CECL reserve related to future loan fundings is recorded as a component of Other liabilities on the consolidated balance sheets. This CECL reserve is estimated using the same process outlined above for outstanding loan balances, and changes in this component of the CECL reserve will similarly impact the Company’s consolidated net income.

For both the funded and unfunded portions of its loans, the Company considers its internal risk rating of each loan as the primary credit quality indicator underlying the assessment. FS Real Estate Advisor and Rialto perform a quarterly review of the Company’s portfolio of loans. In connection with this review, FS Real Estate Advisor and Rialto assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, LTV ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan and project sponsorship. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

Loan Risk Rating	Summary Description
1	Very Low Risk
2	Low Risk
3	Medium Risk
4	High Risk/Potential for Loss
5	Impaired/Loss Likely and/or Foreclosure is Probable

Impairment is indicated when it is deemed probable that the Company will not be able to collect all amounts due to it pursuant to the contractual terms of the loan. If a loan is determined to be impaired, the Company assigns the loan a risk rating of 5 and records the impairment as a specific CECL reserve. For determining a specific CECL reserve, financial instruments are assessed outside of the CECL model on an individual basis. For collateral dependent loans that the Company determines foreclosure of the collateral is probable, the Company assigns the loan a risk rating of 5 and measures the expected losses based on the differences between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. For these loans, the allowance for expected credit losses may be zero if the fair value of the collateral on the measurement date exceeds the amortized cost basis of the loan. For collateral dependent loans where the Company determine foreclosure is not probable, a practical expedient to estimate expected losses is applied using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by FS Real Estate Advisor and Rialto. Actual losses, if any, could ultimately differ from these estimates.

Separate provisions of ASC Topic 326 apply to the Mortgage-backed securities available-for-sale, which are carried at fair value with unrealized gains and losses reported as a component of Accumulated other

13

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

comprehensive income (loss). The Company is required to establish an initial credit loss allowance for those available-for-sale securities that are purchased with credit deterioration (“PCD”) by grossing up the amortized cost basis of each security and providing an offsetting credit loss allowance for the difference between expected cash flows and contractual cash flows, both on a present value basis. As of the January 1, 2023 effective date, no such credit loss allowance gross-up was required on available-for-sale debt securities with PCD.

The Company uses a discounted cash flow method to estimate and recognize a credit loss allowance on its available-for-sale securities. The credit loss allowance represents the difference between the security’s amortized cost basis and the present value of expected cash flows. The credit loss allowance is limited to the difference between the security’s fair value and its amortized cost. Changes in the credit loss allowance are recognized immediately in earnings as a component of Credit loss expense, net.

Real Estate: In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations states that when substantially all the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business. The one property acquisition to date was acquired in 2022 and was accounted for as an asset acquisition.

Upon the acquisition of a property, the Company assesses the fair value of acquired tangible and intangible assets (including land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that it deems appropriate, as well as other available market information. Estimates of future cash flows are based on several factors including the historical operating results, known and anticipated trends and market and economic conditions. The Company capitalizes acquisition-related costs associated with asset acquisitions.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records acquired in-place lease values based on the Company’s evaluation of the specific characteristics of each tenant’s lease. The Company will record acquired above-market and below-market leases at their fair values which represents the present value of the difference between contractual rents of acquired leases and market rents at the time of the acquisition for the remaining lease term, discounted for tenant credit risks. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals. Based on its acquisition to date, the Company’s allocation to customer relationship intangible assets has not been material.

Intangible assets and intangible liabilities are recorded as a component of other assets and other liabilities, respectively, on the Company’s consolidated balance sheets. The amortization of acquired above-market, below-market, and in-place leases is recorded as a component of depreciation and amortization, on the Company’s unaudited consolidated statements of operations.

14

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

The cost of buildings and improvements includes the purchase price of the Company’s properties and any acquisition-related costs, along with any subsequent improvements to such properties. The Company’s investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows:

Description	Depreciable Life
Building	30 to 42 years
Building and land improvements	2 to 20 years
Furniture, fixtures and equipment	1 to 10 years
Tenant improvements	Shorter of estimated useful life or lease term
Lease intangibles	Over lease term

The Company’s management reviews its real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates an impaired value. Since the impairment model considers real estate properties to be “long-lived assets to be held and used,” cash flows to determine whether an asset has been impaired are undiscounted. Accordingly, the Company’s strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If the Company’s strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company’s results. If the Company determines that an impairment has occurred, the affected assets must be reduced to their fair value. During the periods presented, no such impairment occurred.

Fair Value of Financial Instruments: Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements under GAAP. Specifically, this guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

ASC Topic 820 also establishes a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring financial instruments. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument, and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination, as follows:

Level 1: Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date.

Level 2: Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates.

15

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

Level 3: Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2.

The estimated value of each asset reported at fair value using Level 3 inputs is determined by an internal committee comprised of members of senior management of FS Real Estate Advisor.

Certain of the Company’s assets are reported at fair value either (i) on a recurring basis, as of each quarter-end, or (ii) on a nonrecurring basis, as a result of impairment or other events. The Company generally values its assets recorded at fair value by either (i) discounting expected cash flows based on assumptions regarding the collection of principal and interest and estimated market rates, or (ii) obtaining assessments from third-party dealers. For collateral-dependent loans that are identified as impaired, the Company measures impairment by comparing FS Real Estate Advisor’s estimation of fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations may require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by FS Real Estate Advisor and Rialto.

The Company is also required by GAAP to disclose fair value information about financial instruments that are not otherwise reported at fair value in the Company’s consolidated balance sheets, to the extent it is practicable to estimate a fair value for those instruments. These disclosure requirements exclude certain financial instruments and all non-financial instruments.

The Company elected the fair value option for initial and subsequent recognition of the assets and liabilities of its consolidated securitization mortgage loans held in securitization trusts and the related CMBS investments. Interest income and interest expense associated with these loans are presented separately on the unaudited consolidated statements of operations.

The Company separately presents the assets and liabilities of its consolidated securitization loans as individual line items on its consolidated balance sheets. The liabilities of its consolidated securitization loans consist solely of obligations to the bondholders of the related trusts, and are thus presented as a single line item entitled “Mortgage obligations issued by securitization trusts.” The assets of its consolidated securitization loans consist principally of loans. These assets in the aggregate are likewise presented as a single line item entitled “Mortgage loans held in securitization trusts.” The residual difference shown on its unaudited consolidated statements of operations in the line item “Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts” represents the Company’s beneficial interest in the mortgage loans.

The securitization mortgage loan assets as a whole can only be used to settle the obligations of the consolidated mortgage loans. The assets of the Company’s securitization mortgage loans are not individually accessible by the bondholders, which creates inherent limitations from a valuation perspective.

The securitization mortgage loans in which the Company invests are “static”; that is, no reinvestment is permitted, and there is no active management of the underlying assets. In determining the fair value of the assets and liabilities of the securitization mortgage loans, the Company maximizes the use of observable inputs over unobservable inputs.

16

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

Liabilities of the consolidated mortgage obligations: The Company’s consolidated mortgage obligations generally represent bonds that are not owned by the Company directly. The majority of these are either traded in the marketplace or can be analogized to similar securities that are traded in the marketplace. For these liabilities, pricing is considered to be Level 2, where the valuation is based upon quoted prices for similar instruments traded in active markets. The Company generally utilizes third party pricing service providers for valuing these liabilities. In order to determine whether to utilize the valuations provided by third parties, the Company conducts an ongoing evaluation of their valuation methodologies and processes, as well as a review of the individual valuations themselves. In evaluating third party pricing for reasonableness, the Company considers a variety of factors, including market transaction information for the particular bond, market transaction information for bonds within the same trust, market transaction information for similar bonds, the bond’s ratings and the bond’s subordination levels.

For the minority portion of the Company’s consolidated mortgage obligations which consist of unrated or non-investment grade bonds that are not owned by the Company directly, pricing may be either Level 2 or Level 3. If independent third party pricing similar to that noted above is available, the Company considers the valuation to be Level 2. If such third party pricing is not available, the valuation is generated from model-based techniques that use significant unobservable assumptions, and the Company considers the valuation to be Level 3. For mortgage obligations classified as Level 3, valuation is determined based on discounted expected future cash flows which take into consideration expected duration and yields based on market transaction information, ratings, subordination levels, vintage and current market spread. Mortgage obligations may shift between Level 2 and Level 3 of the fair value hierarchy if the significant fair value inputs used to price the mortgage obligations become or cease to be observable.

Assets of the consolidated mortgage loans: The individual assets of a mortgage loan are inherently incapable of precise measurement given their illiquid nature and the limitations on available information related to these assets. Because the Company’s methodology for valuing these assets does not value the individual assets of a mortgage loan, but rather uses the value of the mortgage obligations as an indicator of the fair value of mortgage loan assets as a whole, the Company has determined that its valuations of mortgage loan assets in their entirety should be classified in Level 3 of the fair value hierarchy.

The following methods and assumptions are used to estimate the fair value of other classes of financial instruments, for which it is practicable to estimate that value:

• Cash and cash equivalents: The carrying amount of cash on deposit and in money market funds approximates fair value.

• Restricted cash: The carrying amount of restricted cash approximates fair value.

• Loans receivable held-for-investment, net: The fair values for these loans were estimated by FS Real Estate Advisor based on a discounted cash flow methodology taking into consideration factors, including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and indications of market value from other market participants.

• Mortgage-backed securities, at fair value: The fair values for these investments were based on indicative deal quotes.

17

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

• Mortgage-backed securities held-to-maturity: The fair values for these investments were estimated by FS Real Estate Advisor based on a discounted cash flow methodology pursuant to which a discount rate or market yield is used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement.

• Collateralized loan obligations, repurchase agreements payable, credit facilities payable, and mortgage note payable: The fair values for these instruments were estimated based on the rate at which similar credit facilities would have currently been priced.

Deferred Financing Costs: Deferred financing costs include issuance and other costs related to the Company’s debt obligations. The deferred financing costs related to the Company’s collateralized loan obligations, repurchase agreements, and mortgage note payable are recorded as a reduction in the net book value of the related liability on the Company’s consolidated balance sheets. Deferred financing costs related to the Company’s revolving credit facilities and facilities that are undrawn as of the reporting date are recorded as an asset on the Company’s consolidated balance sheets. These costs are amortized as interest expense using the straight-line method over the term of the related obligation, which approximates the effective interest method.

Revenue Recognition: Security transactions are accounted for on the trade date. The Company records interest income from its loans receivable portfolio on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest or dividends on loans and securities if there is reason to doubt the collectability of such income. Discounts or premiums associated with the investment securities are amortized or accreted into interest income as a yield adjustment on the effective interest method, based on expected cash flows through the expected maturity date of the investment. On at least a quarterly basis, the Company reviews and, if appropriate, makes adjustments to its cash flow projections. The Company records dividend income on the ex-dividend date. Any loan origination fees to which the Company is entitled, loan exit fees, original issue discount and market discount are capitalized and such amounts are amortized as interest income over the respective term of the investment. Upon the prepayment of a loan or security, any unamortized loan origination fees to which the Company is entitled are recorded as fee income. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.

Loans are considered past due when payments are not made in accordance with the contractual terms. The Company does not accrue as receivable interest on loans if it is not probable that such income will be collected. Unless the loan is both well secured and in the process of collection, loans are placed on non-accrual status when principal or interest is 120 days or more past due or when repayment of interest and principal is, in our judgment, in doubt. Interest payments received on non-accrual loans are generally recognized as interest income on a cash basis. If a full recovery of principal is doubtful, the cost recovery method is applied whereby any cash received is applied to the outstanding principal balance of the loan. Recognition of interest income on non-performing loans on an accrual basis is resumed when it is probable that the Company will be able to collect amounts due according to the contractual terms. Please refer to Note 3 and Note 4 of this document for our disclosure of any investments placed on non-accrual.

Offering Costs: Offering costs primarily include, among other things, marketing expenses and printing, legal and due diligence fees and other costs pertaining to the Company’s continuous public offering of shares of its

18

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

common stock, including the preparation of the registration statement and salaries and direct expenses of FS Real Estate Advisor’s personnel, employees of its respective affiliates and others while engaged in such activities. The Company may reimburse FS Real Estate Advisor and Rialto for any offering expenses that they incurred on the Company’s behalf, up to a cap of 0.75% of gross proceeds raised after such time. During the period from November 7, 2016 (Inception) to March 31, 2024, the Company incurred offering costs of $25,373, which were paid on its behalf by FS Investments (see Note 7).

Income Taxes: The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with its taxable year ended December 31, 2017. In order to maintain its status as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders. As a REIT, the Company generally will not be subject to federal income tax on income that it distributes to stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions.

Uncertainty in Income Taxes: The Company evaluates each of its tax positions to determine if they meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax benefits or liabilities in the unaudited consolidated financial statements. Recognition of a tax benefit or liability with respect to an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in the unaudited consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Company did not incur any interest or penalties and none are accrued at March 31, 2024.

Stockholder Servicing Fees: The Company follows the guidance in Accounting Standards Codification Topic 405, Liabilities, when accounting for stockholder servicing fees. The Company will pay stockholder servicing fees over time on its shares of Class T, Class S, Class D and Class M common stock as described in Note 7. The Company records stockholder servicing fees as a reduction to additional paid-in capital and records the related liability in an amount equal to its best estimate of the fees payable in relation to the shares of Class T, Class S, Class D and Class M common stock on the date such shares are issued. The liability will be reduced over time, as the fees are paid to the dealer manager, or adjusted if the fees are no longer payable.

Earnings Per Share: The restricted stock units grant Class I shares issued to FS Real Estate Advisor and Rialto for payment of the administrative services fee are considered to be participating securities. The impact of these restricted stock units on basic and diluted earnings per common share (“EPS”) has been calculated using the two-class method whereby earnings are allocated to the restricted stock units based on dividends declared and the restricted stock units’ participation rights in undistributed earnings. As of March 31, 2024 and March 31, 2023, the effects of the two-class method on basic and diluted EPS were not material to the Company’s consolidated financial statements.

Derivative Instruments: The Company uses interest rate caps to manage risks from fluctuations in interest rates. The Company has not designated any of these contracts as fair value or cash flow hedges for accounting

19

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 2. Summary of Significant Accounting Policies (continued)

purposes. The Company records its derivatives on its consolidated balance sheets at fair value and such amounts are included in Other assets. Any changes in the fair value of these derivatives are recorded in earnings.

The valuation of the Company’s interest rate caps are determined based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of March 31, 2024, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Note 3. Loans Receivable, net

The following table details overall statistics for the Company’s loans receivable portfolio as of March 31, 2024 and December 31, 2023:

	March 31, 2024 (Unaudited)			December 31, 2023
Number of loans		146			143
Principal balance	$	7,901,202		$	7,778,599
Net book value	$	7,785,803		$	7,702,368
Unfunded loan commitments(1)	$	333,143		$	390,312
Weighted-average cash coupon(2)(3)		+3.82	%		+3.86	%
Weighted-average all-in yield(2)(3)		+3.89	%		+3.92	%
Weighted-average maximum maturity (years)(4)		2.9			3.1

(1) The Company may be required to provide funding when requested by the borrowers in accordance with the terms of the underlying agreements.

(2) The Company’s floating rate loans are expressed as a spread over the relevant benchmark rates, which include the Secured Overnight Financing Rate, or SOFR. In addition to cash coupon, all-in yield includes accretion of discount (amortization of premium) and accrual of exit fees.

(3) As of March 31, 2024 and December 31, 2023, the one-month SOFR rate was 5.32% and 5.34%, respectively.

(4) Maximum maturity assumes all extension options are exercised by the borrowers; however, loans may be repaid prior to such date.

20

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Loans Receivable, net (continued)

For the three months ended March 31, 2024 and 2023, the activity in the Company’s loan portfolio, was as follows:

	For the Three Months Ended March 31,
	2024			2023
Loans receivable at beginning of period	$	7,782,219		$	7,350,315
Loan fundings		268,648			483,905
Loan repayments		(146,229	)		(54,922	)
Amortization of deferred fees on loans		1,687			1,517
Exit and extension fees received on loans receivable		(722	)		(120	)
Total loans receivable		7,905,603			7,780,695
CECL reserve		(119,800	)		(41,020	)
Loans receivable, net	$	7,785,803		$	7,739,675

The following tables detail the property type and geographic location of the properties securing the loans in the Company’s loans receivable, held-for-investment portfolio as of March 31, 2024 and December 31, 2023:

	March 31, 2024 (Unaudited)						December 31, 2023
Property Type	Net Book Value			Percentage			Net Book Value			Percentage
Multifamily	$	4,751,178			60	%	$	4,774,344			61	%
Hospitality		1,013,343			13	%		1,029,327			13	%
Industrial		899,722			11	%		714,821			9	%
Office		568,840			7	%		562,643			8	%
Retail		262,225			3	%		268,571			3	%
Mixed Use		190,485			3	%		206,114			3	%
Various		123,116			2	%		129,712			2	%
Self Storage		96,694			1	%		96,687			1	%
Total loans receivable		7,905,603			100	%		7,782,219			100	%
CECL reserve		(119,800	)					(79,851	)
Loans receivable, net	$	7,785,803					$	7,702,368

21

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Loans Receivable, net (continued)

	March 31, 2024 (Unaudited)						December 31, 2023
Geographic Location(1)	Net Book Value			Percentage			Net Book Value			Percentage
South	$	3,852,135			49	%	$	3,879,708			50	%
West		1,482,844			19	%		1,459,857			19	%
Northeast		1,410,803			18	%		1,442,656			18	%
Various		837,155			10	%		678,430			9	%
Midwest		322,666			4	%		321,568			4	%
Total loans receivable		7,905,603			100	%		7,782,219			100	%
CECL reserve		(119,800	)					(79,851	)
Loans receivable, net	$	7,785,803					$	7,702,368

(1) As defined by the United States Department of Commerce, Bureau of the Census.

Loan Risk Rating

As further described in Note 2, FS Real Estate Advisor and Rialto assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, LTV ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan and project sponsorship. Based on a 5-point scale, the Company’s loans are rated “1” through “5”, from less risk to greater risk, which ratings are defined in Note 2.

The following table allocates the net book value of the Company’s loans receivable, held-for-investment portfolio based on the Company’s internal risk ratings:

	March 31, 2024 (Unaudited)								December 31, 2023
Risk Rating	Number of Loans		Net Book Value			Percentage			Number of Loans		Net Book Value			Percentage
1		—	$	—			—			—	$	—			—
2		—		—			—			—		—			—
3		129		7,106,268			90	%		132		7,353,659			95	%
4		14		640,489			8	%		9		374,697			5	%
5		3		158,846			2	%		2		53,863			—
Total loans receivable		146		7,905,603			100	%		143		7,782,219			100	%
CECL reserve				(119,800	)							(79,851	)
Loans receivable, net, at end of period			$	7,785,803							$	7,702,368

22

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Loans Receivable, net (continued)

The Company’s primary credit quality indicator is its risk ratings, which are further discussed in Note 2. The following table presents the net book value of its loans receivable, held-for-investment portfolio as of March 31, 2024 and December 31, 2023, respectively, by year of origination and risk rating:

Risk Rating	Net Book Value of Loans Receivable by Year of Origination March 31, 2024 (Unaudited)
	2024		2023		2022		2021		2020		Prior		Total
1	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2		—		—		—		—		—		—		—
3		235,021		720,707		3,496,516		2,483,305		72,204		98,515		7,106,268
4		—		—		422,696		217,793		—		—		640,489
5		—		—		105,000		36,192		17,654		—		158,846
Total loans receivable	$	235,021	$	720,707	$	4,024,212	$	2,737,290	$	89,858	$	98,515	$	7,905,603
CECL reserve														(119,800	)
Loans receivable, net													$	7,785,803

Risk Rating	Net Book Value of Loans Receivable by Year of Origination December 31, 2023
	2023		2022		2021		2020		2019		Prior		Total
1	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2		—		—		—		—		—		—		—
3		757,348		3,714,430		2,691,177		84,292		64,966		41,446		7,353,659
4		—		309,611		49,673		—		15,413		—		374,697
5		—		—		36,192		17,671		—		—		53,863
Total loans receivable	$	757,348	$	4,024,041	$	2,777,042	$	101,963	$	80,379	$	41,446	$	7,782,219
CECL reserve														(79,851	)
Loans receivable, net													$	7,702,368

Current Expected Credit Loss Reserve

The CECL reserve required under GAAP reflects the Company’s current estimate of potential credit losses related to the loans included in its consolidated balance sheets. The general CECL reserve is measured on a collective basis wherever similar risk characteristics exist within a pool of similar assets. The Company has identified senior loans and mezzanine loans as pools within its loans receivable portfolio. Refer to Note 2 for further discussion of the Company’s CECL reserve.

23

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Loans Receivable, net (continued)

The following table provides details on the changes in CECL reserve for funded loans by investment pool:

	Senior Loans		Mezzanine Loans		Total
CECL Reserve as of December 31, 2023	$	74,074	$	5,777	$	79,851
Increase (Decrease) in general CECL reserve		37,985		1,964		39,949
Increase (Decrease) in specific CECL reserve		—		—		—
CECL reserve as of March 31, 2024	$	112,059	$	7,741	$	119,800

	Senior Loans		Mezzanine Loans		Total
CECL Reserve as of December 31, 2022	$	—	$	—	$	—
CECL reserve recorded on January 1, 2023		35,456		3,963		39,419
Increase (Decrease) in CECL reserve		1,223		378		1,601
CECL reserve as of March 31, 2023	$	36,679	$	4,341	$	41,020

During the three months ended March 31, 2024 and 2023, the Company recorded an increase of $39,949 and $41,020, respectively, in expected credit loss reserve against its loans receivable portfolio, bringing the total CECL reserve to $119,800 as of March 31, 2024.

The following table summarizes our risk rated 5 loans as of March 31, 2024, which were analyzed for specific CECL reserves:

Location	Origination Date		Type	Amortized Cost		Specific CECL Reserve		Non-accrual Status
Seattle, WA		12/17/2021	Office	$	36,192	$	2,967	Cost recovery - May 2023
Fox Hills, CA		12/10/2020	Office	$	17,654	$	—	Cash basis - December 2023
New Rochelle, NY		5/18/2022	Multifamily	$	105,000	$	—	Cash basis - March 2024

The risk rated 5 loans were determined to be collateral dependent as of March 31, 2024. Loans are assigned a risk rating of 5 when an impairment or a loss is likely and/or foreclosure is probable. The allowance for expected credit losses for loans when foreclosure is probable may be zero if the fair value of the collateral on the measurement date exceeds the amortized cost basis of the loan. The Company estimated expected losses based on each loan’s collateral fair value, which was determined by applying a capitalization rate between 5.50% and 7.25% and a discount rate between 7.50% and 9.25%.

The following table presents an aging analysis for the Company’s portfolio of loans held for investment on amortized cost basis:

	Current or Less Than 30 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Loans
March 31, 2024	$	7,614,080	$	194,000	$	50,007	$	40,867	$	7,898,954
December 31, 2023	$	7,659,065	$	50,109	$	15,343	$	51,492	$	7,776,009

24

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 3. Loans Receivable, net (continued)

As of March 31, 2024, the Company had one loan with interest income payments 90 days or more past due that was not placed on non-accrual status with a total amortized cost of $4,675.

Current Expected Credit Loss Reserve for Unfunded Loan Commitments

As of March 31, 2024, the Company had unfunded commitments of $333,143. The expected credit losses over the contractual period of its loans are subject to the obligation to extend credit through its unfunded loan commitments. See Note 2 for further discussion of the CECL reserve related to its unfunded loan commitments.

The following table provides details on the changes in CECL reserve for unfunded loan commitments by investment pool:

	Senior Loans		Mezzanine Loans		Total
CECL Reserve as of December 31, 2023	$	1,540	$	28	$	1,568
Increase (Decrease) in CECL reserve		811		10		821
CECL reserve as of March 31, 2024	$	2,351	$	38	$	2,389

	Senior Loans			Mezzanine Loans		Total
CECL Reserve as of December 31, 2022
CECL reserve recorded on January 1, 2023	$	1,129		$	34	$	1,163
Increase (Decrease) in CECL reserve		(33	)		1		(32	)
CECL reserve as of March 31, 2023	$	1,096		$	35	$	1,131

During the three months ended March 31, 2024 and 2023, the Company recorded an increase of $821 and a decrease of $32, respectively, in expected credit loss reserve against its unfunded loan commitments, bringing the Company’s total CECL reserve on its unfunded loan commitments to $2,389 as of March 31, 2024.

Note 4. Mortgage Backed Securities

Mortgage-backed securities, at fair value

Commercial mortgage-backed securities, or CMBS, classified as available-for-sale are reported at fair value on the consolidated balance sheets with changes in fair value recorded in other comprehensive income. CMBS accounted for under the fair value option are reported at fair value on the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations as a component of Net change in unrealized gain (loss) on mortgage-backed securities, fair value option.

25

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 4. Mortgage Backed Securities (continued)

The table below summarizes various attributes of the Company’s investments in CMBS reported at fair value as of March 31, 2024 and December 31, 2023, respectively.

								Gross Unrealized							Weighted Average
	Outstanding Face Amount		Amortized Cost Basis		Allowance for Credit Losses			Gains		Losses			Fair Value		Coupon			Maturity (years)
March 31, 2024 (Unaudited)
CMBS, available-for-sale	$	171,123	$	167,730	$	(16,688	)	$	387	$	(6,726	)	$	144,704		10.09	%(1)		14.1
CMBS, fair value option	$	91,551	$	89,422	$	—		$	726	$	(216	)	$	89,932		7.72	%(1)		2.6
December 31, 2023
CMBS, available-for-sale	$	172,392	$	169,326	$	(17,582	)	$	239	$	(7,224	)	$	144,759		10.08	%(2)		14.4
CMBS, fair value option	$	92,749	$	90,042	$	—		$	847	$	(414	)	$	90,476		7.57	%(2)		2.9

(1) Calculated using the one-month SOFR rate of 5.32% as of March 31, 2024.

(2) Calculated using the one-month SOFR rate of 5.34% as of December 31, 2023.

As of March 31, 2024, there were two CMBS, available for sale on non-accrual status with a total amortized cost of $26,633. All future interest collections will be accounted for under the cost recovery method.

The Company uses a discounted cash flow method to estimate and recognize an allowance for its available-for sale securities. The following table provides details on the changes in allowance for credit losses for available-for sale securities:

	Three Months Ended March 31, 2024
Allowance for credit losses as of December 31, 2023	$	(17,582	)
Additions on securities for which credit losses were not previously recorded		—
(Increase) decrease on securities with previously recorded credit losses		894
Allowance for credit losses as of March 31, 2024	$	(16,688	)

26

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 4. Mortgage Backed Securities (continued)

The following table presents the gross unrealized losses and estimated fair value of any available-for-sale securities for which an allowance for credit losses has not been recorded that were in an unrealized loss position as of March 31, 2024 and December 31, 2023, respectively.

	Estimated Fair Value				Unrealized Losses
	Securities with a loss less than 12 months		Securities with a loss greater than 12 months		Securities with a loss less than 12 months		Securities with a loss greater than 12 months
March 31, 2024 (Unaudited)
CMBS, available-for-sale	$	—	$	97,504	$	—	$	(6,726	)
December 31, 2023
CMBS, available-for-sale	$	—	$	108,128	$	—	$	(7,224	)

As of March 31, 2024 and December 31, 2023, there were nine securities and ten securities, respectively, with unrealized losses reflected in the table above. After evaluating the securities and recording adjustments for credit losses, the Company concluded that the remaining unrealized losses reflected above were noncredit-related and would be recovered from the securities’ estimated future cash flows. The Company considered a number of factors in reaching this conclusion, including that it did not intend to sell the securities, it was not considered more likely than not that the Company would be forced to sell the securities prior to recovering its amortized cost, and there were no material credit events that would have caused the Company to otherwise conclude that it would not recover the cost of the securities.

Mortgage-backed securities, held-to-maturity

The table below summarizes various attributes of the Company’s investments in held-to-maturity CMBS as of March 31, 2024 and December 31, 2023, respectively.

	Amortized Cost Basis		Credit Loss Allowance			Net Carrying Amount		Gross Unrecognized Holding Gains		Gross Unrecognized Holding Losses			Fair Value
March 31, 2024 (Unaudited)
CMBS, held-to-maturity	$	76,021	$	(155	)	$	75,866	$	—	$	(2,995	)	$	72,871
December 31, 2023
CMBS, held-to-maturity	$	75,309	$	(71	)	$	75,238	$	—	$	(2,282	)	$	72,956

The following table provides details on the changes in CECL reserve for held-to-maturity CMBS:

CECL Reserve as of December 31, 2023	$	71
Increase (Decrease) in CECL reserve		84
CECL reserve as of March 31, 2024	$	155
CECL Reserve as of December 31, 2022	$	—
CECL reserve recorded on January 1, 2023		939
Increase (Decrease) in CECL reserve		(283	)
CECL reserve as of March 31, 2023	$	656

27

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 4. Mortgage Backed Securities (continued)

The table below summarizes the maturities of the Company’s investments in held-to-maturity CMBS as of March 31, 2024 and December 31, 2023, respectively:

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
March 31, 2024 (Unaudited)
CMBS, held-to-maturity	$	76,021	$	—	$	45,902	$	30,119	$	—
December 31, 2023
CMBS, held-to-maturity	$	75,309	$	—	$	45,188	$	30,121	$	—

Note 5. Real Estate

Investment in real estate, net, consisted of the following as of March 31, 2024 and December 31, 2023:

	March 31, 2024 (Unaudited)			December 31, 2023
Building and building improvements	$	120,527		$	120,527
Land and land improvements		39,186			39,186
Furniture, fixtures and equipment		1,064			1,064
In-place lease intangibles		33,531			33,530
Total		194,308			194,307
Accumulated depreciation and amortization		(12,801	)		(10,966	)
Real estate, net	$	181,507		$	183,341

The following table details the Company’s future amortization of intangible assets for each of the next five years and thereafter:

	Amortization
2024 (remaining)	$	2,845
2025		3,814
2026		3,806
2027		3,803
2028		3,803
Thereafter		8,365
Total	$	26,436

28

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financing Arrangements

The following tables present summary information with respect to the Company’s outstanding financing arrangements as of March 31, 2024 and December 31, 2023.

	As of March 31, 2024 (Unaudited)
Arrangement	Weighted  Average Spread(2)			Amount Outstanding(1)		Amount Available		Maturity Date		Carrying Amount of Collateral		Fair Value of Collateral
Collateralized Loan Obligations
2019-FL1 Notes		+1.75	%(5)	$	160,896	$	—		December 18, 2036	$	258,942	$	257,244
2021-FL2 Notes		+1.66	%(5)		600,479		—		May 5, 2038		736,036		722,942
2021-FL3 Notes		+1.63	%(5)		895,442		—		November 4, 2036		1,100,887		1,087,598
2022-FL4 Notes		+2.21	%(5)		837,662		—		January 31, 2039		1,070,194		1,053,724
2022-FL5 Notes		+2.76	%(5)		556,012		—		June 17, 2037		681,093		665,578
2022-FL6 Notes		+2.84	%(5)		552,100		—		August 19, 2037		749,806		736,014
2022-FL7 Notes		+3.18	%(5)		631,042		—		October 17, 2039		814,705		808,113
					4,233,633		—				5,411,663		5,331,213
Repurchase Agreements
WF-1 Facility		+2.25	%(3)		21,959		578,041		August 30, 2024		27,958		26,889
GS-1 Facility		+3.10	%(4)		18,781		431,219		January 26, 2025		84,447		84,133
RBC Facility		+1.32	%		80,914		619,086		N/A		42,293		39,985
BB-1 Facility		+1.96	%(5)		37,537		112,463		February 21, 2025		101,581		101,691
MS-1 Facility		+2.65	%(6)		30,131		—		October 13, 2025		73,238		72,839
NTX-1 Facility		(3	)		—		250,000		November 10, 2024		—		—
BMO-1 Facility		+2.00	%(3)		110,000		—		February 28, 2025		257,458		255,840
Lucid Facility		+1.14	%		15,776		—		N/A		23,850		23,794
					315,098		1,990,809				610,825		605,171
Revolving Credit Facility
MM-1 Facility		+2.14	%(6)(7)		923,350		76,650		September 20, 2029		1,218,376		1,209,163
Barclays Facility		+2.35	%(8)		25,000		285,000		August 1, 2025		—		—
					948,350		361,650				1,218,376		1,209,163
Mortgage Loan		+2.15	%(6)		124,700		2,000		July 9, 2025		154,632		180,556
Total				$	5,621,781	$	2,354,459			$	7,395,496	$	7,326,103

(1) The amount outstanding under the facilities approximates their fair value.

(2) The rates are expressed over the relevant floating benchmark rates, which include Term SOFR, and SOFR Average (compounded average of SOFR over a rolling 30-day period).

(3) Benchmark rate is subject to a 0.00% floor. SOFR benchmark rate is selected with respect to a transaction as set forth in the related transaction confirmation for the underlying transaction.

(4) Term SOFR is subject to a 0.00% floor. GS-1 and Goldman Sachs may mutually agree on rates outside this range or a different floor on an asset by asset basis.

29

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financing Arrangements (continued)

(5) Term SOFR or SOFR Average (compounded average of SOFR over a rolling 30-day period), subject to a 0.00% floor.

(6) Term SOFR is subject to a 0.00% floor.

(7) The rate applicable under the MM-1 Facility is subject to a credit spread adjustment of 0.11%, which was included when the benchmark transitioned from USD LIBOR to Term SOFR.

(8) Borrowings under the Barclays Facility bear interest, at the Company’s election, at either a base rate plus a spread of 1.25% per annum or one-, three- or six-month Term SOFR plus a spread of 2.25% per annum and a credit spread adjustment of 0.10% per annum.

	As of December 31, 2023
Arrangement	Weighted Average Interest Rate(2)			Amount Outstanding(1)		Amount Available		Maturity Date		Carrying Amount of Collateral		Fair Value of Collateral
Collateralized Loan Obligations
2019-FL1 Notes		+1.66	%(5)	$	193,723	$	—		December 18, 2036	$	291,770	$	289,465
2021-FL2 Notes		+1.65	%(5)		633,021		—		May 5, 2038		746,616		735,232
2021-FL3 Notes		+1.62	%(5)		928,483		—		November 4, 2036		1,133,887		1,127,552
2022-FL4 Notes		+2.21	%(5)		837,662		—		January 31, 2039		1,072,212		1,059,356
2022-FL5 Notes		+2.78	%(5)		560,224		—		June 17, 2037		663,202		653,507
2022-FL6 Notes		+2.84	%(5)		552,100		—		August 19, 2037		733,143		727,826
2022-FL7 Notes		+3.18	%(5)		631,042		—		October 17, 2039		789,955		784,845
					4,336,255		—				5,430,785		5,377,783
Repurchase Agreements
WF-1 Facility		+2.00	%(3)		35,794		564,206		August 30, 2024		45,207		44,407
GS-1 Facility		+3.10	%(4)		18,781		431,219		January 26, 2025		84,447		84,068
RBC Facility		+1.32	%%		29,940		—		N/A		42,293		39,796
BB-1 Facility		+1.96	%(5)		11,474		688,526		February 21, 2025		14,802		14,713
MS-1 Facility		+2.65	%(6)		37,537		112,463		October 13, 2025		89,991		89,438
NTX-1 Facility		(3	)		—		250,000		November 10, 2024		—		—
BMO-1 Facility		+2.00	%(3)		110,000		—		March 1, 2024		276,478		276,233
Lucid Facility		+1.15	%		15,693		—		N/A		23,849		23,718
					259,219		2,046,414				577,067		572,373
Revolving Credit Facilities
MM-1 Facility		+2.14	%(6)(7)		850,000		150,000		September 20, 2029		1,148,945		1,139,895
Barclays Facility		+2.35	%(8)		70,000		240,000		August 1, 2025		—		—
					920,000		390,000				1,148,945		1,139,895
Mortgage Loan		+2.15	%(6)		124,700		2,000		July 9, 2025		155,498		182,557
Total				$	5,640,174	$	2,438,414			$	7,312,295	$	7,272,608

(1) The amount outstanding under the facilities approximates their fair value.

30

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financing Arrangements (continued)

(2) The rates are expressed over the relevant floating benchmark rates, which include Term SOFR and SOFR Average (compounded average of SOFR over a rolling 30-day period).

(3) Benchmark rate is subject to a 0.00% floor. SOFR benchmark rate is selected with respect to a transaction as set forth in the related transaction confirmation for the underlying transaction.

(4) Term SOFR is subject to a 0.00% floor. GS-1 and Goldman Sachs may mutually agree on rates outside this range or a different floor on an asset by asset basis.

(5) Term SOFR or SOFR Average (compounded average of SOFR over a rolling 30-day period), subject to a 0.00% floor.

(6) Term SOFR is subject to a 0.00% floor.

(7) The rate applicable under the MM-1 Facility is subject to a credit spread adjustment of 0.11%, which was included when the benchmark transitioned from USD LIBOR to Term SOFR.

(8) Borrowings under the Barclays Facility bear interest, at the Company’s election, at either a base rate plus a spread of 1.25% per annum or one-, three- or six-month Term SOFR plus a spread of 2.25% per annum and a credit spread adjustment of 0.10% per annum.

The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the three months ended March 31, 2024 were $5,572,133 and 7.60%, respectively. The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for the year ended December 31, 2023 were $5,645,887 and 7.24%, respectively.

Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar financing arrangements. The Company was in compliance with all covenants required by its financing arrangements as of March 31, 2024 and December 31, 2023.

Maturities

The Company generally requires the amount outstanding on debt obligations to be paid down before the financing arrangement’s respective maturity date. The following table sets forth the Company’s repayment schedule for secured financings outstanding as of March 31, 2024 based on the maturity date of each financing arrangement:

	Collateralized Loan Obligations(1)		Repurchase Agreements		Revolving Credit Facilities		Mortgage Loan		Total
2024	$	36,022	$	21,959	$	—	$	—	$	57,981
2025		137,226		247,232		25,000		124,700		534,158
2026		1,772,980		—		—		—		1,772,980
2027		2,287,405		—		—		—		2,287,405
2028		—		—		—		—		—
Thereafter		—		45,907		923,350		—		969,257
Total	$	4,233,633	$	315,098	$	948,350	$	124,700	$	5,621,781

(1) The allocation of repayments under the Company’s collateralized loan obligations is based on the maturity date of each agreement, or the maximum maturity date assuming all extension options are exercised by the borrower if the reinvestment period has expired.

31

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financing Arrangements (continued)

Collateralized Loan Obligations

The Company financed certain pools of loans through collateralized loan obligations, which include 2019-FL1, 2021-FL2, 2021-FL3, 2022-FL4, 2022-FL5, 2022-FL6 and 2022-FL7, or collectively, the CLOs. The following table outlines the number of loans, including partial loans, and the principal balance of the collateralized pool of interests for each CLO.

	As of March 31, 2024 (Unaudited)
Collateral Assets	Total Count		Principal Balance
2019-FL1		12	$	259,463
2021-FL2		24		736,122
2021-FL3		31		1,100,988
2022-FL4		26		1,070,619
2022-FL5		25		681,153
2022-FL6		24		749,893
2022-FL7		19		814,814
Total		161	$	5,413,052

Deferred financing costs and discounts related to the collateralization of the CLO notes are amortized to interest expense over the remaining life of the loans. The following table outlines the net book value of the Company’s CLOs on its consolidated balance sheets.

	March 31,
	2024			2023
Face value	$	4,233,633		$	4,383,457
Unamortized deferred financing costs		(22,880	)		(32,648	)
Unamortized discount		(8,209	)		(11,360	)
Net book value	$	4,202,544		$	4,339,449

Repurchase Agreements

The Company has entered into and maintains in effect eight repurchase facilities. The Company, through direct or indirect wholly owned subsidiaries, entered into repurchase agreements with Wells Fargo (the “WF-1 Facility”), Goldman Sachs (the “GS-1 Facility”), Royal Bank of Canada (the “RBC Facility”), Barclays Bank PLC (the “BB-1 Facility”), Morgan Stanley Bank, N.A. (the “MS-1 Facility”), Natixis, New York Branch (the “NTX-1 Facility”), Bank of Montreal (the “BMO-1 Facility”), and Lucid Prime Fund (the “Lucid Facility”). The Company uses repurchase facilities for multiple purposes, including, but not limited to, (i) financing the acquisition and origination of (a) real estate loans or senior controlling participation interests in such loans, (b) pari passu participation interests in mortgage loans and (c) mezzanine loans and, (ii) repurchase transactions of securities and financial instruments. Each repurchase facility is subject to certain representations, warranties, covenants, events of default and indemnities unique to each facility but customary for agreements of this type. Further, the Company has entered into guarantees with respect to each of the repurchase facilities in which the Company guarantees obligations of the facility. Each transaction under each repurchase facility has its own specific terms, such as identification of the assets subject to the transaction, sale price, repurchase price and rate.

32

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 6. Financing Arrangements (continued)

The Company incurred deferred financing costs in connection with each repurchase facility, which costs are being amortized to interest expense over the life of that repurchase facility. The following table outlines the net book value of the Company’s repurchase facilities on its consolidated balance sheets.

	March 31,
	2024			2023
Face value	$	315,098		$	428,135
Unamortized deferred financing costs		(3,334	)		(3,732	)
Net book value	$	311,764		$	424,403

Revolving Credit Facilities

The Company has entered into, and maintains in effect, two revolving credit facilities, the Barclays Facility and the MM-1 Facility. The Barclays Facility is utilized for purposes of financing the operating expenses and general corporate purposes of the Company and its subsidiaries. The MM-1 Facility is utilized for the purposes of financing the acquisition and origination of commercial mortgage loan assets meeting specified eligibility criteria and concentration limits, paying transaction costs and funding distributions to FS CREIT Finance Holdings, LLC (and ultimately to the Company).

The Company incurred deferred financing costs in connection with each revolving credit facility, which costs are being amortized to interest expense over the life of that facility. The following table details the net book value of the Company’s revolving credit facilities on its consolidated balance sheets.

	March 31,
	2024			2023
Face value	$	948,350		$	850,000
Unamortized deferred financing costs		(9,056	)		(11,738	)
Net book value	$	939,294		$	838,262

Mortgage Loan

On June 23, 2022, FS CREIT 555 Aviation LLC, an indirect wholly-owned subsidiary of the Company, entered into a mortgage loan related to its purchase of 555 Aviation (see Note 5). The Company incurred deferred financing costs, which are being amortized to interest expense over the life of the facility. The following table details the net book value of the Company’s mortgage loan on its consolidated balance sheets.

	March 31,
	2024			2023
Face value	$	124,700		$	124,700
Unamortized deferred financing costs		(865	)		(2,132	)
Net book value	$	123,835		$	122,568

33

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions

Compensation of FS Real Estate Advisor, Rialto and the Dealer Manager

Base Management Fee

Pursuant to the fourth amended and restated advisory agreement dated as of December 1, 2022 or the New Advisory Agreement, FS Real Estate Advisor is entitled to a base management fee equal to 1.25% of the NAV for the Company’s Class T, Class S, Class D, Class M and Class I shares, payable quarterly in arrears. The payment of all or any portion of the base management fee accrued with respect to any quarter may be deferred by FS Real Estate Advisor, without interest, and may be taken in any such other quarter as FS Real Estate Advisor may determine. In calculating the Company’s base management fee, the Company will use its NAV before giving effect to accruals for such fee, the performance fee, the administrative services fee, stockholder servicing fees or distributions payable on its shares. The base management fee is a class-specific expense. No base management fee is paid on the Company’s Class F or Class Y shares.

Performance Fee

FS Real Estate Advisor is also entitled to the performance fee calculated and payable quarterly in arrears in an amount equal to 10.0% of the Company’s Core Earnings (as defined below) for the immediately preceding quarter, subject to a hurdle rate, expressed as a rate of return on average adjusted capital, equal to 1.625% per quarter, or an annualized hurdle rate of 6.5%. As a result, FS Real Estate Advisor does not earn a performance fee for any quarter until the Company’s Core Earnings for such quarter exceed the hurdle rate of 1.625%. For purposes of the performance fee, “adjusted capital” means cumulative net proceeds generated from sales of the Company’s common stock other than Class F common stock (including proceeds from the Company’s distribution reinvestment plan) reduced for distributions from non-liquidating dispositions of the Company’s investments paid to stockholders and amounts paid for share repurchases pursuant to the Company’s share repurchase plan. Once the Company’s Core Earnings in any quarter exceed the hurdle rate, FS Real Estate Advisor will be entitled to a “catch-up” fee equal to the amount of Core Earnings in excess of the hurdle rate, until the Company’s Core Earnings for such quarter equal 1.806%, or 7.222% annually, of adjusted capital. Thereafter, FS Real Estate Advisor is entitled to receive 10.0% of the Company’s Core Earnings.

For purposes of calculating the performance fee, “Core Earnings” means: the net income (loss) attributable to stockholders of Class Y, Class T, Class S, Class D, Class M and Class I shares, computed in accordance with GAAP (provided that net income (loss) attributable to Class Y stockholders shall be reduced by an amount equal to the base management fee that would have been paid if Class Y shares were subject to such fee), including realized gains (losses) not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) the performance fee, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (v) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items, in each case after discussions between FS Real Estate Advisor and the Company’s independent directors and approved by a majority of the Company’s independent directors. The performance fee is a class-specific expense. No performance fee is paid on the Company’s Class F shares.

34

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

Method of Payment

Pursuant to the advisory agreement, the base management fee and performance fee may be paid, at FS Real Estate Advisor’s election, in (i) cash, (ii) Class I shares, (iii) performance-contingent rights Class I share awards, or Class I PCRs, or (iv) any combination of cash, Class I shares or Class I PCRs.

Under the Class I PCR agreement entered into between the Company, FS Real Estate Advisor and Rialto, or the Adviser Entities, the PCR Agreement, management and performance fees may be payable to the Adviser Entities in the form of Class I PCRs to the extent that distributions paid to stockholders in the applicable fiscal quarter exceed the Company’s Adjusted Core Earnings. “Adjusted Core Earnings” means: the net income (loss) attributable to stockholders, computed in accordance with GAAP, including (i) realized gains (losses) not otherwise included in GAAP net income (loss), (ii) stockholder servicing fees, and (iii) reimbursements for organization and offering expenses, and excluding (A) non-cash equity compensation expense, (B) non-cash equity based administration fees, (C) depreciation and amortization, (D) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (E) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items. Thereafter, Class I PCRs may become issuable in the form of Class I shares upon the achievement of the following conditions in any fiscal quarter following the initial issuance of the Class I PCRs, together, the Performance Conditions: (a) Adjusted Core Earnings for the quarter exceed distributions paid to stockholders during such quarter (such difference, the “Excess Distributable Income”) and (b) the annualized distribution yield on the Class I Shares (measured over such quarter) is at least at the yield target determined by management given then-current market conditions, the Yield Target. The initial Yield Target will be a 6.0% annualized yield on the Class I shares.

On the last day of any fiscal quarter in which the Company achieves the Performance Conditions (the “Performance Achievement Date”), the Company will issue to the Adviser Entities the number of Class I shares equal in value to the Excess Distributable Income for such quarter in respect of any outstanding Class I PCRs. The Adviser Entities, and their respective affiliates and employees, may not request repurchase by the Company of any Class I shares issued under the PCR Agreement for a period of six (6) months from the date of issuance. Thereafter, upon ten days’ written notice to the Company by the Adviser Entities, the Company must repurchase any Class I shares requested to be repurchased by the Adviser Entities at the then current transaction price per Class I share; provided that no repurchase shall be permitted that would jeopardize the Company’s qualification as a REIT or violate Maryland law. If, prior to the Performance Achievement Date, (i) the New Advisory Agreement is terminated in accordance with Section 12(b) of the New Advisory Agreement (other than Section 12(b)(iii) thereof) or (ii) the sub-advisory agreement is terminated in accordance with Section 9(b) thereof (other than Section 9(b)(v) thereof), any rights related to the Class I PCRs evidenced thereby by the terminated party as of the date of such termination shall immediately vest and the Company shall issue the number of Class I shares issuable upon such vesting. If, prior to the Performance Achievement Date, either of the Adviser Entities resigns as the adviser or sub-adviser, respectively, of the Company, then any rights related to the Class I PCRs evidenced thereby as of the date of such resignation shall remain outstanding and Class I shares issuable in respect thereof shall be issued upon achievement of the Performance Conditions.

Administrative Services Fee

On December 1, 2022, the Company and FS Real Estate Advisor entered into the Fourth Amended and Restated Advisory Agreement (the “Advisory Agreement”), which amended and restated the Third Amended and

35

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

Restated Advisory Agreement, dated December 15, 2021, to replace the reimbursement of administrative service expenses with an administrative services fee equal to 1.0% of the Company’s net asset value per annum attributable to all shares of common stock, before giving effect to any accruals for the base management fee, the performance fee, the administrative services fee, the stockholder servicing fee or any distributions. The administrative services fee is payable quarterly and in arrears in the cash equivalent number of restricted stock units (“Class I RSUs”) representing the right to receive Class I shares of the Company’s common stock (“Class I shares”) based on the then-current Class I transaction price as of the last day of such quarter. Class I RSUs in payment of the administrative services fee will provide the Adviser the right to receive a number of Class I shares equivalent to the number of Class I RSUs, subject to the terms and conditions set forth in the Class I RSU Agreement.

FS Real Estate Advisor may elect, at a later date, to have the Company repurchase some or all of the Class I shares issued to the Adviser in accordance with the Advisory Agreement, including Class I shares issued pursuant to any Class I RSUs, at a per share price equal to the then-current Class I share transaction price. Such Class I shares will not be subject to the repurchase limits of the Company’s share repurchase plan or any reduction or penalty for an early repurchase, provided that the approval of the Company’s independent directors is required for any repurchase request of FS Real Estate Advisor or Rialto, for Class I shares received as payment for advisory fees that, when combined with any stockholder repurchase requests submitted through the Company’s share purchase plan, would cause the Company to exceed the monthly and quarterly repurchase limitations of its share repurchase plan. The FS Real Estate Advisor will have no registration rights with respect to such Class I shares. Any such Class I shares and Class I RSUs issued to Rialto will have the same rights and conditions as those issued to FS Real Estate Advisor.

At least annually, the Company’s board of directors reviews the amount of the administrative services expenses reimbursable to FS Real Estate Advisor and Rialto to determine whether such amounts are reasonable in relation to the services provided. The Company will not reimburse FS Real Estate Advisor or Rialto for any services for which it receives a separate fee or for any administrative expenses allocated to employees to the extent they serve as executive officers of the Company.

Class I Restricted Stock Unit Agreement

On December 1, 2022, the Company, FS Real Estate Advisor and Rialto entered into the Class I Restricted Stock Unit Agreement (the “Class I RSU Agreement”). Pursuant to the Class I RSU Agreement, and in accordance with the Advisory Agreement, the administrative services fee will be payable quarterly in arrears on the last day of each quarter in the cash equivalent number of Class I RSUs based on the then-current Class I share transaction price as of the last day of such quarter. On the last day of each quarter, the Company will issue to FS Real Estate Advisor and Rialto the cash equivalent number of Class I RSUs to which each is entitled. Class I RSUs will vest ratably on the first calendar day of the month following the one, two and three-year anniversary of the applicable grant date, provided that (i) 100% of the Adviser’s Class I RSUs will immediately vest upon the nonrenewal or termination of the Advisory Agreement pursuant to Section 12(b)(ii), Section 12(b)(iii) or Section 12(b)(iv) thereof; (ii) 100% of the Sub-Adviser’s Class I RSUs will immediately vest upon the nonrenewal or termination of the sub-advisory agreement between FS Real Estate Advisor and Rialto (the “Sub-Advisory Agreement”) pursuant to Section 9(b)(i), Section 9(b)(iii), Section 9(b)(iv), Section 9(b)(v) or Section 9(b)(vi) thereof; (iii) 100% of the Adviser’s unvested Class I RSUs will be automatically forfeited upon termination of the Advisory Agreement pursuant to Section 12(b)(i) thereof; and (iv) 100% of the Sub-Adviser’s

36

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

unvested Class I RSUs will be automatically forfeited upon termination of the Sub-Advisory Agreement pursuant to Section 9(b)(ii) thereof. If FS Real Estate Advisor and Rialto resigns as the Company’s adviser or sub-adviser, respectively, then any rights related to the Class I RSUs evidenced thereby as of the date of such resignation will remain outstanding and Class I shares issuable in respect thereof will be issued upon the applicable vesting date. If the Company declares a cash distribution on the Class I shares underlying unvested Class I RSUs, then the Company will credit the account of FS Real Estate Advisor and Rialto with the applicable distribution equivalents, which will be subject to the same vesting and forfeiture restrictions as the Class I RSUs. FS Real Estate Advisor and Rialto, and their respective affiliates and employees, may not request repurchase by the Company of any Class I shares issued under the Class I RSU Agreement for a period of six months from the date of issuance. Thereafter, upon ten days’ written notice to the Company the Company must repurchase any Class I shares requested to be repurchased by FS Real Estate Advisor and Rialto at the most recently published transaction price per Class I share; provided that no repurchase will be permitted that would jeopardize the Company’s qualification as a REIT or violate Maryland law.

Origination Fees

FS Real Estate Advisor has engaged Rialto as sub-adviser to originate loans and other investments on behalf of the Company, and FS Real Estate Advisor oversees the sub-adviser’s origination activities. In connection with these activities, origination fees of up to 1.0% of the loan amount for first lien, subordinated or mezzanine debt or preferred equity financing may be retained by Rialto or FS Real Estate Advisor. Such origination fees will be retained only to the extent they are paid by the borrower, either directly to Rialto or FS Real Estate Advisor or indirectly through the Company. During the three months ended March 31, 2024 and 2023, $2,370 and $3,782, respectively, in origination fees were paid directly by the borrowers to FS Real Estate Advisor or Rialto and not to the Company.

Offering Costs

FS Investments funded the Company’s offering costs in the amount of $25,616 for the period from November 7, 2016 (Inception) to March 31, 2024. These expenses include legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of the Company’s transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals, but excluding selling commissions, dealer manager fees and stockholder servicing fees.

FS Real Estate Advisor may be reimbursed for any organization and offering expenses that it or Rialto has incurred on the Company’s behalf, up to a cap of 0.75% of gross proceeds raised. During the three months ended March 31, 2024, the Company paid $927 to FS Real Estate Advisor for offering costs previously funded. As of March 31, 2024, $4,081 of offering expenses previously funded remained subject to reimbursement to FS Real Estate Advisor and Rialto.

Valuation Services Fee

Pursuant to a sub-advisory agreement between FS Real Estate Advisor and Rialto, FS Real Estate Advisor has engaged Rialto to provide periodic valuations of certain investments held by the Company and is entitled to a

37

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

fee of $1 for each valuation of an individual investment. Rialto shall not be entitled to a fee when an individual investment is valued by an independent valuation firm. Any fees paid to our adviser, the sub-adviser, or their affiliates for any such services does not reduce the advisory fees or the administrative services fees. Any such arrangements are at market terms and rates

The following table describes the fees and expenses accrued under the advisory agreement and sub-advisory agreement during the three months ended March 31, 2024 and 2023:

			Three Months Ended March 31,
Related Party	Source Agreement	Description	2024		2023
FS Real Estate Advisor	Advisory Agreement	Base Management Fee(1)	$	9,393	$	7,876
FS Real Estate Advisor	Advisory Agreement	Performance Fee(2)	$	6,165	$	5,611
FS Real Estate Advisor	Advisory Agreement	Administrative Services Fee(3)	$	7,562	$	6,392
Rialto	Sub-Advisory Agreement	Valuation Services Fees(4)	$	109	$	112
FS Real Estate Advisor or Rialto	Advisory Agreement	Origination Fees	$	2,370	$	3,782

(1) During the three months ended March 31, 2024 and 2023, FS Real Estate Advisor received $9,371 and $7,527, respectively, in cash as payment for base management fees. As of March 31, 2024, $9,388 in base management fees were payable to FS Real Estate Advisor.

(2) During the three months ended March 31, 2024 and 2023, $5,614 and $4,772, respectively, in performance fees were paid to FS Real Estate Advisor. As of March 31, 2024, $6,165 performance fees were payable to FS Real Estate Advisor.

(3) On December 1, 2022, the Company’s method for reimbursing administrative services expense was replaced with an administrative services fee equal to 1.0% of the Company’s net asset value per annum attributable to all shares of common stock, before giving effect to any accruals for the base management fee, the performance fee, the administrative services fee, the stockholder servicing fee or any distributions.

(4) During the three months ended March 31, 2024 and 2023, $0 and $107, respectively, in valuation fees were paid by the Company to Rialto.

The dealer manager for the Company’s continuous public offering is FS Investment Solutions, LLC, or FS Investment Solutions, which is an affiliate of FS Real Estate Advisor. Under the amended and restated dealer manager agreement dated as of August 17, 2018, or the dealer manager agreement, FS Investment Solutions is entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5% of the transaction price of each Class T share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5% of the transaction price (subject to reductions for certain categories of purchasers). FS Investment Solutions is entitled to receive upfront selling commissions of up to 3.5% of the transaction price per Class S share sold in the primary offering (subject to reductions for certain categories of purchasers). The dealer manager anticipates that all of the selling commissions and dealer manager fees will be re-allowed to participating broker-dealers, unless a particular broker-dealer declines to accept some portion of the dealer manager fee they are otherwise eligible to receive. Pursuant to the dealer manager agreement, the Company also reimburses FS Investment Solutions or participating broker-dealers for bona fide due diligence expenses, provided that total organization and offering expenses shall not exceed 15% of the gross proceeds in the Company’s public offering.

38

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

No selling commissions or dealer manager fees are payable on the sale of Class D, Class M, Class I, Class F or Class Y shares or on shares of any class sold pursuant to the Company’s distribution reinvestment plan.

Subject to the limitations described below, the Company pays FS Investment Solutions stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or by broker-dealers servicing stockholders’ accounts, referred to as servicing broker-dealers:

• with respect to the Company’s outstanding Class T shares equal to 0.85% per annum of the aggregate NAV of its outstanding Class T shares, consisting of an advisor stockholder servicing fee of 0.65% per annum and a dealer stockholder servicing fee of 0.20% per annum; however, with respect to Class T shares sold through certain participating broker-dealers, the advisor stockholder servicing fee and the dealer stockholder servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares;

• with respect to the Company’s outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of its outstanding Class S shares;

• with respect to the Company’s outstanding Class D shares equal to 0.3% per annum of the aggregate NAV of its outstanding Class D shares; and

• with respect to the Company’s outstanding Class M shares equal to 0.3% per annum of the aggregate NAV of its outstanding Class M shares.

The Company does not pay a stockholder servicing fee with respect to its Class I, Class F or Class Y shares. The dealer manager reallows some or all of the stockholder servicing fees to participating broker-dealers, servicing broker-dealers and financial institutions (including bank trust departments) for ongoing stockholder services performed by such broker-dealers, and waives (pays back to the Company) stockholder servicing fees to the extent a broker-dealer or financial institution is not eligible or otherwise declines to receive all or a portion of such fees.

The Company will cease paying stockholder servicing fees with respect to any Class D, Class M, Class S and Class T shares held in a stockholder’s account at the end of the month in which the total underwriting compensation from the upfront selling commissions, dealer manager fees and stockholder servicing fees, as applicable, paid with respect to such account would exceed 1.25%, 7.25%, 8.75% and 8.75%, respectively (or a lower limit for shares sold by certain participating broker-dealers or financial institutions) of the gross proceeds from the sale of shares in such account. These amounts are referred to as the sales charge cap. At the end of such month that the sales charge cap is reached, each Class D, Class M, Class S or Class T share in such account will convert into a number of Class I shares (including any fractional shares) with an equivalent aggregate NAV as such share.

In addition, the Company will cease paying stockholder servicing fees on each Class D share, Class M share, Class S share and Class T share held in a stockholder’s account and each such share will convert to Class I shares on the earlier to occur of the following: (i) a listing of Class I shares on a national securities exchange; (ii) the sale or other disposition of all or substantially all of the Company’s assets or the Company’s merger or consolidation with or into another entity in a transaction in which holders of Class D, Class M, Class S or Class T shares receive cash and/or shares of stock that are listed on a national securities exchange; or (iii) the date following the completion of the Company’s public offering on which, in the

39

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 7. Related Party Transactions (continued)

aggregate, underwriting compensation from all sources in connection with the Company’s public offering, including selling commissions, dealer manager fees, stockholder servicing fees and other underwriting compensation, is equal to 10% of the gross proceeds from its primary offering.

The Company accrues future stockholder servicing fees in an amount equal to its best estimate of fees payable to FS Investment Solutions at the time such shares are sold. As of March 31, 2024 and December 31, 2023, the Company accrued $109,570 and $113,501, respectively, of stockholder servicing fees payable to FS Investment Solutions. FS Investment Solutions has entered into agreements with selected dealers distributing the Company’s shares in the public offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and dealer manager fee and all or a portion of the stockholder servicing fees received by FS Investment Solutions to such selected dealers.

FS Investment Solutions also serves or served as the placement agent for the Company’s private offerings of Class I, Class F and Class Y shares pursuant to placement agreements. FS Investment Solutions does not receive any compensation pursuant to these agreements.

Expense Limitation

The Company has entered into an amended and restated expense limitation agreement with FS Real Estate Advisor and Rialto, or the expense limitation agreement, pursuant to which FS Real Estate Advisor and Rialto have agreed to waive reimbursement of or pay, on a quarterly basis, the Company’s annualized ordinary operating expenses for such quarter to the extent such expenses exceed 1.5% per annum of its average net assets attributable to each of its classes of common stock. The Company will repay FS Real Estate Advisor or Rialto on a quarterly basis any ordinary operating expenses previously waived or paid, but only if the reimbursement would not cause the then-current expense limitation, if any, to be exceeded. In addition, the reimbursement of expenses will be made only if payable not more than three years from the end of the fiscal quarter in which the expenses were paid or waived.

To the extent that the conditions to recoupment are satisfied in a future quarter (prior to the expiration of the three-year period for reimbursement set forth in the expense limitation agreement), such expenses may be subject to conditional recoupment in accordance with the terms of the expense limitation agreement.

During the three months ended March 31, 2024 no expense recoupments were paid to FS Real Estate Advisor and Rialto. As of March 31, 2024, no expense recoupments were payable to FS Real Estate Advisor and Rialto.

Capital Contributions and Commitments

In December 2016, pursuant to a private placement, Michael C. Forman and David J. Adelman, principals of FS Investments, contributed an aggregate of $200 to purchase 8,000 Class F shares at the price of $25.00 per share. These individuals will not tender these shares of common stock for repurchase as long as FS Real Estate Advisor remains the Company’s adviser. FS Investments is controlled by Mr. Forman, the Company’s president and chief executive officer, and Mr. Adelman.

As of March 31, 2024, the ownership in the Company’s Class F Shares by FS Real Estate Advisor and Rialto (and each of their respective affiliates and designees) was $18,268 and $410, respectively.

40

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Stockholders’ Equity

Below is a summary of transactions with respect to shares of the Company’s common stock during the three months ended March 31, 2024 and 2023:

	Shares
	Class F			Class Y		Class T			Class S			Class D			Class M			Class I			Total
Balance as of December 31, 2023		734,184			906,648		1,312,367			64,584,819			646,101			4,939,668			47,503,635			120,627,422
Issuance of common stock		—			—		28,871			2,387,718			27,001			246,717			2,385,956			5,076,263
Reinvestment of distributions		6,911			—		6,964			545,547			3,320			28,998			493,199			1,084,939
Repurchases of common stock		(1,249	)		—		(5,825	)		(3,336,531	)		(10,847	)		(52,698	)		(1,352,234	)		(4,759,384	)
Transfers in or out		1			—		(273,559	)		(41,821	)		(129,836	)		(6,631	)		377,671			(74,175	)
Balance as of March 31, 2024		739,847			906,648		1,068,818			64,139,732			535,739			5,156,054			49,408,227			121,955,065
	Amount
	Class F			Class Y		Class T			Class S			Class D			Class M			Class I			Total
Balance as of December 31, 2023	$	17,913		$	22,371	$	31,238		$	1,498,287		$	15,989		$	115,412		$	1,147,391		$	2,848,601
Issuance of common stock		—			—		716			59,831			672			6,246			54,841			122,306
Reinvestment of distributions		174			—		173			13,670			83			723			11,929			26,752
Repurchases of common stock		(32	)		—		(144	)		(83,618	)		(270	)		(1,313	)		(32,710	)		(118,087	)
Transfers in or out		—			—		(4,954	)		(1,048	)		(2,972	)		(165	)		9,139			—
Accrued stockholder servicing fees(1)		—			—		(33	)		720			(9	)		(356	)		—			322
Balance as of March 31, 2024	$	18,055		$	22,371	$	26,996		$	1,487,842		$	13,493		$	120,547		$	1,190,590		$	2,879,894
	Shares
	Class F			Class Y		Class T			Class S			Class D			Class M			Class I			Total
Balance as of December 31, 2022		857,710			906,648		1,600,878			54,908,336			742,999			4,645,072			34,011,164			97,672,807
Issuance of common stock		—			—		46,865			4,420,754			51,094			266,551			5,398,504			10,183,768
Reinvestment of distributions		7,808			—		12,050			452,338			4,188			28,340			328,263			832,987
Repurchases of common stock		(60,795	)		—		(25,948	)		(1,795,102	)		(5,673	)		(33,505	)		(1,261,303	)		(3,182,326	)
Transfers in or out		(9,261	)		—		(42,933	)		(61,890	)		(44,111	)		(147,513	)		314,051			8,343
Balance as of March 31, 2023		795,462			906,648		1,590,912			57,924,436			748,497			4,758,945			38,790,679			105,515,579

41

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Stockholders’ Equity (continued)

	Amount
	Class F			Class Y		Class T			Class S			Class D			Class M			Class I			Total
Balance as of December 31, 2022	$	21,008		$	22,371	$	38,473		$	1,274,345		$	18,417		$	108,522		$	832,242		$	2,315,378
Issuance of common stock		—			—		1,165			110,928			1,272			6,654			128,437			248,456
Reinvestment of distributions		195			—		299			11,348			104			707			7,975			20,628
Repurchases of common stock		(1,522	)		—		(645	)		(45,044	)		(141	)		(836	)		(30,647	)		(78,835	)
Transfers in or out		(232	)		—		(1,068	)		(1,551	)		(1,098	)		(3,682	)		7,631			—
Accrued stockholder servicing fees(1)		—			—		(47	)		(5,873	)		(15	)		(172	)		—			(6,107	)
Balance as of March 31, 2023	$	19,449		$	22,371	$	38,177		$	1,344,153		$	18,539		$	111,193		$	945,638		$	2,499,520

(1) Stockholder servicing fees only apply to Class T, Class S, Class D and Class M shares. Under GAAP, the Company accrues future stockholder servicing fees in an amount equal to its best estimate of fees payable to FS Investment Solutions at the time such shares are sold. For purposes of NAV, the Company recognizes the stockholder servicing fee as a reduction of NAV on a monthly basis. As a result, the estimated liability for the future stockholder servicing fees, which are accrued at the time each share is sold, will have no effect on the NAV of any class.

Share Repurchase Plan

The Company has adopted an amended and restated share repurchase plan, or share repurchase plan, whereby on a monthly basis, stockholders may request that the Company repurchase all or any portion of their shares. The repurchase of shares is limited to no more than 2% of the Company’s aggregate NAV per month of all classes of shares then participating in the share repurchase plan and no more than 5% of the Company’s aggregate NAV per calendar quarter of all classes of shares then participating in the share repurchase plan, which means that in any 12-month period, the Company limits repurchases to approximately 20% of the total NAV of all classes of shares then participating in the share repurchase plan. The Company’s board of directors may modify, suspend or terminate the share repurchase plan if it deems such action to be in the Company’s best interest and the best interest of its stockholders. During the three months ended March 31, 2024 and 2023, the Company repurchased 4,759,384 and 3,182,326, respectively, shares of common stock under its share repurchase plan representing a total of $118,087 and $78,835, respectively. The Company had no unfulfilled repurchase requests during the three months ended March 31, 2024 or 2023, respectively.

Distribution Reinvestment Plan

Pursuant to the Company’s distribution reinvestment plan, holders of shares of any class of the Company’s common stock may elect to have their cash distributions reinvested in additional shares of the Company’s common stock. The purchase price for shares pursuant to the distribution reinvestment plan will be equal to the transaction price for such shares at the time the distribution is payable.

42

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Stockholders’ Equity (continued)

Distributions

The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to its stockholders each year to comply with the REIT provisions of the Code. Dividends are paid first to the holders of the Company’s Series A preferred stock at the rate of 12.0% per annum plus all accumulated and unpaid dividends thereon, and then to the holders of the Company’s common stock. All distributions will be made at the discretion of the Company’s board of directors and will depend upon its taxable income, financial condition, maintenance of REIT status, applicable law, and other factors that the Company’s board of directors deems relevant.

The following table reflects the cash distributions per share that the Company paid on its common stock during the three months ended March 31, 2024:

Record Date	Class F		Class Y		Class T		Class S		Class D		Class M		Class I
January 30, 2024	$	0.1799	$	0.1799	$	0.1362	$	0.1362	$	0.1477	$	0.1477	$	0.1539
February 28, 2024	$	0.1799	$	0.1799	$	0.1362	$	0.1362	$	0.1477	$	0.1477	$	0.1539
March 27, 2024	$	0.1799	$	0.1799	$	0.1362	$	0.1362	$	0.1477	$	0.1477	$	0.1539
Total	$	0.5397	$	0.5397	$	0.4086	$	0.4086	$	0.4431	$	0.4431	$	0.4617

The following table reflects the amount of cash distributions that the Company paid on its common stock during the three months ended March 31, 2024, and 2023:

	Three Months Ended March 31,
	2024		2023
Distributions:
Paid or payable in cash	$	27,088	$	21,895
Reinvested in shares		26,752		20,628
Total distributions	$	53,840	$	42,523
Source of distributions:
Cash flows from operating activities	$	53,840	$	42,523
Offering proceeds		—		—
Total sources of distributions	$	53,840	$	42,523
Net cash provided by (used in) operating activities(1)	$	63,689	$	53,804

(1) Cash flows from operating activities are supported by expense support payments from FS Real Estate Advisor and Rialto pursuant to the Company’s expense limitation agreement. See Note 7 for additional information regarding the Company’s expense limitation agreement.

43

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 8. Stockholders’ Equity (continued)

The Company currently declares and pays regular cash distributions on a monthly basis. The Company’s board of directors previously authorized regular monthly cash distributions for April 2024 for each class of its outstanding common stock in the net distribution amounts per share set forth below:

Class F	Class Y		Class T		Class S		Class D		Class M		Class I
$0.1799	$	0.1799	$	0.1362	$	0.1362	$	0.1477	$	0.1477	$	0.1539

The distributions for each class of outstanding common stock have been or will be paid monthly to stockholders of record as of the monthly record dates previously determined by the Company’s board of directors. These distributions have been or will be paid in cash or reinvested in shares of the Company’s common stock for stockholders participating in the Company’s distribution reinvestment plan.

Note 9. Fair Value of Financial Instruments

The following table presents the Company’s financial assets and liabilities carried at fair value in the consolidated balance sheets by its level in the fair value hierarchy:

	March 31, 2024 (Unaudited)								December 31, 2023
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial Assets
Mortgage-backed securities, at fair value	$	234,636	$	—	$	234,636	$	—	$	235,235	$	—	$	235,235	$	—
Mortgage loans held in securitization trusts, at fair value		956,033		—		—		956,033		950,972		—		—		950,972
Interest rate cap		1,288		—		1,288		—		2,072		—		2,072		—
Total	$	1,191,957	$	—	$	235,924	$	956,033	$	1,188,279	$	—	$	237,307	$	950,972
Financial Liabilities
Mortgage obligations issued by securitization trusts, at fair value	$	883,044		—	$	883,044		—	$	878,545		—	$	878,545		—

44

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 9. Fair Value of Financial Instruments (continued)

The following table presents the changes in fair value of financial assets which are measured at fair value on a recurring basis using Level 3 inputs to determine fair value for the three months ended March 31, 2024:

	Mortgage loans held in securitization trusts, at fair value
	Three Months Ended March 31,
	2024		2023
Fair value at beginning of period	$	950,972	$	324,263
Accretion of discount (amortization of premium)		—		—
Net realized gain (loss)		—		—
Unrealized gain (loss) in earnings(1)		5,061		6
Purchases		—		—
Sales and repayments		—		—
Issuances		—		—
Transfer into Level 3		—		—
Transfers out of Level 3		—		—
Consolidation of securitization trusts		—		664
Deconsolidation of securitization trusts		—		—
Fair value at end of period	$	956,033	$	324,933
Amount of unrealized gains (losses) attributable to assets still held at the reporting date
Included in earnings	$	5,061	$	6
Included in other comprehensive income		—		—

(1) For the three months ended March 31, 2024 unrealized gain of $5,061 related to mortgage loans held in securitization trusts, at fair value was offset by unrealized loss of $4,499 related to mortgage obligations issued by securitization trusts, at fair value.

As of March 31, 2024, the Company utilized a discounted cash flow model, comparable precedent transactions and other market information to quantify Level 3 fair value measurements on a recurring basis. As of March 31, 2024, the key unobservable inputs used in the valuation of mortgage obligations issued by securitization trusts included a blended yield ranging from 9.85% to 15.12% (weighted average blended yield of 12.03%) and a life of 0.5 to 4.75 years (weighted average life of 2.96 years). Significant increases or decreases in any one of the inputs described above in isolation may result in significantly different fair value of the financial assets and liabilities using such Level 3 inputs.

45

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 9. Fair Value of Financial Instruments (continued)

As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial position, for which it is practicable to estimate that value. The following table details the carrying amount, face amount, and fair value of the financial instruments described in Note 2:

	March 31, 2024 (Unaudited)						December 31, 2023
	Book Value		Face Amount		Fair Value		Book Value		Face Amount		Fair Value
Financial Assets
Cash, cash equivalents and restricted cash	$	115,481	$	115,481	$	115,481	$	256,001	$	256,001	$	256,001
Loans receivable - held-for-investment(1)	$	7,785,803	$	7,901,202	$	7,790,410	$	7,702,368	$	7,778,599	$	7,695,871
Mortgage-backed securities held-to-maturity	$	75,866	$	80,300	$	72,871	$	75,238	$	80,300	$	72,956
Financial Liabilities
Repurchase agreements(2)	$	311,764	$	315,098	$	315,098	$	256,730	$	259,219	$	259,219
Credit facilities(2)	$	939,294	$	948,350	$	948,350	$	910,197	$	920,000	$	920,000
Collateralized loan obligations(2)(3)	$	4,202,544	$	4,225,423	$	4,225,423	$	4,301,970	$	4,327,263	$	4,327,263
Mortgage note payable(2)	$	123,835	$	124,700	$	124,700	$	123,657	$	124,700	$	124,700

(1) Book value of loans receivable represents the face amount, net of CECL reserve, unamortized loan fees and costs and accrual of exit fees, as applicable.

(2) Book value represents the face amount, net of deferred financing costs and discount.

(3) Face value represents the face amount, net of discount.

Estimates of fair value for cash, cash equivalents and restricted cash are measured using observable, quoted market prices, or Level 1 inputs. Estimates of fair value for loans receivable, mortgage-backed securities held-to-maturity, repurchase obligations, credit facility obligations and the collateralized loan and mortgage obligations are measured using unobservable inputs, or Level 3 inputs.

CMBS, Fair Value Option

As discussed in the “Fair Value of Financial Instruments” section of Note 2 herein, the Company elected the fair value option for certain CMBS mortgage loans in an effort to eliminate an accounting mismatch resulting from consolidation of the related mortgage loans held in securitization trusts. As of March 31, 2024, the fair value and unpaid principal balance of these CMBS, excluding the notional value of interest-only securities and before consolidation of the securitization mortgage loans, were $72,399 and $75,369, respectively. As a result of the consolidation of the mortgage loans, the total fair value balance of $956,033 represents the Company’s economic interest in the asset. The vast majority of this fair value (all except $72,399 at March 31, 2024) is eliminated in consolidation of the related mortgage obligations before arriving at the GAAP balance for the fair value option investment securities.

46

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 10. Variable Interest Entities

Consolidated Variable Interest Entities

The following table details the assets and liabilities of the Company’s consolidated variable interest entities as of March 31, 2024 and December 31, 2023:

	March 31, 2024 (Unaudited)		December 31, 2023
Assets:
Restricted cash	$	107	$	92,457
Loans receivable, held-for-investment		5,411,662		5,430,785
Interest receivable		30,102		26,891
Other assets		20,693		8,180
Mortgage loans held in securitization trusts, at fair value		956,033		950,972
Total assets	$	6,418,597	$	6,509,285
Liabilities
Collateralized loan obligations, net	$	4,202,544	$	4,301,970
Interest payable		12,618		12,963
Other liabilities		533		533
Mortgage obligations issued by securitization trusts, at fair value		883,044		878,545
Total liabilities	$	5,098,739	$	5,194,011

The Company has financed a portion of its loans through CLOs, which are considered VIEs. The Company has a controlling financial interest in the CLOs and, therefore, consolidates them on its balance sheets because the Company has both (i) the power to direct activities of the CLOs that most significantly affect the CLOs’ economic performance and (ii) the obligation to absorb losses and the right to receive benefits of the CLOs that could potentially be significant to the CLOs.

Assets held by the CLOs are restricted and can be used only to settle obligations of the CLOs. The liabilities are non-recourse to the Company and can only be satisfied from the assets of the CLOs.

Investment Securities

Mortgage loans and obligations held in securitization trusts consolidated in accordance with ASC 810 are structured as pass through entities that receive principal and interest on the underlying collateral and distribute those payments to the certificate holders. The assets and other instruments held by these securitization entities are restricted and can only be used to fulfill the obligations of the entity. Additionally, the obligations of the securitization entities do not have any recourse to the general credit of any other consolidated entities, nor to the Company as the primary beneficiary. The mortgage obligations initially represent investment securities on the balance sheet (pre-consolidation). Upon consolidation of the mortgage loans and obligations, the associated investment securities are eliminated, as is the interest income related to those securities.

47

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 10. Variable Interest Entities (continued)

The inclusion of the assets and liabilities of the mortgage loans and obligations in which the Company is deemed the primary beneficiary has no economic effect on the Company. Its exposure to the obligations of mortgage loans and obligations held in securitization is generally limited to its investment in these entities. The Company is not obligated to provide, nor has provided, any financial support for any of these consolidated structures.

Non-Consolidated Variable Interest Entities

The Company invested in subordinated positions of CMBS trusts which are considered mortgage loans and obligations held in securitization trusts. The Company is not the primary beneficiary of the mortgage loans and obligations because it does not have the power to direct the activities that most significantly affect the mortgage loans and obligations’ economic performance, nor does it provide guarantees or recourse to the mortgage loans and obligations other than standard representations and warranties and, therefore, does not consolidate the mortgage loans and obligations on its balance sheets. The Company has classified its investment in the CMBS as either held-to-maturity or available-for-sale debt securities that are included on the Company’s consolidated balance sheets and are part of the Company’s ongoing impairment review. The Company’s maximum exposure to loss of the securities are limited to its book value of $333,329 as of March 31, 2024.

The Company is not obligated to provide, nor has it provided financial support to these consolidated and non-consolidated mortgage loans and obligations.

Note 11. Commitments and Contingencies

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. Management of FS Real Estate Advisor has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be party to certain legal proceedings in the ordinary course of business. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect on its financial condition or results of operations.

See Note 7 for a discussion of the Company’s commitments to FS Real Estate Advisor and its affiliates (including FS Investments) for the reimbursement of organization and offering costs funded by FS Investments and for the reimbursement of amounts paid or waived by FS Real Estate Advisor and Rialto under the expense limitation agreement.

Note 12. Derivative Instrument

The Company has entered into an interest rate cap contract in order to limit its exposure against the variability of future interest rates on its variable interest rate borrowing. The Company has not designated this derivative as a hedge for accounting purposes. The Company has not entered into a master netting arrangement with its third-party counterparty and does not offset on its consolidated balance sheets the fair value amount

48

FS Credit Real Estate Income Trust, Inc.

Notes to Unaudited Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Note 12. Derivative Instrument (continued)

recorded for its derivative instrument. The table below provides additional information regarding the Company’s derivative instrument as of March 31, 2024.

Type of Derivative	Notional Amount		Strike			Effective Date		Maturity Date		Fair Value(1)
Interest Rate Cap	$	126,700		2.25	%		June 21, 2022		July 9, 2024	$	1,288

(1) Included in Other assets in the Company’s consolidated balance sheets.

The following table details the fair value of the Company’s derivative financial instrument:

Type of Derivative	Realized/ Unrealized Gain (Loss)	Location of Gain (Loss) Recognized in Net Income	Three Months Ended March 31,
			2024			2023
Interest Rate Cap	Unrealized Loss	Other income (loss)	$	(784	)	$	(988	)

Note 13. Subsequent Events

The following is a discussion of material events that have occurred subsequent to March 31, 2024 through the issuance of the consolidated financial statements.

MM-1 Facility

On April 23, 2024, FS CREIT Finance MM-1 Facility, as borrower, entered into a Second Amendment to the Amended and Restated Loan and Servicing Agreement, originally dated as of April 27, 2022, with Wells Fargo Bank, National Association, as administrative agent, Massachusetts Mutual Life Insurance Company and C.M. Life Insurance Company, as lenders, and the other parties thereto. The amendment, among other things, (a) increases the applicable spread over the one-month Term SOFR benchmark rate from (i) 2.025% plus a credit spread adjustment of 0.11% to (ii) 2.30%, (b) extends the end of the availability period from September 20, 2024, to September 20, 2026, and (c) extends the scheduled maturity date from September 20, 2029, to September 20, 2031.

Barclays Facility

On April 24, 2024, the Company, as borrower, entered into an Amended and Restated Credit Agreement with Barclays Bank PLC, as administrative agent and as a lender, certain other lenders, and the other parties thereto. The Amended and Restated Credit Agreement, among other things, (a) increases the lenders’ aggregate commitments from $310,000 to $425,000, and (b) extends the revolving credit termination date in respect of $400,000 of the lenders’ commitments from August 1, 2025, to April 24, 2027, while the revolving credit termination date of the remaining $25,000 commitment remains August 1, 2025.

49

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (in thousands, except share and per share amounts).

The information contained in this section should be read in conjunction with the unaudited consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In this report, “we,” “us” and “our” refer to FS Credit Real Estate Income Trust, Inc.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), regarding, among other things, our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. We undertake no duty to update or revise forward-looking statements, except as required by law.

Introduction

We were incorporated under the general corporation laws of the State of Maryland on November 7, 2016 and formally commenced investment operations on September 13, 2017. We are managed by FS Real Estate Advisor pursuant to an advisory agreement between us and FS Real Estate Advisor. FS Real Estate Advisor is a subsidiary of our sponsor, FS Investments, a national sponsor of alternative investment funds designed for the individual investor. FS Real Estate Advisor has engaged Rialto to act as its sub-adviser. We are currently conducting a public offering of up to $2,750,000 of our Class T, Class S, Class D, Class M and Class I shares of common stock pursuant to a registration statement on Form S-11 filed with the SEC consisting of up to $2,500,000 in shares in our primary offering and up to $250,000 in shares pursuant to our distribution reinvestment plan. We are also conducting a private offering of our Class I common stock to certain accredited investors.

We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2017. We intend to be an investment vehicle of indefinite duration focused on real estate debt investments and other real estate-related assets. The shares of common stock are generally intended to be sold and repurchased by us on a continuous basis. We intend to conduct our operations so that we are not required to register under the 1940 Act.

Our primary investment objectives are to: provide current income in the form of regular, stable cash distributions to achieve an attractive dividend yield; preserve and protect invested capital; realize appreciation in NAV from proactive management and asset management; and provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate debt with lower volatility than public real estate companies.

50

Our investment strategy is to originate, acquire and manage a portfolio of senior loans secured by commercial real estate primarily in the United States. We are focused on senior floating-rate mortgage loans, but we may also invest in other real estate-related assets, including: (i) other commercial real estate mortgage loans, including fixed-rate loans, subordinated loans, B-Notes, mezzanine loans and participations in commercial mortgage loans; and (ii) commercial real estate securities, including CMBS, unsecured debt of listed and non-listed REITs, collateralized debt obligations and equity or equity-linked securities. To a lesser extent we may invest in warehouse loans secured by commercial or residential mortgages, credit loans to commercial real estate companies, residential mortgage-backed securities, or RMBS, and portfolios of single-family home mortgages.

The success of our activities is affected by general economic and market conditions, including, among others, interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws and trade barriers. These factors could affect the level and volatility of securities prices and the liquidity of our investments. Volatility or illiquidity could impair our profitability or result in losses. These factors also could adversely affect the availability or cost of our leverage, which would result in lower returns. Future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments.

Portfolio Overview

Loan Portfolio Overview

The following table details activity in our loans receivable portfolio for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
	2024			2023
Loan fundings(1)	$	268,648		$	483,905
Loan repayments(2)		(146,229	)		(54,922	)
Total net fundings	$	122,419		$	428,983

(1) Includes new loan originations and additional fundings made under existing loans.

(2) Excludes payment held by servicer during the year ended December 31, 2023.

The following table details overall statistics for our loans receivable portfolio as of March 31, 2024 and December 31, 2023:

	March 31, 2024 (Unaudited)			December 31, 2023
Number of loans		146			143
Principal balance	$	7,901,202		$	7,778,599
Net book value	$	7,785,803		$	7,702,368
Unfunded loan commitments(1)	$	333,143		$	390,312
Weighted-average cash coupon(2)		+3.82	%		+3.86	%
Weighted-average all-in yield(2)(3)		+3.89	%		+3.92	%
Weighted-average maximum maturity (years)(4)		2.9			3.1

(1) We may be required to provide funding when requested by the borrower in accordance with the terms of the underlying agreements.

(2) Our floating rate loans are expressed as a spread over SOFR. In addition to cash coupon, all-in yield includes accretion of discount (amortization of premium) and accrual of exit fees.

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(3) As of March 31, 2024 and December 31, 2023, the one-month SOFR rate was 5.32% and 5.34%, respectively

(4) Maximum maturity assumes all extension options are exercised by the borrowers; however loans may be repaid prior to such date.

The following table provides details of our loan receivable, held-for-investment portfolio, on a loan-by-loan basis, as of March 31, 2024:

	Loan Type	Origination Date(1)		Total Loan		Principal Balance		Net Book Value		Cash Coupon(2)	All-in Yield(2)	Maximum Maturity(3)		Location	Property Type	LTV(1)
1	Senior Loan		6/9/2022	$	365,610	$	355,543	$	355,520	+3.30%	+3.30%		6/9/2027	Various	Multifamily	74%
2	Senior Loan		4/28/2022		195,000		195,000		195,285	+4.65%	+4.74%		5/9/2027	New York, NY	Hospitality	70%
3	Senior Loan		7/14/2023		156,500		156,500		156,526	+4.00%	+4.05%		7/9/2028	Various	Multifamily	69%
4	Senior Loan		11/15/2022		146,200		146,200		146,200	+4.21%	+4.21%		11/9/2027	Nashville, TN	Hospitality	52%
5	Senior Loan		6/8/2022		144,160		144,160		144,809	+3.89%	+4.14%		6/9/2027	New York, NY	Multifamily	73%
6	Senior Loan		10/12/2021		130,747		130,747		130,747	+3.11%	+3.11%		6/9/2026	Philadelphia, PA	Multifamily	69%
7	Senior Loan		7/18/2023		128,000		128,000		127,970	+3.75%	+3.75%		8/9/2026	Jersey City, NJ	Multifamily	55%
8	Senior Loan		3/31/2022		120,470		99,560		99,549	+4.30%	+4.30%		4/9/2027	Addison, TX	Office	67%
9	Senior Loan		12/4/2023		110,000		110,000		109,977	+2.90%	+2.99%		12/9/2028	Washington, DC	Mixed Use	59%
10	Senior Loan		5/26/2022		108,500		101,778		101,928	+3.40%	+3.59%		6/9/2027	Mesa, AZ	Multifamily	67%
11	Senior Loan		6/30/2022		106,000		100,000		99,991	+4.15%	+4.15%		7/9/2027	Lynwood, CA	Retail	61%
12	Senior Loan		1/20/2023		105,056		87,056		87,056	+3.70%	+3.70%		2/9/2028	Various	Industrial	64%
13	Senior Loan		5/18/2022		105,000		105,000		105,000	+3.50%	+3.50%		6/9/2027	New Rochelle, NY	Multifamily	61%
14	Senior Loan		6/14/2022		104,630		91,030		91,018	+3.80%	+3.80%		6/9/2027	San Jose, CA	Industrial	39%
15	Senior Loan		1/13/2022		103,600		94,953		94,937	+3.55%	+3.55%		1/9/2027	Austin, TX	Multifamily	80%
16	Senior Loan		9/22/2022		103,552		103,552		103,811	+3.66%	+3.79%		9/1/2024	Various	Industrial	74%
17	Senior Loan		6/28/2022		100,000		100,000		99,987	+3.15%	+3.15%		7/9/2027	Fayetteville, NC	Multifamily	76%
18	Senior Loan		1/13/2023		100,000		100,000		100,151	+4.75%	+4.87%		1/13/2025	New York, NY	Hospitality	41%
19	Senior Loan		7/15/2022		97,000		97,000		96,983	+3.70%	+3.71%		8/9/2027	Middletown, DE	Industrial	68%
20	Senior Loan		12/30/2021		95,000		95,000		94,992	+4.20%	+4.20%		1/9/2027	San Diego, CA	Hospitality	58%
21	Senior Loan		12/21/2021		93,900		88,108		88,102	+3.80%	+3.80%		1/9/2027	Houston, TX	Multifamily	76%
22	Senior Loan		10/3/2022		91,100		81,300		81,287	+4.50%	+4.51%		10/9/2027	Miami, FL	Office	56%
23	Senior Loan		4/29/2022		90,000		90,000		90,000	+3.55%	+3.55%		5/6/2027	Reseda, CA	Multifamily	69%
24	Senior Loan		8/4/2022		90,000		90,000		89,992	+3.65%	+3.65%		8/9/2027	Santa Barbara, CA	Various	60%
25	Senior Loan		5/13/2022		89,500		89,500		89,709	+4.25%	+4.38%		5/9/2027	New York, NY	Multifamily	58%
26	Senior Loan		2/4/2022		89,000		89,000		89,963	+3.85%	+4.35%		2/1/2025	Temecula, CA	Multifamily	75%
27	Senior Loan		9/8/2022		87,000		77,724		77,844	+4.25%	+4.34%		9/9/2027	Washington, DC	Hospitality	52%
28	Senior Loan		3/28/2024		86,500		86,500		86,475	+3.05%	+3.19%		4/9/2029	Various	Industrial	61%
29	Senior Loan		7/20/2022		85,690		81,375		81,480	+3.65%	+3.74%		8/9/2027	Phoenix, AZ	Multifamily	61%
30	Senior Loan		5/12/2021		85,000		85,000		85,114	+3.11%	+3.17%		5/9/2026	Detroit, MI	Industrial	73%
31	Senior Loan		3/9/2022		84,000		81,892		81,892	+3.55%	+3.55%		3/9/2027	Temple Hills, MD	Multifamily	75%
32	Senior Loan		5/13/2022		83,885		83,885		84,065	+4.25%	+4.39%		5/9/2027	New York, NY	Multifamily	60%
33	Senior Loan		7/31/2023		82,000		82,000		82,124	+4.95%	+5.12%		8/9/2028	Berkeley, CA	Hospitality	58%
34	Senior Loan		12/22/2021		81,500		62,515		62,811	+4.75%	+4.92%		1/9/2027	Farmers Branch, TX	Office	62%
35	Senior Loan		12/15/2021		76,820		73,620		73,608	+3.00%	+3.00%		12/9/2026	Sunny Isles, FL	Multifamily	74%
36	Senior Loan		12/23/2021		76,700		76,700		76,686	+4.45%	+4.45%		1/9/2027	Westminster, CO	Retail	65%
37	Senior Loan		2/28/2022		75,000		74,299		74,299	+3.85%	+3.85%		3/9/2027	Atlanta, GA	Multifamily	68%
38	Senior Loan		11/3/2022		73,000		51,507		51,576	+4.75%	+4.84%		11/9/2027	Adairsville, GA	Hospitality	45%
39	Senior Loan		9/10/2021		71,201		68,941		68,930	+3.01%	+3.01%		10/9/2026	Richardson, TX	Multifamily	68%
40	Senior Loan		4/26/2022		69,350		65,619		65,605	+3.72%	+3.73%		5/9/2027	Tucson, AZ	Multifamily	68%
41	Senior Loan		4/26/2021		68,100		66,000		65,998	+3.26%	+3.27%		5/9/2026	North Las Vegas, NV	Multifamily	72%
42	Senior Loan		4/27/2022		67,940		65,443		65,497	+4.00%	+4.06%		5/9/2027	Indianapolis, IN	Multifamily	79%
43	Senior Loan		12/21/2021		65,450		65,450		65,443	+4.35%	+4.35%		1/9/2027	Dallas, TX	Hospitality	58%
44	Senior Loan		4/15/2021		64,460		64,171		64,169	+2.91%	+2.92%		5/9/2026	Lawrenceville, GA	Multifamily	75%
45	Senior Loan		5/20/2022		63,000		62,373		62,367	+4.15%	+4.15%		5/9/2027	Montauk, NY	Hospitality	80%
46	Senior Loan		4/13/2022		62,650		57,131		57,117	+3.90%	+3.91%		5/9/2027	Houston, TX	Multifamily	78%
47	Senior Loan		7/29/2021		62,500		62,500		62,499	+3.21%	+3.22%		8/9/2026	Maitland, FL	Multifamily	72%
48	Senior Loan		7/22/2021		62,100		60,858		60,853	+3.41%	+3.42%		8/9/2026	Nashville, TN	Multifamily	75%

52

	Loan Type	Origination Date(1)		Total Loan		Principal Balance		Net Book Value		Cash Coupon(2)	All-in Yield(2)	Maximum Maturity(3)		Location	Property Type	LTV(1)
49	Senior Loan		10/13/2022	$	60,000	$	54,000	$	54,074	+4.25%	+4.33%		10/9/2027	Pinehurst, NC	Multifamily	60%
50	Senior Loan		8/2/2021		58,947		58,947		58,937	+2.91%	+2.92%		8/9/2026	Austin, TX	Multifamily	73%
51	Senior Loan		2/15/2022		58,750		57,043		57,033	+3.50%	+3.51%		3/9/2027	Antioch, TN	Multifamily	79%
52	Senior Loan		5/12/2022		58,165		57,148		57,141	+3.35%	+3.36%		5/9/2027	Denver, CO	Multifamily	80%
53	Senior Loan		7/7/2022		57,250		55,542		55,616	+4.35%	+4.44%		7/9/2027	Birmingham, AL	Retail	71%
54	Senior Loan		6/23/2022		57,000		50,571		50,641	+4.75%	+4.84%		7/9/2027	Seattle, WA	Multifamily	68%
55	Senior Loan		11/5/2021		55,960		53,475		53,472	+3.21%	+3.22%		11/9/2026	Houston, TX	Industrial	74%
56	Senior Loan		8/17/2022		55,600		54,097		54,157	+3.85%	+3.94%		9/9/2027	Austin, TX	Multifamily	62%
57	Senior Loan		2/17/2022		55,400		51,649		51,736	+4.10%	+4.19%		3/9/2027	Indianapolis, IN	Multifamily	80%
58	Senior Loan		12/21/2022		55,000		53,874		53,917	+3.85%	+3.94%		12/9/2027	San Bernardino, CA	Multifamily	66%
59	Senior Loan		3/7/2022		53,885		51,644		51,731	+3.50%	+3.59%		3/9/2027	Humble, TX	Multifamily	75%
60	Senior Loan		8/9/2021		53,160		51,836		51,832	+3.26%	+3.27%		8/9/2026	Philadelphia, PA	Multifamily	79%
61	Senior Loan		6/16/2022		52,280		49,201		49,195	+3.80%	+3.80%		7/9/2027	Jacksonville, FL	Multifamily	71%
62	Senior Loan		3/12/2021		52,250		34,251		34,249	+5.86%	+5.87%		3/9/2026	San Francisco, CA	Office	65%
63	Senior Loan		7/7/2021		52,200		47,173		47,169	+3.11%	+3.12%		7/9/2026	Austin, FL	Multifamily	74%
64	Senior Loan		3/22/2022		50,750		50,750		50,750	+3.60%	+3.60%		4/9/2027	Humble, TX	Multifamily	72%
65	Senior Loan		2/18/2022		49,240		34,073		34,063	+3.90%	+3.91%		3/9/2027	Atlanta, GA	Office	60%
66	Senior Loan		4/26/2022		49,125		46,633		46,860	+4.05%	+4.38%		5/9/2027	Decatur, GA	Multifamily	72%
67	Senior Loan		12/15/2021		49,000		49,000		49,067	+3.45%	+3.51%		12/9/2026	Ladson, SC	Multifamily	77%
68	Senior Loan		6/23/2021		48,945		48,481		48,477	+2.91%	+2.92%		7/9/2026	Roswell, GA	Multifamily	75%
69	Senior Loan		11/1/2021		48,906		47,675		47,669	+3.81%	+3.82%		11/9/2026	Fort Lauderdale, FL	Office	67%
70	Senior Loan		3/29/2023		48,010		48,010		47,230	+2.25%	+3.33%		10/9/2027	Various	Multifamily	57%
71	Senior Loan		7/29/2021		47,500		47,500		47,499	+3.21%	+3.22%		8/9/2026	Clearwater, FL	Multifamily	79%
72	Senior Loan		8/3/2021		46,500		46,500		46,531	+3.21%	+3.28%		8/9/2026	San Antonio, TX	Multifamily	72%
73	Senior Loan		4/6/2022		46,500		44,721		44,710	+3.50%	+3.51%		4/9/2027	Atlanta, GA	Multifamily	79%
74	Senior Loan		12/17/2021		46,100		36,500		36,192	+4.30%	+4.66%		1/9/2027	Seattle, WA	Office	53%
75	Senior Loan		11/10/2021		45,919		45,314		45,391	+3.86%	+4.20%		11/9/2026	Fayetteville, AR	Multifamily	70%
76	Senior Loan		11/23/2021		45,445		42,059		42,055	+3.05%	+3.05%		12/9/2026	Dallas, TX	Multifamily	69%
77	Senior Loan		8/25/2022		45,000		45,000		45,348	+3.50%	+3.99%		9/9/2027	McKinney, TX	Multifamily	53%
78	Senior Loan		1/28/2022		43,650		36,581		36,683	+5.00%	+5.09%		2/9/2027	Milwaukee, WI	Office	59%
79	Senior Loan		7/28/2021		43,350		42,690		42,686	+3.11%	+3.12%		8/9/2026	Sandy Springs, GA	Multifamily	77%
80	Senior Loan		8/19/2021		43,000		43,000		43,021	+3.21%	+3.27%		9/9/2026	Omaha, NE	Multifamily	75%
81	Senior Loan		8/9/2021		42,660		41,772		41,769	+3.16%	+3.17%		8/9/2026	Southaven, MS	Multifamily	57%
82	Senior Loan		11/1/2021		42,300		41,392		41,385	+3.61%	+3.62%		11/9/2026	Doraville, GA	Multifamily	82%
83	Senior Loan		3/14/2022		42,000		40,478		40,612	+3.50%	+3.67%		4/9/2027	Dallas, TX	Multifamily	76%
84	Senior Loan		8/25/2021		41,395		41,099		41,094	+3.26%	+3.27%		9/9/2026	Cypress, TX	Multifamily	69%
85	Senior Loan		7/21/2021		41,300		40,617		40,615	+2.91%	+2.92%		8/9/2026	Evanston, IL	Multifamily	77%
86	Senior Loan		10/28/2021		40,200		39,578		39,571	+3.11%	+3.12%		11/9/2026	Dallas, TX	Multifamily	74%
87	Senior Loan		9/30/2022		40,000		37,488		37,628	+5.00%	+5.26%		10/9/2027	New Orleans, LA	Hospitality	64%
88	Senior Loan		4/27/2021		39,050		35,635		35,634	+3.26%	+3.27%		5/9/2026	Jamaica, NY	Industrial	61%
89	Senior Loan		6/24/2021		38,600		38,225		38,222	+3.86%	+3.87%		7/9/2026	Austin, TX	Multifamily	76%
90	Senior Loan		8/3/2021		38,500		38,500		38,525	+3.21%	+3.28%		8/9/2026	San Antonio, TX	Multifamily	72%
91	Senior Loan		11/30/2021		38,310		37,193		37,295	+4.45%	+4.62%		12/9/2026	Memphis, TN	Office	70%
92	Senior Loan		1/7/2022		38,000		38,000		38,215	+3.55%	+3.79%		3/9/2027	Miami, FL	Hospitality	49%
93	Senior Loan		8/31/2021		37,391		37,391		37,438	+3.21%	+3.30%		9/9/2026	Colorado Springs, CO	Multifamily	68%
94	Senior Loan		11/4/2021		37,300		37,300		37,182	+3.45%	+3.78%		11/1/2024	Boca Raton, FL	Multifamily	81%
95	Senior Loan		4/29/2022		37,135		35,556		35,609	+3.75%	+3.84%		5/9/2027	Euless, TX	Multifamily	80%
96	Senior Loan		4/9/2019		37,000		37,000		36,997	+4.25%	+4.25%		4/9/2025	New York City, NY	Mixed Use	75%
97	Senior Loan		2/16/2024		36,800		36,800		36,789	+3.00%	+3.01%		3/9/2026	Various	Industrial	63%
98	Senior Loan		11/5/2021		36,325		36,192		36,181	+3.21%	+3.22%		11/9/2026	Mesquite, TX	Multifamily	73%
99	Senior Loan		2/20/2024		36,200		34,300		34,280	+3.15%	+3.17%		3/9/2029	Gilbert, AZ	Industrial	62%
100	Senior Loan		12/21/2021		36,000		36,000		35,992	+3.45%	+3.46%		1/9/2027	Hackensack, NJ	Multifamily	68%
101	Senior Loan		1/7/2022		36,000		36,000		36,000	+3.80%	+3.80%		1/9/2027	Jupiter, FL	Industrial	72%
102	Senior Loan		3/29/2021		35,880		34,397		34,396	+3.71%	+3.72%		4/9/2026	Arlington, TX	Multifamily	80%
103	Senior Loan		5/28/2021		35,785		31,085		31,082	+5.11%	+5.12%		6/9/2026	Austin, TX	Office	57%
104	Senior Loan		12/3/2021		34,327		34,327		34,323	+3.45%	+3.45%		12/9/2026	Various	Self Storage	63%

53

	Loan Type	Origination Date(1)		Total Loan		Principal Balance		Net Book Value			Cash Coupon(2)	All-in Yield(2)	Maximum Maturity(3)		Location	Property Type	LTV(1)
105	Mezz Loan		10/1/2021	$	33,316	$	33,316	$	33,124		10.00%	10.57%		4/1/2026	Various	Various	93%
106	Senior Loan		12/16/2021		33,000		31,504		31,496		+3.55%	+3.56%		1/9/2027	Fort Worth, TX	Multifamily	72%
107	Senior Loan		3/11/2021		32,000		30,000		29,932		+4.61%	+4.68%		3/9/2026	Colleyville, TX	Retail	58%
108	Senior Loan		4/27/2022		31,800		30,141		30,134		+4.30%	+4.31%		5/9/2027	Morrow, GA	Industrial	62%
109	Senior Loan		1/28/2022		31,229		31,229		31,341		+3.81%	+4.01%		9/9/2026	Dallas, TX	Multifamily	82%
110	Mezz Loan		10/20/2022		31,111		29,508		29,508		+6.50%	+6.50%		10/9/2027	Philadelphia, PA	Mixed Use	68%
111	Senior Loan		11/23/2021		30,920		27,974		27,970		+3.05%	+3.06%		12/9/2026	Dallas, TX	Multifamily	69%
112	Senior Loan		2/16/2024		30,700		30,700		30,691		+3.00%	+3.01%		3/9/2026	Various	Industrial	57%
113	Senior Loan		5/4/2021		30,000		25,208		25,207		+5.66%	+5.91%		5/9/2026	Richardson, TX	Office	65%
114	Senior Loan		12/18/2020		28,440		25,100		25,099		+4.61%	+4.62%		1/9/2026	Rockville, MD	Office	69%
115	Senior Loan		12/15/2021		28,400		27,535		27,531		+3.30%	+3.31%		12/9/2026	Arlington, TX	Multifamily	79%
116	Senior Loan		6/28/2019		28,000		28,000		27,999		+5.46%	+5.56%		7/9/2025	Davis, CA	Hospitality	72%
117	Senior Loan		11/18/2021		27,387		27,387		27,383		+3.71%	+3.72%		12/9/2026	Brooklyn, NY	Self Storage	70%
118	Senior Loan		6/25/2021		25,000		24,441		24,439		+3.16%	+3.17%		7/9/2026	Austin, TX	Multifamily	68%
119	Senior Loan		1/28/2022		24,489		24,489		24,577		+3.81%	+4.01%		9/9/2026	Mesquite, TX	Multifamily	78%
120	Senior Loan		7/18/2018		22,500		22,500		22,522		+5.36%	+5.53%		8/9/2025	Gaithersburg, MD	Hospitality	80%
121	Senior Loan		12/10/2020		22,300		17,672		17,654		+5.36%	+5.39%		1/9/2026	Fox Hills, CA	Office	55%
122	Senior Loan		1/28/2022		22,149		22,149		22,228		+3.81%	+4.01%		9/9/2026	Dallas, TX	Multifamily	85%
123	Senior Loan		8/26/2021		21,805		21,605		21,600		+3.21%	+3.22%		9/9/2026	Seattle, WA	Multifamily	69%
124	Senior Loan		7/13/2021		21,350		21,350		21,346		+3.51%	+3.52%		8/9/2026	Grand Prairie, TX	Multifamily	72%
125	Senior Loan		7/20/2021		21,136		18,828		18,872		+3.36%	+3.45%		8/9/2026	Las Vegas, NV	Multifamily	72%
126	Senior Loan		8/6/2021		20,000		20,000		20,048		+3.21%	+3.30%		8/9/2026	Sandy Springs, GA	Multifamily	74%
127	Senior Loan		5/10/2021		19,200		17,892		17,890		+3.61%	+3.62%		5/9/2026	University City, PA	Multifamily	70%
128	Senior Loan		2/16/2024		19,000		19,000		18,994		+3.00%	+3.01%		3/9/2026	Various	Industrial	58%
129	Senior Loan		12/3/2021		18,828		18,828		18,825		+3.45%	+3.46%		12/9/2026	Various	Self Storage	63%
130	Mezz Loan		2/21/2020		18,102		18,102		18,102		10.00%	10.00%		3/1/2030	Various	Industrial	70%
131	Senior Loan		2/26/2021		17,706		17,706		17,704		+3.36%	+3.37%		3/9/2026	Newark, NJ	Industrial	57%
132	Senior Loan		2/19/2020		17,600		14,000		14,003		+3.61%	+3.61%		3/9/2025	Los Angeles, CA	Mixed Use	71%
133	Senior Loan		6/16/2021		17,500		16,956		16,954		+3.36%	+3.37%		7/9/2026	Everett, WA	Multifamily	69%
134	Senior Loan		1/28/2021		16,100		16,100		16,163		+4.61%	+4.74%		2/9/2026	Philadelphia, PA	Self Storage	79%
135	Mezz Loan		6/8/2022		15,840		15,840		15,912		+7.50%	+7.75%		6/9/2027	New York, NY	Multifamily	81%
136	Senior Loan		6/16/2021		15,406		15,347		15,345		+3.36%	+3.37%		7/9/2026	Everett, WA	Multifamily	71%
137	Mezz Loan		2/14/2020		15,000		15,000		15,000		+7.61%	+7.61%		12/5/2026	Queens, NY	Multifamily	75%
138	Senior Loan		2/16/2024		14,700		14,700		14,696		+3.00%	+3.01%		3/9/2026	Various	Industrial	57%
139	Senior Loan		3/25/2021		13,405		12,989		13,021		+3.36%	+3.45%		4/9/2026	Lithonia, GA	Multifamily	67%
140	Senior Loan		2/16/2024		13,100		13,100		13,096		+3.00%	+3.01%		3/9/2026	Various	Industrial	60%
141	Senior Loan		3/19/2021		12,718		12,718		12,780		+4.06%	+4.23%		4/9/2026	Brooklyn, NY	Multifamily	85%
142	Mezz Loan		1/20/2023		11,673		9,673		9,673		+5.20%	+5.20%		2/9/2028	Various	Industrial	64%
143	Senior Loan		3/7/2018		11,000		11,000		10,997		+5.75%	+5.87%		6/9/2024	Las Vegas, NV	Hospitality	71%
144	Mezz Loan		5/12/2022		5,785		5,785		5,785		+10.50%	+10.50%		5/9/2027	Denver, CO	Multifamily	86%
145	Senior Loan		9/23/2021		5,633		4,676		4,757		+4.36%	+4.56%		9/9/2026	Various	Multifamily	77%
146	Mezz Loan		4/6/2022		5,401		5,401		5,297		+11.00%	+11.65%		4/9/2027	Atlanta, GA	Multifamily	88%
Total/Weighted Average				$	8,234,345	$	7,901,202	$	7,905,603		+3.82%	+3.89%					68%
CECL Reserve									(119,800	)
Loans receivable, net								$	7,785,803

(1) Date loan was originated or acquired by us, and the LTV, as of such date. Dates and LTV are not updated for subsequent loan modifications or upsizes.

(2) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rate, which is SOFR. In addition to cash coupon, all-in yield include accretion of discount (amortization of premium) and accrual of exit fees.

(3) Maximum maturity assumes all extension options are exercised by the borrower, however loans may be repaid prior to such date.

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Results of Operations

The following table sets forth information regarding our unaudited consolidated results of operations for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
	2024			2023
Net interest income
Interest income	$	191,726		$	173,803
Less: Interest expense		(110,182	)		(99,814	)
Interest income on mortgage loans held in securitization trusts		16,424			3,687
Less: Interest expense on mortgage obligations issued by securitization trusts		(14,530	)		(3,023	)
Net interest income		83,438			74,653
Other expenses
Management fee		9,393			7,876
Performance fee		6,165			5,611
General and administrative expenses		11,264			9,777
Real estate operating expenses		1,379			—
Depreciation and amortization		1,835			—
Interest expense on real estate		2,357			—
Less: Expense limitation		—			(87	)
Add: Expense recoupment to sponsor		—			—
Net other expenses		32,393			23,177
Other income (loss)
Credit loss expense, net		(39,960	)		(1,286	)
Real estate operating income		4,883			—
Net change in unrealized gain on interest rate cap		(784	)		(988	)
Net realized gain (loss) on mortgage-backed securities, fair value option		333			—
Net realized gain (loss) on extinguishment of debt		174			—
Net change in unrealized gain (loss) on mortgage-backed securities, fair value option		77			—
Unrealized gain (loss) on mortgage loans and obligations held in securitization trusts, net		532			6
Other income (loss), net		—			(81	)
Total other income (loss)		(34,745	)		(2,349	)
Net income before income taxes		16,300			49,127
Income tax expense		(480	)		(550	)
Net income		15,820			48,577
Preferred stock dividends		(4	)		(4	)
Net income attributable to FS Credit Real Estate Income Trust, Inc.	$	15,816		$	48,573

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities. The increase in interest income for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was attributable to debt investments acquired or originated in our portfolio and non-recurring

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prepayment fee income. The increase in interest expense was attributable to an increase in borrowings in order to support our investment activities. The increase in interest income on mortgage loans held in securitization trusts, and interest expense on mortgage obligations issued by securitization trusts was attributable to the consolidation of securitization vehicles.

Other Expenses

Other expenses include management and performance fees payable to FS Real Estate Advisor and general and administrative expenses. General and administrative expenses include administrative services expenses and fees, auditing and professional fees, independent director fees, transfer agent fees, loan servicing expenses and other costs associated with operating our business. The increase in other expenses for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 can primarily be attributed to the increase of our management fee and various general and administrative expenses related to the growth of our net assets.

Expense Limitation

We have entered into an expense limitation agreement with FS Real Estate Advisor and Rialto pursuant to which FS Real Estate Advisor and Rialto have agreed to waive reimbursement of or pay, on a quarterly basis, our annualized ordinary operating expenses for such quarter to the extent such expenses exceed 1.5% per annum of our average net assets attributable to each of our classes of common stock. Ordinary operating expenses for each class of common stock consist of all ordinary expenses attributable to such class, including administration fees, transfer agent fees, fees paid to our board of directors, loan servicing expenses, administrative services expenses and fees, and related costs associated with legal, regulatory compliance and investor relations, but excluding the following: (a) management fees and performance fees paid to FS Real Estate Advisor pursuant to the Advisory Agreement, (b) interest expense and other financing costs, (c) taxes, (d) distribution or shareholder servicing fees and (e) unusual, unexpected and/or nonrecurring expenses. We will repay FS Real Estate Advisor or Rialto on a quarterly basis any ordinary operating expenses previously waived or paid, but only if the reimbursement would not cause the then-current expense limitation, if any, to be exceeded. In addition, the reimbursement of expenses will be made only if payable not more than three years from the end of the fiscal quarter in which the expenses were paid or waived.

During the three months ended March 31, 2024, no expense recoupments were paid to FS Real Estate Advisor and Rialto. As of March 31, 2024, no expense recoupments were payable to FS Real Estate Advisor and Rialto.

Credit Loss Expense, Net

During the three months ended March 31, 2024, our expected credit loss reserve increased by $39,960. Credit loss expenses relate to changes in the Company’s general and specific current expected credit loss (“CECL”) reserves for the Company’s Loans receivable, held-for-investment and Mortgage-backed securities, held-to-maturity portfolios, and the credit loss allowance associated with the Company’s Mortgage-backed securities available-for-sale. The increase in credit loss expense can primarily be attributed to a more adverse macroeconomic outlook.

Non-GAAP Financial Measures

Funds from Operations and Modified Funds from Operations

We use Funds from Operations (“FFO”), a widely accepted non-GAAP financial metric, to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate

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Investment Trusts (“NAREIT”) has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of operating property, plus depreciation and amortization and after adjustments for unconsolidated entities. In addition, NAREIT has further clarified the FFO definition to add-back impairment write-downs of depreciable real estate or of investments in unconsolidated entities that are driven by measurable decreases in the fair value of depreciable real estate and to exclude the earnings impacts of cumulative effects of accounting changes. We have adopted the NAREIT definition for computing FFO.

Due to the unique features of publicly registered, non-listed REITs, the Institute for Portfolio Alternatives (“IPA”), an industry trade group, published a standardized non-GAAP financial measure known as Modified Funds from Operations (“MFFO”), which the IPA has promulgated as a supplemental measure for publicly registered non-listed REITs and which may be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT.

The IPA defines MFFO as FFO adjusted for acquisition fees and expenses, amounts relating to straight line rents and amortization of premiums or accretion of discounts on debt investments, non-recurring impairments of real estate-related investments, mark-to-market adjustments included in net income, non-recurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures.

Because MFFO may be a recognized measure of operating performance within the non-listed REIT industry, MFFO and the adjustments used to calculate it may be useful in order to evaluate our performance against other non-listed REITs. Like FFO, MFFO is not equivalent to our net income or loss as determined under GAAP, as detailed in the table below, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to acquire a significant amount of investments.

Our presentation of FFO and MFFO may not be comparable to other similarly titled measures presented by other REITs. We believe that the use of FFO and MFFO provides a more complete understanding of our operating performance to stockholders and to management, and when compared year over year, reflects the impact on our operations from trends in operating costs, general and administrative expenses, and interest costs. Neither FFO nor MFFO is intended to be an alternative to “net income” or to “cash flows from operating activities” as determined by GAAP as a measure of our capacity to pay distributions. Management uses FFO and MFFO to compare our operating performance to that of other REITs and to assess our operating performance.

Neither the SEC, any other regulatory body nor NAREIT has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, another regulatory body or NAREIT may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

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Our FFO and MFFO are calculated for the three months ended March 31, 2024 and 2023 as follows:

	Three Months Ended March 31,
	2024			2023
Net income (GAAP)	$	15,820		$	48,577
Adjustments to arrive at funds from operations:
Real estate depreciation and amortization		1,835			1,831
Funds from operations	$	17,655		$	50,408
Adjustments to arrive at modified funds from operations:
Accretion of discount on mortgage-backed securities held-to-maturity		(713	)		(4,754	)
Straight-line rental income		(1,356	)		(1,231	)
Net change in unrealized (gain) loss on interest rate cap		784			988
Credit loss expense, net		39,960			1,286
Net change in unrealized (gain) loss on mortgage-backed securities fair value option		(77	)		—
Unrealized (gain) loss on mortgage loans and obligations held in securitization trusts, net		(532	)		—
Modified funds from operations	$	55,721		$	46,697

NAV per Share

FS Real Estate Advisor calculates our NAV per share in accordance with the valuation guidelines approved by our board of directors for the purposes of establishing a price for shares sold in our public offering as well as establishing a repurchase price for shares repurchased pursuant to our share repurchase plan.

In general, our investments are valued by FS Real Estate Advisor based on market quotations, at amortized cost or at fair value determined in accordance with GAAP. In accordance with the valuation guidelines approved by our board of directors, FS Real Estate Advisor calculates our NAV per share for each class of our common stock as of the last calendar day of each month. For purposes of calculating our NAV, FS Real Estate Advisor uses the following valuation methods:

• Commercial real estate debt classified as held-for-investment is valued at amortized cost, net of unamortized acquisition premiums or discounts, loan fees, and origination costs. Mortgage-backed securities are classified as held-to-maturity when we intend to and can hold such securities until maturity and are valued at amortized cost, net of unamortized acquisition premium or discount. Our general CECL reserve is not considered impairment and is excluded from our NAV calculation consistent with other unrealized gains (losses) for investments expected to be held to maturity pursuant to our existing policy for calculating NAV. We recognize such potential credit losses in the NAV calculation if and when a loan is deemed impaired. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, the loan is written down through a loan specific reserve. See Note 2 to our unaudited consolidated financial statements included herein for additional information regarding our accounting for impaired loans, including significant judgments and assumptions included. At least quarterly, FS Real Estate Advisor, with assistance from our sub-adviser, evaluates for impairment each loan classified as held-for-investment.

• Mortgage-backed securities that we do not classify as held-to-maturity are reported at fair value. On a monthly basis, FS Real Estate Advisor values such securities using quotations obtained from an independent third-party pricing service, which provides prevailing bid and ask prices that are screened for validity by the third-party pricing service on the valuation date. For securities for which there is no

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readily available market quotations, FS Real Estate Advisor values the security using current market data and a valuation provided by an independent third-party valuation firm. Each investment is valued by FS Real Estate Advisor no less frequently than quarterly.

• Investments in real estate are initially valued at cost, which is expected to represent fair value at that time. FS Real Estate Advisor, with assistance from our sub-adviser, expects to receive an appraisal performed by an independent third-party appraisal firm on each property prior to or upon acquisition. Each property will then be valued monthly by the Adviser using current market data and a valuation provided by an independent third-party valuation firm. The independent third-party valuation firm will provide a monthly valuation for each property using the discounted cash flow methodology (income approach) as a primary methodology, although other industry standard methodologies may be used, including the sales comparison and replacement cost approaches. Further, the independent third-party valuation firm will provide an annual valuation for each property, which will be consistent with its monthly valuation but will also reflect (i) property specific factors such as property income, cash flow forecasts, capital improvements and key performance indicators (e.g. occupancy rates) and (ii) market specific factors such as discount rates, capitalization rates and market sale transactions.

• Liabilities include repurchase agreements payable, credit facility payable, collateralized loan obligations, mortgage obligations, fees payable to FS Real Estate Advisor and the dealer manager, accounts payable, accrued operating expenses, any portfolio-level credit facilities, and other liabilities. All liabilities are valued at amounts payable, net of unamortized premium or discount, and net of unamortized debt issuance costs. Liabilities related to stockholder servicing fees allocable to Class T, Class S, Class D and Class M shares are only included in the NAV calculation for those classes. Liabilities related to the base management fee is a class-specific expense for Class T, Class S, Class D, Class M and Class I shares, and the performance fee is a class-specific expense for Class T, Class S, Class D, Class M, Class I and Class Y shares. Class I PCRs will not be treated as a liability unless and until Class I shares are issuable pursuant to our advisory agreement and the Class I PCR agreement.

Commercial real estate debt and mortgage-backed securities held-to-maturity are valued at amortized cost, consistent with how they are recorded in accordance with GAAP, as these instruments are intended to be held-to-maturity. Liabilities are valued at amortized cost as these obligations are expected to be satisfied at their carrying value. See Note 9 to our unaudited consolidated financial statements included herein for additional information including a comparison of our carrying value and an estimate of the fair value of our commercial real estate debt, mortgage-backed securities held-to-maturity, repurchase agreements payable, credit facility payable, and collateralized loan obligations.

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The following table provides a breakdown of the major components of our total NAV as of March 31, 2024:

Components of NAV	March 31, 2024
Cash and cash equivalents	$	98,502
Restricted cash		16,979
Loans receivable, net of specific CECL reserve of $2,967		7,902,636
Mortgage-backed securities held-to-maturity		76,021
Mortgage-backed securities, at fair value		234,636
Interest receivable		46,307
Investment in real estate		180,556
Receivable for investment sold and repaid		57,596
Other assets		6,070
Mortgage loans held in securitization trusts, at fair value		956,033
Repurchase agreements payable, net		(311,764	)
Credit facility payable, net		(939,294	)
Collateralized loan obligations, net		(4,202,544	)
Mortgage note payable, net		(123,835	)
Accrued servicing fees(1)		(1,520	)
Other liabilities		(102,681	)
Mortgage obligations issued by securitization trusts, at fair value		(883,044	)
Net asset value	$	3,010,654

(1) See Reconciliation of Stockholders’ Equity to NAV below for an explanation of the differences between the stockholder servicing fees accrued for purposes of NAV and the amount accrued under GAAP.

The following table provides a breakdown of our total NAV and NAV per share by share class as of March 31, 2024:

NAV per Share	Class F		Class Y		Class T		Class S		Class D		Class M		Class I		Total
Net asset value	$	18,682	$	21,885	$	26,527	$	1,607,243	$	13,323	$	128,503	$	1,194,491	$	3,010,654
Number of outstanding shares		739,847		906,648		1,068,818		64,139,732		535,739		5,156,054		49,408,227		121,955,065
NAV per share as of March 31, 2024	$	25.2518	$	24.1385	$	24.8193	$	25.0585	$	24.8683	$	24.9228	$	24.1759

Discount rate and exit capitalization rate are the key assumptions used in the discounted cash flow valuation of our investment in real estate. The discount rate and exit capitalization rate assumptions used in the March 31, 2024 investment in real estate valuation were 10.00% and 6.38%, respectively. A change in these assumptions would impact the calculation of the value of our real estate investment. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:

Input	Hypothetical Change		Investment in Real Estate Values
Discount Rate		0.25% decrease		3.3	%
		0.25% increase		(3.2	)%
Exit Capitalization Rate		0.25% decrease		9.5	%
		0.25% increase		(8.8	)%

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The following table sets forth a reconciliation of our stockholders’ equity to our NAV as of March 31, 2024:

Reconciliation of Stockholders’ Equity to NAV	March 31, 2024
Total stockholders’ equity under GAAP	$	2,792,512
Preferred stock		(125	)
Total stockholders’ equity, net of preferred stock, under GAAP		2,792,387
Adjustments:
Accrued stockholder servicing fees(1)		108,050
General CECL reserve(2)		119,377
Unrealized real estate appreciation(3)		(13,752	)
Accumulated depreciation and amortization(4)		12,801
Other adjustments(5)		(8,209	)
Net asset value	$	3,010,654

(1) Stockholder servicing fees only apply to Class T, Class S, Class D and Class M shares. Under GAAP, we accrue future stockholder servicing fees in an amount equal to our best estimate of fees payable to FS Investment Solutions at the time such shares are sold. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis. As a result, the estimated liability for the future stockholder servicing fees, which are accrued at the time each share is sold, will have no effect on the NAV of any class.

(2) Our loans receivable and mortgage-backed securities held-for-investment balances include a general CECL reserve in our GAAP unaudited    consolidated financial statements. For purposes of calculating our NAV, our general CECL reserve is excluded. We recognize a specific CECL reserve in the NAV calculation if and when a loan is deemed impaired, as described above.

(3) Our investment in real estate is presented at its depreciated cost basis in our GAAP unaudited consolidated financial statements. As such, any increases or decreases in the fair market value of our investment in real estate is not included in our GAAP results. For purposes of calculating our NAV, our investment in real estate is recorded at fair value.

(4) We depreciate our investment in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization are not recorded for purposes of determining our NAV.

(5) Includes (i) straight-line rent receivables, which are recorded in accordance with GAAP but not recorded for purposes of determining our NAV, (ii) increases or decreases in the fair market value of our interest rate cap, which is recorded in accordance with GAAP but not recorded for purposes of determining our NAV. For purposes of calculating our NAV, the interest rate cap is amortized over its term, and (iii) other adjustments.

Limits on the Calculation of Our Per Share NAV

Although our primary goal in establishing our valuation guidelines is to produce a valuation that represents a fair and accurate estimate of the value of our investments, the methodologies used are based on judgments, assumptions and opinions about future events that may or may not prove to be correct, and if different judgments, assumptions or opinions were used, a different estimate would likely result. Furthermore, our published per share NAV may not fully reflect certain extraordinary events because we may not be able to immediately quantify the financial impact of such events on our portfolio. FS Real Estate Advisor monitors our portfolio between valuations to determine whether there have been any extraordinary events that may have materially changed the estimated market value of the portfolio, such as significant market events or disruptions or force majeure events. If required by applicable securities law, we will promptly disclose the occurrence of such event in a prospectus supplement and FS Real Estate Advisor will analyze the impact of such extraordinary event on our portfolio and determine, in coordination with third-party valuation services, the appropriate adjustment to be made to our NAV. We will not, however, retroactively adjust NAV. To the extent that the extraordinary events may result in

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a material change in value of a specific investment, FS Real Estate Advisor will order a new valuation of the investment, which will be prepared by a third-party valuation service. It is not known whether any resulting disparity will benefit stockholders whose shares are or are not being repurchased or purchasers of our common stock. In calculating the number of shares outstanding used in calculating our NAV, we include the number of estimated Class I shares, if any, issuable to the adviser and the sub-adviser pursuant to the PCR Agreement based on the achievement of the Performance Conditions (as defined in the PCR Agreement), which estimate we will true up following the issuance of such Class I shares pursuant to the PCR Agreement.

We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on the ability to sell shares under our share repurchase plan and our ability to suspend or terminate our share repurchase plan at any time. Our NAV generally does not consider exit costs that would likely be incurred if our assets and liabilities were liquidated or sold. While we may use market pricing concepts to value individual components of our NAV, our per share NAV is not derived from the market pricing information of open-end real estate funds listed on stock exchanges.

We do not represent, warranty or guarantee that:

• a stockholder would be able to realize the NAV per share for the class of shares a stockholder owns if the stockholder attempts to sell its shares;

• a stockholder would ultimately realize distributions per share equal to per share NAV upon a liquidation of our assets and settlement of our liabilities or upon any other liquidity event;

• shares of our common stock would trade at per share NAV on a national securities exchange;

• a third party in an arm’s-length transaction would offer to purchase all or substantially all of our shares of common stock at NAV;

• NAV would equate to a market price for an open-end real estate fund; and

• NAV would represent the fair value of our assets less liabilities under GAAP.

Review of our Policies

Our board of directors, including our independent directors, has reviewed our policies described in this Quarterly Report on Form 10-Q and our registration statement and determined that they are in the best interests of our stockholders because: (i) they increase the likelihood that we will be able to originate, acquire and manage a diversified portfolio of senior loans secured by commercial real estate, thereby reducing risk in our portfolio; (ii) there are sufficient loan underwriting opportunities with the attributes that we seek; (iii) our executive officers, director, affiliates of our adviser and sub-adviser have expertise with the type of real estate investments we seek; and (iv) our borrowings will enable us to originate and acquire loan assets and earn revenue more quickly, thereby increasing our likelihood of generating income for our stockholders and preserving stockholder capital.

Liquidity and Capital Resources

As of March 31, 2024, we had $98,502 in cash and cash equivalents, which we and our wholly owned subsidiaries held in custodial accounts. In addition, as of March 31, 2024, we had $2,354,459 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of March 31, 2024, we had unfunded loan commitments of $333,143. We maintain sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise.

We will obtain the funds required to purchase or originate investments and conduct our operations from the net proceeds of our public offering, the private placement of our Class I shares and any future offerings we may conduct, from secured and unsecured borrowings from banks and other lenders, and from any undistributed funds

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from operations. Our principal demands for funds will be for asset acquisitions/originations, the payment of operating expenses and distributions, the payment of interest on any outstanding indebtedness and repurchases of our common stock pursuant to our share repurchase plan. Generally, cash needs for items other than asset acquisitions/originations will be met from operations, and cash needs for asset acquisitions/originations will be funded by public offerings of our shares and debt financings. However, there may be a delay between the sale of our shares and our purchase/originations of assets, which could result in a delay in the benefits to our stockholders of returns generated from our investment operations. Our leverage may not exceed 300% of our total net assets (as defined in our charter) as of the date of any borrowing unless a majority of our independent directors vote to approve any borrowing in excess of this amount.

As of March 31, 2024, our ratio of leverage to total net assets was 201%. Our board of directors will continue to review our ratio of leverage to total net assets on a quarterly basis, as required by our charter.

If we are unable to continue to raise substantial funds in our public offering, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. We have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our public offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

Potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders or proceeds from the sale of assets or collection of loans receivable.

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make certain payments to FS Real Estate Advisor and FS Investment Solutions, the dealer manager for our public offering. During the offering stage of our public offering, these payments will include payments to FS Real Estate Advisor and its affiliates for reimbursement of certain organization and offering expenses. We will reimburse FS Real Estate Advisor for the organization and offering costs it or Rialto incurs on our behalf only to the extent that the reimbursement would not cause the selling commissions, dealer manager fees, accountable due diligence expenses, stockholder servicing fees and the other organization and offering expenses borne by us to exceed 15.0% of the gross offering proceeds from the primary offering as the amount of proceeds increases. FS Real Estate Advisor may be reimbursed for any organization and offering expenses that it or Rialto has incurred on our behalf, up to a cap of 0.75% of gross proceeds raised. FS Investments funded our offering costs in the amount of $25,616 for the period from November 7, 2016 (Inception) to March 31, 2024. Through March 31, 2024, we reimbursed $21,292 to FS Real Estate Advisor for offering expenses previously funded. As of March 31, 2024, $4,081 of offering expenses previously funded remained subject to reimbursement to FS Real Estate Advisor and Rialto.

Subject to the limitations in the advisory agreement and sub-advisory agreement, we expect to make payments to FS Real Estate Advisor in connection with the management of our assets and costs incurred by FS Real Estate Advisor and Rialto in providing services to us. The advisory agreement has a one-year term but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of FS Real Estate Advisor and our board of directors. On August 10, 2023, our board of directors approved the renewal of the advisory agreement effective as of December 1, 2023 for an additional one-year term expiring December 1, 2024. For a discussion of the compensation to be paid to FS Real Estate Advisor and FS Investment Solutions, see Note 7 to our unaudited consolidated financial statements included herein.

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Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash:

	Three Months Ended March 31, 2024
	2024			2023
Cash flows from operating activities	$	63,689		$	53,804
Cash flows used in investing activities		(168,246	)		(453,343	)
Cash flows from financing activities		(35,963	)		320,478
Net increase (decrease) in cash and cash equivalents and restricted cash	$	(140,520	)	$	(79,061	)

Cash flows from operating activities increased $9,885 during the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due an increase in net interest income.

Cash flows used in investing activities decreased $285,097 during the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due to the net decrease of $215,257 in origination and fundings of loans receivables offset by a net increase in principal collections from loans receivable, held-for-investment of $66,392.

Cash flows from financing activities decreased $356,441 during the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due to a net decrease in borrowings of $434,331 and the decrease in issuance of common stock of $126,150.

We utilize our credit and repurchase facilities primarily to finance our loan originations on a short-term basis prior to loan securitizations, including through CLOs. The timing, size, and frequency of our securitizations impact the balances of these borrowings, and produce some fluctuations. The following table provides additional information regarding the balances of our borrowings:

Quarter Ended	Quarterly Average Unpaid Principal Balance		End of Period Unpaid Principal Balance		Maximum Unpaid Principal Balance at Any Month-End
March 31, 2024	$	1,150,574	$	1,263,448	$	1,263,448
December 31, 2023	$	1,098,005	$	1,179,219	$	1,179,219
September 30, 2023	$	1,142,991	$	1,092,175	$	1,221,440
June 30, 2023	$	1,158,316	$	1,101,753	$	1,158,043
March 31, 2023	$	1,222,233	$	1,278,135	$	1,308,357

Critical Accounting Policies and Estimates

Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Refer to the section of our Form 10-K entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” for a full discussion of our critical accounting policies and estimates. There have been no material changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. See Note 2 to our unaudited consolidated financial statements included herein for additional information regarding our accounting policies and significant accounting estimates.

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Related Party Transactions

Compensation of FS Real Estate Advisor, Rialto and the Dealer Manager

Pursuant to the advisory agreement, FS Real Estate Advisor is entitled to an annual base management fee equal to 1.25% of the NAV for our Class T, Class S, Class D, Class M and Class I shares and a performance fee in an amount equal to 10.0% of the Core Earnings for the immediately preceding quarter, subject to a hurdle rate, expressed as a rate of return on average adjusted capital, equal to 1.625% per quarter, or an annualized hurdle rate of 6.5%. We also reimburse FS Real Estate Advisor and Rialto for their actual cost incurred on providing administrative services to us, including the allocable portion of compensation and related expenses of certain personnel providing such administrative services. Further, origination fees of up to 1.0% of the loan amount for first lien, subordinated or mezzanine debt or preferred equity financing may be retained by Rialto or FS Real Estate Advisor. FS Real Estate Advisor has also received compensation for the structuring and negotiation of certain financing arrangements. Pursuant to the advisory agreement, we will reimburse FS Real Estate Advisor and its affiliates for expenses incurred relating to our organization and continuous public offering, including the allocable portion of compensation and related expenses of certain personnel of FS Investments related thereto. FS Real Estate Advisor previously agreed to advance all of our organization and offering expenses until we raised $250,000 of gross proceeds from our public offering. In April 2020, FS Real Estate Advisor and Rialto agreed to defer the recoupment of any organization and offering expenses that may be reimbursable by us under the advisory agreement with respect to gross proceeds raised in the offering in excess of $250,000 until FS Real Estate Advisor, in its sole discretion, determined that we had achieved economies of scale sufficient to ensure that we could bear a reasonable level of expenses in relation to our income. We began reimbursing FS Real Estate Advisor in September 2020 and, as such, FS Real Estate Advisor may be reimbursed for any organization and offering expenses that it or Rialto has incurred on our behalf, up to a cap of 0.75% of gross proceeds raised after such time.

The dealer manager for our continuous public offering is FS Investment Solutions, which is an affiliate of FS Real Estate Advisor. Under the dealer manager agreement, FS Investment Solutions is entitled to receive upfront selling commissions and dealer manager fees in connection with the sale of shares of common stock in our continuous public offering. FS Investment Solutions anticipates that all of the selling commissions and dealer manager fees will be reallowed to participating broker-dealers, unless a particular broker-dealer declines to accept some portion of the dealer manager fee they are otherwise eligible to receive. FS Investment Solutions is also entitled to receive stockholder servicing fees, which accrue daily and are paid on a monthly basis. FS Investment Solutions will reallow such stockholder servicing fees to participating broker-dealers, servicing broker-dealers and financial institutions (including bank trust departments) and will waive (pay back to us) stockholder servicing fees to the extent a broker-dealer or financial institution is not eligible or otherwise declines to receive all or a portion of such fees.

See Note 7 to our unaudited consolidated financial statements included herein for additional information regarding our related party transactions and relationships, including a description of the fees and amounts due to FS Real Estate Advisor, compensation of FS Investment Solutions, capital contributions by FS Investments and Rialto, our expense limitation agreement with FS Investments and our purchase of a mortgage loan from an affiliate of Rialto.

FS Investment Solutions also serves or served as the placement agent for our private offerings pursuant to placement agreements. FS Investment Solutions does not receive any compensation pursuant to these agreements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in interest rates. As of March 31, 2024, 99% of the outstanding principal of our debt investments were floating-rate investments. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we may hold and to declines in the value of any fixed rate investments we may hold. However, many of our variable rate investments provide for an interest rate floor, which may prevent our interest income from increasing until

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benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed our performance fee hurdle rate and may result in a substantial increase in our net investment income and the amount of performance fees payable to FS Real Estate Advisor.

Pursuant to the terms of the FS Rialto 2019-FL1, 2021-FL2, 2021-FL3, 2022-FL4, 2022-FL5, 2022-FL6, 2022-FL7, the WF-1 Facility, the GS-1 Facility, the BB-1 Facility, the MS-1 Facility, the Barclays Revolving Credit Facility, the BMO-1 Facility, the Lucid Facility, the Mortgage loan, and the MM-1 Facility, borrowings are at a floating-rate based on SOFR, and the pricing rate for any specific transaction executed under the RBC Facility may be charged, pursuant to the terms agreed for that transaction, at a floating-rate based on SOFR. To the extent that any present or future credit facilities or other financing arrangements that we or any of our subsidiaries enter into are based on a floating interest rate, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates, when we have debt outstanding, our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

We may seek to limit the impact of rising interest rates on earnings and cash flows through the use of derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets.

The following table shows the effect over a twelve-month period of changes in interest rates on our interest income, interest expense, and net interest income, assuming no changes in the composition of our investment portfolio, including the accrual status of our investments, and our financing arrangements in effect as of March 31, 2024:

Basis Point Changes in Interest Rates	Increase (Decrease) in Interest Income			Increase (Decrease) in Interest Expense			Increase (Decrease) in Net Interest Income			Percentage Change in Net Interest Income
Down 50 basis points(1)	$	(39,568	)	$	(26,498	)	$	(13,070	)		(3.9	)%
Down 25 basis points(1)	$	(19,790	)	$	(13,249	)	$	(6,541	)		(2.0	)%
No change		—			—			—			—
Up 25 basis points	$	19,825		$	13,249		$	6,576			2.0	%
Up 50 basis points	$	39,715		$	26,498		$	13,216			4.0	%

(1) Decrease in rates assumes SOFR does not decrease below 0%.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024.

Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) or 15d-15(f))that occurred during the three months ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material adverse effect upon our financial condition or results of operations.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K, as supplemented by our quarterly report on Form 10-Q. There are no material changes from the risk factors included within our most recent Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Share Repurchase Program

We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares. The repurchase of shares is limited to no more than 2% of our aggregate NAV per month of all classes of shares then participating in our share repurchase plan and no more than 5% of our aggregate NAV per calendar quarter of all classes of shares then participating in our share repurchase plan, which means that in any 12-month period, we limit repurchases to approximately 20% of the total NAV of all classes of shares then participating in the share repurchase plan.

During the three months ended March 31, 2024, we repurchased shares of our common stock in the following amounts, which represented all of the share repurchase requested received for the same period:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
January 1 - January 31, 2024		735,718	$	24.69		735,718		—
February 1 - February 29, 2024		2,433,849	$	24.90		2,433,849		—
March 1 - March 31, 2024		1,589,817	$	24.73		1,589,817		—
Total		4,759,384				4,759,384		—

(1) Repurchases are limited as described above.

Sale of Unregistered Securities

On March 26, 2024, we received $83,333 relating to the sale and issuance of approximately 3,444 Class I shares to an accredited investor at the per share price of $24.1966. The sale of securities was made pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

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Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Item 6. Exhibits.

3.1	Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form S-11, as filed by the Registrant with the SEC on September 7, 2017).
3.2	Articles of Amendment (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the SEC on August 17, 2018).
3.3	Second Articles of Amendment (incorporated by reference to Exhibit 3.3 of the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on August 14, 2019).
3.4	Third Articles of Amendment (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the SEC on April 28, 2022).
3.5	Bylaws (incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form S-11, as filed by the Registrant with the SEC on February 13, 2017).
4.1	Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.2 of the Registrant’s Post-Effective Amendment No. 4 to Form S-11, as filed by the Registrant with the SEC on April 12, 2024).
10.1	Amendment No. 2 to Master Repurchase Amendment, dated as of February  16, 2024, by and among Bank of Montreal, FS CREIT Finance BMO-1 LLC and FS Credit Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 23, 2024).
10.2	Second Amendment to Amended and Restated Loan and Servicing Agreement, dated as of April  23, 2024, by and among FS CREIT Finance MM-1 LLC, Massachusetts Mutual Life Insurance Company, C.M. Life Insurance Company, Barings Finance LLC and FS CREIT Finance Holdings LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 29, 2024).
10.3	Amended and Restated Credit Agreement, dated as of April  24, 2024, among FS Credit Real Estate Income Trust, Inc., Barclays Bank PLC, City National Bank, the lenders party thereto, M&T Bank and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 29, 2024).
31.1*	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
104*	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Previously Filed

+ This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized on May 15, 2024.

FS CREDIT REAL ESTATE INCOME TRUST, INC.
By:	/s/ MICHAEL C. FORMAN
	Michael C. Forman Chief Executive Officer (Principal Executive Officer)
By:	/s/ CHRISTOPHER CONDELLES
	Christopher Condelles Chief Financial Officer (Principal Accounting and Financial Officer)

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