Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ck0001713407 | |
Entity Registrant Name | OAKTREE REAL ESTATE INCOME TRUST, INC. | |
Entity Central Index Key | 1,713,407 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,000 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2018 | Jan. 10, 2018 |
Assets | ||
Cash and cash equivalents | $ 105,816 | $ 200,000 |
Other assets | 94,415 | |
Total Assets | 200,231 | 200,000 |
Liabilities and Equity | ||
Accounts payable, accrued expenses and other liabilities | 88,233 | |
Due to affiliates | 25,000 | |
Commitments and contingencies (Note 6) | ||
Total Liabilities | 113,233 | |
Stockholders' Equity | ||
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized; no shares issued nor outstanding at January 10, 2018 and June 30, 2018, respectively | ||
Common stock, $0.01 par value per share, 1,000,000,000 shares authorized; 20,000 shares issued and outstanding at January 10, 2018 and June 30, 2018, respectively | 200 | 200 |
Additional paid-incapital | 199,800 | 199,800 |
Accumulated deficit | (113,002) | |
Total Stockholders' Equity | 86,998 | 200,000 |
Total Liabilities and Stockholders' Equity | $ 200,231 | $ 200,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Jan. 10, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 20,000 | 20,000 |
Common stock, outstanding | 20,000 | 20,000 |
Statement of Operations
Statement of Operations - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Revenues | ||
Interest income | $ 161 | $ 231 |
Total revenues | 161 | 231 |
Expenses | ||
General and administrative expenses | 88,233 | 113,233 |
Total expenses | 88,233 | 113,233 |
Net Loss | $ (88,072) | $ (113,002) |
Loss per share (basic and diluted): | ||
Net loss per share | $ (4.40) | $ (5.65) |
Weighted average number of shares outstanding | 20,000 | 20,000 |
Statement Cash Flow
Statement Cash Flow | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Operating activities: | |
Net loss | $ (113,002) |
Changes in assets and liabilities: | |
Increase in other assets | (94,415) |
Increase in accounts payable, accrued expenses and other liabilities | 88,233 |
Increase in due to affiliates | 25,000 |
Net cash used in operating activities | (94,184) |
Total decrease in cash and cash-equivalents | (94,184) |
Cash and cash-equivalents at beginning of period | 200,000 |
Cash and cash-equivalents at end of period | $ 105,816 |
Organization and Business Purpo
Organization and Business Purpose | 6 Months Ended |
Jun. 30, 2018 | |
Organization and Business Purpose | 1. Organization and Business Purpose Oaktree Real Estate Income Trust, Inc. (the “Company”) was formed on July 27, 2017 as a Maryland corporation and intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company was organized to invest primarily in well-located, high quality commercial real estate assets that generate strong current cash flow and could further appreciate in value through moderate leasing and repositioning strategies. Moreover, to a lesser extent, the Company plans to invest in real estate-related investments, including private loans and traded real estate-related securities that will help maintain liquidity. The Company anticipates that its investments will be geographically diversified across the top 50 markets in the United States. The Company will be externally managed by Oaktree Fund Advisors, LLC (the “Adviser”), an affiliate of Oaktree Capital Management, L.P. On January 9, 2018, the Company was capitalized with a $200,000 investment by an affiliate of the Adviser. As of June 30, 2018, the Company had not commenced its principal operations and had neither purchased nor contracted to purchase any investments. As of such date, the Adviser had not identified any real estate or real estate-related investments in which it is probable that the Company will invest. |
Capitalization
Capitalization | 6 Months Ended |
Jun. 30, 2018 | |
Capitalization | 2. Capitalization As of June 30, 2018, the Company was authorized to issue up to 1,000,000,000 shares of common stock. On April 11, 2018, the Company amended and restated its charter to authorize the following classes of common stock: Classification No. of Authorized Shares Par Value Preferred stock 50,000,000 $ 0.01 Class T common stock 250,000,000 $ 0.01 Class S common stock 250,000,000 $ 0.01 Class D common stock 250,000,000 $ 0.01 Class I common stock 250,000,000 $ 0.01 1,050,000,000 The Company has registered with the Securities and Exchange Commission an offering of up to $1,600,000,000 in shares in its primary offering and up to $400,000,000 in shares pursuant to its distribution reinvestment plan (the “Offering”). The Company intends to sell any combination of the four classes of shares of its common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and ongoing stockholder servicing fees. Until the release of proceeds from escrow, the per share purchase price for shares of the Company’s common stock in its primary offering will be $10.00 per share plus applicable upfront selling commissions and dealer manager fees. Thereafter, the purchase price per share for each class of common stock will vary and will generally equal the Company’s prior month’s net asset value (“NAV”) per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. The Company will accept proceeds and hold investors’ funds in an interest bearing escrow account until (i) the Company receives purchase orders for at least $150,000,000, including shares purchased by the Company’s sponsor, its affiliates and its directors and officers, in any combination of classes of shares of our common stock, and (ii) the Company’s board of directors has authorized the release of funds in the escrow account. As of June 30, 2018, neither the Company nor its escrow agent received any purchase orders or investor funds from the Offering. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q S-X. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities and accrued expenses at the date of the balance sheet. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. The Company did not hold cash equivalents as of June 30, 2018 or January 10, 2018. Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31 for the year in which the proceeds from escrow are released. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Organization and Offering Expenses The Adviser has agreed to advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through the first anniversary of the date on which escrow is released. The Company will reimburse the Adviser for all such advanced expenses ratably over a 60 month period following the first anniversary of the date escrow is released. As of June 30, 2018 and January 10, 2018, the Adviser and its affiliates had incurred organization and offering expenses on the Company’s behalf of approximately $3.5 million and $1.5 million, respectively. These organization and offering expenses are not recorded in the accompanying financial statements because such costs are not the Company’s liability until the date on which the escrow is released. When recorded by the Company, organizational expenses will be expensed as incurred, and offering expenses will be reflected as a reduction of additional paid-in |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions | 4. Related Party Transactions The Company has entered into an advisory agreement with the Adviser. Pursuant to the advisory agreement between the Company and the Adviser, the Adviser is responsible for sourcing, evaluating and monitoring the Company’s investment opportunities and making decisions related to the acquisition, management, financing and disposition of the Company’s assets, in accordance with the Company’s investment objectives, guidelines, policies and limitations, subject to oversight by the Company’s board of directors. Certain affiliates of the Company, including the Adviser, will receive fees and compensation in connection with the offering and ongoing management of the assets of the Company. The Adviser will be paid a management fee equal to 1.00% of NAV per annum, payable monthly. The management fee will be paid, at the Adviser’s election, in cash or Class I shares. The Adviser has agreed to waive its management fee for the first six months following the date on which the initial proceeds the Offering are released from escrow. The Company may retain certain of the Adviser’s affiliates for necessary services relating to the Company’s investments or its operations, including any administrative services, construction, special servicing, leasing, development, property oversight and other property management services, as well as services related to mortgage servicing, group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, loan servicing, property, title and/or other types of insurance, management consulting and other similar operational matters. Any such arrangements will be at market terms and rates. As of June 30, 2018, the Company had not retained an affiliate of the Adviser for any such services. The Adviser holds a performance participation interest in the Company that entitles it to receive an allocation from the Company equal to 12.5% of the annual Total Return, subject to a 5% annual Hurdle Amount (each term as defined in the advisory agreement) and a high water mark, with a catch-up. The Company will be dependent on the Adviser and its affiliates for certain services that are essential to it, including acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholder's Equity | 5. Stockholder’s Equity Distribution Reinvestment Plan The Company has adopted a distribution reinvestment plan whereby stockholders (other than Alabama, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, Ohio, Oregon, Vermont and Washington investors) will have their cash distributions automatically reinvested in additional shares of common stock unless they elect to receive their distributions in cash. Alabama, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, Ohio, Oregon, Vermont and Washington investors will automatically receive their distributions in cash unless they elect to have their cash distributions reinvested in additional shares of the Company’s common stock. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan will be equal to the offering price before upfront selling commissions and dealer manager fees (the “transaction price”) at the time the distribution is payable, which will generally be equal to the Company’s prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares pursuant to the distribution reinvestment plan. The stockholder servicing fees with respect to shares of the Company’s Class T shares, Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan. Share Repurchase Plan The Company has adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that the Company repurchase all or any portion of their shares. The Company may choose to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any particular month, in its discretion, subject to any limitations in the share repurchase plan. The total amount of aggregate repurchases of Class T, Class S, Class D, and Class I shares will be limited to 2% of the aggregate NAV per month and 5% of the aggregate NAV per calendar quarter. Shares would be repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any early repurchase deduction. Shares that have not been outstanding for at least one year would be repurchased at 95% of the transaction price. Due to the illiquid nature of investments in real estate, the Company may not have sufficient liquid resources to fund repurchase requests and has established limitations on the amount of funds the Company may use for repurchases during any calendar month and quarter. Further, the Company’s board of directors may modify, suspend or terminate the share repurchase plan. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies | 6. Commitments and Contingencies From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2018, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened against it. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events | 7. Subsequent Events The Company has evaluated events from June 30, 2018 through the date the financial statements were issued. There were no subsequent events that need disclosure. |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q S-X. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities and accrued expenses at the date of the balance sheet. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. The Company did not hold cash equivalents as of June 30, 2018 or January 10, 2018. |
Income Taxes | Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31 for the year in which the proceeds from escrow are released. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its stockholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. |
Capitalization (Tables)
Capitalization (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Classes of Common Stock Authorized | On April 11, 2018, the Company amended and restated its charter to authorize the following classes of common stock: Classification No. of Authorized Shares Par Value Preferred stock 50,000,000 $ 0.01 Class T common stock 250,000,000 $ 0.01 Class S common stock 250,000,000 $ 0.01 Class D common stock 250,000,000 $ 0.01 Class I common stock 250,000,000 $ 0.01 1,050,000,000 |
Organization and Business Pur15
Organization and Business Purpose - Additional Information (Detail) | Jan. 09, 2018USD ($) |
Nature Of Operations [Line Items] | |
Capitalized investment by affiliate | $ 200,000 |
Capitalization - Additional Inf
Capitalization - Additional Information (Detail) - USD ($) | Apr. 11, 2018 | Jun. 30, 2018 | Jan. 10, 2018 |
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, shares authorized | 1,050,000,000 | 1,000,000,000 | 1,000,000,000 |
Proceeds and holding of investors' funds in interest bearing escrow account until amount of purchase order received | $ 150,000,000 | ||
Purchase orders or investor funds from Offering | $ 0 | ||
Description of accepting proceeds and holding of investors' funds in interest bearing escrow account | The Company will accept proceeds and hold investors’ funds in an interest bearing escrow account until (i) the Company receives purchase orders for at least $150,000,000, including shares purchased by the Company’s sponsor, its affiliates and its directors and officers, in any combination of classes of shares of our common stock, and (ii) the Company’s board of directors has authorized the release of funds in the escrow account. | ||
Primary Offering [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Purchase price of shares | $ 10 | ||
Primary Offering [Member] | Maximum [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Offering of common stock | $ 1,600,000,000 | ||
Distribution Reinvestment Plan [Member] | Maximum [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Offering of common stock | $ 400,000,000 |
Capitalization - Summary of Cla
Capitalization - Summary of Classes of Common Stock Authorized (Detail) - $ / shares | Jun. 30, 2018 | Apr. 11, 2018 | Jan. 10, 2018 |
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, shares authorized | 1,000,000,000 | 1,050,000,000 | 1,000,000,000 |
Preferred Stock [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Common stock, shares authorized | 50,000,000 | ||
Common Class T- [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Common stock, shares authorized | 250,000,000 | ||
Common Class S- [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Common stock, shares authorized | 250,000,000 | ||
Common Class D [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Common stock, shares authorized | 250,000,000 | ||
Common Class I- [Member] | |||
Schedule of Capitalization, Equity [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Common stock, shares authorized | 250,000,000 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jan. 10, 2018 | |
Percentage of taxable income not subject to federal corporate income tax to the extent it distributes if qualifies for taxation as a REIT | 90.00% | |
Organization and offering expenses incurred by adviser and its affiliates on company's behalf | $ 3.5 | $ 1.5 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018 | |
Schedule of Other Related Party Transactions [Line Items] | |
Percentage of management fee to NAV payable to adviser per annum, payable monthly | 1.00% |
Percentage of performance participation interest to annual total return held by adviser | 12.50% |
Annual hurdle amount, percentage | 5.00% |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) | Jun. 30, 2018 |
Class of Stock [Line Items] | |
Repurchase of shares to NAV per month, percentage | 2.00% |
Repurchase of shares to NAV per calender quarter, percentage | 5.00% |
Repurchase of shares outstanding less than one year to transaction price, percentage | 95.00% |