Filed Pursuant to Rule 424(b)(3)
Registration No. 333-223022
OAKTREE REAL ESTATE INCOME TRUST, INC.
SUPPLEMENT NO. 6 DATED SEPTEMBER 16, 2021
TO THE PROSPECTUS DATED MAY 4, 2021
This prospectus supplement (“Supplement”) is part of and should be read in conjunction with the prospectus of Oaktree Real Estate Income Trust, Inc., dated May 4, 2021 (as supplemented to date, the “Prospectus”). Unless otherwise defined herein, capitalized terms used in this Supplement shall have the same meanings as in the Prospectus. References herein to the “Company,” “we,” “us,” or “our” refer to Oaktree Real Estate Income Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.
The purposes of this Supplement are as follows:
•to provide an update on our investment portfolio;
•to disclose the transaction price for each class of our common stock as of October 1, 2021;
•to disclose the calculation of our August 31, 2021 net asset value (“NAV”) per share for each share class; and
•to provide an update on our current public offering (the “Offering”).
Portfolio Updates for the Month Ending August 31, 2021
Our NAV per share increased for the month ending August 31, 2021, up $0.21 on each of our Class I, Class S and Class C shares, compared to the prior month.
As of August 31, the portfolio was invested 75% in real property, 17% in real estate-related debt and 8% in cash and cash equivalents. Our real property investments are split between multifamily (65%) and office (35%). The company’s leverage ratio increased to 43% compared to 42% in the prior month.
October 1, 2021 Transaction Price
The transaction price for each share class of our common stock for subscriptions accepted as of October 1, 2021 (and repurchases as of September 30, 2021) is as follows:
Transaction Price (per share) | ||||||||
Class S | $ | 11.1222 | ||||||
Class I | $ | 11.2011 | ||||||
Class C | $ | 11.1424 | ||||||
Class T | $ | 11.2011 | ||||||
Class D | $ | 11.2011 |
The transaction price for each of our share classes is equal to such class’s NAV per share as of August 31, 2021. A detailed calculation of the NAV per share is set forth below.
As of August 31, 2021, we had not sold any Class T shares or Class D shares. The transaction price for our Class T and Class D shares is based on our aggregate NAV per share as of August 31, 2021 before assessing stockholder servicing fees. 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. The repurchase price for each share class equals the transaction price of such class.
August 31, 2021 NAV Per Share
We calculate NAV per share in accordance with the valuation guidelines approved by our board of directors. We generally use our prior month’s NAV per share for the purposes of establishing a price for shares sold in our public offering, as well as establishing a repurchase price for our share repurchase program. Our NAV per share, which is updated as of the last business day of each month, is posted on our website at www.oaktreereit.com and is made available on our toll-free, automated telephone line at 833-OAK-REIT (625-7348). The October 1, 2021 transaction price is being determined based on our NAV as of August 31, 2021. Please refer to “Net Asset Value Calculation and Valuation Guidelines” in our prospectus for important information about how our NAV is determined. The Adviser is ultimately responsible for determining our NAV. The Adviser’s determination of our monthly NAV per share is based in part on annual appraisals of each of our properties by independent third-party appraisal firms in individual appraisal reports reviewed by our independent valuation advisor and monthly update appraisals by our independent valuation advisor (where an independent third-party appraisal firm does not provide an appraisal) in accordance with valuation guidelines approved by our board of directors. Our investments in traded real estate securities are valued monthly by the Adviser using quotations from third party pricing vendors. Our independent valuation advisor prepares monthly appraisals of our real estate-related debt investments and property-level debt liabilities.
The following table provides a breakdown of the major components of our total NAV as of August 31, 2021:
Components of NAV | August 31, 2021 | |||||||
Investments in real properties | $ | 371,132,817 | ||||||
Investments in real estate-related securities | 82,843,060 | |||||||
Cash and cash equivalents | 35,046,689 | |||||||
Restricted cash | 5,363,181 | |||||||
Other assets | 7,561,062 | |||||||
Debt obligations | (230,115,652) | |||||||
Accrued performance fee(1) | (2,205,754) | |||||||
Accrued stockholder servicing fees(2) | (139,089) | |||||||
Management fee payable | (403,282) | |||||||
Dividend payable | (825,964) | |||||||
Subscriptions received in advance | — | |||||||
Other liabilities | (6,203,537) | |||||||
Non-controlling interests in joint ventures | (15,317,008) | |||||||
Net asset value | $ | 246,736,523 | ||||||
Number of shares outstanding | 22,162,703 |
(1) | Represents the performance fee for the period ended August 31, 2021. | ||||
(2) | Stockholder servicing fees only apply to Class S, Class T and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. The Dealer Manager does not retain any of these 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 August 31, 2021:
NAV Per Share | Class S Shares | Class I Shares | Class C Shares | Class T Shares | Class D Shares | Total | ||||||||||||||||||||||||||||||||
Net asset value | $ | 202,201,683 | $ | 30,186,190 | $ | 14,348,650 | $ | — | $ | — | $ | 246,736,523 | ||||||||||||||||||||||||||
Number of shares outstanding | 18,180,021 | 2,694,932 | 1,287,750 | — | — | 22,162,703 | ||||||||||||||||||||||||||||||||
NAV per share as of August 31, 2021 | $ | 11.1222 | $ | 11.2011 | $ | 11.1424 | $ | — | $ | — |
As of August 31, 2021, we had not sold any Class T shares or Class D shares.
Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used in the August 31, 2021 valuations, based on property types.
Property Type | Discount Rate | Exit Capitalization Rate | ||||||||||||
Multifamily | 6.58% | 5.15% | ||||||||||||
Office | 7.55% | 6.63% |
These assumptions are determined by the Adviser and reviewed by our independent valuation adviser. A change in these assumptions would impact the calculation of the value of our property investments. 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 | Multifamily Investment Values | Office Investment Values | |||||||||||||||||
Discount Rate | 0.25% decrease | 2.04% | 1.92% | |||||||||||||||||
(weighted average) | 0.25% increase | (2.00)% | (1.84)% | |||||||||||||||||
Exit Capitalization Rate | 0.25% decrease | 3.29% | 2.45% | |||||||||||||||||
(weighted average) | 0.25% increase | (3.04)% | (2.30)% |
The following table provides a breakdown of the major components of our total NAV as of July 31, 2021:
Components of NAV | July 31, 2021 | |||||||
Investments in real properties | $ | 363,608,809 | ||||||
Investments in real estate-related securities | 83,997,779 | |||||||
Cash and cash equivalents | 37,084,366 | |||||||
Restricted cash | 4,889,467 | |||||||
Other assets | 4,611,731 | |||||||
Debt obligations | (230,094,623) | |||||||
Accrued performance fee(1) | (1,403,878) | |||||||
Accrued stockholder servicing fees(2) | (133,015) | |||||||
Management fee payable | (389,276) | |||||||
Dividend payable | (826,716) | |||||||
Subscriptions received in advance | — | |||||||
Other liabilities | (16,305,619) | |||||||
Non-controlling interests in joint ventures | (13,772,965) | |||||||
Net asset value | $ | 231,266,060 | ||||||
Number of shares outstanding | 21,180,118 |
(1) | Represents the performance fee for the period ended July 31, 2021. | ||||
(2) | Stockholder servicing fees only apply to Class S, Class T and Class D shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis as such fee is paid. The Dealer Manager does not retain any of these 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 July 31, 2021:
NAV Per Share | Class S Shares | Class I Shares | Class C Shares | Class T Shares | Class D Shares | Total | ||||||||||||||||||||||||||||||||
Net asset value | $ | 190,852,934 | $ | 27,298,131 | $ | 13,114,995 | $ | — | $ | — | $ | 231,266,060 | ||||||||||||||||||||||||||
Number of shares outstanding | 17,495,437 | 2,484,640 | 1,200,041 | — | — | 21,180,118 | ||||||||||||||||||||||||||||||||
NAV per share as of July 31, 2021 | $ | 10.9087 | $ | 10.9868 | $ | 10.9288 | $ | — | $ | — |
As of July 31, 2021, we had not sold any Class T shares or Class D shares.
Status of Our Current Public Offering
We are offering on a continuous basis up to $2 billion in shares of common stock, consisting of up to $1.6 billion in shares in our primary offering and up to $0.4 billion in shares pursuant to our distribution reinvestment plan.
As of the date hereof, we had issued and sold (i) 20,713,911 shares of our common stock, net of repurchases, (consisting of 19,053,634 Class S shares and 1,660,277 Class I shares; no Class T or Class D shares were issued or sold as of such date) in the primary offering for total net proceeds of $213,788,112 and (ii) 535,062 shares of our common stock (consisting of 504,187 Class S shares and 30,875 Class I shares; no Class T or Class D shares were issued or sold as of such date) pursuant to our distribution reinvestment plan for a total value of $5,624,255. We intend to continue selling shares in the Offering on a monthly basis until the Transaction Effective Date (as defined in Prospectus Supplement No. 3 filed on July 15, 2021), at which time we expect to transition to offering under the follow-on registration statement.