FS Credit REIT Completes Purchase of $352 Million Senior Commercial Real Estate Loan

FS Credit Real Estate Income Trust Inc., a monthly net asset value real estate investment trust that invests primarily in floating rate senior loans secured by commercial real estate properties, announced it has completed the purchase of a $351.8 million portfolio of senior loans from a commercial bank seeking to rebalance its commercial real estate loan holdings.

The portfolio is diversified across 16 performing floating rate loans with an original weighted average loan-to-value of approximately 61%, an in-place debt yield of over 10%, and a weighted average spread that generates an attractive all-in yield.

“FS Credit REIT entered the current cycle with a strong liquidity position in anticipation of opportunities that might arise as markets adjust to the higher interest rate environment,” said Chris Condelles, chief financial officer of FS Credit REIT, which is sponsored by FS Investments. “Periods of dislocation often present opportunities to acquire quality assets at highly attractive terms.”

“This transaction is indicative of the structural opportunity we continue to see in the market for alternative lenders like FS Credit REIT as banks and other lenders remain constrained or seek to rebalance their [commercial real estate] holdings,” said Rob Lawrence, global head of real estate at FS Investments. “The loan portfolio is highly complementary to FS Credit REIT’s existing portfolio, and we believe it will help us continue to provide our stockholders with an attractive income stream and consistent total returns.”

Following the purchase, FS Credit REIT managed $9.1 billion in assets across 153 loans comprised predominantly of multifamily, hospitality and industrial properties as of June 30, 2024.

FS Credit REIT is a public reporting, non-listed REIT that originates, acquires and manages a portfolio of senior loans secured by commercial real estate primarily in the United States. FS Credit REIT seeks to generate an alternative source of income, preserve capital and realize long-term appreciation by investing in commercial real estate debt.

The REIT is currently offering up to $2.75 billion in shares of common stock on a continuous basis, consisting of up to $2.5 billion in shares in its primary offering and up to $250 million in shares pursuant to its distribution reinvestment plan. As of June 13, it had issued and sold in the offering approximately 45.6 million shares of its common stock in the primary offering for total proceeds of $1.129 billion and approximately 6.1 million shares of its common stock pursuant to its distribution reinvestment plan for a total value of just over $151 million.

FS Investments is a global alternative asset manager, overseeing more than $78 billion in assets for a wide range of clients, including institutional investors, financial professionals and individual investors, as of March 31, 2024. The firm has more than 500 employees across offices in the United States, Europe and Asia and is headquartered in Philadelphia.

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