The follow-on offering for FS Credit Real Estate Income Trust Inc., a monthly NAV REIT sponsored by FS Investments, has been declared effective by the Securities and Exchange Commission. The $2.75 billion follow-on offering includes $2.5 billion in shares of common stock and $250 million in distribution reinvestment plan shares.
FS Credit REIT invests in senior loans secured by commercial real estate primarily in the United States. As of January 1, 2020, the REIT has originated and acquired $697 million of loans and other investments. The portfolio was diversified among property types, with 25 percent in office, 24 percent in industrial, 19 percent in multifamily, 13 percent in mixed use, 9 percent in hospitality, 7 percent in retail and 3 percent in self-storage.
The REIT offers five classes of common stock: Class T, Class S, Class D, Class M and Class I. In addition, the company plans to sell Class F and Class Y shares through the distribution reinvestment plan. Class F and Class Y shares were offered via private offerings that raised $69 million, as of February 1, 2021.
The company issues shares equal to the prior month’s NAV per share for each class, plus applicable upfront selling commissions and dealer manager fees.
The price per share in the latest prospectus uses the March 1, 2021 transaction price, which is equal to the class’ NAV as of January 31, 2021, plus applicable upfront selling commissions and dealer manager fees.
Class T shares are priced to the public at $26.00 each, Class S shares are priced at $26.23, Class D are priced at $25.15, Class M are priced at 25.21, and Class I are priced at $24.61.
Class T shares include selling commissions of up to 3.0 percent of the transaction price, dealer manager fees of 0.5 percent, and an annual stockholder servicing fee of 0.85 percent. The stockholder servicing fee for Class T shares will be comprised of an advisor stockholder servicing fee of 0.65 percent per year, and a dealer stockholder servicing fee of 0.20 percent per year.
For Class S shares sold in the primary offering, investors pay selling commissions of up to 3.5 percent and an annual stockholder servicing fee of 0.85 percent.
Class D shares have a 0.3 percent stockholder servicing fee, but no selling commission or dealer-manager fee.
Class M shares have a 0.3 percent stockholder servicing fee, but no selling commission or dealer-manager fee.
Class I shares have no selling commission, dealer-manager fees, or stock stockholder servicing fees.
The minimum initial investment is $5,000 for Class T, Class S, Class D and Class M shares and $1 million for Class I shares.
The follow-on offering will terminate no later than March 2, 2023, unless extended.
Class S shares are available through brokerage and transactional-based accounts, while Class D, Class M and Class I shares are generally available through fee-based programs. Class I shares are available for purchase by endowments, foundations, pension funds and other institutional investors.
FS Credit REIT, which is advised by FS Real Estate Advisor LLC and sub-advised by Rialto Capital Management LLC, raised $339 million in investor equity as of December 2020.