FS Investments REIT Makes First Investments 

FS Credit Real Estate Income Trust, a $2.5 billion non-traded real estate investment trust sponsored by FS Investments, has closed on two floating-rate mortgage loans totaling $43.8 million in its first investments since being declared effective last week.

The first investment is a $9.5 million floating-rate whole mortgage loan purchased from an affiliate of Rialto Capital Management Inc., the REIT sub-adviser. The loan, which was originated in March 2016 by the Rialto affiliate, is secured by Oxford Point, a 200-unit multifamily property with 11 residential buildings totaling 251,000 square feet, located in Gulfport, Mississippi.

The Oxford Point loan matures in March 2018 with a 12-month extension option and bears interest at a floating rate of 4.50 percent over the one-month London Interbank Offered Rate, with an interest rate floor of 4.95 percent per year, and an appraised loan to value ratio of approximately 72 percent. The loan was purchased at cost (100 percent of par) and was funded with proceeds from the REIT’s private offerings and a $5.70 million draw from its Wells Fargo credit facility.

The company also closed a $34.31 million senior floating-rate mortgage loan (of which $29.25 million was funded at closing), secured by a portfolio of seven office buildings totaling 493,000 square feet located in Memphis, Tennessee. The properties are situated adjacent to the Federal Express Corporation World Headquarters and Southwind PGA Golf Course.

The Southwind Loan has an initial 24-month term with three 12-month extensions and bears interest at a floating rate of 4.25 percent over the one-month LIBOR with an interest rate floor of 5.30 percent per year, and an appraised loan to value ratio of approximately 73 percent. FS Credit REIT funded the loan purchase with proceeds from private placement offerings and $17.6 million from the Wells Fargo credit facility.

FS Credit Real Estate Income Trust, which is advised by FS Real Estate Advisor and sub-advised by Rialto Capital Management, plans to invest in floating-rate mortgage loans that are secured by first-priority mortgages on transitional commercial real estate properties. The dealer manager is FS Investment Solutions.

For more FS Investments news, visit their directory page here.