THE OAKTREE REIT OFFERING

About Oaktree REIT

Oaktree REIT seeks to invest in a diversified portfolio of institutionally-managed real estate investments that generate attractive, stable current income for regular distribution to our stockholders. We target income-producing properties that offer long-term growth potential to achieve attractive risk-adjusted total returns, with an emphasis on downside protection. The Real Estate group has a 20-plus year track record of real estate investing across 16 funds, generating positive net returns for all funds to date.

KEY AREAS OF DISTINCTION

  • 20-plus year track record of real estate investing through multiple market cycles
  • $19.3 billion deployed since 2008
  • Positive net returns in each of its 16 funds since inception in 1995
  • 20-plus year track record of real estate investing through multiple market cycles
  • $19.3 billion deployed since 2008
  • Positive net returns in each of its 16 funds since inception in 1995

As of December 31, 2017
Note: Represents the Real Estate group’s experience. There can be no assurance that Oaktree REIT will achieve its investment objective or avoid losses. Past performance is no guarantee of future results.
1 There can be no guarantee Oaktree REIT will be diversified. Further, diversification does not eliminate risk or protect against losses and should not be considered a guarantee of profit.
2 Represents gross invested capital in commercial and debt opportunities led by the Real Estate group since 2009, the first year John Brady (Portfolio Manager) made an investment in commercial properties and real estate-related debt for Oaktree-managed accounts. These investments were not made by Oaktree REIT.

APPLYING A DISCIPLINED APPROACH

PURSUE A FLEXIBLE INVESTMENT STRATEGY

  • Focus on markets that we believe offer the best relative value
  • Seek to gain exposure to office, multifamily, industrial and other income-generating opportunities1
  • Aim to manage liquidity through investments in traded securities and cash equivalents
  • Seek downside protection by buying assets at discounts to intrinsic value
  • Conduct in-depth fundamental research and diversify to mitigate downside risk2

MAINTAIN A CONSERVATIVE INVESTMENT PHILOSOPHY

TAKE THE LONG VIEW

  • Target assets that can generate consistent cash flow through various market cycles
  • Aim to maximize cash flow through an open-end strategy
  • Benefit from an asset class that we believe has lower volatility than other investment opportunities3
  • Seek to generate higher current income than public market alternatives with the potential for capital appreciation4

ACCESS TO AN ATTRACTIVE ASSET CLASS

1 There is no assurance we will pay distributions in any particular amount, if at all.  Any distributions we make will be at the discretion of our board of directors.  We may fund any distributions from sources other than cash from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds (including from sales of our common stock), and we have no limits on the amounts we may pay from such sources.
2 There can be no guarantee Oaktree REIT will be diversified.  Further, diversification does not eliminate risk or protect against losses and should not be considered a guarantee of profit.
3 Past performance does not guarantee future results. An investment in Oaktree REIT is not a direct investment in real estate, and has material differences from a direct investment in real estate, including those related to fees and expenses, liquidity and tax treatment.  Oaktree REIT’s share price is subject to less volatility because its per share NAV is based on the value of real estate assets it owns and is not subject to market pricing forces as is the price of public equities.  Although Oaktree REIT’s share price is subject to less volatility, the value of real estate may fluctuate and may be worth less than was initially paid for it. Oaktree REIT shares are significantly less liquid than public equities, and are not immune to fluctuations.
4 There can be no assurance that Oaktree REIT will achieve its objective or avoid losses.

TERM SHEET1

Product

Oaktree Real Estate Income Trust, Inc. (“Oaktree REIT”) is a non-traded REIT that seeks to invest in a diversified portfolio of income-producing real estate and real estate-related debt investments; generate an attractive, stable level of current income for regular distributions to our stockholders; and invest in assets with long-term growth potential to achieve attractive risk-adjusted total returns, with an emphasis on downside protection

Structure

Non-exchange traded, perpetual life real estate investment trust (REIT)

Portfolio Allocation

Primarily targeting equity in commercial properties and to a lesser extent private loans and debt securities (together with cash and cash equivalents held for liquidity management purposes)

Sponsor/Advisor

Oaktree Capital Management, L.P./Oaktree Fund Advisors, LLC

Maximum Offering

$2.0 billion

Offering Price

$10.00 per share initially, thereafter purchase price will generally be equal to our prior month’s NAV per share for such class as of the last business day of such month, plus applicable selling commissions and dealer manager fees2

Subscriptions/NAV Frequency

  • Monthly purchases as of the first calendar day of each month; subscription requests must be received at least five business days prior to the first calendar day of the month
  • NAV per share, which will generally be equal to our transaction price, will generally be available within 15 calendar days of month end
  • Transaction price will be available on www.oaktreeREIT.com and in prospectus supplements. If the transaction price is not made available on or before the eighth business day before the first calendar day of the month, or a previously disclosed transaction price for that month is changed, then we will provide notice of such price transaction to subscribing investors

Distributions

Monthly (not guaranteed, subject to board approval); may be funded from sources other than cash flow from operations, including the sale of assets, borrowings, return of capital or offering proceeds3

Minimum Initial Investment4

$2,500 (for Class T, Class S and Class D Shares) $1 million (for Class I Shares)

Suitability Standards4

Either (1) a net worth of at least $250,000 or (2) a gross annual income of at least $70,000 and a net worth of at least $70,000. Certain states have additional suitability standards. See the prospectus for more information

Share Repurchase Plan

  • Monthly repurchases will be made at the transaction price, which is generally equal to our prior month’s NAV
  • Shares not held for at least one year will be repurchased at 95% of that month’s transaction price
  • Overall limit of 2% of NAV per month and 5% of NAV per calendar quarter
  • Repurchase requests must be received in good order by the second to last business day of the applicable month
  • We are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion
  • The share repurchase plan is subject to other limitations and our board may modify, suspend or terminate the plan

Tax Reporting

Form 1099-DIV

Dealer Manager Retainer

$75,000 paid quarterly in arrears

1 Terms summarized herein are for informational purposes and qualified in their entirety by the more detailed information set forth in Oaktree REIT’s prospectus. You should read the prospectus carefully prior to making an investment.
2 We may offer shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month’s NAV per share, including by updating a previously disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month.
3 There is no assurance we will pay distributions in any particular amount, if at all. Any distributions we make will be at the discretion of our board of directors. We may fund any distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and we have no limits on the amounts we may pay from such sources.
4 Select broker-dealers may have different suitability standards, may not offer all share classes, and/or may offer Oaktree REIT at a higher minimum initial investment. With respect to Class T shares, the amount of upfront selling commissions and dealer manager fees may vary at select broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. The Advisor and dealer stockholder servicing fees for Class T shares may also vary at select broker-dealers, provided that the sum of such fees will always equal 0.85% per annum of the aggregate NAV.
5A hurdle amount is the minimum rate of return that the Advisor must exceed before collecting a performance fee. A high water mark is the highest peak in value that the REIT has achieved. The catch-up period refers to the time in which it takes for the Advisor to be fully compensated at the agreed-upon rate once investors receive their hurdle amount.

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DISCLOSURES

SUMMARY OF RISK FACTORS

Oaktree Real Estate Income Trust, Inc. (“Oaktree REIT”) is a non-traded REIT that seeks to invest in a diversified portfolio of income-producing real estate and real estate-related debt investments; generate an attractive, stable level of current income for regular distributions to our stockholders; and invest in assets with long-term growth potential to achieve attractive risk-adjusted total returns, with an emphasis on downside protection. This investment involves a high degree of risk. These securities should only be purchased if you can afford to lose your complete investment. Please read the prospectus for a description of the risks associated with an investment in Oaktree REIT. These risks include but are not limited to the following:
  • Oaktree REIT has no prior operating history and we cannot assure you that we will achieve our investment objectives.
  • As a “blind pool” offering, you will not have an opportunity to evaluate our investments before we make them.
  • We do not intend to list our shares of common stock for trading on an exchange or other trading market. The only likely way to dispose of your shares will be by repurchases from us since there is no public trading market for shares of our common stock. Through our share repurchase plan, stockholders may request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the requested shares in any particular month in our discretion. Repurchases will be subject to available liquidity and other significant restrictions and our board of directors may modify, suspend or terminate our share repurchase plan if deemed to be in our best interest and the best interest of our stockholders. Our shares should be considered as having limited to no liquidity.
  • Distributions may be funded by sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, although we cannot guarantee that we will make distributions. We believe that the likelihood that we pay distributions from sources other than cash flow from operations will be higher in the early stages of the offering.
  • After the escrow period, the purchase and repurchase price for shares of our common stock will generally be based on the prior month’s net asset value (“NAV”) and not on any public trading market. While there will be independent annual appraisals of our properties, the properties’ appraisal is inherently subjective, and our NAV may not accurately reflect the actual price at which our assets could be liquidated on any given day. We may offer shares at a price that we believe more appropriately reflects the NAV per share of such common stock rather than the prior month’s NAV per share, including updates to a previously disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month. Each class of shares may have a different NAV per share.
  • We have no employees and are dependent on Oaktree Fund Advisors, LLC (the “Advisor”) to conduct our operations. Oaktree will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and other real estate accounts, the allocation of time of its investment professionals and the substantial fees that we will pay to the Advisor.
  • As a “best efforts” offering, our ability to achieve our investment objectives could be adversely affected if we are not able to raise a substantial amount of capital in the near term.
  • Principal and interest payments on borrowings will reduce funds available for distribution or investment. 
  • There are limits on the ownership and transferability of our shares.
  • We do not own the Oaktree name, but we are permitted to use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Oaktree Capital Management, L.P. (together with its affiliates, “Oaktree”). Use of the name by other parties or the termination of our trademark license agreement may harm our business.
  • An investment in Oaktree REIT is not an investment in fixed income. Fixed income has material differences from an investment in a non-traded REIT, including those related to vehicle structure, investment objectives and restrictions, risks, fluctuation of principal, safety, guarantees or insurance, fees and expenses, liquidity and tax treatment.
  • We intend to qualify as a REIT for U.S. federal income tax purposes beginning with December 31of the first taxable year in which proceeds from our initial offering are released from escrow. However, if we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease as a result of becoming subject to corporate income taxes. 
  • Subject to maintaining our REIT qualification and the limitations in our charter, we may elect to leverage our investments on a recourse or non-recourse basis or otherwise engage in certain investment activities that involve the use of leverage, which may increase losses.
  • Investing in commercial real estate involves certain risks, including but not limited to: bankruptcy, financial difficulty or lease default of a major tenant; interest rate fluctuations and lack of availability of financing; adverse national real estate trends, including increasing vacancy rates; and changes in supply and demand fundamentals. 
  • Oaktree REIT will directly own private real estate. Individual investors will own shares of common stock in Oaktree REIT as opposed to direct ownership of private, non-traded real estate.
  • Numerical data is approximate and as of December 31, 2017 (unless otherwise noted). The words “we”, “us”, and “our” refer to Oaktree Real Estate Income Trust, Inc., unless the context requires otherwise. Numerical data relating to Oaktree includes Oaktree Real Estate-led activities in public and private portfolio companies (unless otherwise noted).

IMPORTANT DISCLOSURE ABOUT OTHER OAKTREE REAL ESTATE FUNDS

This sales material includes information related to prior investments the Oaktree Real Estate group has made, in which the Oaktree REIT will not have any interest. While the investment programs of other Oaktree real estate accounts and our investment strategy each involve real estate-related investments and overlapping personnel, each of these accounts and strategies has distinct investment activities. Oaktree’s experience in managing other Oaktree real estate accounts and other Oaktree accounts is not necessarily applicable to us. There can be no assurance that we will be able to successfully identify, make and realize any particular investment or generate returns for our investors (or that such returns will be commensurate with the risks associated with an investment in us).

Oaktree or its affiliates own or have invested in the properties depicted on this website. By investing in Oaktree REIT, investors will not have an interest in these properties.

FORWARD-LOOKING STATEMENT DISCLOSURE

Statements contained in this sales material that are not historical facts are based on our current expectations, estimates, projections, opinions, and/or beliefs. Such statements are not facts and involve known and unknown risks, uncertainties, and other factors. Prospective investors should not rely on these statements as if they were fact. Certain information contained in this sales material constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue,” “forecast,” or “believe” or the negatives thereof or other variations thereon or other comparable terminology. Due to various risks and uncertainties, including those described in our prospectus, actual events or results or our actual performance may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to future performance or such forward-looking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved.

You should carefully review the “Risk Factors” section of our prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This sales material must be read in conjunction with our prospectus in order to fully understand all the implications and risks of the offering of securities to which it relates. This sales material is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by the prospectus.

Neither the U.S. Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of these securities or determined if the prospectus is truthful or complete. Any representation to the contrary is a criminal offense.