KKR says KREST received repurchase requests for 8.1% of fund’s NAV in Q1

In a regulatory filing earlier, KKR stated: Thank you for your support of KKR Real Estate Select Trust Inc., or "KREST," and for entrusting us with your clients’ capital. KREST seeks to provide investors with access to the potential benefits of income-oriented real estate equity and credit in a single fund. As market conditions have evolved and continue to evolve, we remain focused on optimizing the Fund’s portfolio across high-quality, income-oriented real estate equity and credit exposures to seek to deliver upon our objectives and provide investors with a resilient and attractive yield and total return and a level of downside protection across a wide range of market environments. Amid an uncertain market environment, KREST delivered an 8.32% net total return for 2022 – Class I – while generating an annualized net distribution rate of 5.13% as of December 31, 2022. Within KREST, we are balancing providing access to private real estate, which is an illiquid asset class, with the recognition and understanding that the optionality for a level of regular liquidity is an important feature for KREST shareholders. To facilitate a level of liquidity and as described in the Fund’s prospectus and offer to repurchase, KREST has historically conducted, and intends to continue, quarterly tender offers to repurchase up to 5% of net asset value, or "NAV," of the Fund’s outstanding Common Stock, with such tender offers being made at the sole discretion of KREST’s Board of Directors. KREST’s liquidity provisions are designed both to prevent a liquidity mismatch and to maximize long-term shareholder value. For the Fund’s Q1 2023 tender offer period ending January 13, 2023, KREST received repurchase requests of $128 million, or 8.1%, of the Fund’s aggregate NAV as of December 1, 2022. While this is elevated relative to prior tender offer periods, KREST has continued to benefit from strong fundraising momentum, with $946.5 million of subscriptions in 2022, including $141.7 million during the 4th quarter. This quarter, KREST repurchased Common Stock equating to 5% of NAV, or $79.3 million. Accordingly, redemption requests were fulfilled at a prorated amount equal to 62% of each shareholder’s Q1 2023 tender request. Unfulfilled tender requests will not be carried over to the next quarter automatically. Investors will need to resubmit any unsatisfied portion of their Q1 2023 tender request for repurchase in the future. We believe that KREST has a strong liquidity position, with liquid holdings representing 36% of NAV as of December 31, 2022 across assets such as cash, cash-equivalents and liquid securities, as well as committed and unfunded credit facility capacity. We believe that maintaining a robust liquidity position is a critical component of optimal portfolio construction, particularly in more uncertain market environments such as today’s. We expect that our robust, multifaceted approach to liquidity should continue to allow KREST to repurchase Common Stock equating to 5% of NAV during quarterly tender offer periods without any negative impact to portfolio construction, such as being required to exit real estate equity or credit positions at suboptimal or inopportune times. We believe KREST is well-positioned for today’s market environment as we seek to continue to deliver upon our objectives for your clients." Reference Link