SCHEDULE: Brookfield Affiliates Boost Stake in Real Estate Income Trust

Brookfield Corporation and its affiliates have significantly increased their beneficial ownership in Brookfield Real Estate Income Trust Inc. to over 32% through unit redemptions and fee conversions.

Summary

• Brookfield Corporation and its affiliates collectively hold a significant beneficial ownership in Brookfield Real Estate Income Trust Inc.
• As of November 24, 2025, Brookfield Corporation beneficially owns 30,217,234 shares, representing 32.26% of the Issuer's common stock.
• BUSI II-C L.P., an affiliate, directly holds 29,724,675 shares (31.73%), primarily acquired through the redemption of 26,862,938 Class I-1 OP Units and 2,353,305 Class E OP Units on November 24, 2025.
• Brookfield REIT Adviser LLC, another affiliate, holds 420,303 shares (0.45%), largely received as payment for management fees and through distribution reinvestment.
• BIM Capital LLC holds 72,256 shares (0.08%), acquired through cash purchases and distribution reinvestment.
• The acquisitions are for investment purposes, with the Reporting Persons retaining flexibility to adjust their holdings.
• Key agreements governing these holdings include a Redemption Agreement, an Amended and Restated Advisory Agreement, a Brookfield Share/OP Unit Repurchase Arrangement, and a Distribution Reinvestment Plan.

Sentiment

Score: 7

Explanation: The filing indicates strong, continued commitment and alignment from Brookfield affiliates through significant ownership and structured agreements. The conversion of OP Units to shares and the Adviser's election to receive fees in shares are positive for alignment. However, the complexity of the structure and potential for affiliate-driven decisions warrant careful monitoring.

Positives

• Significant insider ownership by Brookfield affiliates (over 32%) indicates strong alignment of interests with the Issuer's performance.
• The Adviser's election to receive management and performance fees in shares demonstrates confidence in the Issuer's long-term value.
• The ability for the Adviser to have its shares repurchased without early penalties provides liquidity and flexibility.

Negatives

• The complex ownership structure involving numerous Brookfield entities might obscure direct accountability for some investors.
• The repurchase arrangement for Brookfield affiliates is subject to caps and conditions, including the Issuer meeting third-party repurchase requests first, which could limit liquidity for affiliates under certain market conditions.

Risks

• The Reporting Persons may sell or dispose of some or all of their shares at any time, which could impact market price.
• The influence of Brookfield Asset Management employees serving as the Issuer's officers and non-independent directors could lead to decisions that primarily benefit Brookfield affiliates.
• The repurchase arrangement for affiliates is conditional, meaning they might not always be able to liquidate their holdings as desired.

Future Outlook

The Reporting Persons hold their shares for investment purposes and may adjust their holdings by acquiring or disposing of additional securities in the future, depending on market conditions, the Issuer's performance, and other investment opportunities. The Adviser may continue to receive management and performance fees in shares and participate in the distribution reinvestment plan.

Management Comments

• All of the Issuer's officers and directors, other than the Issuer's independent directors, are employees of BAM. In such capacities, these individuals may have influence over the corporate activities of the Issuer.

Industry Context

This filing highlights the continued strategic involvement of Brookfield, a global alternative asset manager, in its sponsored real estate investment trust. The substantial beneficial ownership and the structure of advisory and repurchase agreements demonstrate a deep integration between the asset manager and the REIT, common in externally managed REIT structures. This structure aims to align the interests of the manager with the performance of the trust, leveraging Brookfield's extensive real estate expertise and capital deployment capabilities.

Comparison to Industry Standards

• The external management structure with a 1.25% management fee and a 12.5% performance fee (subject to a 5% hurdle) is common in the REIT and alternative asset management industry, comparable to fees charged by other large asset managers for similar investment vehicles.
• The significant insider ownership (over 32%) by Brookfield affiliates is a strong indicator of alignment, often viewed favorably compared to REITs with minimal insider stakes.
• The repurchase arrangement, while providing liquidity for affiliates, includes conditions (e.g., $50M minimum holding, caps, third-party priority) that are typical for managing liquidity in non-traded or illiquid investment vehicles, balancing sponsor liquidity with overall fund stability.

Corporate Governance

Related Party Transactions

• Redemption of OP Units held by BUSI II-C L.P. (an affiliate) for Issuer shares.
• Payment of management and performance fees to Brookfield REIT Adviser LLC (an affiliate) in shares.
• Participation of BUSI II-C L.P., BIM Capital LLC, and Brookfield REIT Adviser LLC in the Distribution Reinvestment Plan.
• The Brookfield Share/OP Unit Repurchase Arrangement allows the Issuer to repurchase shares/OP Units from BAM and its affiliates.
• All officers and non-independent directors of the Issuer are employees of Brookfield Asset Management.

Stakeholder Impact

• Shareholders: High insider ownership by Brookfield affiliates could be seen as positive for alignment of interests, but the complex web of agreements and potential for affiliate-driven decisions might raise questions about independent governance. The repurchase arrangement for affiliates could potentially compete with third-party shareholder repurchases under certain conditions.
• Employees: The filing notes that the Issuer's officers and non-independent directors are employees of Brookfield Asset Management, indicating a close operational relationship.
• Creditors: No direct impact mentioned, but the stability implied by strong sponsor backing could be indirectly positive.

Next Steps

• Reporting Persons may acquire additional securities or dispose of current holdings based on market conditions and investment opportunities.
• The Adviser may continue to receive management and performance fees in shares.
• BUSI II-C, BIM, and the Adviser may continue to reinvest distributions through the DRIP.

Key Dates

Recommendation

The filing primarily details a change in the form of ownership for a significant insider (BUSI II-C L.P.) from operating partnership units to common shares, along with ongoing fee payments to the adviser in shares. While the substantial insider ownership by Brookfield affiliates (over 32%) suggests strong alignment and commitment, this is largely a structural update rather than a new investment thesis. The existing advisory and repurchase agreements reinforce the operational relationship. There are no new material financial performance indicators or strategic shifts that would warrant a change in investment stance. Investors should continue to monitor the Issuer's underlying real estate performance and the broader market conditions.

Keywords

Brookfield Real Estate Income Trust, SEC Filing, Schedule 13D, Beneficial Ownership, Real Estate Investment Trust, REIT, Brookfield Corporation, Oaktree, Asset Management, Share Redemption, Advisory Agreement, Distribution Reinvestment Plan, Insider Ownership