Form 4: FS Credit Real Estate Income Trust Director Discloses Future Equity Holdings and RSU Grant

Jeffrey P. Krasnoff, a Director of FS Credit Real Estate Income Trust, Inc., has disclosed future changes in his indirect beneficial ownership of common stock and the acquisition of Class I Restricted Stock Units, effective July 10, 2025.

Summary

• Jeffrey P. Krasnoff, a Director of FS Credit Real Estate Income Trust, Inc., is the reporting person.
• The earliest transaction date reported is July 10, 2025.
• Indirect beneficial ownership includes 476,183.442 shares of Class I Common Stock held by Rialto Capital Management, LLC.
• An additional 21,848.042 shares of Class I Common Stock are held indirectly by JTK RCM, LLC, which includes shares received from reinvested distributions.
• 36,491.351 shares of Class F Common Stock are also held indirectly by JTK RCM, LLC, including shares from reinvested distributions.
• On July 10, 2025, 154,639.18 Class I Restricted Stock Units (RSUs) were acquired, which are exercisable and expire on the same date, and are convertible into Class I Common Stock.
• Following the reported transaction, 1,341,153.73 Class I Restricted Stock Units are beneficially owned indirectly by Rialto Capital Management, LLC.
• These RSUs represent administrative services fees paid quarterly by the Company to the Adviser, equal to 1.0% of the Company's net asset value per annum, split 50/50 between the Adviser and Rialto Capital Management LLC.
• The Class I Restricted Stock Units are subject to time-based vesting before they can be exchanged for Class I Common Stock.
• Mr. Krasnoff disclaims beneficial ownership of any shares held by Rialto Capital Management, LLC that exceed his pecuniary interest.

Sentiment

Score: 5

Explanation: A neutral filing, as it is a routine disclosure of insider ownership and compensation structure, not indicative of positive or negative company performance.

Positives

• Director Jeffrey P. Krasnoff is receiving 154,639.18 Class I Restricted Stock Units as part of an administrative services fee, aligning his interests with the company's performance.
• The RSUs are convertible into Class I Common Stock, indicating future equity ownership for the director.

Negatives

• NA

Risks

• NA

Future Outlook

The document details future transactions effective July 10, 2025, specifically the acquisition of Class I Restricted Stock Units, which are subject to time-based vesting and will be exchanged for Class I Common Stock, indicating future equity conversion.

Management Comments

• The reporting person disclaims beneficial ownership of any shares held by Rialto Capital Management, LLC that exceed his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.

Industry Context

Form 4 filings are standard disclosures for public companies, providing transparency on insider holdings and transactions. This filing indicates how a director's compensation is structured, often involving equity to align interests with shareholders, which is a common practice in the real estate investment trust (REIT) sector.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs) as part of executive and director compensation is a common practice across various industries, including real estate and financial services, to align long-term interests with company performance.
• The administrative services fee structure, where a percentage of net asset value is paid in equity, is typical for externally managed REITs or investment vehicles like FS Credit Real Estate Income Trust, Inc., similar to structures seen in companies like Blackstone Mortgage Trust (BXMT) or Starwood Property Trust (STWD) which also have advisory agreements.
• The disclosure of indirect ownership through entities like Rialto Capital Management, LLC and JTK RCM, LLC is standard for insiders with complex holding structures, similar to disclosures by executives at companies like Brookfield Asset Management (BAM) or Ares Management (ARES) where management fees and equity incentives are prevalent.

Corporate Governance

Related Party Transactions

• The administrative services fee is paid to the Adviser, and then split with Rialto Capital Management, LLC, which is associated with the reporting person, Jeffrey P. Krasnoff.
• JTK RCM, LLC, which holds shares for the reporting person, is jointly owned by the reporting person and his spouse.

Stakeholder Impact

• Shareholders: The disclosure provides transparency on director equity holdings and compensation structure, which can influence investor confidence and perception of management alignment. The equity-based compensation aligns the director's interests with shareholder value.
• Management/Adviser: The administrative services fee paid in RSUs provides a form of compensation tied to the company's net asset value, incentivizing performance.

Next Steps

• Time-based vesting of Class I Restricted Stock Units.
• Exchange of vested Class I Restricted Stock Units for Class I Common Stock.

Key Dates

Keywords

Form 4, insider ownership, beneficial ownership, restricted stock units, common stock, director, equity compensation, FS Credit Real Estate Income Trust, Jeffrey P. Krasnoff, Rialto Capital Management, JTK RCM