Brookfield REIT Narrows Losses, Shifts Investment Focus

TL;DR

**Brookfield REIT is cleaning up its balance sheet and pivoting to debt, making it a more stable, albeit potentially slower-growth, play in real estate.**

AI Summary

Brookfield Real Estate Income Trust Inc. reported a net loss attributable to stockholders of $1.741 million for the three months ended September 30, 2025, a significant improvement from the $10.200 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss attributable to stockholders of $0.329 million, compared to a $20.479 million loss in 2024. Total revenues decreased slightly to $36.077 million for the three months ended September 30, 2025, from $39.391 million in 2024, primarily due to a reduction in rental revenues from $33.715 million to $32.361 million. However, total expenses saw a substantial reduction, falling from $68.712 million in Q3 2024 to $32.279 million in Q3 2025, largely driven by the absence of a $33.922 million impairment of investments in real estate that occurred in 2024. The company's investments in real estate-related loans and securities, net, increased significantly from $71.505 million at December 31, 2024, to $207.585 million at September 30, 2025, indicating a shift in investment strategy. Total assets grew to $2.017 billion from $1.821 billion over the same period, while total liabilities increased to $1.203 billion from $1.176 billion. Stockholders' equity also saw a healthy increase to $436.127 million from $323.226 million.

Why It Matters

This 10-Q reveals Brookfield REIT is actively managing its portfolio, significantly reducing losses by avoiding major impairments seen in the prior year. The substantial increase in real estate-related loans and securities investments, from $71.505 million to $207.585 million, suggests a strategic pivot towards debt investments, potentially seeking higher yields or diversification in a challenging real estate market. For investors, this indicates a more stable financial footing and a proactive management approach, but also a potential shift in risk profile. Employees and customers might see this as a sign of operational efficiency and resilience, while the broader market will watch how this strategy impacts the company's competitive position against other REITs focusing solely on direct property ownership.

Risk Assessment

Risk Level: medium — While the company significantly reduced its net loss and avoided major impairments, its total liabilities increased to $1.203 billion, and it continues to rely on an affiliate line of credit, which grew from $12.790 million to $30.000 million. The substantial increase in investments in real estate-related loans and securities, from $71.505 million to $207.585 million, introduces new credit risk exposures, as these are inherently less liquid and more volatile than direct property investments.

Analyst Insight

Investors should closely monitor Brookfield REIT's performance in its real estate-related loans and securities portfolio, as this is a growing segment of its assets. Given the improved financial performance and strategic shift, consider this a potential long-term hold for diversification, but be aware of the increased exposure to credit risk in its debt investments.

Financial Highlights

debt To Equity

2.76

revenue

$36.077M

operating Margin

N/A

total Assets

$2.017B

total Debt

$1.083B

net Income

-$1.741M

eps

N/A

gross Margin

N/A

cash Position

$19.534M

revenue Growth

-8.4%

Revenue Breakdown

Key Numbers

• $1.741M — Net Loss Attributable to Stockholders (Q3 2025) (Improved from $10.200M loss in Q3 2024, indicating reduced operational losses.)
• $0.329M — Net Loss Attributable to Stockholders (9M 2025) (Significantly better than $20.479M loss in 9M 2024, showing overall financial improvement.)
• $36.077M — Total Revenues (Q3 2025) (Slight decrease from $39.391M in Q3 2024, mainly due to lower rental revenues.)
• $32.279M — Total Expenses (Q3 2025) (Substantial reduction from $68.712M in Q3 2024, primarily due to no real estate impairment.)
• $207.585M — Investments in Real Estate-Related Loans and Securities, Net (Sep 30, 2025) (Significant increase from $71.505M at Dec 31, 2024, indicating a strategic shift.)
• $2.017B — Total Assets (Sep 30, 2025) (Increased from $1.821B at Dec 31, 2024, reflecting portfolio growth.)
• $1.203B — Total Liabilities (Sep 30, 2025) (Increased from $1.176B at Dec 31, 2024, showing higher leverage.)
• $436.127M — Total Stockholders' Equity (Sep 30, 2025) (Increased from $323.226M at Dec 31, 2024, indicating improved shareholder value.)
• $30.000M — Affiliate Line of Credit (Sep 30, 2025) (Increased from $12.790M at Dec 31, 2024, indicating reliance on affiliate funding.)
• $75.5 million — DST Program Gross Proceeds (Sep 30, 2025) (Capital raised through private placement offerings, diversifying funding sources.)

Key Players & Entities

• Brookfield Real Estate Income Trust Inc. (company) — registrant
• Brookfield REIT Adviser LLC (company) — external manager
• Oaktree Fund Advisors, LLC (company) — sub-adviser for liquid assets
• Brookfield Asset Management Ltd. (company) — affiliate of the adviser
• Oaktree Capital Management, L.P. (company) — affiliate of the sub-adviser
• $1.741 million (dollar_amount) — net loss attributable to stockholders for Q3 2025
• $10.200 million (dollar_amount) — net loss attributable to stockholders for Q3 2024
• $33.922 million (dollar_amount) — impairment of investments in real estate in Q3 2024
• $207.585 million (dollar_amount) — investments in real estate-related loans and securities, net, as of September 30, 2025
• $71.505 million (dollar_amount) — investments in real estate-related loans and securities, net, as of December 31, 2024

FAQ

Risk Factors

• Reliance on Debt Financing [medium — financial]: The company's mortgage loans and secured credit facilities increased to $1.083 billion as of September 30, 2025, from $1.061 billion at December 31, 2024. This indicates a continued reliance on debt to finance its operations and investments.
• Increased Affiliate Borrowing [medium — financial]: The affiliate line of credit significantly increased to $30.000 million from $12.790 million. This suggests a growing dependence on funding from affiliated entities, which could pose concentration risk.
• Real Estate Market Fluctuations [high — market]: The company's primary investments are in real estate. Fluctuations in the real estate market, including changes in property values and rental income, can significantly impact the company's financial performance and the value of its investments.
• Investment Strategy Shift [medium — operational]: There has been a significant increase in investments in real estate-related loans and securities, net, to $207.585 million from $71.505 million. This shift in strategy may introduce new risks associated with credit and market volatility of these instruments.
• Accumulated Deficit [medium — financial]: The company has an accumulated deficit of $332.005 million as of September 30, 2025. While this has improved from the prior period, it indicates that the company has not yet achieved sustained profitability.

Industry Context

The real estate investment trust (REIT) sector is characterized by its reliance on property income and capital appreciation. Companies like Brookfield REIT operate within a landscape influenced by interest rate environments, property market cycles, and regulatory frameworks. The trend towards diversified real estate debt and securities investments reflects a broader industry strategy to seek yield and manage risk across different real estate capital stacks.

Regulatory Implications

As a REIT, Brookfield REIT is subject to specific IRS regulations regarding income distribution and asset composition. Changes in tax laws or interpretations could impact its REIT status and financial performance. Compliance with securities regulations for its continuous public offerings is also critical.

What Investors Should Do

1. Monitor the performance of real estate-related loans and securities.
2. Analyze the impact of increased leverage and affiliate financing.
3. Assess the sustainability of reduced operating losses.
4. Evaluate the success of ongoing capital raising efforts.

Key Dates

• 2025-09-30: Q3 2025 Financial Reporting — Reported a reduced net loss and increased assets, signaling potential operational improvements and portfolio growth.
• 2025-07-02: Third Public Offering Commencement — Initiated a new offering of up to $7.5 billion in shares, indicating continued efforts to raise capital for expansion.
• 2024-09-30: Q3 2024 Financial Reporting — Reported a net loss of $10.200 million and a significant impairment of investments in real estate ($33.922 million).
• 2021-11-02: Second Public Offering Commencement — Began a large public offering of up to $7.5 billion in shares, a key period for capital raising.
• 2019-12-31: REIT Election Effective — Commenced operations as a Real Estate Investment Trust, impacting tax structure and investment strategy.
• 2017-07-27: Company Formation — The inception of Brookfield Real Estate Income Trust Inc.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. (Brookfield REIT is structured as a REIT, which has specific tax and operational requirements.)

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (Indicates the company's historical profitability, with a current deficit of $332.005 million.)

Investments in real estate-related loans and securities, net

Investments in debt instruments and securities tied to real estate assets. (This category has seen significant growth, indicating a strategic shift in the company's investment portfolio.)

Affiliate line of credit

A credit facility provided by a related party or affiliated company. (The increase in this line of credit suggests greater reliance on funding from Brookfield or its affiliates.)

Redeemable non-controlling interests

Interests held by third parties in consolidated entities that have redemption features, allowing holders to demand repurchase. (Represents a significant liability-like component of the company's equity structure.)

Distribution reinvestment plan

A plan that allows shareholders to automatically reinvest dividends or distributions into purchasing additional shares of the company's stock. (Part of the company's capital raising strategy, as mentioned in the third public offering.)

Year-Over-Year Comparison

Brookfield Real Estate Income Trust Inc. has shown a significant reduction in net losses year-over-year, with Q3 2025 losses at $1.741 million compared to $10.200 million in Q3 2024. This improvement is largely attributable to the absence of a substantial real estate impairment charge that occurred in the prior year, rather than organic revenue growth, as total revenues saw a slight decrease. The company's balance sheet reflects a strategic shift towards real estate-related loans and securities, which have more than doubled. While total assets have grown, so have liabilities, particularly mortgage loans and an affiliate line of credit, indicating increased leverage and reliance on related-party funding.

Key Financial Figures

• $0.01 — g: 30,796,429 Class I shares, par value $0.01 per share, 25,188,623 Class S shares, p

Filing Documents

• oak-20250930.htm (10-Q) — 2768KB
• ex-101_asof9302025.htm (EX-10.1) — 17KB
• ex-102_asof9302025.htm (EX-10.2) — 598KB
• ex-103_asof9302025.htm (EX-10.3) — 563KB
• ex-104_asof9302025.htm (EX-10.4) — 22KB
• ex-311_asof09302025.htm (EX-31.1) — 10KB
• ex-312_asof09302025.htm (EX-31.2) — 10KB
• ex-321_asof09302025.htm (EX-32.1) — 7KB
• ex-322_asof09302025.htm (EX-32.2) — 7KB
• oak-20250930_g1.jpg (GRAPHIC) — 31KB
• 0001713407-25-000134.txt ( ) — 15325KB
• oak-20250930.xsd (EX-101.SCH) — 91KB
• oak-20250930_cal.xml (EX-101.CAL) — 102KB
• oak-20250930_def.xml (EX-101.DEF) — 500KB
• oak-20250930_lab.xml (EX-101.LAB) — 853KB
• oak-20250930_pre.xml (EX-101.PRE) — 717KB
• oak-20250930_htm.xml (XML) — 2737KB

FINANCIAL STATEMENTS (Unaudited)

FINANCIAL STATEMENTS (Unaudited) 1 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 1 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Consolidated Statements of Changes in Stockholders ' Equity for the three and nine months ended September 30, 2025 and 2024 3 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 39 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 58 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 59 PART II. OTHER INFORMATION 59 ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 59 ITEM 1A.

RISK FACTORS

RISK FACTORS 59 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 59 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 61 ITEM 4. MINE SAFETY DISCLOSURES 61 ITEM 5. OTHER INFORMATION 61 ITEM 6. EXHIBITS 62

SIGNATURES

SIGNATURES 64 WEBSITE DISCLOSURE Investors and others should note that we use our website, www.BrookfieldREIT.com , to announce material information to investors and the marketplace. While not all of the information that we post on our website is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others interested in us to review the information that we share on our website. Information contained on, or available through, our website is not incorporated by reference into this document. Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Brookfield Real Estate Income Trust Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share data) September 30, 2025 December 31, 2024 Assets Investments in real estate, net $ 1,561,380 $ 1,592,802 Investments in real estate-related loans and securities, net 207,585 71,505 Investments in unconsolidated entities 162,136 81,566 Intangible assets, net 32,544 35,008 Cash and cash equivalents 19,534 13,763 Restricted cash 14,354 10,544 Accounts and other receivables, net 11,553 9,401 Other assets 7,655 6,674 Total Assets $ 2,016,741 $ 1,821,263 Liabilities and Equity Mortgage loans and secured credit facilities, net $ 1,082,840 $ 1,061,366 Affiliate line of credit 30,000 12,790 Due to affiliates 27,707 32,883 Intangible liabilities, net 23,776 24,783 Accounts payable, accrued expenses and other liabilities 36,093 42,732 Subscriptions received in advance 2,254 1,204 Total Liabilities 1,202,670 1,175,758 Commitments and contingencies — — Redeemable non-controlling interests 303,784 302,743 Stockholders' Equity Preferred stock, $ 0.01 par value per share, 50,000 shares authorized; no shares issued nor outstanding at September 30, 2025 and December 31, 2024, respectively — — Common stock - Class S shares, $ 0.01 par value per share, 225,000 shares authorized; 25,553 and 27,817 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 255 278 Common stock - Class I shares, 0.01 par value per share, 250,000 shares authorized; 31,071 and 14,215 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 311 142 Common stock - Class T shares, 0.01 par value per share, 225,000 shares authorized; 15 and no shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively — — Common stock - Class D shares, 0.01 par value per share, 100,000 shares authorized; 100 and 127 shares issued and outstanding as of Se

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Organization and Business Purpose Brookfield Real Estate Income Trust Inc. ("Brookfield REIT" or the "Company") was formed on July 27, 2017 as a Maryland corporation and has elected to be taxed as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2019. The Company invests primarily in well-located, high-quality real estate properties that generate strong current cash flow and could further appreciate in value through proactive, best-in-class asset management. To a lesser extent, the Company invests in real estate-related debt investments, including real estate-related loans and real estate-related securities. Brookfield REIT OP GP LLC, a wholly owned subsidiary of the Company, is the sole general partner of Brookfield REIT Operating Partnership L.P. (the "Operating Partnership"). Substantially all of the Company's business is conducted through the Operating Partnership. The Company and the Operating Partnership are externally managed by Brookfield REIT Adviser LLC (the "Adviser"), an affiliate of Brookfield Asset Management Ltd. (together with its affiliates, "Brookfield"). The Company and the Adviser have engaged Oaktree Fund Advisors, LLC (the "Sub-Adviser"), an affiliate of Oaktree Capital Management, L.P. ("Oaktree"), to select and manage certain of the Company's liquid assets, including certain real estate-related loans and securities. Brookfield holds a majority stake in Oaktree. The Company is conducting a continuous public offering (the "Public Offering") of Class S, Class T, Class D and Class I shares of its common stock pursuant to the Securities Act of 1933, as amended (the "Securities Act"). On April 30, 2018, the Company launched its initial public offering of up to $ 2.0 billion in shares of its common stock. On November 2, 2021, the initial public

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