EQUITY
SUBORDINATED
DEBT
SENIOR
MORTGAGE DEBT
INVESTMENT STRATEGY
INVESTING UP AND DOWN THE CAPITAL STACK EQUITY SUBORDINATED DEBT SENIOR MORTGAGE DEBT
The “capital” stack represents the capital invested in a property – both debt and equity – and shows the relative risk/return profile of each, along with their priority in receiving payment. For example, investors in senior mortgage debt have lower capital risk and have priority in receiving interest payments.
Rodin Income has the ability to invest up and down the capital stack, however, we expect the majority of the investments to be in senior mortgage debt. While senior mortgage debt can have a lower risk profile than other types of mortgage debt, it does not eliminate the risk of loss.
As it relates to the capital stack illustrated to the left, senior mortgage debt has lower risk, is the first to be repaid, has higher claim priority and provides more downside protection. Commercial real estate equity has a higher risk, is the last to be repaid, has lower claim priority, but provides the greatest upside potential. Subordinated debt falls in between on the risk/return spectrum.
Representing ownership in a property either through preferred or common equity. Preferred equity has preference of payment over common equity.
As it relates to the capital stack illustrated to the left, senior mortgage debt has lower risk, is the first to be repaid, has the highest claim priority and provides more downside protection. Commercial real estate equity has higher risk, is the last to be repaid, has lower claim priority, but provides the greatest potential for upside potential. Subordinated debt fall in between in the risk/return profile.
The junior portion of the mortgage loan which ranks below the primary mortgage loan in order of repayment in the event of a default.
As it relates to the capital stack illustrated to the left, senior mortgage debt has lower risk, is the first to be repaid, has the highest claim priority and provides more downside protection. Commercial real estate equity has higher risk, is the last to be repaid, has lower claim priority, but provides the greatest potential for upside potential. Subordinated debt fall in between in the risk/return profile.
Generally the most conservative type of investment to be held by Rodin Income, excluding cash. Mortgage loans are typically considered the foundation of the capital stack.
As it relates to the capital stack illustrated to the left, senior mortgage debt has lower risk, is the first to be repaid, has the highest claim priority and provides more downside protection. Commercial real estate equity has higher risk, is the last to be repaid, has lower claim priority, but provides the greatest potential for upside potential. Subordinated debt fall in between in the risk/return profile.
RODIN INCOME INTENDS TO ORIGINATE: |
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Mortgage loans which are pooled into structured investments such as collateralized loan obligations (CLOs) and commercial mortgaged-backed securities (CMBSs) |
RODIN INCOME ALSO INTENDS TO: |
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Buy individual mortgage loans |
Buy “participation” in mortgage loans or a portion of a mortgage loan |
Buy bonds secured by mortgage loans |
Sell senior interests in mortgage loans to outside investors |
THE OPPORTUNITY
REAL ESTATE INVESTOR DEMAND FOR DEBT REMAINS HIGH
The economic strength of the past few years has yielded a growing commercial real estate market, resulting in increased occupancy rates, rents, new construction and property demand. With favorable economic conditions and sustained real estate activity, we see continued demand for commercial real estate financing, which will allow us to be selective in our purchases and originations of real estate debt investments.
Current market conditions may not persist. Past performance does not guarantee future results and markets may not perform as expected.
NUMBER OF COMMERCIAL BANKS
Source: Rosen Consulting. Used with permission. May 2018.
TRADITIONAL LENDERS
UNABLE TO MEET THE CURRENT DEMAND
With the number of commercial banks decreasing and the remainder facing tighter regulations, traditional lenders cannot meet the current demand for commercial real estate debt. We believe Rodin Income is well positioned to take advantage of this supply and demand imbalance.
about Rodin Income
DOWNLOAD BROCHURECOMMERCIAL REAL ESTATE CHARGE-OFF RATES
HISTORY CONFIRMS THE CONSERVATIVE NATURE OF COMMERCIAL REAL ESTATE DEBT
Only twice in the past 25 years has the charge-off rate for commercial real estate exceeded 2%. “Charge-offs” are the act of writing off a loan or a portion of a loan as uncollectable. The amount of the outstanding balance which is deemed uncollectable is recorded as a loss.
By the fourth quarter of 2017, the commercial real estate charge-off rate fell below 1% demonstrating the healthy lending conditions present for today’s investors.
Past performance is not indicative of future results. As with any investment, there is the risk of loss when investing in commercial real estate.
POTENTIAL ADVANTAGES
WHY CONSIDER COMMERCIAL REAL ESTATE DEBT
Just as investors seek to maintain a balance of stocks and bonds, the right mix of equity and debt is equally important when investing in commercial real estate.
Rodin Income is not a direct investment in commercial real estate debt, however, through investing in commercial real estate debt, this REIT seeks to provide additional investor benefits, including:
All the benefits may be mitigated by changing valuations, market forces and limited liquidity. Limited liquidity of Rodin Income Trust may impact investors’ ability to sell at any price. Additionally, there are risks, costs and additional restrictions associated with investing in Rodin Income Trust. Please see a prospectus for complete details.
Learn about Cantor Fitzgerald Income Trust, Inc., our publicly registered, non-traded, monthly-valued perpetual REIT.
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OFFERING HIGHLIGHTS
A THOUGHTFUL CHOICE IN THE NON-TRADED REIT SPACE
PRICING
The Net Asset Value (NAV) is calculated quarterly. The Offering Price is derived from the NAV as follows:
Offering Price = NAV + Upfront Selling Commissions + Dealer Manager Fees – Sponsor Support
CLASS A | CLASS T | CLASS I | |
---|---|---|---|
Sales Commissions | 6% | 3% | 0% |
Dealer Manager Fees | 3% | 3% | 1.5% |
Sponsor Support* | (4%) | (4%) | (1.5%) |
*Subject to reimbursements under certain circumstances
SUITABILITY REQUIREMENTS
$250,000 net worth or $70,000 annual gross income. Higher suitability in certain states and Class I shares are only available for purchase by certain types of investors. Please consult the prospectus.
DISTRIBUTION FREQUENCY
Monthly, subject to Board Declaration.
TAX REPORTING
Form 1099-DIV
DISTRIBUTION REINVESTMENT PLAN (DRP)
Up to $250 million to be purchased at most recently announced Net Asset Value (NAV).
SHARE PURCHASE PLAN
(as a percentage of NAV, pro-rata redemptions, monthly availability)
BEFORE YEAR 1 | AFTER YEAR 1 | AFTER YEAR 2 | AFTER YEAR 3 | AFTER YEAR 4 |
---|---|---|---|---|
96% of NAV | 97% of NAV | 98% of NAV | 99% of NAV | 100% of NAV |
Shares redeemed at purchase price in case of death or qualifying disability of investor.
Repurchases are limited to 10% per year and 2% per month of the combined NAV of all classes of shares as of the last calendar day of the previous calendar year or month, respectively; the program may be modified, suspended or terminated at any time upon ten-days prior written notice to stockholders.
SPONSOR SUPPORT
CLASS A & T SHARES: Sponsor to pay a portion of the underwriting compensation in an amount up to 4% of gross offering proceeds.
CLASS I SHARES: Sponsor to pay the dealer manager fees in an amount up to 1.5% gross offering proceeds.
*Sponsor support is subject to reimbursement under certain circumstances.
Please acknowledge that you have had the opportunity to review the prospectus for Rodin® Income Trust, Inc. It is available through the link below.
YOU MUST RECEIVE A COPY OF THE PROSPECTUS
This website is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. An offering is made only by prospectus, which should be read in order to fully understand all of the implications.
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