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:
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:
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.

  • $1.4 TRILLION OF COMMERCIAL MORTGAGES ARE MATURING IN 2018 AND BEYOND

    Maturing Commercial Mortgages in 2018 and beyond

    Source: Rosen Consulting. Used with permission. May 2018.

  • THE VOLUME OF COMMERCIAL PROPERTY SALES REMAINS STRONG

    Commercial Real Estate Transaction Volume

    Source: Rosen Consulting. Used with permission. May 2018.

  • COMMERCIAL REAL ESTATE DEBT ORIGINATION IS GROWING

    opportunity graph

    Source: Rosen Consulting. Used with permission. May 2018.

NUMBER OF COMMERCIAL BANKS

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.

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COMMERCIAL REAL ESTATE CHARGE-OFF RATES

Commercial Real Estate Charge-Off Rates

Source: Rosen Consulting, pulled from St. Louis Federal Reserve, May 2018. Note - Seasonally adjusted. Used with permission.

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:

GENERATING CURRENT
INCOME
PROVIDING INTEREST RATE
PROTECTION
DELIVERING STRONG
RISK-ADJUSTED RETURNS
PRESERVING
CAPITAL
INCREASING PORTFOLIO
DIVERSIFICATION
LOWERING PORTFOLIO
VOLATILITY

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 Rodin® Global, our equity REIT that invests in net-lease commercial properties.

OFFERING HIGHLIGHTS

A THOUGHTFUL CHOICE IN THE NON-TRADED REIT SPACE

OFFERING SIZE

$1 BILLION

MINIMUM INVESTMENT

$2,500

SHARE CLASSES
CLASS

A

CLASS

T

CLASS

I

PRICING

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

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

DISTRIBUTION FREQUENCY

Monthly, subject to Board Declaration.

*There is no guarantee of distributions. Distributions may be paid from sources other than cash flow from operations, including offering proceeds, which may reduce an investor’s overall return.
TAX REPORTING

TAX REPORTING

Form 1099-DIV

DISTRIBUTION REINVESTMENT PLAN (DRP)

DISTRIBUTION REINVESTMENT PLAN (DRP)

Up to $250 million to be purchased at most recently announced Net Asset Value (NAV).

SHARE REPURPOSE PROGRAM

SHARE REPURPOSE PROGRAM

 

AFTER 1 YEAR AFTER 2 YEARS AFTER 3 YEARS AFTER 4 YEARS AFTER 5 YEARS
96% of NAV 97% of NAV 98% of NAV 99% of NAV 100% of NAV

We will repurchase shares at a price equal to, or at a discount from, NAV per share of the share class being repurchased.

*Repurchases limited to 5% of weighted average number of Rodin Income Trust’s common shares outstanding during prior calendar year; redemptions will be funded solely from the proceeds of our DRP and any other funds set aside by the board of directors; program may be modified, suspended or terminated at any time upon 10 days prior written notice to the stockholders.

SPONSOR SUPPORT

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.