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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2025

or

For the transition period from to

Commission file number 000-56632

Fortress Net Lease REIT

(Exact name of registrant as specified in its charter)

(212) 798-6100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act:

(Title of class)

Common Shares

Class S common shares of beneficial interest, $0.01 par value per share

Class D common shares of beneficial interest, $0.01 par value per share

Class I common shares of beneficial interest, $0.01 par value per share

Class F-S common shares of beneficial interest, $0.01 par value per share

Class F-D common shares of beneficial interest, $0.01 par value per share

Class F-I common shares of beneficial interest, $0.01 par value per share

Class D-S common shares of beneficial interest, $0.01 par value per share

Class E common shares of beneficial interest, $0.01 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the common shares held by non-affiliates of the registrant: There is currently no established public market for the registrant’s common shares.

As of March 26, 2026, the issuer had the following common shares of beneficial interest outstanding: 4,219,303 Class S shares, 18,998,006 Class I shares, 25,608,395 Class F-S shares, 72,754,383 Class F-I shares, 37,583,680 Class D-S shares and 2,581,895 Class E shares.

Documents Incorporated by Reference: None.

TABLE OF CONTENTS

Form 10-K

Year Ended December 31, 2025

USE OF CERTAIN DEFINED TERMS

In this annual report on Form 10-K (this “Annual Report”), the following terms shall have the meanings set forth below, except where the context suggests otherwise:

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements, which relate to future events or the future performance or financial condition of Fortress Net Lease REIT (the “Company,” “we,” “us,” or “our”). Forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology, although not all forward-looking statements include these words. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Some of the statements in this Annual Report constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Annual Report may include statements as to:

The forward-looking statements contained in this Annual Report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” in this Annual Report. Other factors that could cause our actual results to differ materially include:

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could also be inaccurate. In light of these and other uncertainties, the inclusion of a forward-looking statement in this Annual Report should not be regarded as a representation by us that our plans and objectives will be achieved.

You should read this Annual Report and the documents that we reference herein and have filed as exhibits hereto with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Annual Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Annual Report, whether as a result of any new information, future events or otherwise.

For more information regarding these and other risks and uncertainties that we face, see the section entitled “Item 1A. Risk Factors” and any such updated factors included in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document.

SUMMARY RISK FACTORS

The following is only a summary of the principal risks that may adversely affect our business, financial condition and results of operations and cash flows. The following should be read in conjunction with the complete discussion of risk factors we face, which are set forth below under “Item 1A. Risk Factors.”

Some of the more significant risks relating to our business and ownership of our shares include:

Risks Related to Our Business and Operations

Risks Related to Our Relationship with Fortress, Our Adviser and the Management Agreement

Risks Related to Our Organization and Structure

Risks Related to Tax Laws and Regulations

Risks Related to Ownership of Our Shares

The foregoing risks and other risks are more fully described in the section titled “Item 1A. Risk Factors” in this Annual Report. If any of these risks actually occur, our business, financial condition, results of operations, cash flows, and prospects could be materially and adversely affected. As a result, you could lose all or part of your investment in our common shares.

PART I

ITEM 1. BUSINESS

Overview

We are a Maryland statutory trust formed on January 24, 2023. The Company is designed to offer individual investors an ability to access net lease real estate. We are a privately-placed, non-listed, perpetual life REIT. We own all or substantially all of our assets through the Operating Partnership. We are externally managed by our Adviser, an affiliate of our sponsor, Fortress. Our principal office is located at 1345 Avenue of the Americas, New York, NY 10105 and our telephone number is (212) 798-6100.

Our investment strategy is focused primarily on acquiring, owning, financing and leasing a diversified portfolio of single-tenant commercial real estate properties subject to medium- to long-term net leases with creditworthy and/or investment grade tenants or guarantors across the United States and, to a lesser extent, Canada, Europe or other jurisdictions as we see fit. We seek to invest in any and all commercial property types that we deem appropriate, including retail, office, industrial and any other specialized use assets. The Company generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income to shareholders and maintain our qualification as a REIT.

The Adviser

The Adviser serves as our administrator. The Company and Operating Partnership have entered into a management agreement (as the same may be amended or restated from time to time, the “Management Agreement”) with the Adviser, pursuant to which the Adviser will manage the Company and the Operating Partnership on a day-to-day basis. The Company and the Operating Partnership have also entered into an administration agreement (as the same may be amended or restated from time to time, the “Administration Agreement”) with the Adviser, pursuant to which the Adviser will provide certain office and administrative services to the Company and the Operating Partnership. See “—Management Agreement” and “—Administration Agreement” for additional information relating to the Management Agreement and Administration Agreement.

The Adviser is an affiliate of Fortress and, as such, our Adviser has access to the broader resources of Fortress, subject to Fortress’s policies and procedures regarding the management of conflicts of interest. See “Item 13. Certain Relationships and Related Transactions, and Director Independence—Potential Conflicts of Interest” for additional information relating to our potential conflicts of interest.

Fortress

Fortress Investment Group LLC, a Delaware limited liability company and an affiliate of the Adviser, is a leading global investment management firm. Fortress offers a range of alternative investment strategies, including private equity for institutional and private investors around the world. As of September 30, 2025, Fortress had approximately $54 billion of assets under management. Fortress is co-headquartered in New York and Dallas, and has offices in Abu Dhabi, Atlanta, Greenwich, Hong Kong, London, Los Angeles, Madrid, Menlo Park, Rome, Sydney and Tokyo.

Investment Objective

Our investment objective is to deliver superior risk adjusted returns from a diversified real estate portfolio across the United States and to a lesser extent, Canada, Europe or other jurisdictions as we see fit. We look to generate a known and predictable stream of cash flow by investing primarily in single tenant net leased assets, whereby the tenant is responsible for all property operating expenses, such as maintenance and repairs, real estate taxes and insurances, and capital expenditures, allowing us to deliver consistent dividends to our shareholders. By utilizing our Adviser’s strong financial underwriting and understanding of real estate fundamentals and corporate credit, we will attempt to construct a portfolio that will minimize risks and preserve shareholder capital while also driving shareholder value through consistent asset appreciation. Through the use of our Adviser’s extensive sourcing platform, we intend to curate a purpose-built portfolio that offers superior risk adjusted returns when compared to our peers. However, we cannot assure you that we will achieve our investment objectives. See “Item 1A. Risk Factors—Risks Related to Our Business and Operations.”

Investment Strategies

Our strategy has been carefully developed based on Fortress’s more than 20-year track record of generating attractive risk-adjusted yields, as well as preserving and growing investors’ capital, while providing a steady stream of cash flow to pay regular cash distributions to our shareholders. We believe that Fortress’s extensive experience, including investing through various economic cycles, will provide our Adviser with a more informed understanding of various investment strategies appropriate for specific cycles, not just during a bull market, which we believe provides us with a competitive advantage. Our investments include land, building and leasehold interests in the United States primarily and are expected to include investments in other jurisdictions as we see fit. We seek to invest in any and all commercial property types, including retail, office, industrial and any other specialized use assets. These investments could be part of a sale-leaseback transaction directly with tenants, through a “build-to-suit” property transaction with prospective tenants and/or by purchasing the assets with leases already in place. We consider asset, tenant and geographic concentrations while retaining the flexibility to invest as we consider appropriate to generate attractive risk-adjusted yields as well as preserve and grow investors’ capital. We intend to primarily focus on acquiring assets with five years or more in remaining weighted average lease terms that are leased to a single tenant. From time to time, we may acquire assets with lease durations shorter than five years if we believe that the leases can be extended on or prior to, or that the assets can be re-let to an acceptable tenant upon, lease maturity or may acquire assets that are leased to multiple tenants. We may invest on a standalone basis and may co-invest in transactions with affiliates of Fortress or third parties.

We utilize our Adviser’s extensive sourcing platform to originate transactions. We seek to establish long-term relationships with our tenants which often lead to repeat transactions. Additionally, our Adviser has access to over 1,000 active relationships through the broader Fortress Credit Team and many more historic relationships Fortress has built and cultivated over its more than 20-year history. Fortress Credit Team is a recognized leader in the private lending and alternative investments space. As of December 31, 2024, the Fortress Credit Team has a global team of approximately 670 people, with expertise in numerous industries. These relationships come with considerable goodwill that we believe will enable us to source off-market opportunities not available to our peers.

We plan to capitalize on our Adviser’s credit underwriting expertise to acquire assets at attractive yields. We employ a credit-first approach to understanding the financial wherewithal of a tenant, which we believe gives us a significant advantage over our peers. We enhance our credit underwriting by leveraging the Fortress Credit and Real Estate Platform, which is available to the Adviser to assist in underwriting, lease negotiations, asset management and financing. Fortress has more than 20 years of experience in various forms of credit and real estate investing that form the foundation of our net lease underwriting approach. As of December 31, 2024, the Fortress Credit Funds have invested over $200 billion across various asset classes, capital structures and credit ratings ranging from investment grade to distressed, with more than 1,500 borrowers, and have acquired more than $75 billion of total real estate assets in more than 1,000 real estate transactions. Fortress has more than 139 people globally dedicated to real estate investing.

Fortress is one of the largest alternative asset managers, and we believe we are adept at effectively employing leverage, utilizing the capital markets and value-enhancing structures where appropriate. Our Adviser has deep-rooted relationships with various forms of lending institutions and we believe Fortress’s long-established relationship with national money centers and regional banks is even more valuable in the current economic environment. We also may employ an interest rate and currency hedging strategy to help protect shareholder value.

Another key to our investment strategy is proactive asset management. The goal of our active monitoring is to track macro- and micro-economic and industry trends that impact our tenants as well as their financial statements when available. We believe this will allow us to seize on the opportunities to extend leases based on any opportunities we see through our monitoring. We also plan to utilize this data to recycle assets if we need to.

We may also invest in loans, preferred equity, and other alternative investments in or primarily secured by real estate, subject to the limitations imposed by reason of our intention to qualify as a REIT and maintaining our exclusion from being required to register under the Investment Company Act. We also may to a lesser extent invest in marketable securities, cash, cash equivalents and other short-term investments to provide a source of liquidity for our anticipated share repurchase plan, cash management, and other purposes.

Acquisition Strategies

We focus our acquisition activities on real properties and related assets that are primarily located in the United States but may invest in Canada, Europe or other jurisdictions as we see fit. The assets will be primarily net leased whereby the tenant is generally responsible for insurance, maintenance and repairs, taxes, and utilities, which we believe will generate known and predictable cash flows. In addition, we may acquire multi-tenant properties which will typically (i) include a dominant anchor tenant, (ii) be a part of an acquisition of a portfolio primarily consisting of single tenant properties or (iii) be structured to create a synthetic single tenant lease. Other potential investments may include gross leases, commercial real estate debt and/or equity security investments (including equity in other property companies and partnerships, stocks of REITs and commercial real estate securitizations), preferred equity investments, vacant buildings and land (either for future development, renovation or a potential sale-leaseback).

We focus on acquiring assets with five years or more in remaining weighted average lease terms leased to a single tenant. From time to time, we may acquire assets with lease durations shorter than five years if we believe that the leases can be extended on or prior to, or that the assets can be re-let to an acceptable tenant upon, lease maturity or may acquire assets leased to multiple tenants. We may acquire existing buildings or enter into build-to-suit arrangements in which we develop assets to suit the needs of prospective tenants based on an executed lease.

We seek to invest in any and all commercial property types that we deem appropriate, including retail, office, industrial and any other specialized use assets. We may also invest in capital assets such as various types of machinery and equipment. We intend to acquire properties leased to tenants across a broad range of industries. Our strategy is to focus on acquiring tenants with a strong credit profile by utilizing our credit underwriting expertise while also finding assets with sound real estate fundamentals. We seek to acquire commercial properties occupied by creditworthy tenants, including investment-grade rated, non-investment grade rated and unrated public and private companies (collectively referred to herein as “creditworthy tenants”), that have strong cash generating ability, a strong balance sheet and/or other attractive financial metrics within their market segment. We believe that a key factor to our success will be our Adviser’s ability to underwrite a tenant’s credit. Each of our prospective tenants undergoes a comprehensive proprietary credit assessment. Our Adviser conducts credit analysis by evaluating prospective tenants’ management teams, strategic positioning within their industries, growth prospects, operating margins, financial leverage and cyclicality for an appropriate balance to ensure there is adequate downside protection in their business. The credit underwriting process also seeks to assess the strengths, weaknesses, opportunities and threats to our tenants’ businesses that drive the underlying value proposition of our tenants’ businesses and their ability to create value long-term, including the outlook of the tenant’s market segment and the tenant’s relationship with its customers and suppliers. By evaluating both traditional credit metrics and the long-term value proposition of our tenants’ businesses, we seek to maximize predictable, durable and growing cash flows while mitigating risk in our portfolio.

Joint Ventures

We also may acquire properties in joint ventures with affiliates, including Fortress Managed Accounts, which will allow the Company and its affiliates to collectively acquire 100% ownership of a property. We will often acquire 100% interests in properties. In addition, we intend to enter into joint ventures with third parties to source, acquire, develop, improve or dispose of properties. In certain cases, we may not control the management of joint ventures in which we invest, but we may have the right to approve major decisions of the joint venture. We will not participate in joint ventures in which we do not have or share control to the extent that we believe such participation would potentially threaten our status as a non-investment company exempt from the Investment Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that are suitable for both us and one or more Fortress Managed Accounts.

Leverage

We regularly employ direct or indirect leverage in a variety of forms through borrowings, derivatives and other financial instruments as part of our investment program. The greater our total leverage relative to our equity capital base, the greater the risk of loss and possibility of gain due to market fluctuations in the values of our investments. Leverage can result in the total loss of capital. Historically, Fortress net lease investments have averaged 55-65% leverage. In certain instances, where a transaction can support it, we could add more leverage, or in the alternative, utilize lower leverage in our Adviser’s discretion.

We borrow funds (on a secured or unsecured basis), directly or indirectly through one or more investment vehicles, to facilitate investments or otherwise in connection with our business. We have obtained and may obtain additional credit facilities in order to finance investments or pay expenses with borrowings. Financings may take various forms, and may be entered into with brokers and dealers retained by us. In addition, we may directly or indirectly utilize seller financing when making investments, and may be assigned existing indebtedness that is not prepayable. The Adviser is under no obligation to arrange for any affiliate to lend money to us; however, we may borrow funds from affiliates of our Adviser without the approval of our board of trustees (the “board” or “board of trustees”). To the extent that any borrowing is made from, or reimbursement is made to, affiliates of our Adviser, the interest rate thereon may not exceed the prime rate of JPMorgan Chase Bank plus 3.0% per annum without the approval of a majority of our independent trustees. Moreover, without the approval of the board of trustees, we are not permitted to incur any indebtedness if such incurrence would cause our aggregate indebtedness to exceed 75% (measured at the time of incurrence) of the cost of our non-realized investments.

In addition, in an effort to have enough cash available to repurchase shares pursuant to our share repurchase plan and to fund investments, we may reserve borrowing capacity under a line of credit to borrow against, in part, to repurchase shares during periods when we may not have sufficient funds to fund all repurchase requests.

Temporary Strategies

During periods in which the Adviser determines that economic or market conditions are unfavorable to investors and a defensive strategy would benefit us, we may temporarily depart from our investment strategy without providing advance notice to, or obtaining the consent of, our shareholders. During these periods, we may deviate from our investment guidelines and invest all or any portion of our assets in U.S. government securities, including bills, notes and bonds differing as to maturity and rates of interest that are either issued or guaranteed by the U.S. Treasury or by U.S. government agencies or instrumentalities; non-U.S. government securities that have received the highest investment grade credit rating; certificates of deposit issued against funds deposited in a bank or a savings and loan association; commercial paper; bankers’ acceptances; fixed time deposits; shares of money market funds; credit-linked notes; repurchase agreements with respect to any of the foregoing; or any other fixed income securities that the Adviser considers consistent with this strategy. During these periods, we may also determine to pay down certain of our indebtedness and have indebtedness below our target leverage or we may borrow more to provide for additional liquidity causing us to exceed our target leverage. It is impossible to predict when, or for how long, the Adviser will use these alternative strategies. There can be no assurance that such strategies will be successful.

Taxation of the Company

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes commencing with our initial taxable year ended December 31, 2023. A REIT is a company that derives most of its income from real property or real estate mortgages and has elected to be subject to tax as a REIT. If a corporation elects to be subject to tax as a REIT and qualifies as a REIT, it will generally not be subject to U.S. federal corporate income taxes on income that it currently distributes to its shareholders. A company’s qualification as a REIT depends on its ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources of its gross income, the composition and values of its assets, its distribution levels to its shareholders, and the concentration of ownership of its capital stock.

A privately placed, non-listed, perpetual-life REIT is a REIT whose shares are not listed for trading on a stock exchange or other securities market. We use the term “perpetual-life REIT” to describe an investment vehicle of indefinite duration, whose common shares are intended to be sold by the REIT monthly on a continuous basis at a price generally equal to the REIT’s prior month’s net asset value per share. The net asset value of perpetual-life REITs may be subject to volatility related to the values of their underlying assets. In our perpetual-life structure, the investors may request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. While we may consider a liquidity event at any time in the future, we are not obligated by the Company’s Third Amended and Restated Declaration of Trust (as the same may be amended or restated from time to time, the “Declaration of Trust”) or otherwise to effect a liquidity event at any time.

Fortress Net Lease REIT Structure

FIG LLC

FIG LLC, the direct parent of the Adviser and a wholly-owned subsidiary of Fortress, is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) with the SEC. FIG LLC and the Adviser operate under a single set of policies and procedures that are reasonably designed to comply with the requirements of the Advisers Act. The Adviser is a relying advisor pursuant to applicable SEC guidance.

Operating Partnership

The Operating Partnership was formed on January 3, 2023, to acquire and hold assets on our behalf. We own all or substantially all of our assets through the Operating Partnership. FNLR GP LLC, a Delaware limited liability company and our wholly-owned subsidiary, is the sole general partner of the Operating Partnership. The Special Limited Partner, a wholly-owned subsidiary of Fortress Operating Entity I LP, an affiliate of Fortress, owns a special limited partner interest in the Operating Partnership. The use of our Operating Partnership to hold all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”). Using an UPREIT structure may give us an advantage in acquiring properties from persons who want to defer recognizing a gain for U.S. federal income tax purposes. In addition, each of the Adviser and the Special Limited Partner may elect to receive units in the Operating Partnership in lieu of cash for the management fee and performance participation interest, respectively. The Adviser may also elect to receive units in the Operating Partnership in lieu of cash for all or a portion of certain expense reimbursements. The Adviser and the Special Limited Partner may put these units back to the Operating Partnership and receive cash, and intend to do so from time to time, unless our board of trustees determines that any such repurchase for cash would be prohibited by applicable law or our Declaration of Trust, in which case such Operating Partnership units will be repurchased for common shares.

Management Agreement

Our board of trustees at all times has oversight responsibility for governance, financial controls, compliance and disclosure with respect to the Company and our Operating Partnership. Pursuant to the Management Agreement, our board of trustees has delegated to the Adviser the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of trustees; provided, however, that the Adviser’s authority to make investments outside of the scope and criteria provided for within our investment guidelines (as such guidelines may be amended from time to time by the board of trustees) is subject to limitations and requires the prior approval of the board of trustees or any duly authorized committee of the board of trustees, as the case may be. We believe that the Adviser currently has sufficient staff and resources to be capable of fulfilling the duties set forth in the Management Agreement.

Services

Under the terms of the Management Agreement, the Adviser is responsible for the following:

The Adviser’s services under the Management Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to the Company and Operating Partnership are not impaired. The above summary is provided to illustrate the material functions which the Adviser will perform for us and it is not intended to include all of the services which may be provided to us by the Adviser or third parties.

Term

Unless earlier terminated as described below, the Management Agreement will remain in effect for a period of two years from May 1, 2023, and year-to-year thereafter if approved annually by a majority of the board of trustees and a majority of the independent trustees.

Without payment of penalty, the Company may terminate the Management Agreement with the Adviser upon 60 days’ written notice. The decision to terminate the agreement may be made by a majority of the board of trustees. In addition, without payment of penalty, the Adviser may generally terminate the Management Agreement upon 60 days’ written notice. Notwithstanding the foregoing rights to terminate the Management Agreement, certain provisions relating to the duties of, and payments to, the Adviser, indemnification by the Company and the Operating Partnership, non-solicitation and miscellaneous considerations, will survive the termination of the Management Agreement.

For a discussion of the Adviser’s compensation and expense reimbursement, see “—Compensation of the Adviser and Expense Reimbursement.” For additional discussion of company expenses, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Year Ended 2025 Highlights—Expenses.”

Compensation of the Adviser and Expense Reimbursement

Management Fee

As compensation for its services provided pursuant to the Management Agreement, we pay the Adviser, for Class S investors, Class D investors and Class I investors, a management fee equal to 1.25% of NAV per annum payable monthly, and Class F-S investors, Class F-D investors, Class F-I investors, Class D-S investors and Class E investors, a management fee equal to 1.00% of NAV per annum payable monthly. However, the management fee paid to the Adviser in respect of any Class F-S shares, Class F-D shares, Class F-I shares, Class B shares, Class C shares, Class D-S shares and Class E shares that were purchased by a shareholder during the Initial Share Offering Period (including any such shares issued pursuant to our distribution reinvestment plan during the Initial Share Offering Period and any Class B shares or Class C shares that were converted into Class F-I shares or Class D-S shares) (collectively, the “Waiver Eligible Shares”) was waived for six months by the Adviser (measured, in respect of each such shareholder and such shareholder’s Waiver Eligible Shares, regardless of whether any such shares were purchased on different days, from the later of (i) the day on which such shareholder first purchased any such shares for cash and (ii) if applicable, the day on which such shares were released from escrow (and not, for the avoidance of doubt, from the day on which any such shares may have been (x) issued pursuant to our distribution reinvestment plan, (y) received in connection with a conversion or exchange of other shares or (z) later acquired); such later date in respect of any investor, the “Issuance Date”); provided, that with respect to any shareholder who subscribed for shares during the Initial Share Offering Period pursuant to a subscription agreement that may be drawn down in one or more closings at the Company’s discretion, the “Issuance Date” for purposes of the six month fee waiver shall be measured, in respect of each Waiver Eligible Shares issued pursuant to such subscription agreement, from the day on which such Waiver Eligible Share is issued to such shareholder. As of December 31, 2025, there were no Waiver Eligible Shares outstanding. In addition, the management fee paid to the Adviser in respect of any Class E shares will be waived by the Adviser for so long as the Company qualifies as a “publicly offered REIT” for U.S. federal income tax purposes (i.e., a REIT that is required to file annual and periodic reports with the SEC under the Exchange Act) (a “Publicly Offered REIT”). Any management fee shall be calculated and paid to the Adviser on a class-by-class basis, based on the NAV of each applicable class of our shares.

Additionally, to the extent that our Operating Partnership issues Operating Partnership units to parties other than us or any class of Operating Partnership units as determined by us, as sole member of the general partner of the Operating Partnership, our Operating Partnership will pay the Adviser, for Class S units, Class D units and Class I units, a management fee equal to 1.25% of the NAV per annum payable monthly, and for Class F-S units, Class F-D units, Class F-I units, Class D-S units and Class E units, a management fee equal to 1.00% of NAV per annum payable monthly, in each case attributable to such Operating Partnership units not held by us. However, the management fee paid to the Adviser in respect of any Class F-S units, Class F-D units, Class F-I units, Class D-S units and Class E units that were issued to parties other than us during the Initial Share Offering Period (including any such Operating Partnership units issued pursuant to our distribution reinvestment plan during the Initial Share Offering Period and any Class B units or Class C units that were converted into Class F-I units or Class D-S units) (collectively, the “Waiver Eligible Units”) was waived for six months by the Adviser (measured, in respect of each such unitholder and such unitholder’s Waiver Eligible Units, regardless of whether any such Operating Partnership units were issued on different days, from the day on which such unitholder was first issued any such Operating Partnership units for cash (and not, for the avoidance of doubt, from the day on which any such Operating Partnership units may have been (x) issued pursuant to our distribution reinvestment plan, (y) received in connection with a conversion or exchange of other Operating Partnership units or shares or (z) later acquired); such date in respect of any unitholder, the “OP Unit Issuance Date”). As of December 31, 2025, there were no Waiver Eligible Units outstanding. In addition, the management fee paid to the Adviser in respect of any Class E units will be waived by the Adviser for so long as we qualify as a Publicly Offered REIT.

Similar to the calculation of the management fee payable to the Adviser with respect to our shares, any management fee payable to the Adviser with respect to each class of our Operating Partnership units shall be calculated on a class-by-class basis, based on the NAV of each applicable class of units.

Further, the Operating Partnership has issued Operating Partnership units, with respect to which no management fee will be paid to the Adviser, to current or former Fortress affiliates, or current or former employees, officers or directors of any Fortress affiliate (or family and estate planning vehicles of, and foundations and other charitable organizations established or sponsored by, any of them).

In calculating our management fee, we will use our NAV before giving effect to accruals for the management fee, performance participation allocation, ongoing servicing fees or distributions payable on our shares. Our NAV per share for each class is calculated by EA RESIG, LLC, a subsidiary of Eisner Advisory Group LLC (“Eisner”), a third-party firm that provides us with certain administrative and accounting services, and such calculation is reviewed and confirmed by the Adviser. As part of Eisner’s calculations, Eisner will use inputs provided by the Adviser, including valuation conclusions that have been reviewed by Empire Valuation Consultants, LLC (“Empire”), our independent valuation advisor. However, the Adviser is ultimately and solely responsible for determining our NAV and overseeing the process relating to Eisner’s calculation of our NAV. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Calculation and Valuation of Net Asset Value” for more information regarding the calculation of our NAV per share of each class.

All or a portion of the management fee may be paid, at the Adviser’s election, in cash, Class E shares or Class A units of our Operating Partnership. The Adviser generally expects to elect to receive Class E shares or Class A units of the Operating Partnership primarily for the Company’s cash management purposes and alignment of interest, but intends to have its shares or units repurchased from time to time. Any repurchase requests by the Adviser will be consistent with the Adviser’s fiduciary duties to us and our shareholders. Our Class E shares and Class A units of our Operating Partnership obtained by the Adviser will not be subject to the repurchase limits of our share repurchase plan or any early repurchase deduction, whereby certain classes of our shares (i.e., Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares and Class E shares) that have not been outstanding for at least one year are repurchased at 98% of the transaction price.

In addition, the Company and the Operating Partnership may, from time to time, offer different classes of shares or Operating Partnership units which feature a higher or lower management fee or performance participation allocation, as applicable.

Performance Allocation

So long as the Management Agreement has not been terminated (including by means of non-renewal), the Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive an allocation from (i) Class S units, Class D units and Class I units of the Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up (each such term as defined below), and (ii) the Class F-S units, Class F-D units, Class F-I units and Class E units of the Operating Partnership equal to 10% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up. Total Return is defined as total distributions plus the change in the Company’s NAV per share, adjusted for subscriptions and repurchases. However, the performance participation interest to the Special Limited Partner in respect of any Waiver Eligible Units was waived for six months by the Special Limited Partner (measured, in respect of each limited partner and such limited partner’s Waiver Eligible Units, from the applicable OP Unit Issuance Date and, in respect of any Waiver Eligible Units held by us, either directly or through the general partner of the Operating Partnership, in a manner consistent with the calculation of the six month period that was applicable to the corresponding Waiver Eligible Shares that were attributable to such Waiver Eligible Units). As of December 31, 2025, there were no Waiver Eligible Units outstanding. In addition, the Special Limited Partner’s performance participation interest with respect to Class E units of the Operating Partnership will be waived by the Special Limited Partner so long as we qualify as a Publicly Offered REIT. Such allocation will be measured on a calendar year basis, made annually and accrued monthly. The Special Limited Partner will not hold a performance participation interest with respect to Class A units or Class D-S units of the Operating Partnership.

Specifically, the Special Limited Partner in the aggregate will be allocated a performance participation in an amount equal to:

For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in the NAV of units issued during the then-current calendar year but (ii) exclude the proceeds from the initial issuance of such units. The performance participation interest allocated to the Special Limited Partner shall be in respect of Class S units, Class D units, Class I units, Class F-S units, Class F-D units, Class F-I units and Class E units (provided, that the Special Limited Partner will waive the performance participation interest with respect to Class E units for so long as the Company qualifies as a Publicly Offered REIT) units only and not, for the avoidance of doubt, Class A units or Class D-S units.

“Hurdle Amount” for any period during a calendar year means that amount that results in a 5% annualized internal rate of return on the NAV of the Operating Partnership units outstanding at the beginning of the then-current calendar year and all Operating Partnership units issued since the beginning of the then-current calendar year, taking into account the timing and amount of all distributions accrued or paid (without duplication) on all such units and all issuances of Operating Partnership units over the period and calculated in accordance with recognized industry practices. The ending NAV of the Operating Partnership units used in calculating the internal rate of return will be calculated before giving effect to any accrual to the performance participation interest and applicable ongoing servicing fee expenses; provided that the calculation of the Hurdle Amount for any period will exclude any Operating Partnership units repurchased during such period, which units will be subject to the performance participation allocation upon repurchase as described below.

Except as described in Loss Carryforward Amount below, any amount by which Total Return falls below the Hurdle Amount will not be carried forward to subsequent periods.

“Loss Carryforward Amount” shall initially equal zero and shall cumulatively increase by the absolute value of any negative annual Total Return and decrease by any positive annual Total Return; provided that the Loss Carryforward Amount shall at no time be less than zero and provided further that the calculation of the Loss Carryforward Amount will exclude the Total Return related to any Operating Partnership units repurchased during such year, which units will be subject to the performance participation allocation upon repurchase as described below. The effect of the Loss Carryforward Amount is that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of the calculation of the Special Limited Partner’s performance participation. This is referred to as a “High Water Mark.”

The Special Limited Partner will also be allocated a performance participation with respect to all applicable Operating Partnership units that are repurchased at the end of any month (in connection with repurchases of our shares in our share repurchase plan) in an amount calculated as described above with the relevant period being the portion of the year for which such unit was outstanding, and proceeds for any such unit repurchase will be reduced by the amount of any such performance participation.

Distributions on the performance participation interest may be payable in cash, Class E shares or Class A units at the election of the Special Limited Partner. If the Special Limited Partner elects to receive such distributions in Operating Partnership units, the Special Limited Partner may request the Operating Partnership to repurchase such Operating Partnership units from the Special Limited Partner at a later date. The Operating Partnership will repurchase any such Class A units for Class E shares or cash (at the Special Limited Partner’s elections) unless our board of trustees determines that any such repurchase for cash would be prohibited by applicable law or the Operating Partnership Agreement, in which case such Class A units will be repurchased for Class E shares. Any such repurchase request will not be subject to the Early Repurchase Deduction or similar repurchase limits that exist under our share repurchase plan or any Mandatory Holding Period (as defined under “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities —Share Repurchase Plan”).

The NAV of the Operating Partnership calculated on the last trading day of a calendar year shall be the amount against which changes in NAV is measured during the subsequent calendar year. In our first calendar year of operations, the performance participation will be prorated for the portion of the calendar year.

The measurement of the foregoing net assets change is also subject to adjustment by our board of trustees to account for any unit dividend, unit split, recapitalization or any other similar change in the Operating Partnership’s capital structure or any distributions made after the commencement of our private offering that the board of trustees deems to be a return of capital (if such changes are not already reflected in the Operating Partnership’s net assets).

The Special Limited Partner will not be obligated to return any portion of performance participation paid based on our subsequent performance.

Except with respect to Class A units, changes in our Operating Partnership’s NAV per unit of each class will generally correspond to changes in our NAV per share of the corresponding class of our common shares. Distributions with respect to the performance participation interest are calculated from the Operating Partnership’s Total Return over a calendar year. As a result, the Special Limited Partner may be entitled to receive payments under the performance participation for a given year even if some of our shareholders who purchased shares during such year experienced a decline in NAV per share. Similarly, shareholders whose shares are repurchased during a given year may have their shares repurchased at a lower NAV per share as a result of an accrual for the estimated performance participation at such time, even if no performance participation allocation for such year is ultimately payable to the Special Limited Partner at the end of such calendar year.

In the event the Management Agreement is terminated, the Special Limited Partner will be allocated any accrued performance participation with respect to all Operating Partnership units as of the date of such termination.

The following tables summarize performance allocation and management fee accrued during the year ended December 31, 2025 ($ in thousands):

Organization and Offering Expense Reimbursement

The Adviser has agreed to advance all of our organization and offering expenses on our behalf (including legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of our escrow agent and transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals, but excluding the ongoing servicing fees) through November 1, 2024, the first anniversary of the date on which we broke escrow for our private offering. We reimburse the Adviser for all such advanced expenses ratably over the 60 months following the first anniversary of the date on which we broke escrow for our private offering, which occurred on November 1, 2023. After November 1, 2024, we reimburse the Adviser for any organization and offering expenses associated with our private offering that it incurs on our behalf as and when incurred. The Adviser may elect to receive all or a portion of any such reimbursements in the form of cash, Class E shares or Class A units of our Operating Partnership. To the extent that the Adviser elects to receive any portion of these reimbursements in Class E shares or Class A units of our Operating Partnership, we may repurchase such Class E shares or Class A units of our Operating Partnership from the Adviser at a later date and such repurchases of Class E shares or Class A units of our Operating Partnership will not be subject to the repurchase limits of our share repurchase plan or any Early Repurchase Deduction.

Administration Agreement

The Adviser serves as our administrator. Pursuant to the Administration Agreement, the Adviser will perform, or oversee the performance of, administrative services necessary for our continued operation, which will include providing office space, equipment and office services, maintaining financial records, preparing reports to shareholders and reports filed with the SEC (as applicable),

and managing the payment of expenses and the performance of administrative and professional services rendered by others. We believe the Adviser currently has sufficient staff and resources so as to be capable of fulfilling the duties set forth in the Administration Agreement.

We will reimburse our Adviser for services performed for us pursuant to the terms of the Administration Agreement, which will include certain costs and expenses, and for certain organization costs incurred prior to the commencement of our operations, and for certain offering costs. In addition, we will reimburse the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser (or its affiliates) to certain individuals who devote time to our business and affairs and act on our behalf, in each case, based on the applicable percentage of time such individual allocated, on an estimated basis, to our operations. The Adviser may elect to receive all or a portion of any such reimbursements in the form of cash, Class E shares of the Company or Class A units of our Operating Partnership. In addition, pursuant to the terms of the Administration Agreement, the Adviser may delegate its obligations under the Administration Agreement to an affiliate or to a third party and we will reimburse the Adviser for any services performed for us by such affiliate or third party. To the extent that the Adviser outsources any of its functions, we will pay the fees associated with such functions on a direct basis, without profit to the Adviser.

Unless earlier terminated as described below, the Administration Agreement will remain in effect for a period of two years from the date it first became effective, and will remain in effect from year-to-year thereafter if approved annually by a majority of the board of trustees and a majority of the independent trustees. We or the Adviser may terminate the Administration Agreement, without payment of any penalty, upon 60 days’ written notice. Our decision to terminate the agreement may be made by a majority of the board of trustees.

The Administration Agreement provides that the Adviser and its affiliates’ respective officers, directors, members, managers, shareholders and employees are entitled to indemnification from us from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf pursuant to authority granted by the Administration Agreement, except where attributable to willful misfeasance, bad faith or gross negligence in the performance of such person’s duties or reckless disregard of such person’s obligations and duties under the Administration Agreement.

Management of Our Operating Partnership

We will hold substantially all of our assets in the Operating Partnership or in subsidiary entities in which the Operating Partnership owns an interest. For purposes of determining our compliance with the asset and gross income tests for qualification as a REIT for U.S. federal income tax purposes, our proportionate share of the assets and income of the Operating Partnership will be deemed to be our assets and income.

FNLR GP LLC, a Delaware limited liability company and our wholly-owned subsidiary, is the sole general partner of the Operating Partnership. The limited partnership interests in the Operating Partnership are held by the Special Limited Partner and may be held by controlled subsidiaries of Fortress, current or former affiliates of the Adviser, current or former employees, officers or directors of Fortress or its affiliates (including eligible family members), and certain investors who have exchanged property, cash or other assets for limited partnership units.

As the sole general partner of the Operating Partnership, FNLR GP LLC has the exclusive power to manage and conduct the business of the Operating Partnership. A general partner is accountable to a limited partnership as a fiduciary and consequently must exercise good faith and integrity in handling partnership affairs. No limited partner of the Operating Partnership may transact business for the Operating Partnership, or participate in management activities or decisions, except as provided in the Operating Partnership Agreement and as required by applicable law. FNLR GP LLC may not be removed as general partner by the limited partners. FNLR GP LLC will at all times have oversight and policy-making authority, including responsibility for governance, financial controls, compliance and disclosure with respect to the Operating Partnership. Pursuant to the Management Agreement, we, as sole member of the general partner, have delegated to the Adviser authority to make decisions related to the management of our and the Operating Partnership’s assets, including sourcing, evaluating and monitoring our investment opportunities and making decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of trustees.

The Special Limited Partner has expressly acknowledged, and any future limited partners of the Operating Partnership will expressly acknowledge, that we, as the sole member of FNLR GP LLC, as the general partner of the Operating Partnership, are acting on behalf of the Operating Partnership, ourselves and our shareholders, collectively. Neither we nor our board of trustees is under any obligation to give priority to the separate interests of the limited partners of the Operating Partnership or our shareholders in deciding whether to cause the Operating Partnership to take or decline to take any actions. If there is a conflict between the interests of our shareholders on the one hand and the Operating Partnership’s limited partners on the other, we will endeavor in good faith to resolve the conflict in a manner not adverse to either our shareholders or the Operating Partnership’s limited partners; provided, however, that for so long as we own a controlling interest in the Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our shareholders or the Operating Partnership’s limited partners may be resolved in favor of our shareholders. We are not liable under the Operating Partnership Agreement to the Operating Partnership or to any of its limited partners for monetary damages for losses sustained, liabilities incurred or benefits not derived by such limited partners in connection with such decisions; provided that we have acted in good faith.

The Operating Partnership Agreement generally requires that the Operating Partnership be operated in a manner that will enable us to (1) satisfy the requirements for qualification as a REIT for U.S. federal income tax purposes, unless we have determined not to so qualify in accordance with our Declaration of Trust, and (2) to avoid any income or excise tax liability imposed by the Code or analogous provisions of state law.

Capital Contributions

We intend to contribute net offering proceeds after payment of fees and expenses attributable to our offering and operations, to the Operating Partnership as capital contributions. However, we will be deemed to have made capital contributions in the amount of the gross offering proceeds received from investors, and the Operating Partnership will be deemed to have simultaneously paid the fees, commissions and other costs associated with our private offering and our operations.

If the Operating Partnership requires additional funds at any time in excess of capital contributions made by us, the Operating Partnership may borrow funds from a financial institution or other lenders or we or any of our affiliates may provide such additional funds through loans, purchase of additional partnership interests or otherwise (which we or such affiliates will have the option, but not the obligation, of providing). In addition, the Operating Partnership may admit additional limited partners whose investments may be subject to a different management fee and repurchase limitations if our board of trustees concludes in good faith that such admittance is in our best interest.

Operating Partnership Units Generally

Operating Partnership units represent an interest as a limited partner in the Operating Partnership. The Operating Partnership may issue additional Operating Partnership units and classes of Operating Partnership units with rights different from, and superior to, those of Operating Partnership units of any class, without the consent of the limited partners or our shareholders. Additionally, the Operating Partnership may issue Operating Partnership units to others that will be subject to a higher or lower Special Limited Partner participation interest or no participation interest. Further, the Operating Partnership expects to issue Operating Partnership units, which the Special Limited Partner will not be entitled to a participation interest, to current or former affiliates of the Adviser or current or former employees, officers or directors of Fortress or its affiliates. Holders of Operating Partnership units do not have any preemptive rights with respect to the issuance of additional units.

Limited partners of any class do not have the right to participate in the management of the Operating Partnership. Limited partners of any class who do not participate in the management of the Operating Partnership, by virtue of their status as limited partners, generally are not liable for the debts and liabilities of the Operating Partnership beyond the amount of their capital contributions. The voting rights of the limited partners of any class are generally limited to approval of specific types of amendments to the Operating Partnership Agreement.

Operating Partnership units, other than the Special Limited Partner interest and general partner interest, are currently divided into nine classes of units: (a) Class S units, (b) Class D units, (c) Class I units, (d) Class F-S units, (e) Class F-D units, (f) Class F-I units, (g) Class D-S units, (h) Class E units and (i) Class A units.

Description of Units

In general, the Class S units, Class D units, Class I units, Class F-S units, Class F-D units, Class F-I units, Class D-S units and Class E units are intended to correspond on a one-for-one basis with our Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares, Class D-S shares and Class E shares, respectively. When we receive proceeds from the sale of common shares, we will contribute such proceeds to the Operating Partnership and receive Operating Partnership units that correspond to the classes of our shares sold.

In general, the units will share in distributions from the Operating Partnership when such distributions are declared by us, as sole member of the general partner, which decision will be made in our sole discretion. In the case of a conversion of Operating Partnership units for our shares, such Operating Partnership units shall convert to the corresponding share class of the Company. Class A units shall convert to Class E shares of the Company. Upon the Operating Partnership’s liquidation, Class S units, Class D units, Class F-S units, Class F-D units, Class D-S units, Class E units, and Class A units will automatically convert to Class I units or Class F-I units, as applicable, in each case in proportion to the NAV per unit of each class, and the resulting Class I units and Class F-I units will share on a unit-by-unit basis in the assets of the Operating Partnership that are available for distribution, after payment of all liabilities, establishment of reserves and after payment of any preferred return owed to holders of any Operating Partnership preferred units and payment of the portion distributable to the holder of the Special Limited Partner interest. In addition, a portion of the items of income, gain, loss and deduction of the Operating Partnership for U.S. federal income tax purposes will be allocated to each Operating Partnership unit, regardless of whether any distributions are made by the Operating Partnership.

For each unit, investors generally will be required to contribute money or property, with a net equity value determined by the general partner. Holders of Operating Partnership units will not be obligated to make additional capital contributions to the Operating Partnership. Further, these holders will not have the right to make additional capital contributions to the Operating Partnership or to purchase additional Operating Partnership units without our consent as sole member of the general partner.

Each class of units, other than the Class A units, may be subject to a management fee as described under “—Compensation of the Adviser and Expense Reimbursement—Management Fee” and each class of units, other than the Class A units and Class D-S units, may be subject to a performance participation allocation as described under “—Compensation of the Adviser and Expense Reimbursement—Performance Allocation.”

The Adviser may elect to receive its management fee in cash, Class E shares or Class A units of the Operating Partnership, and distributions on the Special Limited Partner’s performance participation allocation may be payable in cash, Class E shares or Class A units at the election of the Special Limited Partner. See “—Special Limited Partner Interest” below.

Operating Partnership unitholders (other than us, the Adviser or the Special Limited Partner) after owning one or more Operating Partnership units for one year, generally may, subject to certain restrictions, exchange such Operating Partnership units for a corresponding number of our common shares; provided, that Class D-S units that have not been outstanding for at least two years may not be exchanged or redeemed. Furthermore, the general partner of the Operating Partnership, in its discretion, and at any time, shall have the right to convert all or any portion of any class of a unitholder’s Operating Partnership units into the corresponding class of our shares. However, if a corresponding class of our shares does not exist for an Operating Partnership unit, such Operating Partnership units shall convert to a class of our shares as determined by us as sole member of the general partner in our discretion so long as the economic terms applicable to such class of our shares are not materially less favorable than the economic terms of the applicable class of Operating Partnership units; provided, that Class A units may be converted to Class E shares.

The Adviser and the Special Limited Partner may exchange Class A units for a corresponding number of Class E shares at any time. The Adviser and the Special Limited Partner will have the option of exchanging Class E shares for an equivalent aggregate NAV amount of any other respective class of shares.

Special Limited Partner Interest

The Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive an allocation from (i) the Class S units, Class D units and Class I units of the Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up, and (ii) the Class F-S units, Class F-D units, Class F-I units and Class E units of the Operating Partnership equal to 10% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark, with a Catch-Up. However, the performance participation interest to the Special Limited Partner in respect of any Waiver Eligible Units was waived for six months by the Special Limited Partner (measured, in respect of each limited partner and such limited partner’s Waiver Eligible Units, from the applicable OP Unit Issuance Date, and, in respect of any Waiver Eligible Units held by us, either directly or through the general partner of the Operating Partnership, in a manner consistent with the calculation of the six month period that was applicable to the corresponding Waiver Eligible Shares that were attributable to such Waiver Eligible Units). As of December 31, 2025, there were no Waiver Eligible Units outstanding. In addition, the performance participation interest to the Special Limited Partner with respect to Class E units will be waived by the Special Limited Partner for so long as we qualify as a Publicly Offered REIT. Such allocation will be measured on a calendar year basis, made annually and accrued monthly. The Special Limited Partner will not hold a performance participation interest with respect to Class A units or Class D-S units of the Operating Partnership. Distributions on the Special Limited Partner’s performance participation allocation may be payable in cash, Class E shares or Class A units at the election of the Special Limited Partner. See “—Compensation of the Adviser and Expense Reimbursement—Performance Allocation” for more information.

Issuance of Additional Limited Partnership Interests

As sole manager of the sole general partner of the Operating Partnership, we will have the ability to cause the Operating Partnership to issue additional limited partnership interests (including Operating Partnership units), preferred partnership interests or convertible securities. We have issued Operating Partnership units, and may issue more in the future.

Our Operating Partnership allows us to be organized as an UPREIT. A sale of property directly to a REIT is generally a taxable transaction to the selling property owner. In an UPREIT structure, a seller of appreciated property who desires to defer taxable gain on the transfer of such property may, subject to meeting applicable tax requirements, transfer the property to the Operating Partnership in exchange for limited partnership interests (including Operating Partnership units) on a tax-deferred basis. Being able to offer a seller the opportunity to defer taxation of gain until the seller disposes of its interest in the Operating Partnership may give us a competitive advantage in acquiring desired properties relative to buyers who cannot offer this opportunity.

In addition, investing in the Operating Partnership, rather than in our common shares, may be more attractive to certain institutional or other investors due to their business or tax structure.

Transferability of Interests

Without the consent of a majority in interest of the limited partners of the Operating Partnership, other than any interests held by us, we may not voluntarily cause FNLR GP LLC to withdraw as the general partner of the Operating Partnership or withdraw as the sole member of FNLR GP LLC, engage in any merger, consolidation or other business combination or transfer our general partnership interest in the Operating Partnership (except to a wholly owned subsidiary), unless: (1) the transaction in which such withdrawal, business combination or transfer results in the limited partners of the Operating Partnership receiving or having the right to receive an amount of cash, securities or other property equal in value to the amount they would have received if they had exercised their exchange rights immediately prior to such transaction or (2) in the case of a merger or other business combination, the successor entity contributes substantially all of its assets to the Operating Partnership in return for an interest in the Operating Partnership and agrees to assume all obligations of the general partner of the Operating Partnership.

With certain exceptions, the limited partners may not transfer their interests in the Operating Partnership, in whole or in part, without our written consent, as sole member of the general partner.

Exculpation

We, as sole member of the general partner, will not be liable to the Operating Partnership or limited partners for errors in judgment or other acts or omissions not amounting to Disabling Conduct (as defined in the Management Agreement) with regard to the Operating Partnership Agreement since a provision has been made in the Operating Partnership Agreement for exculpation of the general partner. Therefore, purchasers of interests in the Operating Partnership have a more limited right of action than they would have absent the limitation in the Operating Partnership Agreement.

Indemnification

The Operating Partnership Agreement provides for the indemnification of us, as general partner, by the Operating Partnership for liabilities we incur in dealings with third parties on behalf of the Operating Partnership. To the extent that the indemnification provisions purport to include indemnification of liabilities arising under the Securities Act, in the opinion of the SEC, such indemnification is contrary to public policy and therefore unenforceable.

Tax Matters

FNLR GP LLC, as the sole general partner of the Operating Partnership, is the Operating Partnership’s partnership representative and has the authority to make tax elections under the Code on the Operating Partnership’s behalf.

Term

The Company has been established, and is expected to continue, for an indefinite period of time. As part of the Company’s indefinite term structure, investors may request the repurchase of their shares on a monthly basis (as further discussed below).

Governmental Regulations

As an owner of real estate, our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which include, among other things: (i) federal and state securities laws and regulations; (ii) federal, state and local tax laws and regulations, (iii) state and local laws relating to real property; and (iv) federal, state and local environmental laws, ordinances, and regulations.

Compliance with the federal, state and local laws described above has not had a material adverse effect on our business, assets, results of operations, financial condition and ability to pay distributions, and we do not believe that our existing portfolio will require us to incur material expenditures to comply with these laws and regulations.

Investment Company Act Considerations

We engage primarily in the business of investing in real estate and conduct our operations, directly and through wholly or majority-owned subsidiaries, so that neither we nor any of our subsidiaries is required to register as an investment company under the Investment Company Act. A company is an “investment company” under the Investment Company Act:

We acquire real estate and real estate-related assets (whether in the form of debt or equity) directly, primarily by acquiring fee interests in real property. We also will invest in real property indirectly through investments in joint venture entities, including joint venture entities in which we do not own a controlling interest and joint venture entities in which affiliated accounts may invest. We will conduct our businesses primarily through the Operating Partnership, a majority-owned subsidiary, and expect to establish other direct or indirect majority-owned subsidiaries to hold particular assets.

We conduct our operations so that we and most, if not all, of our wholly and majority-owned subsidiaries will comply with the 40% test. We continuously monitor our holdings on an ongoing basis to determine compliance with this test. We expect that most, if not all, of our wholly owned and majority-owned subsidiaries will not be relying on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act. Consequently, interests in these subsidiaries (which are expected to constitute a substantial majority of our assets) generally will not constitute “investment securities.” Accordingly, we believe that we and most, if not all, of our wholly and majority-owned subsidiaries will not be considered investment companies under Section 3(a)(1)(C) of the Investment Company Act.

In addition, we believe that neither we nor any of our wholly- or majority-owned subsidiaries are considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because they do not engage primarily or hold themselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we and our wholly- and majority-owned subsidiaries are primarily engaged in non-investment company businesses related to real estate. Consequently, we conduct our and our wholly- and majority-owned subsidiaries’ respective operations such that none of them are required to register as an investment company under Section 3(a)(1)(A) of the Investment Company Act. The Company therefore is not subject to the obligations of a registered investment company and investors in the Company will not receive the protections afforded by the Investment Company Act to investors in a registered investment company.

The Company is not registered as an investment company under the Investment Company Act in reliance upon one or more exclusions or exemptions therefrom, including, but not limited to, Section 3(c)(5)(C) of the Investment Company Act. The SEC and its staff have taken the position that this exemption generally requires that at least 55% of an entity’s assets be comprised of mortgages and other liens on and interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s assets must be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-related assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be comprised of miscellaneous assets).

We classify our assets for purposes of our 3(c)(5)(C) exemption based upon no-action positions taken by, and the interpretive guidance provided by, the SEC and its staff. These no-action positions are based on specific factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than 20 years ago. No assurance can be given that the SEC or its staff will concur with our classification of our assets. In addition, the SEC or its staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exemption from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.

For purposes of determining whether we satisfy the 55%/25% test noted above, based on certain no-action letters issued by the SEC and its staff, we classify our fee interests in real property, held by us directly or through our wholly-owned or majority-owned subsidiaries, as qualifying assets. In addition, based on no-action letters issued by the SEC and its staff, we treat our investments in any joint ventures that, in turn, invest in qualifying assets such as real property, as qualifying assets, but only if we are active in the management and operation of the joint venture and have the right to approve major decisions by the joint venture; otherwise, they will be classified as real estate-related assets. We will not participate in joint ventures in which we do not have or share control to the extent that we believe such participation would potentially threaten our status as a non-investment company exempt from the Investment Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that are suitable for both us and one or more Fortress Managed Accounts. We expect that no less than 55% of our assets will consist of investments in real property, including any joint ventures that we control or in which we share control.

Qualifying for an exemption from registration under the Investment Company Act limits our ability to make certain investments. For example, these restrictions may limit our and our subsidiaries’ ability to invest directly in mortgage-backed securities that represent less than the entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations and certain asset-backed securities, non-controlling equity interests in real estate companies or in assets not related to real estate; however, we and our subsidiaries may invest in such securities to a certain extent.

Although we intend to monitor our portfolio, there can be no assurance that we will be able to maintain this exemption from registration. A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the Section 3(c)(5)(C) exemption, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.

If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan, which could materially adversely affect our NAV and our ability to pay distributions to our shareholders.

Foreign Ownership

Given that Fortress and the Company qualify as “foreign persons” for purposes of the Committee on Foreign Investment in the United States or any member agency thereof acting in its capacity as such (“CFIUS”) under the Defense Production Act of 1950 (as amended, including all implementing regulations thereof, the “DPA” (and, together with CFIUS laws, rules, regulations, directives and special measures, and any applicable agreements thereunder, the “CFIUS Regulations”)), certain investments made by the Company may be subject to review under CFIUS Regulations.

The Company may be restricted or prohibited by CFIUS Regulations from making certain investments in U.S. businesses or disposing of certain investments in U.S. businesses based on national security concerns (including, for example, a site’s proximity to sensitive U.S. government or military installations, tenants that are sensitive for national security purposes, and other factors). If the Company is permitted to make such investments, the CFIUS Regulations may place restrictions, obligations or conditions on these investments. Furthermore, other U.S. regulatory bodies may also impose ownership, governance and/or control restrictions on investments by non-U.S. persons, resulting in limitations on the structure through which investments may be held.

Investors that are “Foreign Persons” (as defined under CFIUS Regulations) (including Foreign Persons that are Fortress Affiliates (including, for this purpose, members of the Fortress Owner Group)) will be restricted from (among other things) accessing, or having governance rights that allow influence over the safekeeping or release of, personally identifiable information (PII), protected health information (PHI) or other similar information in respect of the Company’s investments in the possession of Fortress (or otherwise), or from controlling the Company’s investments, in each case, as determined by Fortress in its discretion and in a manner consistent with its obligations under the letter and spirit of the CFIUS Regulations.

The Adviser and our board of trustees will be authorized, without the consent of any person, including any shareholder, to take such action as it reasonably determines to be necessary or advisable to comply with or reduce risk arising under the CFIUS Regulations.

Additionally, other countries have implemented (or are in the process of implementing) similar “foreign ownership” regulations that may require governmental approval prior to an investment by the Company, limit the amount of investment by the Company in a particular company, asset or sector or restrict investment by the Company to a specific class of securities of a company that have less advantageous terms than the classes available for purchase by nationals. Certain countries may also require Fortress or the Adviser to obtain additional information from its shareholders or investors in connection with a particular investment. If such information is not obtained or provided, the Company may not be able to complete an investment, may be required to dispose of an investment or may be subject to other adverse consequences as a result.

Any or all of the above factors could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects, and there can be no assurance that Fortress will be able to (i) obtain all regulatory approvals or agreements with CFIUS that may be required by or warranted pursuant to CFIUS Regulations or otherwise that it does not yet have or that it may require in the future, (ii) obtain any necessary modifications to existing regulatory approvals or agreements with CFIUS, or (iii) maintain required regulatory approvals or agreements with CFIUS. Regulatory impacts on the Company or a delay in obtaining or failure to obtain any regulatory approvals required by the CFIUS Regulations or otherwise, or amendments thereto, or delay or failure to satisfy any regulatory conditions or other applicable requirements could result in an adverse effect on the Company and require attention and resources of Fortress and its executive officers that might otherwise be devoted to the Company.

U.S. Foreign Corrupt Practices Act

Fortress and the Company intend to comply with the Foreign Corrupt Practices Act of 1977, as amended, and other anti-corruption laws, anti-bribery laws and regulations, as well as anti-boycott regulations, to which they are subject. As a result, the Company may decline to participate in transactions that present undue risk under such laws or regulations.

Competition

We face competition from various entities for investment opportunities, including other REITs, pension funds, insurance companies, investment funds and companies, partnerships and developers. In addition to third-party competitors, other programs sponsored by the Adviser and its affiliates, particularly those with investment strategies that overlap with ours, will seek investment opportunities under Fortress’s prevailing policies and procedures.

In the face of this competition, our Adviser has access to Fortress’s professionals and their industry expertise and relationships, which we believe provide us with a competitive advantage and help us source, evaluate and compete for potential investments. We believe these relationships will enable us to compete more effectively for attractive investment opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face.

Emerging Growth Company

We are and will remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the date of an initial public offering pursuant to an effective registration statement under the Securities Act, (ii) in which we have total annual gross revenue of at least $1.235 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our shares that is held by non-affiliates exceeds $700 million as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an “emerging growth company” we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our shares less attractive because we may rely on some or all of these exemptions.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We may take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our financial statements may not be comparable to companies that comply with public company effective dates. Also, because we are not a large accelerated filer or an accelerated filer under Section 12b-2 of the Exchange Act, and will not be for so long as our common shares are not traded on a securities exchange, we will not be subject to auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act even once we are no longer an emerging growth company.

Human Capital

We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided by individuals who are employees of the Adviser or its affiliates pursuant to the terms of the Management Agreement and Declaration of Trust.

The Private Offering

Subscriptions to purchase our shares may be made on an ongoing basis, but investors may only purchase our shares pursuant to accepted subscription orders as of the first business day of each month (based on the prior month’s transaction price), and to be accepted, a subscription request must be received in good order at least five business days prior to the first business day of the month (unless waived by the Dealer Manager). A subscription order may be canceled at any time before the time it has been accepted.

The purchase price per share of any class of shares will be equal to the then-current transaction price of such class of shares, which will generally be our prior month’s NAV per share of the applicable class of shares as of the last calendar day of such month. Our NAV may vary significantly from one month to the next. We may offer shares of any class at a price that we believe reflects the NAV per share of the applicable class of shares more appropriately than the prior month’s NAV per share of the applicable class, including by updating a previously available offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share of such class of shares since the end of the prior month. In contrast to securities traded on an exchange or over-the-counter, where the price often fluctuates as a result of, among other things, the supply and demand of securities in the trading market, our NAV will be calculated once monthly using our valuation methodology, and the price at which we sell new shares of any class and repurchase outstanding shares of any class will not change depending on the level of demand by investors or the volume of requests for repurchases.

Generally, within 15 calendar days after the last calendar day of each month, we will determine our NAV per share for each share class as of the last calendar day of the prior month, which will generally be the transaction price for the then-current month for such share class. However, in certain circumstances, the transaction price will not be made available until a later time.

As of December 31, 2025, we issued and sold 145,448,949 common shares in the private offering to accredited investors (consisting of 14,670 Class S shares, 12,842,095 Class I shares, 24,311,883 Class F-S shares, 68,237,184 Class F-I shares, 37,527,819 Class D-S shares and 2,515,299 Class E shares).

Subsequent to December 31, 2025, we issued and sold 16,609,907 common shares in the private offering to accredited investors (consisting of 4,204,633 Class S shares, 6,194,123 Class I shares, 1,355,058 Class F-S shares, 4,655,274 Class F-I shares, 191,516 Class D-S shares and 9,303 Class E shares).

Conflicts of Interest

We are subject to conflicts of interest arising out of our relationship with Fortress and its affiliates, including the Adviser. See “Part I. Item 1A—Risk Factors—Risks Related to Our Relationship with Fortress, Our Adviser and the Management Agreement” and “Part III. Item 13—Certain Relationships and Related Transactions, and Director Independence.”

Available Information

Investors may obtain copies of our filings with the SEC, free of charge, from the website maintained by the SEC at www.sec.gov. In addition, from time to time, we may use our website (https://pws.fortress.com/repurchase-offers-fnlr) as a distribution channel for company information. Accordingly, investors should monitor this channel, in addition to following our SEC filings. Our filings with the SEC, however, are the primary source for current, material information about us. We are providing our website address solely for the information of investors. The information on our website, however, is not incorporated by reference in or otherwise part of this Annual Report.

ITEM 1A. RISK FACTORS

You should specifically consider the following material risks in addition to the other information contained in this Annual Report. The occurrence of any of the following risks might have a material adverse effect on our business and financial condition. The risks and uncertainties discussed below are not the only ones we face, but do represent those risks and uncertainties that we believe are most significant to our business, operating results, financial condition, prospects and forward-looking statements. As used herein, the term “you” refers to our current shareholders or potential investors in our common shares, as applicable.

Risks Related to Our Business and Operations

We are subject to risks related to the ownership of commercial real estate that could affect the performance and value of our properties.

Factors beyond our control can affect the performance and value of our properties and may cause the performance and value of our properties to decline. Our core business is to invest in net leased assets, primarily to single tenants, either individually or as a portfolio. The investments may include a combination of land, building and/or leasehold interests, primarily in the United States. However, we may invest in other jurisdictions as our Adviser deems appropriate. We will seek to invest in any and all commercial property types, including retail, office, industrial and any other specialized use assets. These investments could be originated as part of a sale-leaseback transaction directly with tenants, through a “build-to-suit” property transaction with prospective tenants (in which we develop assets to suit the needs of prospective tenants that are either net-leased at the start of construction or net-leased shortly after completion of construction) and/or by purchasing the assets with leases already in place.

Accordingly, our performance is subject to risks incident to the ownership of commercial real estate, including:

We have limited opportunities to increase rents under our long-term leases with tenants, which could impede our growth and materially and adversely affect us.

We typically lease our properties pursuant to long-term net leases that often have renewal options. Substantially all of our leases provide for annual rent escalations, but these built-in increases may be less than what we otherwise could achieve in the market.

Long-term net leases generally provide the tenant greater discretion in using the leased property than ordinary property leases, such as the right to freely sublease the property (while holding the original tenant liable unless we agree to swap with an equal or higher tenant), and to make alterations in the leased premises and, in limited circumstances, to terminate the lease prior to its expiration under specified circumstances. Furthermore, long-term net leases have an increased risk that contractual rental increases in future years will fail to result in fair market rental rates during those years. If we do not accurately judge the potential for increases in market rental rates when negotiating these long-term leases, significant increases in future property operating costs, to the extent not covered under the net leases could result in us receiving less than fair value from these leases. As a result, income to and distributions from us could be lower than they would otherwise be if we did not engage in long-term net leases. See “—We may be unable to lease vacant space or renew leases or re-lease space on favorable terms as leases expire.”

We may be limited in the number and type of investments we make and the value of your investment in us will fluctuate with the performance of the specific assets we acquire.

Our private offering is being made on a “best efforts” basis, meaning that the Dealer Manager and participating broker-dealers are only required to use their best efforts to sell our common shares and have no firm commitment or obligation to purchase any shares. As a result, the amount of proceeds we raise in our private offering may be substantially less than the amount we would need to create a diversified portfolio of investments. If we are unable to raise substantial funds, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments that we make. Moreover, the potential impact of any single asset’s performance on the overall performance of our portfolio will increase unless and until we raise sufficient proceeds to diversify the portfolio. Further, we expect to have certain fixed operating expenses, regardless of whether we are able to raise substantial funds in our private offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions to you.

We face risks associated with the deployment of our capital.

In light of the nature of our continuous offering in relation to our investment strategy and the need to be able to deploy potentially large amounts of capital quickly to capitalize on potential investment opportunities, if we have difficulty identifying and purchasing suitable properties on attractive terms, there could be a delay between the time we receive net proceeds from the sale of our common shares in our private offering or any private offering and the time we invest the net proceeds. We may also from time to time hold cash pending deployment into investments or have less than our targeted leverage, which cash or shortfall in target leverage may at times be significant, particularly at times when we are receiving high amounts of offering proceeds and/or times when there are few attractive investment opportunities. Such cash may be held in an account for the benefit of our shareholders that may be invested in money market accounts or other similar temporary investments, each of which are subject to the management fees.

The business of identifying, structuring and completing real estate and real estate-related transactions is highly competitive and involves a high degree of uncertainty. In the event we are unable to find suitable investments, such cash may be maintained for longer periods which would be dilutive to overall investment returns. For example, we will continue to pay the Adviser the management fee based on our NAV, which includes cash, money market accounts and other similar temporary investments. This could cause a substantial delay in the time it takes for your investment to realize its full potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to you. It is not anticipated that the temporary investment of

such cash into money market accounts or other similar temporary investments pending deployment into investments will generate significant interest, and investors should understand that such low interest payments on the temporarily invested cash may adversely affect overall returns. In the event we fail to timely invest the net proceeds of sales of our common shares or do not deploy sufficient capital to meet our targeted leverage, our results of operations and financial condition may be adversely affected.

In addition, the targeted nature of our investment strategy means that significant amounts of our capital may be committed to a single investment or group of related investments. Accordingly, we may be obligated to devote future capital raised in our private offering to such committed investments and unable to pursue other potential investment opportunities at ideal times, if at all.

Following our initial investment in any investment, we are permitted to invest additional funds in such investment or could have the opportunity to increase our investment in such investment by investing in additional real estate assets related thereto (whether for opportunistic reasons, to fund the needs of the investment, as an equity cure under applicable debt documents or for other reasons). There can be no assurance that we will make follow-on investments or that we will have sufficient funds to make all or any of such follow-on investments (including an event of default under applicable debt documents in the event an equity cure cannot be made). Any decision by us not to make follow on investments or our inability to make such investments could have a substantial adverse effect on a particular real estate asset in need of such an investment.

If we are unable to successfully integrate new investments and manage our growth, our results of operations and financial condition may suffer.

We have in the past and may in the future significantly increase the size and/or change the types of investments in our portfolio. We may be unable to successfully and efficiently integrate newly acquired investments into our existing portfolio or otherwise effectively manage our assets or growth. In addition, increases in the size of our investment portfolio and/or changes in our investment focus may place significant demands on our Adviser’s administrative, operational, asset management, financial and other resources which could lead to decreased efficiency. Any failure to effectively manage such growth or increase in scale could adversely affect our results of operations and financial condition.

Our data centers may not be suitable for re-leasing without significant expenditures or renovations.

Because many of our data centers contain tenant improvements installed at our tenants’ expense, they may be better suited for a specific data center user or technology industry tenants and could require significant modification in order for us to re-lease vacant space to another data center user or technology industry tenants. The tenant improvements may also become outdated or obsolete as the result of technological change, the passage of time or other factors.

Although our data centers have a weighted average lease term of 16.49 years, we may need to re-lease the data centers upon the expiration of the lease term or for any other reasons. If we need to re-lease our data centers, we may be required to invest significant amounts or offer significant discounts to tenants in order to lease or re-lease that space, either of which could adversely affect our financial and operating results.

Adverse economic conditions, including the resulting effect on consumer spending, could have a material and adverse effect on our business, financial condition, results of operations and cash flows.

Our business could be significantly affected by global and national economic and market conditions generally and by the local economic conditions where our properties are concentrated. A recession, slowdown and/or sustained downturn in the U.S. real estate market and the markets in which our tenants operate would have a pronounced impact on us, the value of our assets and our profitability. Reduction in consumer or corporate spending could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our primary business is to lease properties. When individuals and companies purchase and produce fewer goods, our tenants have less demand for our properties. We could also be materially and adversely affected by any overall weakening of, or disruptions in, the financial markets. Specific risks related to adverse economic conditions, among others, may include:

The length and severity of any economic slowdown or downturn cannot be predicted. As a result, we may see increases in bankruptcies of our tenants and increased defaults by tenants, and we may experience higher vacancy rates and delays in re-leasing vacant space. The occurrence of any of the foregoing could have a material and adverse effect on our business, financial condition, results of operations and cash flows.

Global economic, political and market conditions may adversely affect our business, financial condition and results of operations, including our revenue growth and profitability.

Various social and political tensions in the United States and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) may contribute to increased market volatility, may have long-term effects on the United States and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide. For example, the conflict between Russia and Ukraine, the ongoing and developing conflicts in the Middle East, the recent U.S. military action in Venezuela and Iran and other developing conflicts, and resulting market volatility, could adversely affect our business, financial condition or results of operations. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. In addition, other government actions, including sanctions, export controls, tariffs and trade wars, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline. Since the inauguration of U.S. President Donald Trump in January 2025, the U.S. Government has announced tariff actions against certain imported goods, and has issued an “America First Trade Policy” memorandum that could lead to additional tariff and trade measures. Additionally, the U.S. Government imposes economic sanctions and trade restrictions against certain countries and persons from time to time. If the U.S. Government imposes such tariffs, sanctions, trade restrictions, or other measures against products and materials, it could have a material adverse impact on our business, financial condition, and results of operations. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our performance. We will continue to monitor developments and seek to manage our investments in a manner consistent with achieving our investment objectives, but there can be no assurance that we will be successful in doing so.

In addition, the current regulatory environment in the United States and in other countries may be impacted by future legislative developments. Any significant changes under the Trump administration in, among other things, economic policy (including with respect to interest rates and foreign trade), the regulation of the investment management industry, tax law, immigration policy or government entitlement programs could have a material adverse impact on us and our investments.

The valuation of our investments may not be certain or transparent as a result of the highly volatile environments we operate in.

Investing in highly volatile environments presents certain inherent risks, including reduced market liquidity, reduced price transparency and less certainty in core assumptions in respect of a particular investment or an investment strategy as a whole. While such investment environments provide the opportunity for significant returns, they also present significant risks, many of which cannot be predicted, managed or hedged against. If we fail to identify or adequately evaluate potential risks or changes, we may invest at a valuation that is not commensurate with the risk profile of a particular investment or where we would otherwise not invest were more accurate information available, resulting in reduced returns or a complete or partial loss of capital. There can be no assurance that we will accurately identify all potential considerations that may adversely affect the performance of any one or more of our investments or investment strategies.

Adverse economic conditions and other events or occurrences that negatively affect the general economy in the United States or in markets in which our properties are geographically concentrated may materially and adversely affect our results of operations.

Our operating performance may be impacted by the economic conditions of specific markets in which we have concentrations of properties. Our revenues from, and the value of, our properties located in geographic markets may be affected by local or regional real estate conditions (such as an oversupply of or reduced demand for properties) and the local or regional economic climate. Business layoffs, downsizing, industry slowdowns, changing demographics and other factors may adversely impact the economic climate in these markets. Because of the number of properties we have located in certain of our geographic markets, a downturn in their economies or real estate conditions or any decrease in demand for properties resulting from the regulatory environment, business climate or energy or fiscal problems therein could materially and adversely affect our and our tenants’ businesses.

We are exposed to general economic conditions, local, regional, national and international economic conditions and other events and occurrences that negatively affect the markets in which we own properties. For example, if commercial real estate property values decrease materially it may cause borrowers to default on their mortgages or negotiate more favorable terms and conditions on their mortgages. All of the foregoing factors may adversely affect the value of the collateral securing loans and other assets held by us and thereby lower or even eliminate any value to be derived from a restructuring or liquidation of such investments.

In addition, given that our properties and related assets are expected to primarily be located in the United States, a downturn in the United States economy, or unfavorable political or economic changes in the United States, could materially and adversely affect us disproportionately to our competitors whose portfolios are more geographically diverse.

Tenant and industry concentrations may make us more susceptible to adverse events than if our portfolio were more diversified.

Any adverse change in the financial condition of our tenants we have significant concentrations of now or in the future, or any downturn in the industries in which our tenants operate, or in any other industry in which we may have a significant concentration now or in the future, could adversely affect our tenants that are involved in such industries, their demand for our properties, their ability to renew or re-lease our properties at the same or increased rent, or at all, and their ability to make rental payments on properties already leased to them.

To the extent that tenants and potential tenants are adversely affected by macro or microeconomic changes, our properties may experience decreases in demand, higher default rates on leases or other payments and amounts due, or other adverse results, all of which may have a material and adverse effect on our business, financial condition, results of operations and cash flows.

We may be unable to lease vacant space or renew leases or re-lease space on favorable terms as leases expire.

We are subject to the risk that, upon the expiration of leases for space located in our properties, leases may not be renewed by existing tenants at the same or increased rents, or at all, the space may not be re-leased to new tenants or the terms of renewal or re-leasing (including the cost of required renovations or concessions to tenants) may be less favorable to us than current lease terms. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge to retain tenants when our tenants’ leases expire. In addition, there may be certain tenants who have the ability to sublease properties to third parties without our consent. If a tenant subleases a property to a third party, the original tenant remains obligated under the lease. However, if one of our existing tenants subleases a property, it could increase the likelihood that a lease will not be renewed at the end of its term or that the original tenant may default under its obligations under the lease. In the event of default by a significant number of tenants, we may experience delays and incur substantial costs in enforcing our rights as landlord, and we may be unable to re-lease spaces. If rental rates for our properties decrease, our existing tenants do not renew their leases or we do not re-let a significant portion of our available space and space for which leases expire, our financial condition, results of operations and cash flows, could be materially and adversely affected.

The vacancy of one or more of our properties could result in us having to incur significant capital expenditures to re-lease the property.

The loss of a tenant, either through lease expiration or tenant bankruptcy or insolvency, may require us to spend significant amounts of capital before the property is suitable for a new tenant and cause us to incur significant costs to source new tenants. In many instances, the leases we enter into or assume through acquisition are for properties that are specifically suited to the particular business of our tenants. Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant.

In addition, in the event we decide to sell certain properties, we may have difficulty selling it to a party other than the tenant due to the special purpose for which any such property may have been designed or modified. This potential limitation on our ability to sell a property may limit our ability to quickly modify our portfolio in response to changes in our tenants’ business prospects, economic or other conditions, including tenant demand, which could materially and adversely affect our results of operations and financial condition.

We are subject to certain risks associated with construction and renovation of our properties.

We are permitted to acquire direct or indirect interests in underdeveloped real property (which could be non-income producing), and properties in which we invest may require construction and/or renovation in order to meet tenant needs. To the extent that we invest in such assets, it will be subject to the risks normally associated with such assets and construction activities, including the possibility of construction cost overruns and delays due to various factors (including inclement weather, labor or material shortages, the unavailability of construction and permanent financing and timely receipt of zoning and other regulatory approvals), the availability of both construction and permanent financing on favorable terms and market or site deterioration after acquisition. Any unanticipated delays or expenses could have an adverse effect on our operations and financial condition. Properties under construction or renovation are likely to receive little or no cash flow from the date of acquisition through the date of completion of such work and would likely continue to experience operating deficits after the date of completion. In addition, market conditions could change during the course of construction that make such construction less attractive than at the time it was commenced.

Additionally, the renovation, refurbishment or expansion by us or by a tenant under a mortgaged property involves risks of cost overruns and non-completion. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate. Other risks may include rehabilitation costs exceeding original estimates, possibly making a project uneconomical and disrupting subsequent leasing of the property. If such renovation is not completed in a timely manner, or if it costs more than expected, we or a borrower may experience a prolonged impairment of net operating income.

We are subject to certain risks related to build-to-suit properties including difficulties to sell or re-let upon tenant defaults or lease terminations and additional risks related to properties under development.

Certain of the properties that we expect to acquire will be designed and built for a particular use or tenant. If we own a property when the lease terminates and the tenant does not renew its occupancy under the lease, if the tenant terminates its lease, if the tenant defaults on its lease or if the tenant rejects its lease pursuant to a bankruptcy proceeding, the property might not be marketable without substantial capital improvements or rent concessions. Improvements could require the use of cash that would otherwise be distributed to investors. Attempting to sell the property without improvements may also result in a lower sales price. In the event we are forced to sell a property, we may have difficulty selling it to a party other than the tenant due to the special purpose for which the related property may have been designed.

Risks related to build-to-suit projects also include the potential for failing to meet an agreed-upon delivery schedule and cost overruns, which may among other things, cause the total project costs to exceed the original budget. In some cases, the prospective tenant will bear these risks. However, in other instances, we may be required to bear these risks, which means that we may have to advance funds to cover cost overruns that we would not be able to recover through increased rent payments or that we may experience delays in the project that delay commencement of rent. The incurrence of these costs or any non-occupancy by the tenant upon completion may reduce our returns or result in losses to us.

In addition, in connection with build-to-suit programs and the acquisition of properties under development, we may enter into purchase and sale arrangements with developers of suitable properties under development or construction pursuant to which we

would be obligated to purchase the property at the completion of construction. We may also engage in development and construction activities involving existing properties, including the expansion of existing facilities (e.g., at the request of a tenant) or the development or build-out of vacant space. We may advance significant amounts in connection with certain development projects. As a result, we will be subject to potential development risks and construction delays and the resultant increased costs and risks which could adversely affect our results of operations and financial condition.

Certain of our investments may be in the form of ground leases, which provide limited rights to the underlying property.

We may acquire leasehold interests in respect of properties that are the subject of a ground lease, where third party owners hold the fee interest in those properties (each, a “Fee Owner”). In such cases, our interest in such a property will be subordinate to the Fee Owner’s interest in that property, and our investment in the leasehold interest will be subject not only to the potentially competing interests of the Fee Owner, but also to interests held by third parties, such as mortgages or other liens (e.g., mechanic’s liens) that encumber the Fee Owner’s fee interest and which may be superior and potentially adverse to our interests. A default by the Fee Owner under any of these competing interests and the enforcement or foreclosure of those interests by the holders thereof may also result in the termination or impairment of our leasehold interest. In addition, any bankruptcy or insolvency of the Fee Owner could potentially impair or terminate our leasehold interest. This risk is increased if the fee interest were itself subject to financing liens. In the event of the Fee Owner’s bankruptcy, there can be no assurance that a tenant will not acquiesce in a rejection or disaffirmance of the lease by the Fee Owner or its trustee in bankruptcy, or that the Fee Owner’s bankruptcy trustee will not seek to sell the property free and clear of the lease. The occurrence of the foregoing could have an adverse effect on our results of operations and financial condition.

We are subject to certain risks associated with the management of our properties.

Property managers and tenants of net lease properties are responsible for the maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease or agreement, we may incur expenses for deferred maintenance expenditures or other liabilities once the relationship is terminated. While it is expected that our leases will generally provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant. In addition, to the extent tenants are unable to conduct their operation of the property on a financially successful basis, their ability to pay rent may be adversely affected. Although we will endeavor to monitor, on an ongoing basis, compliance by tenants and managers with their obligations and other factors that could affect the financial performance of its properties, such monitoring may not in all circumstances ascertain or forestall deterioration in the condition of a property or the financial circumstances of a tenant. The occurrence of the foregoing could have an adverse effect on our results of operations and financial condition.

Actual or perceived threats associated with epidemics, pandemics or public health crises could have a material adverse effect on our results of operations and the businesses of our tenants.

Epidemics, pandemics, and other public health crises could materially and adversely affect our ability to pay distributions, and our and our tenants’ results of operations and liquidity.

The extent to which such epidemics, pandemics and other public health crises may impact our investments and operations will depend on a variety of factors, including, among others, the duration of the pandemic, information that may emerge concerning severity, and the actions taken to contain the pandemic or treat the disease, particularly in the markets in which our properties are located. As a result, the full impact of any pandemic on our business is highly uncertain and cannot be predicted with confidence. Nevertheless, any future epidemics, pandemics or public health crises could materially and adversely affect our business, financial condition, liquidity and results of operations, as well as our ability to pay distributions to our shareholders, for the reasons discussed above.

We are exposed to potential impacts of future climate change and climate change-related risks.

We are exposed to potential physical risks from possible future changes in climate. The real estate assets securing or related to our investments may be negatively affected by the exposure to environmental conditions such as droughts, famines, floods, storms, wildfires and other climate change and environmental-related events; although a number of these risks may be insurable, it is not guaranteed that the insurance coverage may in all cases be adequate and losses connected to these events may be material. If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.

Properties occupied by a single tenant pursuant to a single lease subject us to risk of tenant default.

Our strategy focuses on owning, operating and investing in single-tenant, net leased commercial properties. Therefore, the financial failure of, or default in payment by, a tenant under its lease is likely to cause a significant or complete reduction in our rental revenue from that property and possibly a reduction in the value of the property. We may also experience difficulty or a significant delay in re-leasing or selling such property. In addition, prolonged and/or unanticipated vacancies at our properties or a tenant’s inability to fulfill its obligations under its lease may cause us to bear more direct property level operating expenses (such as property taxes, costs for repairs and replacements, and property management expenses) than anticipated and may place significant demands on the Adviser’s administrative, operational, asset management, financial and other resources. This risk is magnified in situations where we lease multiple properties to a single tenant and the financial failure of the tenant’s business affects more than a single property. A failure or default by such a tenant could reduce or eliminate rental revenue from multiple properties and reduce the value of such properties, which could materially and adversely affect our results of operations and financial condition.

There are risks associated with the termination or expiration of leases and tenant defaults.

Our properties are generally expected to be subject to a single tenant occupying 100% of each property. There can be no assurance that we will be able to retain tenants in any of our respective properties upon the expiration of our leases. Upon the expiration or early termination of such leases, the availability of the entire building may have an adverse effect on our ability to achieve the lease terms and rents we might otherwise be able to achieve if space were to turn over in smaller portions, spread out over a period of time. If the space is suited to the particular needs of a former tenant, then we may have difficulty finding a new tenant for the space or may need to redevelop such space.

The success of our investments will materially depend on the financial stability of our tenants. A default by a tenant on its lease payments would cause us to lose the revenue associated with such lease and require us to find an alternative source of revenue to meet mortgage payments and prevent a foreclosure if the property is subject to a mortgage. The Adviser could fail to, or be unable to, discover factors that would indicate a heightened level of uncertainty with respect to particular key tenants when performing due diligence on prospective investments. An early termination of a lease by a bankrupt tenant would result in unanticipated expenses to re-let the premises. Tenant defaults thus increase the risk that we, and hence investors, could suffer a loss.

In addition, if a tenant defaults or goes bankrupt, we would likely experience delays in enforcing our rights as landlord and could incur substantial costs in protecting our investment and re-letting the property. In the event of a tenant’s bankruptcy or insolvency, we could be restricted from evicting such tenant solely because of its bankruptcy. However, a bankruptcy court could potentially authorize the tenant to terminate its leases with us. In such instances, our claim against the bankrupt tenant for unpaid future rent would be an unsecured prepetition claim subject to statutory limitations, and therefore such amounts received in bankruptcy are likely to be substantially less than the remaining rent we otherwise would be owed under the lease. Further, any claim we have for unpaid past rent could be substantially less than the amount owed. If a lease is terminated, we could be unable to lease property for the rent previously received or sell the investment without incurring a loss. These events could limit our ability to make distributions and decrease the value of an investment in us.

We may be concentrated with exposure to a limited number of tenants. We are more likely to experience higher rates of lease default or termination in the event of a downturn in a particular industry or market than we would if the tenant base were more diversified. Our revenue from and the value of the investments in our portfolio could be affected by a number of factors, including a deterioration in the financial condition of a particular tenant and the corresponding downgrading of its credit rating. These factors could have a material adverse effect on our operating results and financial condition. Our ability to sell or lease our investments could be difficult due to economic factors beyond our control. If, due to credit default and/or vacancy, the Company is unable to

obtain favorable lease terms for its properties, it could be forced to sell investments at a loss due to the repositioning expenses likely to be incurred.

There are risks associated with Master Leases, including the enforceability of certain terms in connection with tenant bankruptcy proceedings.

We expect, in certain cases, to bundle leases to multiple properties together under a single master lease (each, a “Master Lease”). It is anticipated that such Master Lease agreements may include non-monetary cross-default provisions and require that all tenants and properties subject to the Master Lease support the rental obligations under the Master Lease on a joint and several basis. The terms of a Master Lease may also limit tenants’ rights to terminate a Master Lease with respect to individual properties. While the use of a Master Lease structure may reduce the risks associated with the financial failure of a single asset or tenant, it may pose other risks to us. For example, tenants may seek to argue that certain provisions of a Master Lease are not enforceable in general or under certain circumstances. Further, tenants involved in bankruptcy proceedings may seek to reject their obligations with respect to certain but not all properties under the Master Lease. We believe that our Master Leases will be enforceable and not rejectable in part, and certain of our Adviser’s affiliates have been successful in enforcing Master Leases and overcoming bankrupt tenants’ attempts to reject Master Leases with respect to some but not all properties subject thereto. Nonetheless, any court’s decision with respect to our Master Leases would be based on the facts and circumstances that exist at the time that the issues are raised, including the terms of the Master Lease. In this regard, we may seek to include certain cross-default or other provisions in the Master Leases that benefit us, as lessor, but that also may be cited by tenants as support for their arguments. There can be no assurance that a tenant’s argument in any particular instance would not succeed in court. In particular, bankruptcy courts have broad equitable powers that may result in rulings that favor a tenant’s attempt to reject a Master Lease, and, in turn, benefit other similarly situated tenants in their attempts to reject their obligations under a Master Lease, resulting in the loss of revenue from all such properties. The occurrence of any of the foregoing could have a material and adverse effect on our results of operations and financial condition.

We are subject to certain risks related to difficulties in selling or reletting special use single tenant properties upon tenant defaults or lease terminations.

We may invest in commercial or industrial properties, including special use single tenant properties. With these properties, if the current lease is terminated or not renewed, we may be required to renovate the property or to make rent concessions in order to lease the property to another tenant or sell the property. In addition, we may have difficulty selling the property to a party other than the tenant due to the special purpose for which the property may have been designed. These and other limitations may affect our ability to sell or release properties and may adversely affect returns to investors.

Continued government intervention and instability in Europe may adversely affect our business, financial condition and results of operations, including our revenue growth and profitability.

The already challenged economic and political environment in Europe may be adversely affected by events outside our control, such as changes in government policies, European Union (the “EU”) directives in the credit sector and other areas and resulting increase in sovereign debt, political instability, terrorist attacks, social unrest and rioting or military action affecting Europe and/or other areas abroad and taxation and other political, economic or social developments in or affecting Europe. Policymakers in many advanced economies have publicly acknowledged the need to urgently adopt credible strategies to contain public debt and excessive fiscal deficits and later bring them down to more sustainable levels. The implementation of these policies may restrict economic recovery. Against a background of increasing unease over the macro/financial implications of sizeable fiscal imbalances, investors have reduced their investment in many Eurozone countries. Continued reduction in investment flows may restrict economic recovery. Due to the uncertainty regarding the success of any austerity measures and reforms, new taxes may be imposed on us and existing taxes may be increased. There can be no assurance that such government intervention, political instability or additional taxes will not have an adverse effect on our returns.

The need to reduce Europe’s dependency on European Central Bank funding will also increase the likelihood of deleveraging, reducing some European countries’ loans to the economy. In the context of continued market turmoil, worsening macroeconomic conditions and increasing unemployment, coupled with declining consumer spending and business investment and the worsening credit profile of some European corporate and retail borrowers, the value of assets collateralizing secured loans, including houses

and other real estate, could decline significantly. Such a decline could result in impairment of the value of the loan assets or an increase in the level of non-performing loans, either of which may have a material adverse effect on our returns.

We may not be able to complete certain desired investments because such investments may be subject to regulatory review and approval requirements, including pursuant to foreign investment regulations and review by governmental entities such as the Committee on Foreign Investment in the United States, or may be ultimately prohibited.

Given that Fortress and the Company qualify as “foreign persons” for purposes of the CFIUS Regulations, certain investments made by the Company may be subject to review under CFIUS Regulations.

As a result of such review, the Company may be restricted or prohibited by CFIUS Regulations from making certain investments in U.S. businesses or disposing of certain investments in U.S. businesses based on national security concerns. If the Company is permitted to make such investments, the CFIUS Regulations may place restrictions, obligations or conditions on these investments. Furthermore, other U.S. regulatory bodies may also impose ownership, governance and/or control restrictions on investments by non-U.S. persons, resulting in limitations on the structure through which investments may be held.

It is expected that investors that are “Foreign Persons” (as defined under CFIUS Regulations) (including Foreign Persons that are affiliates, partners, members, shareholders, officers, directors and employees of Fortress ) will be restricted from (among other things) accessing, or having governance rights that allow influence over the safekeeping or release of, personally identifiable information (PII), protected health information (PHI) or other similar information in respect of the Company’s investments in the possession of Fortress (or otherwise), or from controlling the Company’s investments, in each case, as determined by Fortress in its discretion and in a manner consistent with its obligations under the letter and spirit of the CFIUS Regulations.

The Adviser and our board of trustees will be authorized, without the consent of any person, including any shareholder, to take such action as it reasonably determines to be necessary or advisable to comply with or reduce risk arising under the CFIUS Regulations.

Additionally, other countries have implemented (or are in the process of implementing) similar “foreign ownership” regulations that may require governmental approval prior to an investment by the Company, limit the amount of investment by the Company in a particular company, asset or sector or restrict investment by the Company to a specific class of securities of a company that have less advantageous terms than the classes available for purchase by nationals. Certain countries may also require Fortress or the Adviser to obtain additional information from its shareholders or investors in connection with a particular investment. If such information is not obtained or provided, the Company may not be able to complete an investment, may be required to dispose of an investment or may be subject to other adverse consequences as a result.

Any or all of the above factors could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects, and there can be no assurance that Fortress will be able to (i) obtain all regulatory approvals or agreements with CFIUS that may be required by or warranted pursuant to CFIUS Regulations or otherwise that it does not yet have or that it may require in the future, (ii) obtain any necessary modifications to existing regulatory approvals or agreements with CFIUS, or (iii) maintain required regulatory approvals or agreements with CFIUS. Regulatory impacts on the Company or a delay in obtaining or failure to obtain any regulatory approvals required by the CFIUS Regulations or otherwise, or amendments thereto, or delay or failure to satisfy any regulatory conditions or other applicable requirements could result in an adverse effect on the Company and require attention and resources of Fortress and its executive officers that might otherwise be devoted to the Company.

We are subject to risks investing outside of the United States, including business uncertainties, currency exchange risks and political, social and economic uncertainty.

We may invest a portion of our net assets in properties or assets located outside the United States. In addition to business uncertainties and currency exchange risks, such investments may be affected by political, social and economic uncertainty affecting a country or region. Many real estate markets are not as developed or as efficient as those in the United States, and as a result, liquidity may be reduced and price volatility may be higher. The legal and regulatory environment may also be different, particularly as to bankruptcy and reorganization. Financial accounting and auditing standards and practices may differ, and there may be less publicly available information in respect of such companies. For a company that keeps accounting records in local currency, inflation accounting rules in some countries require, for both tax and accounting purposes, that certain assets and liabilities be

restated on the company’s balance sheet in order to express items in terms of a currency of constant purchasing power. As a result, financial data may be materially affected by restatements for inflation and may not accurately reflect the real condition of real estate and companies. Accordingly, our ability to conduct due diligence in connection with an investment and to monitor the investment may be adversely affected by these factors.

We may be subject to additional risks which include possible adverse political and economic developments, possible seizure or nationalization of foreign deposits and possible adoption of governmental restrictions which might adversely affect payment to investors located outside the country of the issuer/property owner, whether from currency blockage or otherwise. Furthermore, some of the investments and/or the income they generate may be subject to taxes levied by governments which have the effect of increasing the cost of such investments and reducing the realized gain or increasing the realized loss on such investments at the time of sale. Income received by us from sources within some countries may be reduced by withholding and other taxes imposed by such countries. Any such taxes paid by us will reduce our net income or return from such investments and our ability to make distributions. While we may take these factors into consideration in making our investment decisions, no assurance can be given that we will be able to fully avoid these risks.

We are subject to certain risks related to incurring contingent liabilities in connection with investments, including the assumption by us of default risk or other third-party risks.

We may from time to time incur contingent liabilities in connection with an investment. For example, in order to procure financing in connection with our investment activities, we may enter into agreements pursuant to which we agree to assume responsibility for default risk or other risk presented by a third party, a warehouse financing vehicle or an investment vehicle. In addition, in connection with the disposition of an asset by us, we may be required to make certain representations about such asset, and may also be required to indemnify the purchasers of such asset with respect to certain matters, including the accuracy of such representations. Any such representations made by us may survive for a period of time subsequent to the disposition of an asset. We may incur numerous other types of contingent liabilities. There can be no assurance that we will adequately reserve for our contingent liabilities and that such liabilities will not have an adverse effect on our business.

The use of seller financing may increase the risks associated with the use of leverage, including the risk of loss of an investment and the exposure of such investment to adverse economic factors such as deteriorations in overall conditions in the economy, the real estate markets or in the condition of the particular issuer.

We may directly or indirectly utilize seller financing (i.e., make investments that are financed, in whole or in part, by borrowing from the sellers of the investments or their affiliates) (and may be assigned existing indebtedness that is not prepayable) and other one-off financing solutions on a case-by-case basis. Providers of seller financing may be motivated to sell a particular asset, and may be willing to provide a prospective purchaser of such asset with more favorable pricing and/or greater amounts of leverage than would otherwise be the case if such purchaser sought financing from unrelated, third-party providers of leverage. To the extent that we are able to obtain seller financing in connection with a particular investment, we may seek to employ more leverage than would otherwise be the case in the absence of such seller financing. While our use of seller financing could increase the potential return to investors to the extent that there are gains associated with such investment, such use of seller financing will increase risks associated with the use of leverage generally, including the risks associated with such investment, including the risk of loss of that investment and the exposure of such investment to adverse economic factors such as deteriorations in overall conditions in the economy, the real estate markets or in the condition of the particular issuer, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

We are subject to certain risks related to using secured leverage, including having such parties seeking recourse against our assets generally, and such recourse may not be limited to any particular investment or asset.

To the extent that we determine to utilize leverage, one or more investments or our other assets may be pledged to secure the indebtedness. If we become subject to a liability, parties seeking to have the liability satisfied may have recourse to our assets generally and such recourse may not be limited to any particular investment or asset, such as the loan or property giving rise to the liability. To the extent we choose to use special purpose entities for individual transactions to reduce recourse risk, the bona fides of such entities may be subject to later challenge based on a number of theories, including veil piercing, substantive consolidation and other grounds. We may provide either direct or contingent guarantees in support of credit facilities used to acquire investments,

fund expenses relating to investments and/or in connection with derivative transactions, and there can be no assurance that such guarantees will not have adverse consequences on our business, financial condition, results of operations or cash flows.

There are risks associated with entering into financing arrangements, and such arrangements may contain provisions that expose us to particular risk of loss.

To the extent that we enter into financing arrangements, such arrangements may contain provisions that expose us to particular risk of loss. For example, any cross-default provisions could magnify the effect of an individual default. If a cross-default provision were exercised, this could result in a substantial loss. Also, we or any investment vehicle may, in the future, enter into financing arrangements that contain financial covenants that could require us to maintain certain financial ratios. If we or an investment vehicle were to breach the financial covenants contained in any such financing arrangement, we might be required to repay such debt immediately in whole or in part, together with any attendant costs, and we might be forced to sell some of our assets to fund such costs. We might also be required to reduce or suspend distributions to our investors. Such financial covenants may also limit our ability to adopt the financial structure (e.g., by reducing levels of borrowing) which we would have adopted in the absence of such covenants.

Failure to hedge effectively may materially and adversely affect our financial condition, results of operations, cash flows, cash available for distribution and our ability to service our debt obligations.

We may from time to time purchase or sell various financial instruments, including interest rate cap or collar agreements and interest rate swap agreements, when seeking to mitigate risk associated with our investments (e.g., our exposure to interest rate volatility); however, it is generally impossible to fully hedge an investment given the uncertainty as to the amount and timing of projected cash flows and investment returns, if any, on our investments. Such investments may also be used for investment or speculative purposes which can lead to losses on both our investments and the related transactions. Conversely, there will be times in which we believe that it is not advisable to enter into hedging transactions and instead elect to remain unhedged against particular types of risks that in other cases we hedge against. Accordingly, we may be exposed to fluctuations in currencies and other market conditions specific to the underlying asset.

Interest rate hedging agreements also involve specific risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and that these arrangements may not be effective in reducing our exposure to interest rate changes. These interest rate hedging arrangements may create additional assets or liabilities from time to time that may be held or liquidated separately from the underlying property or loan for which they were originally established.

The success of our hedging transactions will be subject to our ability to predict correlations between the value of the portfolios’ assets and the direction of currency exchange rates, interest rates and securities prices and similar matters. Therefore, while we may enter into such transactions to seek to reduce perceived risks, unanticipated changes in values may result in a poorer overall performance than if we had not engaged in any such hedging transaction. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio position being hedged may vary, potentially leaving us with exposure to all or a portion of the risks being hedged.

We may not always be able to obtain hedging from third parties at attractive rates. Accordingly, Fortress or its affiliates may provide us with hedging services but are under no obligation to do so. To the extent that any hedging services are provided, Fortress or its affiliates may charge us a service fee of up to 5 basis points on the gross notional amount of the amount subject to hedging and such services shall not require board of trustees approval.

Hedging may reduce the overall returns on our investments. Failure to hedge effectively may materially adversely affect our results of operations and financial condition.

We are subject to additional counterparty risks in connection with engaging in private transactions, which are typically not subject to credit evaluation and regulatory oversight.

We will be subject to various counterparty risks. For example, we may effect a portion of our transactions in “over-the-counter” or “interdealer” markets or through private transactions. The participants in such markets and the counterparties in such private

transactions are typically not subject to credit evaluation and regulatory oversight as are members of “exchange based” markets. This may expose us to the risk that a counterparty will not settle a transaction because of a credit or liquidity problem, thus causing us to suffer losses. In addition, in the case of a default, we could become subject to adverse market movements while replacement transactions are executed. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where we have concentrated our transactions with a single or small group of counterparties. Furthermore, upon the bankruptcy, insolvency or liquidation of any counterparty, we may be deemed to be a general unsecured creditor of such counterparty and could suffer a total loss with respect to any positions and/or transactions with such counterparty. In the recent market conditions, counterparty risk has substantially increased and is more difficult to predict. In addition to heightened risks of bankruptcy, in this environment there is a greater risk that counterparties may have their assets frozen or seized as a result of government intervention or regulation. We are not restricted from dealing with any particular counterparty or from concentrating any or all of our transactions with a single counterparty. Our ability to transact business with any one or number of counterparties, the lack of any meaningful and independent evaluation of such counterparties’ financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses and could materially and adversely affect our results of operations and financial condition.

We may be affected by our inability to access or renew short-term financing credit facilities in connection with an anticipated portfolio-level financing.

In some cases, relatively short-term credit facilities may be used to finance the acquisition of assets until a sufficient quantity of assets is accumulated, at which time the assets are refinanced through portfolio-level financing, which may include a securitization. As a result, we are subject to the risk that we will not be able to acquire, during the period that the short-term facilities are available, a sufficient amount of eligible assets for the purposes of a portfolio-level financing. We also bear the risk that we will not be able to obtain such short-term credit facilities or may not be able to renew any short-term credit facilities after they expire should we find it necessary to obtain extensions for such short-term credit facilities to allow more time to seek and acquire the necessary eligible instruments for a long-term financing. Our inability to renew or extend these short-term credit facilities may require us to seek more costly financing for these assets or to lose the ability to utilize them in connection with a portfolio-level financing. We may provide guarantees in support of credit facilities used to acquire assets, and there can be no assurance that any recourse exercised under such guarantees will not have adverse consequences for us. The occurrence of the foregoing could have an adverse effect on our business, financial condition, results of operations and cash flows.

We may face risks associated with options, including losing our entire investment due to the volatility of the underlying security or currency.

As part of our hedging program, we may purchase and sell (“write”) options on securities and currencies on national and international securities exchanges and in the domestic and international over-the-counter markets. The seller (“writer”) of an uncovered put option assumes the risk of a decline in the market price of the underlying security or currency below the exercise price of the option. The seller of a put option which is covered (e.g., the writer has a short position in the underlying security or currency) assumes the risk of an increase in the market price of the underlying security or currency above the sales price (in establishing the short position) of the underlying security or currency, plus the premium received, and gives up the opportunity for gain on the underlying security or currency below the exercise price of the option. The buyer of a put option assumes the risk of losing its entire investment in the put option. The seller of an uncovered call option assumes the risk of a theoretically unlimited increase in the market price of the underlying security or currency above the exercise price of the option. The writer of a call option which is covered (e.g., the writer holds the underlying security or currency) assumes the risk of a decline in the market price of the underlying security or currency less the premium received, and gives up the opportunity for gain on the underlying security or currency above the exercise price of the option. The buyer of a call option assumes the risk of losing its entire investment in the call option.

Options on securities may be cash settled, settled by physical delivery or settled by entering into a closing purchase transaction. In entering into a closing purchase transaction, we may be subject to the risk of loss to the extent that the premium paid for entering into such closing purchase transaction exceeds the premium received when the option was written, which could have an adverse effect on our business, financial conditions, results of operations and cash flows.

We may face risks associated with forward trading, including illiquidity and revenue losses due to disruptions in the market.

Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and “cash” trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals who deal in the forward markets are not required to continue to make markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. There have been periods during which certain participants in these markets have refused to quote prices for certain currencies or commodities or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which they were prepared to sell. Disruptions can occur in any market traded by us due to unusually high trading volume, political intervention or other factors. The imposition of controls by governmental authorities might also limit such forward trading, to our possible detriment. The occurrence of any of the foregoing could have an adverse effect on our business, financial conditions, results of operations and cash flows.