0002107762 2026-06-30 0002107762 2025-12-23 2026-06-30 0002107762 2026-07-21 2026-07-21 0002107762 2026-07-30 0002107762 2026-04-01 2026-06-30 0002107762 us-gaap:CommonStockMember 2026-06-30 0002107762 us-gaap:CommonStockMember 2026-07-21 0002107762 us-gaap:PreferredStockMember 2026-07-21 0002107762 us-gaap:SubsequentEventMember 2026-07-21 2026-07-21 0002107762 us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2026-07-21 2026-07-21 0002107762 ck0002107762:CommonClassEMember us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2026-07-21 2026-07-21 0002107762 us-gaap:CommonStockMember 2026-01-29 2026-01-29 0002107762 us-gaap:SubsequentEventMember 2026-07-23 2026-07-23 0002107762 ck0002107762:CommonClassIClassFIClassAIAndClassEMember 2025-12-23 2026-06-30 0002107762 ck0002107762:CommonClassDMember 2025-12-23 2026-06-30 0002107762 ck0002107762:CommonClassSClassFSAndClassASMember 2025-12-23 2026-06-30 iso4217:USD shares pure iso4217:USD shares false Q2 0002107762 --12-31 MO MD 10-Q true 2026-06-30 2026 false 000-56823 HPS Net Lease Income REIT 41-6768756 8027 Forsyth Boulevard St. Louis 63105 314 828-4200 Yes Yes Non-accelerated Filer true true false false 50

Unlimited

1000

0.01

999

1000

<div style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 1. Business and Organization </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">HPS Net Lease Income REIT (the “Company”) is a Maryland statutory trust formed on December 23, 2025 and intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ending December 31, 2026. The Company is structured as a <div style="white-space:nowrap;display:inline;">non-listed,</div> perpetual-life private REIT, and therefore its securities are not listed on a national securities exchange. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company’s investment objectives are to generate attractive, risk-adjusted returns in the form of current income and long-term capital appreciation across economic cycles. The Company seeks to achieve its investment objectives by building a diversified portfolio of stabilized, income producing industrial properties with long term net leases primarily throughout the United States. The Company intends to predominantly focus on acquiring and actively managing <div style="white-space:nowrap;display:inline;"><div style="white-space:nowrap;display:inline;">build-to-suit</div></div> industrial properties that are leased to single tenants, the majority of which are expected to directly have, or have corporate parent entities that have, investment grade corporate credit ratings from Moody’s Ratings, S&P Global Ratings or Fitch Ratings. The term <div style="white-space:nowrap;display:inline;"><div style="white-space:nowrap;display:inline;">“build-to-suit”</div></div> refers to properties whose location, design, physical fit out and/or management are customized to the specific needs of the tenant, often with capital investment funded by the tenant. The Company primarily focuses on early stage investment in <div style="white-space:nowrap;display:inline;"><div style="white-space:nowrap;display:inline;">build-to-suit</div></div> properties, either through investing in the development stage of a property or the purchase of newly constructed properties. However, it may also acquire existing stabilized, <div style="white-space:nowrap;display:inline;"><div style="white-space:nowrap;display:inline;">build-to-suit</div></div> industrial properties that it believes offer attractive long-term leases, renewal options or re-lease dynamics. To a lesser extent, the Company may invest in sale-leaseback transactions with creditworthy entities and real estate-related investments, including commercial mortgage loans and mezzanine loans. The Company also plans to invest a smaller portion of its assets in money market instruments, U.S. government or government agency securities, and other more liquid credit investments such as broadly syndicated loans, bonds, and residential and commercial mortgage-backed securities. The Company intends to use these investments to maintain liquidity for its share repurchase plan and manage cash before investing subscription proceeds into industrial properties, while also seeking attractive risk-adjusted investment returns. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company will be externally managed by ElmTree Funds, LLC (“ElmTree”, or the “Advisor”), a registered investment adviser with the Securities and Exchange Commission (the “SEC”) and an indirect subsidiary of BlackRock, Inc. (NYSE: BLK) (“BlackRock”). The Company plans to own all or substantially all of its assets through HNET Operating Partnership, L.P. (the “Operating Partnership”), a Delaware limited partnership and a consolidated subsidiary of the Company. The Company is the sole general partner of the Operating Partnership, and HNET SLP, L.P. (the “Special Limited Partner”), an affiliate of the Advisor, owns a special limited partner interest in the Operating Partnership. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company intends to commence its private offering during the second half of 2026 and engage in a continuous, unlimited private offering of its common shares to “accredited investors” (as defined in Rule 501 promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”)) made pursuant to exemptions provided by Section 4(a)(2) of the Securities Act and applicable state securities laws. As of June 30, 2026, there have been no purchases under the private offering. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Company had neither purchased nor contracted to purchase any investments. The Advisor had not identified any net lease investments or commercial real estate-related debt assets in which it is probable that the Company will invest. </div>

2025-12-23

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 2. Summary of Significant Accounting Policies </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company believes the following significant accounting policies, among others, affect its significant estimates and assumptions used in the preparation of the consolidated financial statement. Separate statements of operations, changes in equity, and cash flows have not been presented because the Company has not commenced operations. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Basis of Presentation </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The interim consolidated financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Rule <div style="white-space:nowrap;display:inline;">10-01</div> of Regulation <div style="white-space:nowrap;display:inline;">S-X.</div> All intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments considered necessary for the fair statement of the consolidated financial statement for the interim period presented have been included. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Use of Estimates </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The preparation of the consolidated financial statement in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statement. Actual results could differ from those estimates and such differences could be material. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Cash and Cash Equivalents </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit. There were no cash equivalents as of June 30, 2026. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Organization and Offering Costs </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor has agreed to advance organization and offering costs, including legal, accounting and other expenses incurred in connection with the Company’s organization and continuous offering of its common shares, on the Company’s behalf through the first anniversary of the initial closing of its offering that includes investors other than ElmTree, HPS, BlackRock and/or their respective affiliates (the “Initial Retail Closing”). </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Advisor has incurred organization and offering costs of $2.5 million on behalf of the Company. As of June 30, 2026, the reimbursement of Advisor-incurred organization and offering costs did not presently represent a liability of the Company since the obligation to reimburse the Advisor was conditional upon the Company commencing operations. Commencement of operations is expected to occur upon the Initial Retail Closing. When recorded by the Company, organization costs will be expensed as incurred and offering costs will be charged to equity. Any amount due to the Advisor but not paid will be recognized as a liability on the Consolidated Balance Sheet. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Operating Expenses </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor has agreed to advance certain operating expenses, excluding certain investment-related expenses and financing expenses, on the Company’s behalf through the first anniversary of the Initial Retail Closing. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Advisor has incurred operating expenses of $0.2 million on behalf of the Company. As of June 30, 2026, the reimbursement of Advisor-incurred operating expenses did not presently represent a liability of the Company since the obligation to reimburse the Advisor was conditional upon the Company commencing operations. Commencement of operations is expected to occur upon the Initial Retail Closing. When recorded by the Company, operating expenses will be expensed as incurred. Any amount due to the Advisor but not paid will be recognized as a liability on the Consolidated Balance Sheet. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Segment Information </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Company had not commenced operations. The Company intends to operate in a single operating and reporting segment and seeks to achieve its investment objectives by building a diversified portfolio of stabilized, income producing industrial properties with long term net leases primarily throughout the United States. The Chief Operating Decision Maker (“CODM”) will comprise of the Company’s chief executive officer and chief financial officer. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Income Taxes </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2026. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its shareholders. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company has not yet filed its initial tax return. </div>

<div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Use of Estimates </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The preparation of the consolidated financial statement in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statement. Actual results could differ from those estimates and such differences could be material. </div>

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Organization and Offering Costs </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor has agreed to advance organization and offering costs, including legal, accounting and other expenses incurred in connection with the Company’s organization and continuous offering of its common shares, on the Company’s behalf through the first anniversary of the initial closing of its offering that includes investors other than ElmTree, HPS, BlackRock and/or their respective affiliates (the “Initial Retail Closing”). </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Advisor has incurred organization and offering costs of $2.5 million on behalf of the Company. As of June 30, 2026, the reimbursement of Advisor-incurred organization and offering costs did not presently represent a liability of the Company since the obligation to reimburse the Advisor was conditional upon the Company commencing operations. Commencement of operations is expected to occur upon the Initial Retail Closing. When recorded by the Company, organization costs will be expensed as incurred and offering costs will be charged to equity. Any amount due to the Advisor but not paid will be recognized as a liability on the Consolidated Balance Sheet. </div>

2500000

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold"><div style="font-style:italic;display:inline;">Operating Expenses </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor has agreed to advance certain operating expenses, excluding certain investment-related expenses and financing expenses, on the Company’s behalf through the first anniversary of the Initial Retail Closing. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Advisor has incurred operating expenses of $0.2 million on behalf of the Company. As of June 30, 2026, the reimbursement of Advisor-incurred operating expenses did not presently represent a liability of the Company since the obligation to reimburse the Advisor was conditional upon the Company commencing operations. Commencement of operations is expected to occur upon the Initial Retail Closing. When recorded by the Company, operating expenses will be expensed as incurred. Any amount due to the Advisor but not paid will be recognized as a liability on the Consolidated Balance Sheet. </div>

200000

If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its shareholders.

<div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 3. Equity </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Company was authorized to issue an unlimited number of common shares, par value $0.01 per share. On July 21, 2026, the Company amended and restated its declaration of trust, (as amended, restated and/or supplemented from time to time, the “Declaration of Trust”), which authorizes an unlimited number of common shares of beneficial interest, par value $0.01 per share, including common shares classified as Class S, Class D, Class I, <div style="white-space:nowrap;display:inline;">Class F-S,</div> <div style="white-space:nowrap;display:inline;">Class F-I,</div> <div style="white-space:nowrap;display:inline;">Class A-S,</div> <div style="white-space:nowrap;display:inline;">Class A-I</div> and Class E, and an unlimited number of preferred shares, par value $0.01 per share. The Company intends to undertake a continuous, blind pool private offering in reliance on Rule 506(b) of Regulation D promulgated under the Securities Act and/or Regulation S under the Securities Act. The purchase price per share for each class of common shares is generally equal to the net asset value (“NAV”) per share of the applicable share class as of the last calendar day of the prior month, and is not based on any public trading market. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On January 29, 2026 (date of initial capitalization), the Company was capitalized through the purchase by HPS Investment Partners, LLC (the “Administrator” or “HPS”), a part of BlackRock and an affiliate of the Advisor, of 50 common shares for an aggregate purchase price of $1,000. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Distribution Reinvestment Plan </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, the Company adopted a distribution reinvestment plan, whereby shareholders will have their cash distributions automatically reinvested in additional common shares unless they elect to receive their distributions in cash. Any cash distributions attributable to common shares of the Company owned by participants in the distribution reinvestment plan will be immediately reinvested in additional common shares of the same class on behalf of the participants on the business day such distribution would have been paid to such shareholder. The per share purchase price for common shares purchased under the distribution reinvestment plan will be equal to the transaction price for such common shares at the time the distribution is payable, which will generally be equal to the Company’s prior month’s NAV per share. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Share Repurchase Plan </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, the Company adopted a share repurchase plan, whereby, commencing with first full calendar quarter following the Initial Retail Closing, the Company, in its discretion, may repurchase, in each quarter, up to 5% of the Company’s aggregate NAV as of the end of the prior quarter. To the extent the Company chooses to repurchase common shares in any particular calendar quarter, it will only repurchase common shares following the close of business as of the last calendar day of the quarter. The Board of Trustees (the “Board”) may make exceptions to, modify or suspend the share repurchase plan if, in its discretion, it deems such action to be in the best interest of the Company. The Board cannot terminate the share repurchase plan absent a liquidity event that results in the Company’s shareholders receiving cash or securities listed on a national securities exchange or where otherwise required by law. If the Company does not repurchase the full amount of all common shares requested to be repurchased in any given calendar quarter, funds will be allocated pro rata based on the total number of common shares being repurchased and without regard to class. All unsatisfied repurchase requests must be resubmitted after the start of the next quarter, or upon the recommencement of the share repurchase plan, as applicable. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company expects to repurchase shares at a transaction price generally equal to prior month’s NAV per share, except that Class S shares, Class D shares, Class I shares and Class E shares that have not been outstanding for at least one year, and <div style="white-space:nowrap;display:inline;">Class F-I</div> shares, <div style="white-space:nowrap;display:inline;">Class F-S</div> shares, <div style="white-space:nowrap;display:inline;">Class A-S</div> shares and <div style="white-space:nowrap;display:inline;">Class A-I</div> shares that have not been outstanding for at least two years, will be repurchased at 95% of the transaction price (an “Early Repurchase Deduction”). The <div style="white-space:nowrap;display:inline;">one-year</div> or <div style="white-space:nowrap;display:inline;">two-year</div> holding period, as applicable, is measured from the first calendar day of the month in which the shares were issued to the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may only be waived, at the Company’s sole discretion, in the case of repurchase requests arising from the death or qualified disability of the holder and in other limited circumstances. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Early Repurchase Deduction will be retained by the Company for the benefit of remaining shareholders. </div>

0.01

50 1000 0.05 0.95

<div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 4. Related Party Transactions </div><div style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Advisory Agreement </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, the Company entered into an advisory agreement (the “Advisory Agreement”) with the Advisor and the Operating Partnership. Pursuant to the Advisory Agreement, the Advisor is responsible for, among other things, sourcing, evaluating and monitoring investment opportunities and executing the acquisition, management, financing and disposition and overseeing the development of the Company’s assets, in accordance with the Company’s investment guidelines and subject to oversight by its Board. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Management Fee </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As compensation for its services provided pursuant to the Advisory Agreement, the Company will pay the Advisor a management fee, in an amount equal to (i) 1.25% of the NAV for Class S shares, Class D shares, and Class I shares, plus (ii) 0.75% of NAV for <div style="white-space:nowrap;display:inline;">Class F-S</div> shares and <div style="white-space:nowrap;display:inline;">Class F-I</div> shares, plus (iii) 0.50% of NAV for <div style="white-space:nowrap;display:inline;">Class A-S</div> and <div style="white-space:nowrap;display:inline;">Class A-I</div> shares, in each case, per annum. In addition, to the extent that the Operating Partnership issues limited partnership units in the Operating Partnership (“Operating Partnership Units”) to parties other than the Company, the Operating Partnership will pay the Advisor a management fee, in an amount equal to (i) 1.25% of NAV for Class S Operating Partnership Units, Class D Operating Partnership Units, and Class I Operating Partnership Units, plus (ii) 0.75% of NAV for <div style="white-space:nowrap;display:inline;">Class F-S</div> Operating Partnership Units and <div style="white-space:nowrap;display:inline;">Class F-I</div> Operating Partnership Units, plus (iii) 0.50% of NAV for <div style="white-space:nowrap;display:inline;">Class A-S</div> Operating Partnership Units and <div style="white-space:nowrap;display:inline;">Class A-I</div> Operating Partnership Units, in each case, per annum. The Advisor will not earn a management fee with respect to Class E shares or Class E Operating Partnership Units. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The management fee will be accrued monthly based on the NAV of the applicable class of common shares and/or Operating Partnership Units as of the first calendar day of each month. The management fee will be payable monthly in arrears, and may be paid, at the election of the Advisor, in either (i) cash or (ii) Class E shares or Class E Operating Partnership Units with an aggregate value equivalent to the cash fee otherwise payable (based upon the then-current NAV per share or per Operating Partnership Unit, as applicable). The Advisor reserves the right to waive or defer the management fee in whole or in part in its sole discretion from time to time. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Performance Participation Allocation </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">So long as the Advisory Agreement has not been terminated (including by means of <div style="white-space:nowrap;display:inline;">non-renewal),</div> the Special Limited Partner will hold a performance participation interest in the Operating Partnership that entitles it to receive an allocation from the Operating Partnership, in an amount equal to (i) 12.5% of the Total Return (as defined in the Amended and Restated Limited Partnership Agreement of the Operating Partnership dated July 23, 2026 (the “Amended and Restated Limited Partnership Agreement”)) of the Class S Operating Partnership Units, Class D Operating Partnership Units and Class I Operating Partnership Units, plus (ii) 10.0% of the Total Return of the <div style="white-space:nowrap;display:inline;">Class F-S</div> Operating Partnership Units and <div style="white-space:nowrap;display:inline;">Class F-I</div> Operating Partnership Units, plus (iii) 5.0% of the Total Return with respect to <div style="white-space:nowrap;display:inline;">Class A-S</div> Operating Partnership Units and <div style="white-space:nowrap;display:inline;">Class A-I</div> Operating Partnership Units, in each case, subject to a 5.0% Hurdle Amount and a High Water Mark, with a <div style="white-space:nowrap;display:inline;">Catch-Up</div> (each, as defined in the Amended and Restated Limited Partnership Agreement of the Operating Partnership). The Special Limited Partner will not be allocated a performance participation with respect to the Class E Operating Partnership Units. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The performance participation allocation will be accrued monthly and payable annually in arrears, and may be paid, at the election of the Special Limited Partner, in (i) cash or (ii) Class E Operating Partnership Units, or any combination thereof. The Special Limited Partner will not be obligated to return any portion of the performance participation paid based on the Company’s subsequent performance. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Dealer Manager Agreement </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 23, 2026, the Company entered into a dealer manager agreement (the “Dealer Manager Agreement”) with HPS Securities, LLC (the “Dealer Manager”), a part of BlackRock and an affiliate of Advisor, and the Company (or the Dealer Manager on the Company’s behalf) intends to enter into selected intermediary agreements and participating adviser agreements with certain broker-dealers and registered investment advisers, as applicable. Under the Dealer Manager Agreement and the selected intermediary agreements and participating adviser agreements, the Dealer Manager will serve as the dealer manager, for the Company’s offering of Class S shares, Class D shares, Class I shares, <div style="white-space:nowrap;display:inline;">Class F-S</div> shares, <div style="white-space:nowrap;display:inline;">Class F-I</div> shares, <div style="white-space:nowrap;display:inline;">Class A-S</div> shares, <div style="white-space:nowrap;display:inline;">Class A-I</div> shares and Class E shares. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company will pay the Dealer Manager class-specific shareholder servicing fees for ongoing services rendered to shareholders by participating broker-dealers or broker-dealers servicing investors’ accounts, up to per annum rates as follows: </div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:68%;border-spacing:0;margin:0 auto"> <tr> <td style="width:84%"></td> <td style="vertical-align:bottom;width:13%"></td> <td></td> <td></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="font-weight:bold;display:inline;">Shareholder<br/>Servicing Fee</div><br/><div style="font-weight:bold;display:inline;">as a % of NAV</div></td> <td style="vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class I, <div style="white-space:nowrap;display:inline;">Class F-I,</div> <div style="white-space:nowrap;display:inline;">Class A-I</div> and Class E Common Shares</div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">—</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class D Common Shares</div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">0.25</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"></div><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class S, <div style="white-space:nowrap;display:inline;">Class F-S</div> and <div style="white-space:nowrap;display:inline;">Class A-S</div> Common Shares</div><div></div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">0.85</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr></table><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Dealer Manager anticipates that all or a portion of shareholder servicing fee will be reallowed to participating broker-dealers that the Dealer Manager engages to offer and sell the shares. The Company’s obligations under the Dealer Manager Agreement to pay the shareholder servicing fees with respect to the common shares distributed will survive the termination of the agreement until such shares are no longer outstanding. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Administration Agreement </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 23, 2026, the Company entered into an administration agreement (the “Administration Agreement”) with the Administrator. Pursuant to the Administration Agreement, the Administrator will perform, or oversee the performance of, administrative services necessary for the Company’s continued operation, including but not be limited to, vendor management; overseeing the valuation of investments and the calculation of NAV; maintaining financial records; preparing shareholders, financial and regulatory reporting; ensuring compliance with REIT related and other regulations. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company will reimburse the Administrator for the costs and expenses incurred by the Administrator in performing its obligations under the Administration Agreement, which will include the actual cost of goods and services used by the Company and obtained, whether payable to an affiliate or a <div style="white-space:nowrap;display:inline;">non-affiliated</div> person, including but not limited to fees paid to administrators, custodians, transfer agents, consultants, attorneys, technology providers and other services providers. The amount of the reimbursement payable to the Administrator will be the lesser of (i) the Administrator’s actual costs incurred in providing such services and (ii) the amount that the Company estimates it would be required to pay alternative service providers for comparable services in the same geographic location. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Advanced Organization and Offering Costs and Certain Operating Expenses </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor has agreed to advance organization and offering costs and certain operating expenses on the Company’s behalf through the first anniversary of the Initial Retail Closing. The Company will reimburse the Advisor for all such advanced organization and offering costs and operating expenses ratably in 60 equal monthly installments following the first anniversary of the Initial Retail Closing. Such reimbursement may be paid, at the Advisor’s election, in cash or Class E shares, or any combination thereof. If the Advisor elects to receive any portion of such reimbursement in common shares, the Company may repurchase such shares from the Advisor at a later date. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Advisor incurred organization and offering costs of $2.5 million and operating expenses of $0.2 million on behalf of the Company. As of June 30, 2026, the Company had not reimbursed the Advisor for such expenses. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Other Services </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Subject to the approval by a majority of the Board, including a majority of the Independent Trustees, in accordance with the Declaration of Trust, the Company expects that, in the majority of cases, the Advisor or one of its affiliates will provide the property management services for the Company’s properties and will receive property management fees and other compensation for such services. To a lesser extent, the Advisor may engage third-party property managers. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Advisor, or one or more affiliates of the Advisor, may provide development and/or real estate construction services for certain properties, or consultant services related to foregoing, and receive fees and other compensation for such services, subject to approval by a majority of the Board, including a majority of the Independent Trustees. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In addition, subject to approval by a majority of the Board, including a majority of the Independent Trustees, the Company may retain the Advisor or certain affiliates of the Advisor, from time to time, to provide services relating to its investments or operations, including but not be limited to, <div style="white-space:nowrap;display:inline;">in-house</div> transactional legal and tax services, transaction support services, transaction consulting services, accounting services, audit services, tax services, valuation services, finance/budget services, information technology services, human resources, judicial processes, environmental, social and governance services, operational services, risk management services, corporate secretarial services, treasury services, trusteeship services, vendor management, data management services, compliance services, hedging and currency management, fund finance, investor relations services, account management services, share transfer services, asset management and operations, loan management services, property management services, construction management services, leases services, property, title, and/or other types of insurance and related services, and other similar operational matters. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Company had not retained an affiliate of the Advisor for any such services. </div>

As compensation for its services provided pursuant to the Advisory Agreement, the Company will pay the Advisor a management fee, in an amount equal to (i) 1.25% of the NAV for Class S shares, Class D shares, and Class I shares, plus (ii) 0.75% of NAV for Class F-S shares and Class F-I shares, plus (iii) 0.50% of NAV for Class A-S and Class A-I shares, in each case, per annum. In addition, to the extent that the Operating Partnership issues limited partnership units in the Operating Partnership (“Operating Partnership Units”) to parties other than the Company, the Operating Partnership will pay the Advisor a management fee, in an amount equal to (i) 1.25% of NAV for Class S Operating Partnership Units, Class D Operating Partnership Units, and Class I Operating Partnership Units, plus (ii) 0.75% of NAV for Class F-S Operating Partnership Units and Class F-I Operating Partnership Units, plus (iii) 0.50% of NAV for Class A-S Operating Partnership Units and Class A-I Operating Partnership Units, in each case, per annum. The Advisor will not earn a management fee with respect to Class E shares or Class E Operating Partnership Units. So long as the Advisory Agreement has not been terminated (including by means of non-renewal), the Special Limited Partner will hold a performance participation interest in the Operating Partnership that entitles it to receive an allocation from the Operating Partnership, in an amount equal to (i) 12.5% of the Total Return (as defined in the Amended and Restated Limited Partnership Agreement of the Operating Partnership dated July 23, 2026 (the “Amended and Restated Limited Partnership Agreement”)) of the Class S Operating Partnership Units, Class D Operating Partnership Units and Class I Operating Partnership Units, plus (ii) 10.0% of the Total Return of the Class F-S Operating Partnership Units and Class F-I Operating Partnership Units, plus (iii) 5.0% of the Total Return with respect to Class A-S Operating Partnership Units and Class A-I Operating Partnership Units, in each case, subject to a 5.0% Hurdle Amount and a High Water Mark, with a Catch-Up (each, as defined in the Amended and Restated Limited Partnership Agreement of the Operating Partnership). The Special Limited Partner will not be allocated a performance participation with respect to the Class E Operating Partnership Units. <div style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company will pay the Dealer Manager class-specific shareholder servicing fees for ongoing services rendered to shareholders by participating broker-dealers or broker-dealers servicing investors’ accounts, up to per annum rates as follows: </div><div style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> </div> <table cellpadding="0" cellspacing="0" style="text-align:start; BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt;width:68%;border-spacing:0;margin:0 auto"> <tr> <td style="width:84%"></td> <td style="vertical-align:bottom;width:13%"></td> <td></td> <td></td> <td></td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td style="vertical-align:bottom"> </td> <td style="vertical-align:bottom"> </td> <td colspan="2" style="border-bottom:1.00pt solid #000000;vertical-align:bottom;text-align:center"><div style="font-weight:bold;display:inline;">Shareholder<br/>Servicing Fee</div><br/><div style="font-weight:bold;display:inline;">as a % of NAV</div></td> <td style="vertical-align:bottom"> </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class I, <div style="white-space:nowrap;display:inline;">Class F-I,</div> <div style="white-space:nowrap;display:inline;">Class A-I</div> and Class E Common Shares</div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">—</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class D Common Shares</div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">0.25</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt;background-color:#cceeff"> <td style="vertical-align:top"><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"></div><div style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Class S, <div style="white-space:nowrap;display:inline;">Class F-S</div> and <div style="white-space:nowrap;display:inline;">Class A-S</div> Common Shares</div><div></div></td> <td style="vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom"> </td> <td style="white-space:nowrap;vertical-align:bottom;text-align:right">0.85</td> <td style="white-space:nowrap;vertical-align:bottom">% </td></tr></table> 0 0.0025 0.0085

2500000

200000

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 5. Economic Dependency </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company is dependent on the Advisor and its affiliates for certain services that are essential to it, including the sale of the Company’s common shares, origination, acquisition and disposition decisions, and certain other responsibilities. In the event that the Advisor and its affiliates are unable to provide such services, the Company would be required to find alternative service providers. </div>

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 6. Commitments and Contingencies </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As of June 30, 2026, the Company was not subject to any material litigation nor was the Company aware of any material litigation threatened against it. </div>

<div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;font-weight:bold">Note 7. Subsequent Events </div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company evaluated subsequent events through the filing of this Quarterly Report on Form <div style="white-space:nowrap;display:inline;">10-Q,</div> and no events have occurred that require consideration as adjustments to, or disclosures in, the consolidated financial statement, except as noted below. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Amended and Restated Declaration of Trust and Bylaws </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Effective on July 21, 2026, in connection with the commencement of its private offering, the Company executed the Declaration of Trust, which amended and restated the Company’s declaration of trust, dated December 23, 2025, and the Company adopted its bylaws. </div><div style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, 50 common shares held by HPS were converted into 50 Class E common shares. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Election of Trustees </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, Faith Rosenfeld, as the sole Trustee of the Company, increased the size of the Board to six members and elected each of Robert F. Cummings, Jr., Lisa Hess, James G. Koman, David Lehman, and Robert Van Dore to the Board to fill the vacancies created by such increase, effective July 21, 2026, after which Ms. Rosenfeld resigned as Trustee of the Company and the Board reduced its size to five members. The Board also appointed Ms. Hess and Messrs. Cummings and Van Dore to the audit committee of the Board (the “Audit Committee”) and appointed Mr. Koman as the chairperson of the Board and Mr.Van Dore as the chairperson of the Audit Committee. </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;text-align:center"> </div><div style="margin-top:0pt;margin-bottom:0pt ; font-size:8pt"> </div><div style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Distribution Reinvestment Plan and Share Repurchase Plan </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, the Company adopted a distribution reinvestment plan and a share repurchase plan. See <div style="font-style:italic;display:inline;">“Note 3. Equity”</div> for additional information. </div><div style="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><div style="font-style:italic;display:inline;">Related Party Arrangements </div></div><div style="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On July 21, 2026, the Company entered into an Advisory Agreement with the Advisor. On July 23, 2026, the Company entered into a Dealer Manager Agreement and an Administration Agreement with the Dealer Manager and the Administrator, respectively. See <div style="font-style:italic;display:inline;">“Note 4. Related Party Transactions”</div> for additional information. </div>

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