KKR’s KREST Fully Satisfies Q3 Redemptions, Ending Two-Quarter Proration Streak

KKR Real Estate Select Trust Inc. fully satisfied investor redemption requests in its third-quarter tender offer, ending a streak of two consecutive quarters in which the fund prorated withdrawals. The nontraded REIT tapped its discretionary overage provision to repurchase $72 million in shares, its second-highest quarterly total this year.

The offer, which expired July 17, was structured to repurchase up to 3,116,157 shares across Class I, D, S, and U common stock at net asset value as of the July 17 expiration date. When the offer opened, KREST’s most recently reported NAV, as of June 3, was $23.27 per share. Shareholders tendered 3,155,949 shares – more than the fund initially offered to buy – and KREST accepted all of them, using a provision that lets it repurchase an additional 2% of aggregate NAV beyond its standard 5% quarterly cap without amending or extending the offer. In total, the fund repurchased shares equal to 5.06% of aggregate NAV, or $72,018,747, at $22.82 per share.

The result marks a turnaround from KREST’s prior two quarters. The fund’s Q2 2026 tender was prorated at 74%, meaning investors received 74 cents for every dollar they sought to redeem, after requests topped the quarterly cap for a second straight period. The Q3 window opened with NAV still below the $27-per-share level KKR has pledged to support by June 2027.

KREST’s redemption pressure dates to December 2022 when the fund first limited withdrawals after requests exceeded its 5% cap. KKR has since taken several steps to support the fund, including waiving KREST’s incentive fee through mid-2027 and, per a 2024 shareholder priority plan, injecting $50 million of equity capital and agreeing to forfeit up to 7.7 million shares to support the $27 NAV target.

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