KREST Q4 tender draws 3.67% of NAV, first below cap in a year

Demand in KKR Real Estate Select Trust's fourth-quarter repurchase offer fell below the fund's 5% cap for the first time in a year, AltsWire reported on Oct. 20. Shareholders tendered 2,285,571 shares against the 3,116,841 the fund had offered to buy, and KREST accepted all of them at $22.75 per share, its net asset value on the Oct. 16 expiration date, for about $52 million, or 3.67% of NAV. The fund did not use the provision that lets it repurchase up to an additional 2% of NAV when an offer is oversubscribed.

The prior quarter below the cap was Q4 2025, when 1,751,423 shares were tendered, roughly 3.1% of NAV. Requests then ran at or above the limit for three consecutive quarters. KREST prorated its Q1 2026 offer at 81% and its Q2 offer at 74%. In Q3 it filled a 3,155,949-share request against a 3,116,157-share cap using the overflow provision, repurchasing 5.06% of NAV, about $72 million, at $22.82 per share.

At $22.75, the tender price came in $0.51 below the roughly $23.26 per share the fund estimated after KKR Alternative Assets LLC contributed about 1.9 million Class I shares on Sept. 16. The fund canceled those shares. It was below each NAV AltsWire has reported for the fund this year — $23.16 in February, $23.22 in May, $23.27 in June — and below the $23.31 the fund projected when the plan was amended, based on its Aug. 31 valuation.

NAV slipped to $22.71 across all share classes as of Oct. 19, according to the fund's website, leaving KREST $4.25 per share short of the $27 NAV the shareholder priority plan is designed to support. The tender price was therefore slightly above the Oct. 19 NAV, so exiting holders received more per share than the fund's latest mark.

The Sept. 16 contribution is about 25% of the roughly 7.7 million shares committed under the shareholder priority plan. KKR said it expects, but is not obligated, to make comparable contributions in each of the next three quarters, with the full commitment fulfilled by June 1, 2027. The fund said the share cancellation was intended to be accretive to NAV per share.

The Q4 offer was the first since KKR moved up part of its shareholder support commitment and added the 2% early repurchase deduction, which applies to shares held less than a year. The deduction applies only to shares purchased on or after Oct. 1, so in this offer it could reach only shares bought between Oct. 1 and the Oct. 16 expiration, a 16-day window.