# EDGAR Filing Document

**Accession Number:** 0002035428
**File Stem:** 0002035428-25-000038
**Filing Date:** 2025-11
**Character Count:** 232149
**Document Hash:** 4e66f3a80b9e0edbdc89d886ce64c2c6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0002035428-25-000038.hdr.sgml**: 20251107

**ACCESSION NUMBER**: 0002035428-25-000038

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 81

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251107

**DATE AS OF CHANGE**: 20251107

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Franklin BSP Real Estate Debt, Inc.
- **CENTRAL INDEX KEY:** 0002035428
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 993480205
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56705
- **FILM NUMBER:** 251462086

**BUSINESS ADDRESS:**
- **STREET 1:** ONE MADISON AVENUE
- **STREET 2:** SUITE 1600
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10010
- **BUSINESS PHONE:** 000-000-0000

**MAIL ADDRESS:**
- **STREET 1:** ONE MADISON AVENUE
- **STREET 2:** SUITE 1600
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10010

?xml version='1.0' encoding='ASCII'? fbred-20250930

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2025

or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number - 000-56705

**FRANKLIN BSP REAL ESTATE DEBT, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Maryland** | **99-3480205** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

---

| | |
|:---|:---|
| **One Madison Avenue**<br>**New York, New York** | **10010** |
| (Address of principal executive offices) | (Zip Code) |

---

(Registrant's telephone number, including area code) **212-588-6770**

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

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.

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
| | Emerging growth company ☒ |

---

If 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 is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of November 7, 2025, there were 6,279,010 shares of our common stock, $0.001 par value, outstanding consisting of 40 shares of common stock, 3,150,806 shares of Class G common stock, 1,737,878 shares of Class G-D common stock, 1,382,552 shares of Class G-S common stock and 7,734 shares of Class E common stock.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| | **Page** |
| **<u>[PART I - FINANCIAL INFORMATION](#ibdf05e5717464600aa62fc99676958d9_10)</u>** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1. Consolidated Financial Statements](#ibdf05e5717464600aa62fc99676958d9_13)[and Notes](#ibdf05e5717464600aa62fc99676958d9_13)[(Unaudited)](#ibdf05e5717464600aa62fc99676958d9_13)</u> | <u>[2](#ibdf05e5717464600aa62fc99676958d9_13)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheets as of September](#ibdf05e5717464600aa62fc99676958d9_16)[30, 2025 and December 31, 2024 (Unaudited)](#ibdf05e5717464600aa62fc99676958d9_16)</u> | <u>[2](#ibdf05e5717464600aa62fc99676958d9_16)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025](#ibdf05e5717464600aa62fc99676958d9_19)[and thr](#ibdf05e5717464600aa62fc99676958d9_19)[ee months ended S](#ibdf05e5717464600aa62fc99676958d9_19)[eptember 30,](#ibdf05e5717464600aa62fc99676958d9_19)[2024](#ibdf05e5717464600aa62fc99676958d9_19)[and for the Period from May 22, 2024](#ibdf05e5717464600aa62fc99676958d9_19)[(date of inception](#ibdf05e5717464600aa62fc99676958d9_19)[) through September 30, 2](#ibdf05e5717464600aa62fc99676958d9_19)[024](#ibdf05e5717464600aa62fc99676958d9_19)[(Unaudited)](#ibdf05e5717464600aa62fc99676958d9_19)</u> | <u>[3](#ibdf05e5717464600aa62fc99676958d9_19)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2025](#ibdf05e5717464600aa62fc99676958d9_25)[a](#ibdf05e5717464600aa62fc99676958d9_25)[nd t](#ibdf05e5717464600aa62fc99676958d9_25)[hree months](#ibdf05e5717464600aa62fc99676958d9_25)[en](#ibdf05e5717464600aa62fc99676958d9_25)[ded September 30, 2024 and](#ibdf05e5717464600aa62fc99676958d9_25)[for the Period from May 22, 2024 (date of inception) through September 30, 2024](#ibdf05e5717464600aa62fc99676958d9_25)[(Unaudited)](#ibdf05e5717464600aa62fc99676958d9_25)</u> | <u>[4](#ibdf05e5717464600aa62fc99676958d9_25)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statement of Cash Flows for the Nine Months Ended September](#ibdf05e5717464600aa62fc99676958d9_28)[30, 2025](#ibdf05e5717464600aa62fc99676958d9_28)[and for the Period May 22, 2024](#ibdf05e5717464600aa62fc99676958d9_28)[(date of incep](#ibdf05e5717464600aa62fc99676958d9_28)[tion](#ibdf05e5717464600aa62fc99676958d9_28)[) through September 30, 2024](#ibdf05e5717464600aa62fc99676958d9_28)[(Unaudited)](#ibdf05e5717464600aa62fc99676958d9_28)</u> | <u>[5](#ibdf05e5717464600aa62fc99676958d9_28)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements (Unaudited)](#ibdf05e5717464600aa62fc99676958d9_31)</u> | <u>[6](#ibdf05e5717464600aa62fc99676958d9_31)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#ibdf05e5717464600aa62fc99676958d9_79)</u> | <u>[20](#ibdf05e5717464600aa62fc99676958d9_79)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 3. Quantitative and Qualitative Disclosures About Market Risk](#ibdf05e5717464600aa62fc99676958d9_94)</u> | <u>[32](#ibdf05e5717464600aa62fc99676958d9_94)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 4. Controls and Procedures](#ibdf05e5717464600aa62fc99676958d9_97)</u> | <u>[32](#ibdf05e5717464600aa62fc99676958d9_97)</u> |
| **<u>[PART II - OTHER INFORMATION](#ibdf05e5717464600aa62fc99676958d9_100)</u>** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1. Legal Proceedings](#ibdf05e5717464600aa62fc99676958d9_103)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_103)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1A. Risk Factors](#ibdf05e5717464600aa62fc99676958d9_106)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_106)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#ibdf05e5717464600aa62fc99676958d9_109)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_109)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 3. Defaults Upon Senior Securities](#ibdf05e5717464600aa62fc99676958d9_112)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_112)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 4. Mine Safety Disclosures](#ibdf05e5717464600aa62fc99676958d9_115)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_115)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 5. Other Information](#ibdf05e5717464600aa62fc99676958d9_118)</u> | <u>[33](#ibdf05e5717464600aa62fc99676958d9_118)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 6. Exhibits](#ibdf05e5717464600aa62fc99676958d9_121)</u> | <u>[35](#ibdf05e5717464600aa62fc99676958d9_121)</u> |
| <u>[Signatures](#ibdf05e5717464600aa62fc99676958d9_124)</u> | <u>[36](#ibdf05e5717464600aa62fc99676958d9_124)</u> |

---

------

**PART I. FINANCIAL INFORMATION**

**ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)**

**FRANKLIN BSP REAL ESTATE DEBT, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

*(in thousands, except share and per share)*

---

| | | |
|:---|:---|:---|
| | **September 30, 2025** | **December 31, 2024** |
| **Assets** | | |
| Loans receivable, at fair value (includes pledged loans of $164,867 and $0 at September 30, 2025 and <br>&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2024, respectively) | $188224 | $— |
| Real estate securities, at fair value (includes pledged securities of $27,201 and $0 at September 30, 2025 and December 31, 2024, respectively) | 74328 | **—** |
| Cash | 18821 | 26 |
| Restricted cash | 12314 | **—** |
| Interest receivable | 833 | **—** |
| Prepaid expenses and other assets | 223 | **—** |
| **Total assets** | $**294743** | $**26** |
| **Liabilities and Equity** |  |  |
| Repurchase agreements, at fair value | $148096 | $— |
| Subscriptions received in advance | 12314 |  |
| Due to affiliates | 8672 | 25 |
| Distributions payable | 855 |  |
| Interest payable | 353 |  |
| Accrued expenses and other liabilities | 750 |  |
| **Total liabilities** | **171040** | **25** |
| **Commitments and contingencies (See Note 11)** |  |  |
| **Equity** |  |  |
| Common stock, $0.001 par value per share, 100,000 shares authorized, 40 and 40 <br>&nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding as of September 30, 2025 and December 31, 2024, <br>&nbsp;&nbsp;&nbsp;&nbsp;respectively |  |  |
| Common stock, Class G shares, $0.001 par value per share, 2,731,490 and zero shares <br>&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 3 |  |
| Common stock, Class G-D shares, $0.001 par value per share, 1,537,002 and zero shares <br>&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 2 |  |
| Common stock, Class G-S shares, $0.001 par value per share, 955,237 and zero shares <br>&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 1 |  |
| Common stock, Class E shares, $0.001 par value per share, 7,717 and zero shares <br>&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  |  |
| Additional paid-in capital | 127258 | 1 |
| Accumulated deficit | (3561) |  |
| **Total stockholders' equity** | **123703** | **1** |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and stockholders' equity** | $**294743** | $**26** |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

*(in thousands, except share and per share data)*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30, 2025** | **Three months ended September 30, 2024** | **Nine months ended September 30, 2025** | **For the Period May 22, 2024 (date of inception) through September 30, 2024** |
| **Income** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | $4896 | $— | $7094 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: interest expense | (2230) |  | (3274) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income | 2666 |  | 3820 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fee and other income | 446 |  | 1245 |  |
| **Total income** | 3112 |  | 5065 |  |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Administrative fees | 464 |  | 1984 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Organizational costs |  |  | 1053 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 368 |  | 912 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting fees | 168 |  | 555 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing fees | 795 |  | 1182 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Management & performance fees - related party | 482 |  | 569 |  |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total expenses** | 2277 |  | 6255 |  |
| **Other Income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on real estate securities, at fair value | 265 |  | 400 |  |
| **&nbsp;&nbsp;&nbsp;&nbsp; Total other income** | 265 |  | 400 |  |
| **Net Income (Loss)** | 1100 | $— | (790) | $— |
| Net income (loss) per common share, basic and diluted | $0.24 | $— | $(0.23) | $— |
| **Weighted average common shares outstanding, basic and diluted** | **4574684** | **40** | **3499588** | **40** |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

 **(Unaudited)**

*(in thousands)*

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** | **For the three months ended September 30, 2025:** |
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Additional Paid-In Capital** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| **Balance at June 30, 2025** | $**—** | $**2** | $**1** | $**—** | $**—** | $**76513** | $**(2408)** | $**74108** |
| Net income |  |  |  |  |  |  | 1100 | 1100 |
| Proceeds from issuance of common shares |  | 1 | 1 | 1 |  | 51931 |  | 51934 |
| Offering costs |  |  |  |  |  | (1186) |  | (1186) |
| Distribution declared on common shares (See note 9) |  |  |  |  |  |  | (2253) | (2253) |
| **Balance at September 30, 2025** | $**—** | $**3** | $**2** | $**1** | $**—** | $**127258** | $**(3561)** | $**123703** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** | **For the three months ended September 30, 2024:** |
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Additional Paid-In Capital** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| **Balance at June 30, 2024** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** |
| Common shares issued |  |  |  |  |  | 1 |  | 1 |
| **Balance at September 30, 2024** | $**—** | $**—** | $**—** | $**—** | $**—** | $**1** | $**—** | $**1** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** | **For the nine months ended September 30, 2025:** |
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Additional Paid-In Capital** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| **Balance at December 31, 2024** | $**—** | $**—** | $**—** | $**—** | $**—** | $**1** | $**—** | $**1** |
| **Net loss** |  |  |  |  |  |  | (790) | (790) |
| Proceeds from issuance of common shares |  | 3 | 2 | 1 |  | 131262 |  | 131268 |
| Offering costs |  |  |  |  |  | (4005) |  | (4005) |
| Distribution declared on common shares (See note 9) |  |  |  |  |  |  | (2771) | (2771) |
| **Balance at September 30, 2025** | $**—** | $**3** | $**2** | $**1** | $**—** | $**127258** | $**(3561)** | $**123703** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** | **For the Period from May 22, 2024 (date of inception) through September 30, 2024:** |
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Additional Paid-In Capital** | **Accumulated Deficit** | **Total Stockholders' Equity** |
| **Balance at May 22, 2024 (date of inception)** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** | $**—** |
| Common shares issued |  |  |  |  |  | 1 |  | 1 |
| **Balance at September 30, 2024** | $**—** | $**—** | $**—** | $**—** | $**—** | $**1** | $**—** | $**1** |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**(Unaudited)**

*(in thousands, except share and per share data)*

---

| | | |
|:---|:---|:---|
| | **Nine months ended September 30, 2025** | **For the Period May 22, 2024 (date of inception) through September 30, 2024** |
| **Cash flows from operating activities:** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(790) | $— |
| **Adjustments to reconcile net loss to net cash provided by operating activities:** |  |  |
| Unrealized (gain) loss on real estate securities, at fair value | (400) |  |
| Financing fees | 1182 |  |
| **Change in assets and liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in interest receivable | (833) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in prepaid expenses and other assets | (223) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in interest payable | 353 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in due to affiliates | 4675 | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in accrued expenses and other liabilities | 750 |  |
| Net cash provided by operating activities | $4714 | $25 |
| **Cash flows from investing activities:** |  |  |
| Loan origination and funding activities | $(195724) | $— |
| Principal repayments received on loans | 7500 |  |
| Purchases of real estate securities | (74789) |  |
| Proceeds from sale or paydown of real estate securities | 861 |  |
| **Net cash used in investing activities** | $(262152) | $— |
| **Cash flows from financing activities:** |  |  |
| Borrowings on repurchase agreements | $124300 | $— |
| Net borrowings (paydowns) on repurchase agreements - less than 90 days maturity | 23796 |  |
| Financing fees paid | (1182) |  |
| Proceeds from issuance of common stock, net offering costs paid | 131235 | 1 |
| Distributions paid | (1916) |  |
| Subscriptions received in advance | 12314 |  |
| **Net cash provided by financing activities** | $288547 | $1 |
| **Net increase in cash and restricted cash** | $31109 | $26 |
| **Cash and restricted cash, beginning of the period** | 26 |  |
| **Cash and restricted cash, end of the period** | $31135 | $26 |
| **Reconciliation of cash and restricted cash:** |  |  |
| Cash | $18821 | $26 |
| Restricted cash | 12314 |  |
| **Cash and restricted cash, end of the period** | $31135 | $26 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for interest | $2921 | $— |
| **Non-cash activities:** |  |  |
| Accrued stockholder servicing fees due to affiliates | $1751 | $— |
| Accrued offering costs due to affiliates | 2220 |  |
| Distributions payable | 855 |  |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**For the period ended September 30, 2025**

**(Unaudited)**

**Note 1 - Organization**

Franklin BSP Real Estate Debt, Inc. (the "Company") was formed on May 22, 2024 as a Maryland corporation and intends to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes. The Company was organized to originate high-quality commercial real estate loans.

The Company is externally managed by Benefit Street Partners, L.L.C. (the "Adviser"). The Adviser is a limited liability company that is registered as an investment adviser with the Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). The Adviser oversees the management of the Company's activities and is responsible for making investment decisions with respect to the loans the Company originates.

The Company intends to use its proceeds from its private offering of common shares (the "Offering") to finance the Company's investment objectives. The Company's investment strategy is to originate, acquire, finance and manage a portfolio of primarily commercial real estate ("CRE") investments, focused on senior secured CRE loans across a wide range of geography. To a lesser extent, the Company may invest in, or originate, other real-estate related debt and equity investments, which may include subordinated debt, commercial mortgage-backed securities ("CMBS") and collateralized loan obligations ("CLOs").

**Note 2 - Summary of Significant Accounting Policies**

*Basis of Presentation and Consolidation*

The following is a summary of significant accounting policies consistently followed by the Company in the preparation of its consolidated financial statements. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and consolidate the financial statements of the Company and its controlled subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

The accompanying unaudited consolidated interim financial statements have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the accompanying unaudited consolidated interim financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of financial statements for the interim periods presented.

The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 31, 2025.

The Company was formed on May 22, 2024 and operations commenced on April 1, 2025.

*Use of Estimates*

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these consolidated financial statements. Actual results could differ from those estimates. In the opinion of management, the interim data includes all adjustments necessary for a fair statement of the results for the period.

*Cash and Cash Equivalents*

Cash and cash equivalents include cash held in banks and short-term, liquid investments in a money market deposit account that have original or remaining maturity dates of three months or less when purchased. Cash and cash equivalents are carried at cost which approximates fair value. The Company did not hold cash equivalents as of September 30, 2025.

*Restricted Cash* 

Restricted cash consists of cash received for subscriptions prior to the date on which the subscriptions are effective. The Company's restricted cash pertaining to subscriptions received in advance is held primarily in a bank account controlled by the Company's transfer agent.

*Fair Value Option*

The Company has elected the fair value option for certain eligible financial assets and liabilities including CRE loans, real estate securities and liabilities associated with borrowing facilities. These financial assets and liabilities for which the Company has elected the fair value option are recorded in Loans receivable, at fair value, Real estate securities, at fair value, and

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

Repurchase agreements, at fair value on the Consolidated Balance Sheets. The fair value elections were made to create a more direct alignment between the Company's financial reporting and the calculation of Net Asset Value ("NAV") per share used to determine the prices at which investors can purchase and redeem shares of the Company's common shares, par value $0.001 per share.

The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately on the Company's Consolidated Balance Sheets from those instruments using another accounting method.

The Company's fair value option elections will be made in accordance with the guidance in Accounting Standards Codification ("ASC") 825, *Financial Instruments,* that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attributed for certain eligible financial assets and liabilities. In the case of loans and securities investments for which fair value option is elected, loan origination fees and costs related to the origination or acquisition of the instrument should be immediately recognized within Fee and Other Income on the Consolidated Statements of Operations. In the case of debt facilities for which the fair value option is elected, financing fees related to the debt should be immediately recognized as an expense within Financing Fees on the Consolidated Statements of Operations. Unrealized gains and losses on assets and liabilities for which the fair value option has been elected are also reported in earnings without deferral. This is because under the fair value option, a lender reports the instrument at its exit price (i.e., the price that would be received to sell the instrument in an orderly transaction), which reflects the market's assessment of the instrument's cash flows and risks and does not include any equity-specific costs or fees.

*Revenue Recognition*

Interest income on performing loans and financial instruments is accrued based on the outstanding principal amount and contractual terms on the instrument. Origination fees and direct loan costs are recorded in income on the Consolidated Statements of Operations within Fee and other income and not deferred.

As of September 30, 2025, the Company has elected the fair value option for each of its outstanding loans. There were no loans outstanding as of December 31, 2024.

*Organization and Offering Costs*

Organization costs consist of costs incurred to establish the Company and enable it legally to do business. Organization costs are expensed as incurred and recorded on the Company's Consolidated Statements of Operations. Offering costs consist of costs incurred in connection with the offering. Offering costs are recorded as a reduction to paid-in capital when the offering is completed.

The Company will bear the organization and offering expenses incurred in connection with the formation of the Company and the offering, including certain out of pocket expenses of the Adviser and its agents and affiliates under the Company's advisory agreement (the "Advisory Agreement"). In addition, the Adviser may request reimbursement from the Company for the organization and offering costs it incurs on the Company's behalf.

Under the Advisory Agreement, the Adviser will pay for organization and offering costs incurred prior to the first anniversary of April 1, 2025. The Company will reimburse the Adviser all organization and offering costs paid for by the Adviser in 60 equal monthly installments commencing with the first anniversary of April 1, 2025 or over an alternative time period agreed to by the Company's Board of Directors (the "Board") and the Adviser. After the first anniversary of April 1, 2025, the Company will reimburse the Adviser for any organization and offering costs paid on the Company's behalf as they are incurred.

As of September 30, 2025, the Adviser and its affiliates have incurred organization and offering expenses on the Company's behalf of approximately $3.3 million recorded in Due to affiliates on the Consolidated Balance Sheets.

*Operating Expenses*

The Adviser may pay for certain of the Company's operating expenses prior to the first anniversary of April 1, 2025. All operating expenses paid by the Adviser will be reimbursed by the Company to the Adviser in 60 equal monthly installments commencing on the first anniversary of April 1, 2025 or over an alternative time period agreed to by the Board and the Adviser. If the Adviser pays any operating expenses after the first anniversary of April 1, 2025, the Company will reimburse the Adviser at the end of each fiscal quarter for total operating expenses paid by the Adviser during such quarter. However, the Company may not reimburse the Adviser at the end of any fiscal quarter for total operating expenses (as defined in the Advisory Agreement) that, in the four consecutive fiscal quarters then ended, exceed the greater of 2% of average invested assets or 25% of net income for such four fiscal quarters determined without reduction for any non-cash reserves and excluding any gain from the sale of our assets for that period (the "2%/25% Guidelines"). The Company may reimburse the Adviser for expenses in

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

excess of the 2%/25% Guidelines if a majority of the Company's independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. If the Company's independent directors do not approve such excess amount as being so justified, the Adviser will reimburse the Company the amount by which the operating expenses exceeded the 2%/25% Guidelines.

As of September 30, 2025, the Advisor and its affiliates have incurred operating expenses on the Company's behalf of approximately $1.1 million, recorded in Due to affiliates in the Consolidated Balance Sheets.

*Repurchase Agreements* 

Real estate loans and securities sold under repurchase agreements have been treated as a secured borrowing and accounted for as repo to maturity transaction under ASC 860, *Transfers and Servicing*, because the Company maintains effective control over the transferred securities as this aligns with the adoption of the accounting policy. Commercial mortgage loans and real estate securities financed through repurchase agreements remain in the Consolidated Balance Sheets as an asset and cash received from the purchaser is recorded as a liability. Interest paid in accordance with repurchase agreements is recorded in Interest expense in the Consolidated Statements of Operations.

*Shareholder Servicing Fees*

The Company accrues the full amount of stockholder servicing fees payable over an estimated investor holding period as an offering cost at the time each applicable share is sold during our continuous offering and records the amount as an offset (reduction) to additional paid-in capital in the Consolidated Balance Sheets. As of September 30, 2025, $1.8 million of stockholder servicing fees have been recorded as an offset to additional paid-in capital in the Consolidated Balance Sheets.

*Income Taxes*

The Company intends to elect to be treated as a REIT under the Internal Revenue Code beginning with the taxable year ending December 31, 2025. In general, as a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" to its stockholders in a year, the Company will not be subject to U.S. federal income tax to the extent of the income that it distributes. The Company believes it currently qualifies, and it intends to continue to qualify as a REIT under the Internal Revenue Code. 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 evaluates tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether it is "more-likely-than-not" (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Company did not record any tax provision in the current period. However, management's conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities on-going analysis of and changes to tax laws, regulations and interpretations thereof.

*Concentration of Credit Risk* 

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash investments, single asset CMBS, loan investments and interest receivable. The Company may place cash investments in excess of insured amounts with high quality financial institutions. The Company performs ongoing analysis of credit risk concentrations in its investment portfolio by evaluating exposure to various markets, underlying property types, term, tenant mix and other credit metrics. While our investment objectives include avoiding excess borrower concentration, we expect to experience some level of borrower concentration prior to the time that we have raised substantial offering proceeds and acquired a broad loan portfolio. As of September 30, 2025, there are three borrowers whose aggregate loan balance approximates 28% of our total assets balance.

*Segment Reporting* 

In accordance with FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures the Company operates through a single operating and reporting segment with an investment objective to provide high current income while maintaining downside protection on its investments. The chief operating decision maker ("CODM") is comprised of the Company's Chief Executive Officer/President and the Chief Financial Officer/Chief Operating Officer, and assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

Company's net income under GAAP. The CODM uses net income as a key metric in determining the amount of dividends to be distributed to the Company's stockholders. As the Company's operations comprise of a single reporting segment, the segment assets are reflected in total assets on the accompanying Consolidated Balance Sheets and the significant segment expenses are listed on the accompanying Consolidated Statements of Operations.

**Note 3 - Related Party Transactions**

*Advisory Agreement*

On April 1, 2025, the Company entered into the Advisory Agreement with the Adviser in which the Adviser, subject to the overall supervision of the Board, manages the day-to-day operations of, and provides investment advisory services to the Company. Under the Advisory Agreement, the Adviser is responsible for sourcing, evaluating and monitoring the Company's investment opportunities and making decisions related to the acquisition, origination, management, financing and disposition of the Company's assets, in accordance with the Company's investment objectives, guidelines, policies and limitations, subject to oversight by the Board.

Pursuant to the Advisory Agreement, the Company pays the Adviser a fee for investment advisory and management services consisting of two components- a base management fee and performance fee ("Performance Fee"). In addition, the Adviser is also entitled to a portion of certain commitment fees charged to and paid by the borrower on loans originated by the Company.

*Management and Performance Fees*

As compensation for the services provided pursuant to the Advisory Agreement, the Adviser will be paid a management fee equal to 1.25% per annum of the NAV allocable to each class of common shares, except for Class F, F-S, F-D, G, G-S, G-D and E common shares (the "Management Fee"). The Management Fee for Class F, F-S and F-D common shares is equal to 0.60% per annum of the NAV allocable to each such class of common shares. The Management Fee for Class G, G-S and G-D common shares is equal to 0.55% per annum of the NAV allocable to each such class of common shares. There is no management fee with respect to Class E shares. The Management Fee is payable monthly in arrears. In calculating the Management Fee, the Company will use the NAV before giving effect to accruals for the Management Fee, Stockholder Serving Fee, the Performance Fee or any distributions.

The Adviser may be entitled to receive a performance fee for each class of common share, other than Class E common shares, which is accrued monthly and payable quarterly in arrears. The Performance Fee will be an amount, not less than zero, equal to (i) 12.5% of Core Earnings (as defined below) for the immediately preceding four calendar quarters (each such period, a "4-Quarter Performance Measurement Period"), subject to a hurdle rate, expressed as an annual rate of return on average Adjusted Capital (as defined in the Advisory Agreement), equal to 5.0% (the "Annual Hurdle Rate"), minus (ii) the sum of any Performance Fees paid to the Adviser with respect to the first three calendar quarters in the applicable 4-Quarter Performance Measurement Period. The Adviser does not earn a Performance Fee for any calendar quarter until Core Earnings for the applicable 4-Quarter Performance Measurement Period exceed the Annual Hurdle Rate.

As defined in the Advisory Agreement, Core Earnings shall mean for the applicable performance measurement period, the net income (loss), computed in accordance with GAAP, attributable to holders of classes of Common Shares to which the Performance Fee applies, including realized gains (losses) not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) the Performance Fee, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, (v) one-time events pursuant to changes in GAAP, and (vi) certain non-cash adjustments and certain material non-cash income or expense items, in each case after discussions between the Advisor and the Independent Directors and approved by a majority of the Independent Directors.

For each of the three full calendar quarters preceding the fourth quarter of the initial 4-Quarter Performance Measurement Period, the Performance Fee will be an amount, not less than zero, equal to (i) 12.5% of our Core Earnings for all of the full calendar quarter periods completed since the initial closing of our private offering (each such period, a "Partial-Year Performance Measurement Period"), subject to the Applicable Hurdle Rate (as defined below), which is calculated by multiplying the Annual Hurdle Rate by a fraction consisting of (x) a numerator equal to the number of full calendar quarter

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

periods included in the Partial-Year Performance Measurement Period, and (y) a denominator equal to 4, minus (ii) the sum of any Performance Fees paid to the Adviser with respect to the prior Partial-Year Performance Measurement Periods.

Once the Company's Core Earnings exceed the Applicable Hurdle Rate, the Adviser is entitled to a "catch-up" fee payable quarterly equal to the amount of Core Earnings in excess of the Applicable Hurdle Rate (as defined in the Advisory Agreement), until the Company's Core Earnings for the applicable performance measurement period exceed a percentage of average adjusted capital equal to the specified Applicable Hurdle Rate divided by the difference of 1 minus 0.125 for the applicable performance measurement period. Thereafter, the Adviser is entitled to receive 12.5% of the Company's Core Earnings.

The Management Fee and Performance Fee may be paid, at the Adviser's election, in any combination of cash or common shares with a cash equivalent value (based on NAV per share allocable to such class). If the Adviser elects to receive any portion of its Management Fee or Performance Fee in common shares, the Adviser or any subsequent transferee thereof may elect to have the Company repurchase such common shares from the Adviser or such transferee at a later date at a repurchase price per common share equal to the then NAV per share allocable to such class. Common shares obtained by the Adviser or any subsequent transferee will not be subject to the Company's share repurchase plan, including the repurchase limits or any reduction or penalty for an early repurchase.

*Due to Affiliates*

The following table detail the components of Due to affiliates as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| *(in thousands)* | **September 30, 2025** | **December 31, 2024** |
| Accrued organization costs | $1053 | $— |
| Accrued offering costs | 2220 |  |
| Accrued management fees | 242 |  |
| Accrued performance fees | 327 |  |
| Accrued administration fees | 1984 |  |
| Accrued shareholder services fees | 1751 | **—** |
| Due to advisor | 1070 |  |
| Other | 25 | 25 |
| **Total due to affiliates** | $**8672** | $**25** |

---

*Accrued Organization and Offering Costs*

The Adviser will pay for organization and offering costs incurred prior to the first anniversary of April 1, 2025. The Company will reimburse the Adviser all organization and offering costs paid for by the Adviser in 60 equal monthly installments commencing with the first anniversary of April 1, 2025 or over an alternative time period agreed to by the Board and the Adviser. After the first anniversary of April 1, 2025, the Company will reimburse the Adviser for any organization and offering costs paid on the Company's behalf as they are incurred.

*Accrued Operating Expenses*

The Adviser may pay for certain of the Company's operating expenses prior to the first anniversary of April 1, 2025. All operating expenses paid by the Adviser will be reimbursed by the Company to the Adviser in 60 equal monthly installments commencing on the first anniversary of April 1, 2025 or over an alternative time period agreed to by the Board and the Adviser. If the Adviser pays any operating expenses after the first anniversary of April 1, 2025, the Company will reimburse the Adviser at the end of each fiscal quarter for total operating expenses paid by the Adviser during such quarter. The Company received $25,000 from an affiliate of the Adviser for expenses incurred after the Company commenced operations. The Company expects to reimburse such amount in the fourth quarter of 2025.

*Stockholder Servicing Fees*

The Company entered into a dealer manager agreement (the "Dealer Manager Agreement") with Franklin Distributors, L.L.C. (the "Dealer Manager"), an affiliate of the Advisor, on January 23, 2025 effective as of September 1, 2024. The Dealer Manager is entitled to receive stockholder servicing fees with respect to certain classes of our common shares, including 0.85% per annum of the aggregate NAV for each of the Class F-S shares and Class G-S shares and 0.25% per annum of the aggregate NAV for each of the Class F-D shares and Class G-D shares.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

The Dealer Manager anticipates that substantially all of the stockholder servicing fees will be retained by, or reallowed (paid) to, participating broker-dealers. For the three and nine months ended September 30, 2025, the Dealer Manager did not retain any stockholder servicing fees.

The Company accrues the estimated amount of the future stockholder servicing fees payable to the Dealer Manager. Accrued stockholder servicing fees were $1.8 million at September 30, 2025. There was no accrued stockholder servicing fees at December 31, 2024.

**Note 4 - Investments in Loans Receivable**

At September 30, 2025, the Company's held for investment loan portfolio is as follow:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *($ in thousands)* | *($ in thousands)* | *($ in thousands)* |  |  |  |
| **Loan Type** | **Loan Amount** <sup>(1)</sup> | **Principal Balance Outstanding** | **Fair Value** | **Weighted Average Interest Rate** <sup>(2)</sup> | **Weighted Average Life** <sup>(3)</sup> |
| Senior | $262675 | $183170 | $183170 | 8.12% | 4.15 |
| Mezzanine | 25301 | 5054 | 5054 | 14.64% | 4.48 |
| **Total** | $287976 | $188224 | $188224 | 8.29% | 4.16 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Loan amount consists of outstanding principal balance plus unfunded loan commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents the weighted average interest rate for each loan at September 30, 2025. Loans earn interest at the one-month term Secured Overnight Financing Rate ("SOFR") plus a spread. At September 30, 2025, the one-month SOFR was 4.13%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Assumes all extension options are exercised by the borrower, however, loans may be prepaid prior to such date. Extension options are subject to satisfaction of certain predefined conditions as defined in the respective loan agreements.

The below tables detail the property type and geographic location of the properties securing our commercial real estate loans as of September 30, 2025:

---

| | | |
|:---|:---|:---|
| *($ in thousands)* | *($ in thousands)* | *($ in thousands)* |
|  | **September 30, 2025** | **September 30, 2025** |
| **Property Type** | **Fair Value** | **Percentage** |
| Multifamily | $126101 | 66.99% |
| Industrial | 37811 | 20.09% |
| Hospitality | 15000 | 7.97% |
| Mixed Use | 9312 | 4.95% |
| **Total** | $188224 | 100% |

---

---

| | | |
|:---|:---|:---|
| *($ in thousands)* | *($ in thousands)* | *($ in thousands)* |
|  | **September 30, 2025** | **September 30, 2025** |
| **Region** | **Fair Value** | **Percentage** |
| Far West | $67914 | 36.08% |
| Southeast | 47815 | 25.40% |
| Various <sup>(1)</sup> | 37810 | 20.09% |
| Southwest | 27404 | 14.56% |
| Mideast | 7281 | 3.87% |
| **Total** | $188224 | 100% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Various includes industrial and multifamily portfolios with multiple locations throughout the United States.

The Company did not have investments in loans receivable at December 31, 2024.

**Note 5 - Investments in Real Estate Securities**

The following is a summary of the Company's investments in real estate securities, at fair value at September 30, 2025:

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** |
| *(in thousands, except interest rates)* | **Number of Bonds** | **Benchmark Interest Rate** | **Weighted Average Interest Rate** | **Weighted Average Contractual Maturity (years)** | **Par Value** | **Fair Value** |
| CMBS Bonds | 14 | 1 month SOFR | 7.28% | 5.03 | $74049 | $74328 |

---

The Company did not have investments in real estate securities at December 31, 2024.

The Company reports CMBS bonds at fair value on the Consolidated Balance Sheets with changes in fair value recorded in Unrealized gain (loss) on real estate securities, at fair value in the Consolidated Statements of Operations.

The following table shows the amortization cost, unrealized gain (loss) and fair value of the Company's CMBS bonds at September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands)* | **Amortized Costs** | **Unrealized Gain** | **Unrealized Loss** | **Fair Value** |
| CMBS Bonds | $73928 | $400 | $– $| 74328 |

---

The Company did not have investments in real estate securities at December 31, 2024.

**Note 6 - Repurchase Agreements**

The following table presents the value of repurchase agreements, at fair value at September 30, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *(in thousands, except interest rates)* | *(in thousands, except interest rates)* | *(in thousands, except interest rates)* |  |  |  |  |  |  |
| **Description** | **Weighted Average Interest Rate** <sup>(1)</sup> | **Maximum Facility Size** | **Available Capacity** | **Debt Amount Outstanding** | **Fair Value of Debt** | **Fair Value of Collateral** | **Current Maturity Date** | **Maximum Maturity Date** <sup>(2)</sup> |
| FBRED REIT BWH Seller, LLC | 6.02% | $250000 | $217352 | $32648 | $32648 | $33779 | 5/8/2028 | 5/8/2030 |
| FBRED REIT JWH Seller, LLC | 6.53% | 250000 | 176818 | 73182 | 73182 | 107704 | 3/18/2027 | 3/18/2030 |
| FBRED REIT WWH Seller, LLC | 5.63% | 150000 | 131531 | 18470 | 18470 | 23384 | 7/30/2027 | 7/30/2030 |
| FBRED REIT High Yield Securities, LLC - JPM (3) | 4.92% | n/a | n/a | 23796 | 23796 | 27201 | 30 days | 30 days |
| FBRED REIT High Yield Securities - Lucid (3) | —% | n/a | n/a |  |  |  | 30 days | 30 days |
| **Total** | 6.05% |  |  | $148096 | $148096 | $192068 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the weighted average interest rate at September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Borrowing facilities may have extension options, subject to lender approval and compliance with certain financial and administrative covenants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Borrowings are tied to real estate securities with a 30-day repurchase maturity term, which automatically renew, subject to administrative covenants.

The Company did not have outstanding repurchase agreements at December 31, 2024.

Borrowings under the Company's repurchase agreements bear interest at one-month term SOFR plus a spread. At September 30, 2025, the one-month SOFR was 4.13%. Our repurchase agreements are subject to certain non-financial and financial covenants, including liquidity, tangible net worth and leverage covenants. We were in compliance with these covenants as of September 30, 2025.

*Repurchase Agreement Facilities*

On March 17, 2025, the Company, through its indirect wholly-owned subsidiary FBRED REIT High Yield Securities, LLC, entered into a Master Repurchase Agreement (the "MRA") with J.P. Morgan Securities LLC. Under the MRA, there is no maximum aggregate commitment. There is no initial maturity date of the MRA, however the borrowings are tied to real estate securities with 30-day repurchase maturity terms.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

On March 18, 2025, the Company, through its indirect wholly-owned subsidiary FBRED REIT JWH Seller, LLC ("JWH"), entered into an Uncommitted Master Repurchase Agreement (the "Uncommitted MRA") with J.P. Morgan Chase Bank, National Association. The Uncommitted MRA provides up to $250 million of advances. At the Company's option, the Uncommitted MRA may be upsized to provide up to $500 million in advances. The initial maturity date of the Uncommitted MRA is March 18, 2027.

On May 8, 2025, the Company, through its indirect wholly-owned subsidiary FBRED REIT BWH Seller, LLC, entered into an MRA with Barclays Bank PLC. The MRA provides up to $250 million of advances. The initial maturity date of the MRA is May 8, 2028.

On July 30, 2025, the Company, through its indirect wholly-owned subsidiary FBRED REIT WWH Seller, LLC, entered into a Master Repurchase Agreement (the "MRA") with Wells Fargo Bank, National Association. The MRA provides up to $150 million of advances. The initial maturity date of the MRA is July 30, 2027, which may be extended for up to three years.

On September 19, 2025, the Company, through its indirect wholly-owned subsidiary FBRED REIT High Yield Securities, LLC, entered into a Master Repurchase Agreement (the "Lucid MRA") with Lucid Prime Fund LLC. Under the Lucid MRA, there is no maximum aggregate commitment. There is no initial maturity date on the MRA, however the borrowings are tied to real estate securities 30-day repurchase maturity term.

The following table represents the future principal payments under the Company's outstanding repurchase agreements at September 30, 2025:

---

| | |
|:---|:---|
| *(in thousands)* |  |
| **Year** | **Amount** |
| 2025 | $23796 |
| 2026 |  |
| 2027 |  |
| 2028 |  |
| 2029 |  |
| Thereafter | 124300 |
| Total | $148096 |

---

**Note 7 - Fair Value Measurements**

In accordance with ASC 820, *Fair Value Measurement* ("ASC 820"), fair value is defined as the price that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

Each financial asset and liability is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 – Quoted prices in active markets for identical assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 – Other significant observable inputs (including quoted prices for similar assets or liabilities, interest rates, prepayment speeds, credit risk, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 – Significant unobservable inputs (including the Company's own assumptions in determining the fair value of assets and liabilities at the reporting date).

*Valuation of Financial Assets and Liabilities Measured at Fair Value*

The Company measures the fair value of its loans receivable and repurchase agreements using a discounted cash flow analysis unless observable market data is available. A discounted cash flow analysis requires management to make estimates regarding future interest rates and credit spreads. The most significant of these inputs relates to credit spreads and is unobservable. Thus, the Company has determined that the fair values of loans receivable and repurchase agreements valued using a discount cash flow analysis should be classified as Level 3 of the fair value hierarchy, while mortgage loans valued using securitized pricing should be classified as Level 2 of the fair value hierarchy. Mortgage loans classified as Level 3 are transferred to Level 2 if securitization pricing becomes available. The Company obtains third party pricing for determining the fair value of real estate securities, resulting in a Level 2 classification.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

The following table presents the Company's financial assets and liabilities carried at fair value on a recurring basis in the Consolidated Balance Sheets at September 30, 2025 by their level in the fair value hierarchy:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
| *(in thousands)* | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Financial Assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans receivable, at fair value | $— | $— | $188224 | $188224 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate securities, at fair value |  | 74328 |  | 74328 |
| **Total** | $— | $74328 | $188224 | $262552 |
| **Financial Liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase agreements, at fair value | $— | $— | $148096 | $148096 |
| **Total** | $— | $— | $148096 | $148096 |

---

The Company did not have financial assets and liabilities carried at fair value at December 31, 2024.

*Valuation of Loans Receivable, at Fair Value*

The following table shows a reconciliation of the beginning and ending fair value measurements of the Company's loans receivable at September 30, 2025:

---

| | |
|:---|:---|
| *(in thousands)* | **September 30, 2025** |
| Beginning balance at January 1, 2025 | $— |
| Loan originations and fundings | 195724 |
| Principal paydowns | (7500) |
| Unrealized gain (loss) on loans receivable |  |
| Balance at September 30, 2025 | $188224 |

---

The Company did not have investments in loans receivable measured at fair value during the year ended December 31, 2024.

The following table summarizes the significant unobservable inputs used in the fair value measurement of the Company's loans receivable at September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands)* | **Fair Value** | **Valuation Technique** | **Unobservable Inputs** | **Weighted Average Rate** | **Range** |
| Loans receivable, at fair value - Senior | $159999 | Discounted Cash Flow | Discount Rate | 4.03% | 2.50% - 6.59% |
| Loans receivable, at fair value - Senior | 23171 | Recent Transaction <sup>(1)</sup> | n/a | n/a | n/a |
| Loans receivable, at fair value - Mezzanine | 5054 | Discounted Cash Flow | Discount Rate | 10.67% | 10.15% - 15.43% |
| Loans receivable, at fair value - Mezzanine |  | Recent Transaction <sup>(1)</sup> | n/a | n/a | n/a |
|  | $188224 |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any loans receivable originated during the calendar month are valued utilizing the transaction price as a market approach under ASC 820.

The Company did not have Loans receivable, at fair value at December 31, 2024.

*Valuation of Repurchase Agreements, at Fair Value*

The following table shows a reconciliation of the beginning and ending fair value measurements of the Company's repurchase agreements at September 30, 2025:

---

| | |
|:---|:---|
| *(in thousands)* | **September 30, 2025** |
| Beginning balance at January 1, 2025 | $— |
| Borrowings under repurchase agreements | 290701 |
| Repayment under repurchase agreements | (142605) |
| Balance at September 30, 2025 | $148096 |

---

The Company did not have repurchase agreements measured at fair value during the year ended December 31, 2024.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

The following table summarizes the significant unobservable inputs used in the fair value measurement of the Company's repurchase agreements at September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands)* | **Fair Value** | **Valuation Technique** | **Unobservable Inputs** | **Weighted Average Rate** | **Range** |
| Repurchase agreements, at fair value | $135405 | Discounted Cash Flow | Discount Rate | 2.02% | 0.70% - 3.70% |
| Repurchase agreements, at fair value | 12691 | Recent Transaction <sup>(1)</sup> | n/a | n/a | n/a |
|  | $148096 |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any borrowings under repurchase agreements executed during the calendar month are valued utilizing the transaction price as a market approach under ASC 820.

The Company did not have Repurchase agreements, at fair value at December 31, 2024.

**Note 8 - Prepaid Expenses and Other Assets and Accrued Expenses and Other Liabilities**

The following table summarizes the components of Prepaid expenses and other assets:

---

| | | |
|:---|:---|:---|
| *(in thousands)* | **September 30, 2025** | **December 31, 2024** |
| Prepaid expenses | $56 | $— |
| Exit fee receivables | 167 | $— |
| **Total prepaid expenses and other assets** | $**223** | $**—** |

---

The following table summarizes the component of Accrued expenses and other liabilities:

---

| | | |
|:---|:---|:---|
| *(in thousands)* | **September 30, 2025** | **December 31, 2024** |
| Accrued expenses | $696 | $— |
| Directors compensation payable | 54 | **—** |
| **Accrued expenses and other liabilities** | $**750** | $**—** |

---

**Note 9 - Stockholders' Equity&nbsp;&nbsp;&nbsp;&nbsp;**

*Authorized Capital*

As of May 22, 2024, the Company was authorized to issue 100,000 shares of common stock, par value $0.001 per share. On March 27, 2025, the Company amended it Articles of Incorporation, pursuant to which the Company is authorized to issue 3.2 billion shares, consisting of 3.1 billion shares of common stock, par value of $0.001 per share, of which 500 million shares are classified as Class I common stock, and 100.0 million shares of preferred stock, par value of $0.001 per share.

Effective April 1, 2025, the Company supplemented its Articles of Incorporation to classify 100 million of its common shares as Class F common stock, 400 million of its common shares as Class F-D common stock, 400 million of its common shares as Class F-S common stock, 100 million of its common shares as Class G common stock, 400 million of its common shares as Class G-D common stock, 400 million of its common shares as Class G-S common stock and 200 million of its common shares as Class E common stock.

The Company has commenced a continuous private offering, pursuant to which it offers and sells to a limited number of investors various classes of its common shares. The classes of common shares may have different upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees, as well as different management fees and performance participation allocations. The initial per share purchase price for shares of the Company's common shares in the offering was equal to the most recently determined NAV per share for the applicable class (which was deemed to be $25.00 until the last calendar day of the month during which the Company makes its first investment, which was April 1, 2025) plus applicable upfront selling commissions and dealer manager fees. Thereafter, the purchase price per share for each class of the Company's common shares varies and will generally equal the prior month's NAV per share for each applicable class, as calculated monthly, plus applicable upfront selling commissions and dealer manager fees.

*Common Shares*

On April 1, 2025 the Company completed its first closing of its private offering of common shares.

The table below summarizes changes in the Company's outstanding common shares and proceeds from the issuance of common shares for the nine months ended September 30, 2025:

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Total** |
| **Shares outstanding at December 31, 2024** | 40 |  |  |  |  | 40 |
| Common shares issued |  |  |  |  |  |  |
| **Shares outstanding at March 31, 2025** | 40 |  |  |  |  | 40 |
| Common shares issued |  | 1770675 | 1230562 | 168500 |  | 3169737 |
| **Shares outstanding at June 30, 2025** | 40 | 1770675 | 1230562 | 168500 |  | 3169777 |
| Common shares issued |  | 937730 | 282484 | 783281 | 7700 | 2011195 |
| DRIP shares issued |  | 23085 | 23956 | 3456 | 17 | 50514 |
| **Shares outstanding at September 30, 2025** | 40 | 2731490 | 1537002 | 955237 | 7717 | 5231486 |
| Proceeds from issuance of common shares <br>&nbsp;&nbsp;&nbsp;&nbsp;*(in thousands)* | $— | $68654 | $38475 | $23946 | $193 | $131268 |

---

The table below summarizes changes in the Company's outstanding common shares and proceeds from the issuance of common shares for the period from May 22, 2024 (date of inception) through September 30, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Total** |
| **Shares outstanding at May 22, 2024 (date of inception)** |  |  |  |  |  |  |
| Common shares issued |  |  |  |  |  |  |
| Common shares redeemed |  |  |  |  |  |  |
| **Shares outstanding at June 30, 2024** |  |  |  |  |  |  |
| Common shares issued | 40 |  |  |  |  | 40 |
| **Shares outstanding at September 30, 2024** | 40 |  |  |  |  | 40 |
| Proceeds from issuance of common shares<br> *(in thousands)* | $1 | $— | $— | $— | $— | $1 |

---

*Share Repurchase Plan*

The Company has adopted a share repurchase plan whereby stockholders may request on a quarterly basis that the Company repurchase all or any portion of their shares. However, the share repurchase plan is discretionary and the Company is 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 calendar quarter. In addition, the Company's ability to fulfill repurchase requests is subject to a number of limitations, including whether there is sufficient cash available to meet such requests. As a result, share repurchases may not be available each calendar quarter. Repurchases will be made at the transaction price in effect on the repurchase date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price (an "Early Repurchase Deduction"). The one-year holding period is measured as of the first calendar day immediately following the prospective repurchase date. The Early Repurchase Deduction will not apply to shares acquired through the Company's distribution reinvestment plan ("DRIP").

The aggregate NAV of total repurchases of common stock (excluding any Early Repurchase Deduction) is limited to no more than 5% of the aggregate NAV per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding month). Shares issued to the Adviser pursuant to the Advisory Agreement are not subject to these repurchase limitations.

In the event that the Company determines to repurchase some but not all of the shares submitted for repurchase during any calendar quarter under the share repurchase plan, shares repurchased at the end of the calendar quarter will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted after the start of the next calendar quarter, or upon the recommencement of the share repurchase plan, as applicable.

Under the share repurchase plan, the Board may make exceptions to, amend, suspend (including indefinitely) or terminate the share repurchase plan at any time if it deems such action to be in the Company's best interest and the best interests of the stockholders.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

The Company may fund repurchase requests from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and there are no limits on the amounts the Company may pay from such sources. Should repurchase requests, in the Company's judgment, place an undue burden on its liquidity, adversely affect the Company's operations or risk having an adverse impact on the Company as a whole, or should the Company otherwise determine that investing its liquid assets in real estate or other investments rather than repurchasing its shares is in the best interests of the Company as a whole, then the Company may choose to repurchase fewer shares than have been requested to be repurchased, or none at all.

For the three and nine months ended September 30, 2025, the Company did not receive any repurchase requests.

*Distribution Reinvestment Plan* 

The Company has adopted a distribution reinvestment plan whereby stockholders will have their cash distributions automatically reinvested in additional shares of common stock unless they elect to receive their distributions in cash. The per share purchase price for shares purchased under the distribution reinvestment plan is equal to the transaction price at the time the distribution is payable.

*Distributions*

The following table details the aggregate distributions declared for the Company's common shares for the three months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** |
| Aggregate gross distribution declared per common share | $0.5001 | $0.5001 | $0.5001 | $0.3334 |
| Stockholder servicing fee per common share | $— | $(0.0145) | $(0.0316) | $— |
| Net distributions declared per common share | $0.5001 | $0.4856 | $0.4685 | $0.3334 |

---

The following table details the aggregate distributions declared for the Company's common shares for the nine months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** |
| Aggregate gross distribution declared per common share | $0.6668 | $0.6668 | $0.6668 | $0.3334 |
| Stockholder servicing fee per common share | $— | $(0.0205) | $(0.0494) | $— |
| Net distributions declared per common share | $0.6668 | $0.6463 | $0.6174 | $0.3334 |

---

The Company did not declare a distribution during the three and nine months ended September 30, 2024.

**Note 10 - Earnings Per Common Share**

Earnings per common share for the three and nine months ended September 30, 2025 is computed as presented in the table below:

---

| | | |
|:---|:---|:---|
| *(in thousands, except share and per share amounts)* | **Three months ended September 30, 2025** | **Nine months ended September 30, 2025** |
| **Basic and Diluted** |  |  |
| Net income (loss) available to common stockholders | $1100 | $(790) |
| Weighted average common shares outstanding | 4574684 | 3499588 |
| Basic and diluted earnings per common share | $0.24 | $(0.23) |

---

**Note 11 - Commitments and Contingencies**

*Commitments*

As of September 30, 2025, the Company had unfunded commitments on delayed draw term loans of $99.8 million. As of September 30, 2025, the Company's unfunded commitments consisted of the following:

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| *(in thousands)* |  |  |
| **Investment Type** | **Total Commitment** | **Remaining Commitment** |
| Senior Mortgage | $160256 | $79505 |
| Mezzanine | 20741 | 20247 |
|  | $180997 | $99752 |

---

*Litigation and Regulatory Matters*

In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

*Indemnifications*

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote. Accordingly, the Company has not entered into any contracts and not accrued any liability in conjunction with such indemnifications.

**Note 12 - Dependency** 

The Company is dependent on the Adviser 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 Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers.

**Note 13 - Subsequent Events**

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q. The following activity took place subsequent to September 30, 2025.

*Common Shares* 

Subsequent to September 30, 2025, and in connection with the Company's continuous private offering, the Company issued shares of its Class G common stock, Class G-D common stock, Class G-S common stock and Class E common stock.

These offers and sales of the Class G common stock, Class G-D common stock, Class G-S common stock and Class E common stock were exempt from the registration provisions of the Securities Act, by virtue of Section 4(a)(2) and Regulation D thereunder.

The following table details the shares issued between October 1, 2025 and November 7, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands, except share amounts)* | **Common Shares, excluding DRIP** | **Common Shares, excluding DRIP** | **DRIP** | **DRIP** |
| **Title of Securities** | **Number of Shares Sold** | **Aggregate Consideration** | **Number of Shares Sold** | **Aggregate Consideration** |
| Class G Common Stock | 409828 | $10318 | 9488 | $239 |
| Class G-D Common Stock | 192267 | 4813 | 8610 | 216 |
| Class G-S Common Stock | 424209 | 10695 | 3106 | 78 |
| Class E Common Stock | 0 |  | 17 |  |
| Total | 1026304 | $25826 | 21221 | $533 |

---

*Distributions Declared*

The following table summarizes subsequent payments related to distributions on common stock declared by the Board as of the record dates noted. Net distributions paid (after any servicing fees) from October 1, 2025 through November 7, 2025 were $0.9 million, and were paid in cash or reinvested in the applicable class of common stock for stockholders participating in the Company's distribution reinvestment plan.

------

**FRANKLIN BSP REAL ESTATE DEBT, INC.** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**For the period ended September 30, 2025**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Record Date** | **Declaration Date** | **Payment Date** | **Distributions Per Share** | **Share Class** |
| September 30, 2025 | August 6, 2025 | October 15, 2025 | $0.1667 | G, G-D, G-S |
| October 31, 2025 | August 6, 2025 | November 15, 2025 | $0.1667 | G, G-D, G-S |
| September 30, 2025 | September 8, 2025 | October 15, 2025 | $0.1667 | E |
| October 31, 2025 | September 8, 2025 | November 15, 2025 | $0.1667 | E |
| November 28, 2025 | November 5, 2025 | December 15, 2025 | $0.1667 | G, G-D, G-S, E |
| December 31, 2025 | November 5, 2025 | January 15, 2026 | $0.1667 | G, G-D, G-S, E |
| January 30, 2026 | November 5, 2025 | February 16, 2026 | $0.1667 | G, G-D, G-S, E |
| February 27, 2026 | November 5, 2025 | March 16, 2026 | $0.1667 | G, G-D, G-S, E |

---

*Related Party Transaction*

On November 5, 2025, the Company completed the sale of a 50% participation interest in four commercial real estate loans to an entity managed by and affiliated with the Advisor, generating net cash proceeds of $39.7 million. The loans had an aggregate carrying value of $39.3 million within Loans receivable, at fair value on the Consolidated Balance Sheet as of September 30, 2025, and total and unfunded commitments of $50.7 million and $11.3 million, respectively, as further described in Note 11.

------

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** 

*The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.*

*References herein to "Franklin BSP Real Estate Debt Inc." "Company," "we," "us," or "our" refer to Franklin BSP Real Estate Debt, Inc. and its subsidiaries unless the context specifically requires otherwise.*

**Forward Looking Statements**

Certain information contained in this Quarterly Report on Form 10-Q constitutes "forward-looking statements," which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, including those set forth under Item 1A "Risk Factors", actual events or results or the actual performance of the company may differ materially from those reflected or contemplated in such forward-looking statements. As a result, prospective investors should not rely on such forward-looking statements in making their investment decisions. In addition, certain statements reflect estimates, predictions or opinions of the company, benefit street partners or their affiliates, which cannot be independently verified and may change. There is no guarantee that these estimates, predictions or opinions will be ultimately realized.

You should carefully review the section entitled "Risk Factors" for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website at http://www.sec.gov. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, including (but not limited to), as a result of new information and future events.

**Overview**

We are a Maryland corporation that was formed on May 22, 2024. We intend to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning with the taxable year ending December 31, 2025. We are externally managed by Benefit Street Partners, L.L.C. ("Adviser").

We intend to use our proceeds from our private offering of common stock to finance our investment objectives. We seek to achieve attractive risk-adjusted returns while preserving capital by primarily originating senior floating-rate mortgage loans, but also by investing in other real estate-related assets, including subordinated mortgage loans, mezzanine loans, and participations in such loans, commercial real estate securities, including commercial mortgage-backed securities ("CMBS"), equity or equity-linked securities in real estate operating companies, and net leased properties.

We intend to target middle market companies, which we generally define as companies that have loans between $25 million and $100 million, although we may invest in larger or smaller companies. We will invest across a mix of asset classes, but intend to focus on lending in the multifamily space. To a lesser extent, we may invest in, or originate, other real-estate related debt and equity investments, which may include subordinated debt, CMBS and collateralized loan obligations ("CLOs").

We seek to focus on a flexible mix of credit and other real estate investments associated with high-quality assets to generate current cash flow. We seek to identify attractive risk-reward investment opportunities with a focus on financing middle market investments.

We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our business, other than those referred to in this Quarterly Report on Form 10-Q.

**Q3 2025 Highlights**

***Capital Activity and Distributions***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three and nine months ended September 30, 2025, we sold an aggregate of 2.0 million and 5.2 million, respectively, of our common shares for a net consideration of approximately $50.7 million and $130.0 million, respectively, through our continuous offering. In addition, during the three and nine months ended September 30, 2025, we issued 50,514 shares pursuant to our distribution reinvestment plan (the "DRIP") for an aggregate net value of approximately $1.3 million.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three months ended September 30, 2025, we declared aggregate net distributions of $0.5001, $0.4856, $0.4685 and $0.3334 per Class G share, Class G-D share, Class G-S share and Class E share, respectively. During the nine months ended September 30, 2025, we declared aggregate net distributions of $0.6668, $0.6463, $0.6174 and $0.3334 per Class G share, Class G-D share, Class G-S share and Class E share, respectively.

***Investments***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three months ended September 30, 2025, we originated nine new floating rate commercial real estate loans with a total commitment amount of $96.2 million and total outstanding principal amount of $46.6 million. One loan was repaid for its full commitment amount of $7.5 million during the three months ended September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of September 30, 2025, our commercial real estate loan portfolio included 22 floating rate commercial real estate loans with a total commitment amount of $277.8 million and total outstanding principal amount of $188.2 million and one fixed rate commercial real estate loan with a total commitment amount of $10.2 million, with no outstanding balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three months ended September 30, 2025, we invested in four new floating rate CMBS bonds. As of September 30, 2025, the fair value of these four bonds was $17.1 million. As of September 30, 2025, our floating rate CMBS bond portfolio included 14 securities with a total principal balance of $73.9 million and total fair value of $74.3 million.

***Financing Activity***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three months ended September 30, 2025, we entered into two new repurchase agreement facilities. On July 30, 2025, we entered into a repurchase agreement with Wells Fargo Bank, National Association. The repurchase agreement provides up to $150.0 million of advances. On September 19, 2025, we entered into a repurchase agreement with Lucid Prime Fund, LLC. There is no maximum aggregate commitment under this facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• During the three and nine months ended September 30, 2025, we incurred net borrowings of $12.2 million and $148.1 million, respectively, under our repurchase agreements.

**Financial Condition**

*Investment Activities*

*Investments in Loans Receivable*

As of September 30, 2025, our commercial real estate loan portfolio consists of 23 loans. The following table details the statistics of our loans receivable portfolio as of September 30, 2025:

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *(in thousands, except interest rates)* | *(in thousands, except interest rates)* | *(in thousands, except interest rates)* | *(in thousands, except interest rates)* |  |  |  |  |  |
| **Description** | **Location** | **Origination Date** | **Interest Rate** <sup>(1)</sup> | **Loan Commitment** <sup>(2)</sup> | **Principal Balance Outstanding** | **Fair Value** | **Payment Terms** | **Maximum Maturity Date** <sup>(3)</sup> |
| Multifamily | Texas | 3/26/2025 | 10.13% | $23806 | $2561 | $2561 | I/O | 10/9/2029 |
| Multifamily | Texas | 3/26/2025 | 19.38% | 4596 | 494 | 494 | I/O | 10/9/2029 |
| Industrial | Various | 4/7/2025 | 8.18% | 27360 | 27360 | 27360 | I/O | 4/9/2030 |
| Industrial | Various | 4/7/2025 | 14.13% | 4560 | 4560 | 4560 | I/O | 4/9/2030 |
| Multifamily | Texas | 4/11/2025 | 7.13% | 7500 | 7500 | 7500 | I/O | 4/9/2030 |
| Hospitality | Florida | 5/14/2025 | 8.63% | 7500 | 7500 | 7500 | I/O | 5/9/2030 |
| Hospitality | South Carolina | 4/16/2025 | 8.38% | 7500 | 7500 | 7500 | I/O | 5/9/2028 |
| Multifamily | California | 5/8/2025 | 10.63% | 41188 | 28772 | 28772 | I/O | 5/9/2029 |
| Multifamily (4) | California | 5/8/2025 | 14.00% | 10196 |  |  | I/O | 5/9/2029 |
| Multifamily | California | 5/22/2025 | 6.78% | 22558 | 22558 | 22558 | I/O | 6/9/2030 |
| Multifamily | California | 5/30/2025 | 10.38% | 7500 | 6584 | 6584 | I/O | 6/9/2029 |
| Multifamily | North Carolina | 5/30/2025 | 7.38% | 7500 | 6279 | 6279 | I/O | 6/9/2030 |
| Multifamily | North Carolina | 6/13/2025 | 7.08% | 10000 | 10000 | 10000 | I/O | 6/9/2028 |
| Multifamily | Texas | 6/30/2025 | 7.13% | 10000 | 10000 | 10000 | I/O | 7/9/2030 |
| Multifamily | Florida | 7/3/2025 | 6.63% | 7500 | 7224 | 7224 | I/O | 7/9/2028 |
| Multifamily | Tennessee | 8/18/2025 | 10.38% | 27763 |  |  | I/O | 9/9/2030 |
| Multifamily | Tennessee | 8/18/2025 | 17.46% | 5949 |  |  | I/O | 9/9/2030 |
| Mixed Use | North Carolina | 8/19/2025 | 7.38% | 10000 | 9312 | 9312 | I/O | 9/9/2029 |
| Multifamily | Various | 8/15/2025 | 9.18% | 10000 |  |  | I/O | 2/9/2028 |
| Multifamily | Texas | 8/21/2025 | 6.88% | 7500 | 6848 | 6848 | I/O | 9/9/2030 |
| Industrial | Various | 9/10/2025 | 7.13% | 7500 | 5891 | 5891 | I/O | 9/9/2030 |
| Multifamily | Nevada | 9/29/2025 | 6.78% | 10000 | 10000 | 10000 | I/O | 10/9/2030 |
| Multifamily | New Jersey | 9/30/2025 | 9.18% | 10000 | 7281 | 7281 | I/O | 10/9/2029 |
|  |  |  |  | $287976 | $188224 | $188224 |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the interest rate for each loan at September 30, 2025. Loans earn interest at the one-month term Secured Overnight Financing Rate ("SOFR") plus spread. At September 30, 2025, the one-month SOFR was 4.13%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Loan amounts consist of outstanding principal balance plus funded loan commitments for each loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Maximum maturity date assumes all extension options are exercised by the borrower, however, loans may be prepaid prior to such date. Extension options are subject to satisfaction of certain predefined conditions as defined in the respective loan agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Loan has a fixed rate of 14%.

*Investments in Real Estate Securities*

The following table details the statistics of our real estate securities portfolio as of September 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** | **CMBS Bonds** |
| *(in thousands, except interest rates)* | **Number of Bonds** | **Benchmark Interest Rate** | **Weighted Average Interest Rate** | **Weighted Average Contractual Maturity (years)** | **Par Value** | **Fair Value** |
| CMBS Bonds | 14 | 1 month SOFR | 7.28% | 5.03 | $74049 | $74328 |

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*Financing Activities*

We finance the majority of our loan portfolio through repurchase agreements. As of September 30, 2025, we had five repurchase agreement facilities that bear interest at one-month term SOFR plus a spread. These facilities had a weighted average borrowing rate of 6.05% at September 30, 2025.

The table below summarizes our repurchase agreement borrowings at September 30, 2025:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *(in thousands, except interest rates)* | *(in thousands, except interest rates)* | *(in thousands, except interest rates)* |  |  |  |  |  |  |
| **Description** | **Weighted Average Interest Rate** <sup>(1)</sup> | **Maximum Facility Size** | **Available Capacity** | **Debt Amount Outstanding** | **Fair Value of Debt** | **Fair Value of Collateral** | **Current Maturity Date** | **Maximum Maturity Date** <sup>(2)</sup> |
| FBRED REIT BWH Seller, LLC | 6.02% | $250000 | $217352 | $32648 | $32648 | $33779 | 5/8/2028 | 5/8/2030 |
| FBRED REIT JWH Seller, LLC | 6.53% | 250000 | 176818 | 73182 | 73182 | 107704 | 3/18/2027 | 3/18/2030 |
| FBRED REIT WWH Seller, LLC | 5.63% | 150000 | 131531 | 18470 | 18470 | 23384 | 7/30/2027 | 7/30/2030 |
| FBRED REIT High Yield Securities, LLC - JPM (3) | 4.92% | n/a | n/a | 23796 | 23796 | 27201 | 30 days | 30 days |
| FBRED REIT High Yield Securities - Lucid (3) |  | n/a | n/a |  |  |  | 30 days | 30 days |
| **Total** | 6.05% |  |  | $148096 | $148096 | $192068 |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the weighted average interest rate at September 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Borrowing facilities may have extension options, subject to lender approval and compliance with certain financial and administrative covenants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Borrowings are tied to real estate securities with a 30-day repurchase maturity term, which automatically renew, subject to administrative covenants.

Borrowings under our repurchase agreements bear interest at one-month term SOFR plus a spread. At September 30, 2025, the one-month SOFR was 4.13%.

Each of our repurchase agreements contains customary terms and conditions, including but not limited to, negative covenants relating to restrictions on our operations with respect to our status as a REIT, and financial covenants, such as a minimum interest coverage ratio covenant, minimum tangible net worth covenant, cash liquidity covenant and maximum Leverage Ratio covenant.

As of September 30, 2025, we were in compliance with the covenants of our financing facilities.

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**Results of Operations**

There were no operations for the year ended December 31, 2024 and the three months ended March 31, 2025. Operations commenced April 1, 2025.

For the three and nine months ended September 30, 2025, our results of operations consisted of:

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| | | |
|:---|:---|:---|
| *(in thousands, except share and per share amounts)* | **Three Months Ended<br>September 30, 2025** | **Nine Months Ended<br>September 30, 2025** |
| **Income** |  |  |
| &nbsp;&nbsp;Interest income | $4896 | $7094 |
| &nbsp;&nbsp;Less: interest expense | (2230) | (3274) |
| &nbsp;&nbsp;Net interest income | 2666 | 3820 |
| &nbsp;&nbsp;Fee and other income | 446 | 1245 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total income** | 3112 | 5065 |
| **Expenses** |  |  |
| &nbsp;&nbsp;Administrative fees | 464 | 1984 |
| &nbsp;&nbsp;Organizational costs |  | 1053 |
| &nbsp;&nbsp;General and administrative expenses | 368 | 912 |
| &nbsp;&nbsp;Accounting fees | 168 | 555 |
| &nbsp;&nbsp;Financing fees | 795 | 1182 |
| &nbsp;&nbsp;Management & performance fees - related party | 482 | 569 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total expenses** | 2277 | 6255 |
| **Other income** |  |  |
| &nbsp;&nbsp;Unrealized gain on real estate securities, at fair value | 265 | 400 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total other income** | 265 | 400 |
| **Net income (loss)** | $1100 | $(790) |
| Net loss per common share, basic and diluted | $0.24 | $(0.23) |
| **Weighted average common shares outstanding, basic and diluted** | **4574684** | **3499588** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total income for the three and nine months ended September 30, 2025 was $3.1 million and $5.1 million, respectively, and consisted of interest income of $4.9 million and $7.1 million, respectively, interest expense of $2.2 million and $3.3 million, respectively, and fee and other income of $0.4 million and $1.3 million, respectively (predominantly origination fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Administrative fees for the three and nine months ended September 30, 2025 were $0.5 million and $2.0 million, respectively. These fees were predominately personnel and other Advisor costs of providing services pursuant to the Advisory Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Organizational costs for the nine months ended September 30, 2025 were $1.1 million. We did not incur any organizational costs during the three months ended September 30, 2025. These costs have been advanced by the Adviser and paid on our behalf. We will commence reimbursement of the advances to the Adviser in April 2026 and will pay the balance due at that time, ratably in 60 monthly installments thereafter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• General and administrative expenses for the three and nine months ended September 30, 2025 were $0.4 million and $0.9 million, respectively. These fees related to services such as third party administrative fees, transfer agent fees, legal, filing fees, board of director compensation and valuation services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Accounting fees for the three and nine months ended September 30, 2025 were $0.2 million and $0.6 million, respectively. These fees are related to audit and tax services for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financing fees for the three and nine months ended September 30, 2025 were $0.8 million and $1.2 million, respectively. These fees are related to the various debt obligations we entered into to fund loan originations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management and performance fees - related party for the three and nine months ended September 30, 2025 were $0.5 million and $0.6 million, respectively. These fees represent fees incurred under the Advisory Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total other income for the three and nine months ended September 30, 2025 was $0.3 million and $0.4 million, respectively, which related to the remeasurement of the real estate securities at fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the three and nine months ended September 30, 2025, Offering costs of $0.1 million and $2.2 million, respectively, were incurred. Under generally accepted accounting principles in the United States of America ("GAAP"), these costs are charged directly against stockholders' equity. These costs have been advanced by the Adviser and paid on our behalf. We will commence reimbursement of the advances to the Adviser in April 2026 and will pay the balance due at that time, ratably in 60 monthly installments thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In addition, for the three and nine months ended September 30, 2025, stockholder servicing fees were $1.1 million and $1.8 million, respectively and were charged directly against stockholders' equity.

Our net income for the three months September 30, 2025 was approximately $1.1 million or $0.24 per weighted average common share (basic). Our net loss for the nine months ended September 30, 2025 was approximately ($0.8) million or ($0.23) per weighted average common share (basic).

**Liquidity And Capital Resources**

Liquidity is a measure of our ability to meet our cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make new investments where appropriate, pay distributions to our stockholders and other general business needs. We believe that we have sufficient current liquidity and access to additional liquidity to meet our financial obligations for the next twelve months and beyond.

Our initial closing of our private offering occurred on April 1, 2025, at which time we commenced our principal operations.

Since the initial closing of our private offering of our common stock occurred on April 1, 2025, we have issued common stock for a total of $157.5 million through November 7, 2025, including shares issued pursuant to the DRIP. We expect to have subsequent closings of common stock through our private offering on a monthly basis. We intend to promptly invest the net proceeds from each closing in our target assets consistent with our investment objectives. In addition, we expect to obtain debt financing on our assets consistent with our financing strategy, and intend to use the proceeds to make additional investments in our target assets.

We expect to generate cash primarily from (i) the net proceeds of our continuous private offering, (ii) cash flows from our operations, (iii) any financing arrangements we may enter into in the future, and (iv) any future offerings of our equity or debt securities. We expect that during our first 12 months of operations our primary sources of capital will be net proceeds from monthly closings on our continuous private offering, debt financing and interest payments on our investments. We expect longer term capital sources to include these same sources and repayments of principal on our target investments.

Our primary use of cash will be for (i) origination or acquisition of commercial mortgage loans and other commercial debt investments, CMBS and other commercial real estate-related debt investments, (ii) the cost of operations (including the Management Fee and Performance Fee), (iii) debt service of any borrowings, (iv) periodic repurchases, including under our share repurchase plan, and (v) cash distributions (if any) to the holders of our shares to the extent declared by our Board of Directors (the "Board").

We intend to elect to be taxed and to operate in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986 ("Code") commencing with our taxable year ending December 31, 2025. Under the Code, to qualify as a REIT, we must distribute at least 90% of our taxable income subject to certain adjustments and excluding capital gain, and we must distribute 100% of our taxable income to avoid federal income tax payment obligations. These requirements will restrict our ability to retain cash flow to fund future liquidity needs.

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Our Adviser has agreed to several support measures that will enhance our liquidity. Our Adviser has agreed to advance all organization and offering expenses (other than upfront selling commissions, dealer manager fees and stockholder servicing fees) and may advance certain of our operating expenses on our behalf through the first anniversary of the initial closing of our private offering. We will reimburse the Adviser for all such advanced costs and expenses ratably over the 60 months following the first anniversary of the initial closing of our private offering.

Our primary sources of liquidity include cash and available borrowings under our repurchase agreements. The following table summarizes amounts available under these sources at September 30, 2025:

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| | |
|:---|:---|
| *(in thousands)* | **September 30, 2025** |
| Cash | $18821 |
| Available borrowings on undrawn repurchase agreements | 525701 |
| **Total available liquidity and capital resources** | $544522 |

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**Contractual Obligations and Commitments**

The following table shows our payment obligations for repayment of debt at September 30, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands)* | **Less Than 1 Year** | **1-3 Years** | **3-5 Years** | **More Than 5 years** | **Total** |
| Repurchase agreements | $23796 | $— | $124300 | $— | $148096 |
| **Total** | $23796 | $— | $124300 | $— | $148096 |

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In the ordinary course of business, we may enter into future funding commitments. At September 30, 2025, we had unfunded commitments on delayed draw term loans of $99.8 million. At September 30, 2025 the Company's unfunded commitments consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands)* |  |  |  |  |
| **Investment Type** | **Collateral Type** | **Commitment Type** | **Total Commitment** | **Remaining Commitment** |
| Senior Mortgage | Multifamily | Delayed Draw | 23805 | 21244 |
| Mezzanine | Multifamily | Delayed Draw | 4595 | 4102 |
| Senior Mortgage | Multifamily | Delayed Draw | 41188 | 12416 |
| Mezzanine | Multifamily | Delayed Draw | 10196 | 10196 |
| Senior Mortgage | Multifamily | Delayed Draw | 7500 | 917 |
| Senior Mortgage | Multifamily | Delayed Draw | 7500 | 1221 |
| Senior Mortgage | Multifamily | Delayed Draw | 7500 | 276 |
| Senior Mortgage | Multifamily | Delayed Draw | 27763 | 27763 |
| Mezzanine | Multifamily | Delayed Draw | 5949 | 5949 |
| Senior Mortgage | Mixed Use | Delayed Draw | 10000 | 688 |
| Senior Mortgage | Multifamily | Delayed Draw | 10000 | 10000 |
| Senior Mortgage | Multifamily | Delayed Draw | 7500 | 652 |
| Senior Mortgage | Industrial | Delayed Draw | 7500 | 1609 |
| Senior Mortgage | Multifamily | Delayed Draw | 10000 | 2719 |
| **Total** |  |  | $180997 | $99752 |

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**Cash Flows**

The following table summarizes the changes in cash and restricted cash for the nine months ended September 30, 2025:

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| | |
|:---|:---|
| *(in thousands)* | **For the nine months ended September 30, 2025** |
| Net cash provided by operating activities | $4714 |
| Net cash used in investing activities | (262152) |
| Net cash provided by financing activities | 288547 |
| **Net increase in cash and restricted cash** | $31109 |

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Cash flows provided by operating activities were $4.7 million and were primarily due to interest income and origination fees earned on the loans receivable and real estate securities during the during the nine months ended September 30, 2025.

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Cash flows used in investing activities were $262.2 million and were primarily related to the origination of loans and real estate securities during the nine months ended September 30, 2025.

Cash flows provided by financing activities were $288.5 million and were primarily related to proceeds received from repurchase agreements and issuance of common stock during the nine months ended September 30, 2025.

**Net Asset Value ("NAV") and NAV Per Share Calculation**

We calculate our NAV each month in accordance with valuation guidelines approved by the Board. We calculate our NAV for each class of shares based on the net asset values of our investments (including but not limited to commercial real estate loans and debt securities), the addition of any other assets (such as cash, restricted cash, receivables, and other assets obtained in the ordinary course of business), and the deduction of any liabilities (including but not limited to financing facilities, payables, and other liabilities incurred in the ordinary course of business). NAV is not a measure used under GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV differs from GAAP. NAV is not equivalent to stockholders' equity or any other GAAP measure.

The following table details the major components of our NAV as of September 30, 2025:

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| | |
|:---|:---|
| *(in thousands, except share data)* |  |
| **Components of NAV** | **September 30, 2025** |
| Loans receivable, at fair value | $188224 |
| Real estate securities, at fair value | 74328 |
| Cash | 18821 |
| Restricted cash | 12314 |
| Interest receivable | 833 |
| Other assets <sup>(1)</sup> | 1252 |
| Repurchase agreements, at fair value | (148096) |
| Interest payable | (353) |
| Subscription received in advance | (12314) |
| Due to affiliates <sup>(2)</sup> | (2251) |
| Accrued stockholder serving fees <sup>(3)</sup> | (17) |
| Distribution payable | (855) |
| Other accrued liabilities | (750) |
| **Net asset value** | $131136 |
| Number of outstanding shares (all classes) | 5231486 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Other assets represents exit fee receivable and unamortized debt facility costs. In accordance with the fair value option under GAAP, direct costs incurred in the establishment of debt facilities are expensed at the time the facilities are established. For purposes of NAV, these costs are capitalized and amortized over the life of the debt facility, therefore included in the above amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Due to affiliates excludes $4.6 million advanced by the Adviser for organizational, offering and operating expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Accrued stockholder servicing fee represents the accrual for the full cost of the stockholder servicing fee for Class G-D and Class G-S shares. Under GAAP, we accrued an estimate of the full cost of the stockholder servicing fees over the life of each share as an offering cost at the time we sold each of the Class G-D and Class G-S shares. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis.

The following table provides a breakdown of our total NAV and NAV per share by class as of September 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *(in thousands, except share amounts and per share data)* | **Common Shares** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares Class E** | **Total** |
| Net Asset Value | $— | $68685 | $38406 | $23853 | $192 | $131136 |
| Number of outstanding shares | 40 | 2731490 | 1537002 | 955237 | 7717 | 5231486 |
| NAV per share | $— | $25.15 | $24.99 | $24.97 | $24.88 | $25.07 |

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*Reconciliation of Stockholders' Equity to NAV*

Despite being a well-recognized term across many industries as a practical expedient for measuring the fair value of certain investments, NAV is not a measure used under GAAP. As described above, our monthly NAV is determined in accordance with valuation guidelines that we believe are consistent with industry practice and have been approved by the Board, but the treatment of certain assets and liabilities used for the determination of NAV under these guidelines differs from GAAP. Thus, our NAV is not equivalent to Stockholders' equity or any other GAAP measure.

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The following table reconciles GAAP stockholders' equity per our Consolidated Balance Sheets to our NAV at September 30, 2025:

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| | |
|:---|:---|
| *(in thousands)* | **September 30, 2025** |
| Stockholders' equity | $123703 |
| Adjustments: |  |
| Advanced organization, offering and operating costs | 4669 |
| Accrued stockholder servicing fees not currently payable <sup>(1)</sup> | 1734 |
| Unamortized debt issuance costs | 1030 |
| NAV | $131136 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)We have accrued stockholder servicing fees totaling $1.8 million of which approximately $17,000 is currently payable to the Dealer Manager as of September 30, 2025.

Given their timing and substantial size, reflecting organizational, offering and operating expense in NAV when incurred can be overly punitive to the NAV per share of early investors and reduce cash available for new investments that will inure to the benefit of later investors. To help mitigate the impact of this timing difference, the Adviser incurred the bulk of these costs on our behalf and agreed to allow them to be repaid ratably over 60 months starting after the first anniversary of the initial closing of our private offering. Under the terms of our advisory agreement, the Adviser advanced all of our organizational, offering and operating expenses (other than upfront selling commissions and ongoing stockholder servicing fees). We will decrease our NAV by the amount of each monthly repayment made to the Adviser during the reimbursement period. These costs were expensed as incurred in our GAAP financial statements.

Under the terms of our agreement, the Dealer Manager is entitled to receive upfront selling commissions for certain classes of common stock, including Class F-S, Class F-D, Class G-S and Class G-D shares and stockholder servicing fees for certain classes of our common stock, including Class F-S, Class F-D, Class G-S and Class G-D shares sold in the continuous offering. Under GAAP, we accrue the full amount of stockholder servicing fees payable over an estimated investor holding period as an offering cost at the time each applicable share is sold during the continuous offering and treat the amount as an offset (reduction) to Additional paid-in capital. As the actual monthly amounts are remitted to the Dealer Manager, the NAV is reduced by a corresponding amount.

We have elected the fair value option for our financing facilities and expense debt issuance costs in accordance with GAAP. However, when calculating our NAV, we capitalize debt issuance and other financing costs as incurred and expense the costs over the life of the financing facility so that the costs to maintain the facility are borne by all investors who benefit from its use, rather than just those who were invested during the period in which the facility was implemented.

**Distributions**

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Code. Distributions are at the discretion of the Board and include a review of earnings, cash flow, liquidity and capital resources.

The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor.

The initial closing of our private offering occurred on April 1, 2025, at which time we commenced our principal operations.

The following table summarizes our distributions declared during the three and nine months ended September 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| *(in thousands)* | **Amount** | **Percentage** | **Amount** | **Percentage** |
| **Distributions** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable in cash | $831 | 37% | $966 | 35% |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinvested in shares | 1422 | 63% | 1805 | 65% |
| &nbsp;&nbsp;&nbsp;&nbsp; Total distribution | $2253 | 100% | $2771 | 100% |
| Sources of Distributions |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash flows from operating activities | $2253 | 100% | $2771 | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;Offering proceeds |  | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total sources of distribution | $2253 | 100% | $2771 | 100% |
| Net cash provided by operating activities | $3069 |  | $4714 |  |

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The table below details the net distribution per share declared for each of our common share classes for the nine months ended September 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Record Date** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** |
| June 30, 2025 | $0.1667 | $0.1607 | $0.1489 | $— |
| July 31, 2025 | $0.1667 | $0.1623 | $0.1603 | $— |
| August 29, 2025 | $0.1667 | $0.1616 | $0.1517 | $— |
| September 8, 2025 | $— | $— | $— | $0.1667 |
| September 30, 2025 | $0.1667 | $0.1617 | $0.1565 | $0.1667 |
| **Totals** | $**0.6668** | $**0.6463** | $**0.6174** | $**0.3334** |

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**Critical Accounting Estimates**

Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting estimates are those that require the application of management's most difficult, subjective or complex judgments on matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses.

*Valuation of Investments in Commercial Loans*

The Board is responsible for overseeing the valuation of our portfolio investments at fair value as determined in good faith pursuant to the Adviser's valuation policy, The Adviser, subject to the oversight of the Board, has the day-to-day responsibility for implementing the portfolio valuation process that is set forth in our valuation policies.

Our investments in commercial loans are carried at fair value as we elected the fair value option. In determining the fair value of our investment, the commercial loans do not have readily available market quotations. As such, we determine fair value using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our

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investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company's ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. We classify this investment as Level 3 within the valuation hierarchy. Judgments used to determine fair value of Level 3 instruments are more significant than those required when determining the fair value of instruments classified as Level 1 or 2 due to the inherent uncertainty of the estimates and judgments used.

As part of our quarterly valuation process the Adviser may be assisted by one or more independent valuation firms engaged by us. The Adviser as valuation designee determines the fair value of each investment, in good faith, based on the input of the independent valuation firm(s) (to the extent applicable).

With respect to investments for which market quotations are not readily available, the Adviser undertakes a multi-step valuation process each quarter, as described below:

 · Each portfolio company or investment will be valued by the Adviser, potentially with assistance from one or more independent valuation firms engaged by the Board;

 · The independent valuation firm(s) conduct independent appraisals and make an independent assessment of the value of each investment; and

 · The Adviser determines the fair value of each investment, in good faith, based on the input of the Adviser and independent valuation firm (to the extent applicable).

In circumstances where the Adviser deems appropriate, the Adviser's internal valuation team values certain investments. When performing the internal valuations, the Adviser utilizes similar valuation techniques as an independent third-party pricing service would use. Such valuations will be approved by an internal valuation committee of the Adviser, with oversight from the Board.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate an investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

*Net Change in Unrealized Appreciation or Depreciation*

Net change in unrealized appreciation or depreciation will reflect the change in investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

**New Tax Legislations**

Effective July 4, 2025, certain changes to U.S. tax law were approved that impact us and our stockholders. Among other changes, this legislation (i) permanently extended the 20% deduction for "qualified REIT dividends" for individuals and other non-corporate taxpayers under Section 199A of the Internal Revenue Code (the "Code"), (ii) increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries ("TRSs") from 20% to 25% for taxable years beginning after December 31, 2025, and (iii) increased the base on which the 30% interest deduction limit under Section 163(j) of the Code applies by excluding depreciation, amortization and depletion from the definition of "adjusted taxable income" (i.e. based on EBITDA rather than EBIT) for taxable years beginning after December 31, 2024.

**Related Party Transactions**

We have entered into an advisory agreement with Benefit Street Partners, L.L.C. See <u>[Note 3 - Related Party Transactions](#ibdf05e5717464600aa62fc99676958d9_43)</u> to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

------

The Adviser may be entitled to receive a Performance Fee for each class of common share except Class E common shares, which is accrued monthly and payable quarterly in arrears. Refer to "Note 3 - Related Party Transactions - Management and Performance Fees" to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a summary of how our performance fee is computed.

For the three and nine months ended September 30, 2025 Performance Fees were approximately $319,000 and $323,000, respectively.

------

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not required for a smaller reporting company.

**ITEM 4. CONTROLS AND PROCEDURES** 

**Evaluation of Disclosure Controls and Procedures**

An evaluation of the effectiveness of the design and operation of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based upon this evaluation, such officers have concluded that as of the end of the period covered by this report our disclosure controls and procedures (a) were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and (b) included, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including such officers, as appropriate to allow timely decisions regarding required disclosure.

**Changes in Internal Control Over Financial Reporting**

During the quarter ended September 30, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

------

**PART II. OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

From time to time, we may be involved in various claims and legal actions in the ordinary course of business. As of September 30, 2025, we were not subject to any material legal proceedings.

**ITEM 1A. RISK FACTORS**

Our potential risks and uncertainties are presented in the section entitled "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025. There have been no material changes from these risk factors.

**ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS**

**Unregistered Sales of Equity Securities**

We are engaged in a continuous private offering of our common stock to "accredited investors" (as defined in Regulation D under the Securities Act) made pursuant to the exemptions provided by Section 4(a)(2) of the Securities Act and Regulation D thereunder and applicable state securities laws.

The following table details the common shares sold pursuant to our ongoing private offering, including the DRIP, during the nine months ended September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands, except share amounts)* | **Number of Common Shares Sold** | **Number of Common Shares Sold** | **Number of Common Shares Sold** | **Number of Common Shares Sold** |  |
| **Date Shares Sold** | **Common Shares <br>Class G** | **Common Shares <br>Class G-D** | **Common Shares <br>Class G-S** | **Common Shares <br>Class E** | **Aggregate Consideration (1)** |
| April 1, 2025 | 1202888 | 176600 |  |  | $34487 |
| May 1, 2025 | 195412 | 1050000 | 55000 |  | 32519 |
| June 2, 2025 | 372375 | 3962 | 113500 |  | 12375 |
| July 1, 2025 | 393632 | 223094 | 295772 |  | 23135 |
| July 15, 2025 (DRIP) | 7094 | 7471 | 589 |  | 383 |
| August 1, 2025 | 223914 | 9569 | 84557 | 6600 | 8193 |
| August 14, 2025 (DRIP) | 7664 | 8205 | 1320 |  | 432 |
| September 2, 2025 | 320184 | 49821 | 402952 | 1100 | 19518 |
| September 12, 2025 (DRIP) | 8328 | 8281 | 1547 | 17 | 457 |
| Total | 2731490 | 1537002 | 955237 | 7717 | $131499 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes upfront selling commissions and placement fees of $0.2 million on the Class G-S common shares.

The Board has adopted a share repurchase plan. Refer to "Item 5—Market for Registrant's Common Equity, Related Stockholder Matters, And Issuer Purchases Of Equity Securities—Share Repurchase Plan" in our Annual Report on Form 10-K filed with the SEC on March 31, 2025, for information regarding the terms of our share repurchase plan. During the quarter ended September 30, 2025, we did not repurchase shares pursuant to the share repurchase plan.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

None.

**ITEM 5. OTHER INFORMATION**

------

During the quarterly period ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated any "Rule 10b5-1 trading arrangement" or any "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

------

**ITEM 6. EXHIBITS**

(a) List of documents filed:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Financial Statements of the Company. (See Item 1 above.)

&nbsp;&nbsp;&nbsp;&nbsp;(2) Exhibits

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 10.1 | <u>[Master Repurchase Agreement, dated as of July 30, 2025 by and between FBRED REIT WWH Seller, LLC and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, filed with the SEC on August 7, 2025)](https://www.sec.gov/Archives/edgar/data/2035428/000203542825000020/fbredreit6-30x25exhibit104.htm)</u> |
| 10.2 | <u>[Guarantee Agreement, dated as of July 30, 2025 by Franklin BSP Real Estate Debt, Inc. (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, filed with the SEC on August 7, 2025)](https://www.sec.gov/Archives/edgar/data/2035428/000203542825000020/fbredreit6-30x25exhibit105.htm)</u> |
| 10.3 | <u>[Master Repurchase Agreement, dated as of September 19, 2025 by and between FBRED REIT High Yield Securities, LLC and Lucid Prime Fund LLC](fbredreit9-30x25exhibit103.htm)[(filed herewith)](fbredreit9-30x25exhibit103.htm)</u> |
| 10.4 | <u>[Guarantee Agreement, dated as of September 19, 2025 by Franklin BSP Real Estate Debt, Inc.](fbredreit9-30x25exhibit104.htm)[(filed herewith)](fbredreit9-30x25exhibit104.htm)</u> |
| 31.1 | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)](fbredreit9-30x25exhibit311.htm)</u> |
| 31.2 | <u>[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)](fbredreit9-30x25exhibit312.htm)</u> |
| 32 | <u>[Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)](fbredreit9-30x25exhibit32.htm)</u> |
| 101.INS | XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document (filed herewith) |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed herewith) |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document (filed herewith) |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document (filed herewith) |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document (filed herewith) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) (filed herewith) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

**Franklin BSP Real Estate Debt, Inc.**

---

| | | |
|:---|:---|:---|
| Date | Signature | Title |
| November 7, 2025 | By: <u>/s/ Michael Comparato</u> <br>&nbsp;&nbsp;&nbsp;&nbsp; Michael Comparato  | Chief Executive Officer, President and Director<br>(Principal Executive Officer) |
| November 7, 2025 | By: <u>/s/ Jerome Baglien</u> <br>&nbsp;&nbsp;&nbsp;&nbsp; Jerome Baglien | Chief Financial Officer, Chief Operating Officer and Treasurer<br>(Principal Financial Officer and Principal Accounting Officer) |

---

## Exhibit 10.3

![image_0b.jpg](image_0b.jpg)Master Repurchase Agreement

![image_1a.jpg](image_1a.jpg)

September 1996 Version

Dated as of&nbsp;&nbsp;&nbsp;&nbsp;September 19, 2025

![image_2a.jpg](image_2a.jpg)

Between:&nbsp;&nbsp;&nbsp;&nbsp;Lucid Prime Fund LLC ("<u>Party A</u>"), a limited liability company, organized under the laws of Delaware

![image_2a.jpg](image_2a.jpg)

and&nbsp;&nbsp;&nbsp;&nbsp;FBRED REIT High Yield Securities, LLC ("<u>Party B</u>"), **a limited liability company, organized under the laws of Delaware**.

![image_2a.jpg](image_2a.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.Applicability**

From time to time the parties hereto may enter into transactions in which one party ("Seller") agrees to transfer to the other ("Buyer") securities or other assets ("Securities") against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a "Transaction" and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in Annex I hereto and in any other annexes identified herein or therein as applicable hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.Definitions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"Act of Insolvency", with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in

------

writing by such party of such party's inability to pay such party's debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"Additional Purchased Securities", Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"Buyer's Margin Amount", with respect to any Transaction as of any date, the amount

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obtained by application of the Buyer's Margin Percentage to the Repurchase Price for such Transaction as of such date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;"Buyer's Margin Percentage", with respect to any Transaction as of any date, a percentage (which may be equal to the Seller's Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"Confirmation", the meaning specified in Paragraph 3(b) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"Income", with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"Margin Deficit", the meaning specified in Paragraph 4(a) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)"Margin Excess", the meaning specified in Paragraph 4(b) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)"Margin Notice Deadline", the time agreed to by the parties in the relevant Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)"Market Value", with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)"Price Differential", with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)"Pricing Rate", the per annum percentage rate for determination of the Price Differential;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)"Prime Rate", the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)"Purchase Date", the date on which Purchased Securities are to be transferred by Seller to Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)"Purchase Price", (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller's obligations under clause (ii) of Paragraph 5 hereof;

2 September 1996 Master Repurchase Agreement

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)"Purchased Securities", the Securities transferred by Seller to Buyer in a Transaction hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term "Purchased Securities" with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)"Repurchase Date", the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)"Repurchase Price", the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)"Seller's Margin Amount", with respect to any Transaction as of any date, the amount obtained by application of the Seller's Margin Percentage to the Repurchase Price for such Transaction as of such date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)"Seller's Margin Percentage", with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer's Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.Initiation; Confirmation; Termination**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a "Confirmation"). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail.

3 September 1996 Master Repurchase Agreement

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.Margin Maintenance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller require Seller in such Transactions, at Seller's option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer ("Additional Purchased Securities"), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at such time (a "Margin Excess"), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any business day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities no later than the close of business in the relevant market on the next business day following such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.Income Payments**

Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Security Interest**

Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.Payment and Transfer**

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.Segregation of Purchased Securities**

To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller's interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the

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Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.

![image_5a.jpg](image_5a.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.Substitution**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.Representations**

Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not

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violate any law, ordinance, charter, by-law or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.Events of Default**

In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one business day's notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an "Event of Default"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The nondefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) of this Paragraph, (i) the defaulting party's obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on the Repurchase Date deter-mined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the nondefaulting party any Purchased Securities subject to such Transactions then in the defaulting party's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the defaulting party, may:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory,

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any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities ("Replacement Securities") of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source.

Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the nondefaulting party may establish the source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party for any excess of the price paid (or deemed paid) by the nondefaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of the option referred to in sub- paragraph (a) of this Paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)The defaulting party shall be liable to the nondefaulting party for (i) the amount of all reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or

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as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)To the extent permitted by applicable law, the defaulting party shall be liable to the non-defaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the nondefaulting party's rights hereunder. Interest on any sum payable by the defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.Single Agreement**

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.Notices and Other Communications**

Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified in Annex II hereto, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.Entire Agreement; Severability**

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.Non-assignability; Termination**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this Agreement and any

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Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.Governing Law**

This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.No Waivers, Etc.**

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure here-from shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.Use of Employee Plan Assets**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be used by either party hereto (the "Plan Party") in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller's latest such financial statements, there has been no material adverse change in Seller's financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any out-standing Transaction involving a Plan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**19.Intent**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The parties recognize that each Transaction is a "repurchase agreement" as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a "securities contract" as

10 September 1996 Master Repurchase Agreement

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that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)It is understood that either party's right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The parties agree and acknowledge that if a party hereto is an "insured depository institution," as such term is defined in the Federal Deposit Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a "qualified financial contract," as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)It is understood that this Agreement constitutes a "netting contract" as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a "covered contractual payment entitlement" or "covered contractual payment obligation", respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a "financial institution" as that term is defined in FDICIA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**20.Disclosure Relating to Certain Federal Protections**

The parties acknowledge that they have been advised that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission ("SEC") under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other party with respect to any Transaction hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

[*Signature Page Follows*]

11 September 1996 Master Repurchase Agreement

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Docusign Envelope ID: CFE45C03-3BDC-4D4C-8A9E-8F091D45B0FB

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**LUCID MANAGEMENT AND**

![image_6a.jpg](image_6a.jpg)**CAPITAL PARTNERS LP, solely as manager on behalf of Party A and not in its individual corporate capacity**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: David Carlson Title: President

**FBRED REIT High Yield Securities, LLC**

![image_7a.jpg](image_7a.jpg)By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Jacob Breinholt

Title: Authorized Signatory

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**ANNEX I Supplemental Terms and Conditions**

This Annex I supplements and forms a part of the Master Repurchase Agreement dated as of September 19, 2025(the "**Agreement**") between Lucid Prime Fund LLC ("**Party A**") and FBRED REIT High Yield Securities, LLC ("**Party B**"). Capitalized terms used but not defined in this Annex I shall have the meanings ascribed to them in the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Other Applicable Annexes</u>**.

In addition to this Annex I and Annex II, the following Annexes and any Schedules thereto shall form a part of the Agreement and shall be applicable thereunder.

N/A

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Definitions</u>**.

For purposes of the Agreement and this Annex I, the following terms shall have the following meanings:

"Business Day" or "business day", with respect to any Transaction hereunder, a day on which regular trading occurs in the principal market for the Purchased Securities subject to such Transaction. Notwithstanding the foregoing, in no event shall a Saturday or Sunday be considered a business day.

"ICE" means ICE Data Pricing & Reference Data, LLC, or any successor thereto. "Pricing Direct" means Pricing Direct Inc. or any successor thereto.

"Margin Notice Deadline" means 10:00 A.M. New York time on a Business Day. Margin Calls may be made orally or by email; provided, that in any event, the party that is required to satisfy the Margin Call shall comply with the terms of the Margin Call, however made, within the timeframe required under Paragraph 4 of the Agreement.

The definition of the term "Market Value" in Paragraph 2(j) of the Agreement is amended by replacing the words "a generally recognized source agreed to by the parties," with the following: "ICE, Pricing Direct or other recognized source agreed to in writing by the parties (each, a "**Recognized Price Source**") and, in the absence, unavailability, inaccuracy or inapplicability of each Recognized Price Source, in each case as determined by Buyer in its sole discretion, another source determined by Buyer, acting in good faith and a commercially reasonably manner,".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Minimum Transfer Amount</u>**. Pursuant to Paragraph 4(e) of the Agreement, the parties hereby agree that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of Paragraph 4 of the Agreement may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds USD 250,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Purchase Price Maintenance</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The parties agree that in any Transaction hereunder whose term extends over an Income payment date for the Securities subject to such transaction, Buyer shall on the date such income is paid transfer to or credit to the account of Seller an amount equal to such Income payment

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or payments pursuant to Paragraph 5(i) and shall not apply the Income payment or payments to reduce the amount to be transferred to Buyer or Seller upon termination of the Transaction pursuant to Paragraph 5(ii) of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding the definition of Purchase Price in Paragraph 2 of the Agreement and the provisions of Paragraph 4 of the Agreement, the parties agree (i) that the Purchase Price will not be increased or decreased by the amount of any cash transferred by one party to the other pursuant to Paragraph 4 of the Agreement and (ii) that transfer of such cash shall be treated as if it constituted a transfer of Securities (with a Market Value equal to the U.S. dollar amount of such cash) pursuant to Paragraph 4(a) or (b), as the case may be (including for purposes of the definition of "**Additional Purchased Securities**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Submission to Jurisdiction and Waiver of Immunity</u>**.

Each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under the Agreement or relating in any way to the Agreement or any Transaction under the Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.

To the extent that either party has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such party hereby irrevocably waives and agrees not to plead or claim such immunity in respect of any action brought to enforce its obligations under the Agreement or relating in any way to the Agreement or any Transaction under the Agreement.

Each party hereto hereby irrevocably waives all right to trial by jury in any action or proceeding arising out of or relating to this Agreement or any Transaction hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Additional Events of Default.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In addition to the Events of Default described in Paragraph 11 of the Agreement, it shall be an "Event of Default" with respect to a party to the agreement (the "**Defaulting Party**") if an Act of Insolvency occurs with respect to any guarantor of (or other provider of credit support in respect of) the Defaulting Party's obligations hereunder or under any Specified Agreement (as defined below), or an event of default, termination event or any similar event occurs with respect to the Defaulting Party (or any guarantor of (or other provider of credit support in respect of) the obligations of the Defaulting Party hereunder or under any Specified Agreement) under any Global Master Repurchase Agreement, ISDA Master Agreement or similar master agreement between the Defaulting Party and the other party or any affiliate of the other party (each, a "**Specified Agreement**") that has resulted in all transactions under such Specified Agreement being terminated and/or accelerated in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In respect to the Events of Default described in Paragraph 11 of the Agreement, it shall be an "Event of Default" with respect to Seller if the Price Differential is payable on any date other than the Repurchase Date of a Transaction, and Seller fails to make payment of such Price Differential, when due, and Buyer has given Seller two (2) Business Day's notice of such failure to pay.

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Each party agrees that, upon learning of the occurrence of any event or the commencement of any condition that constitutes an Event of Default with respect to such party, to promptly give the other party notice of such event or condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Additional Covenant</u>.**

Each party agrees to deliver or provide the other party with the following on the date of execution of the Agreement: evidence satisfactory to the requesting party of its authority to execute the Agreement and enter into the Transactions contemplated hereby and evidence of the authority and true signatures of each official or representative signing this Agreement or, as the case may be, a Confirmation, on its behalf.

Upon request, each party agrees to deliver or provide to the other their most recent audited annual financial statements, to the extent such statements are not otherwise publicly available and the most recent monthly (or quarterly, if only produced quarterly) statement showing its net asset value (the "**NAV**"), leverage ratio and net returns or other similar statement that shows the equity value, leverage and net returns of its business, in each case promptly following such request (and in no event more than five (5) Business Days after such request has been made).

Each party agrees to provide the other party with the following tax document on or before the date of execution of the Agreement: A duly completed and executed U.S. Internal Revenue Service Form W-9, W-BEN or such other form, as applicable.

Prior to or contemporaneously with entering into this Agreement, both Parties shall enter into a nondisclosure agreement regarding any information provided by either party hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Recording of Conversations.</u>**

The parties agree that each may electronically record all telephone conversations between them and that any such recordings may be submitted in evidence in any legal proceedings for the purpose of establishing any matters relating to this Agreement or any Transactions hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Notices and Other Communications.</u>**

Email shall be an acceptable method of communication for purposes of Paragraph 13 of the Agreement. Notices, demands and requests made orally shall be effective when so given, regardless of whether they are promptly confirmed in writing or by other communication.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Inconsistency</u>**.

In the event of any inconsistency between the provisions of this Annex and the provisions of the Agreement attached hereto, the terms contained in this Annex shall prevail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>Setoff</u>**.

In addition and without prejudice to the rights and remedies otherwise available to the nondefaulting party (whether under this Agreement, other contract, applicable law or otherwise), upon the occurrence of a Repurchase Date as the result of an Event of Default with respect to a party, the other (nondefaulting) party and its affiliates will have the right (but not be obliged) without prior notice to the defaulting party or any other person to set-off or apply any obligation of the defaulting party owed to the non-defaulting party or any

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affiliate thereof (whether or not matured or contingent and whether or not arising under the Agreement, and

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regardless of the currency, place of payment or booking office of the obligation) against any obligation of the non-defaulting party or any affiliate thereof owed to the defaulting party (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).

For such purposes, any obligations so set-off or applied that are not denominated in U.S. dollars shall be converted into U.S. dollars on the relevant date at a spot rate published by a recognized source on such date. If any obligation is unascertained, the nondefaulting party may in good faith estimate the amount of that obligation and effect a setoff or application in respect of the amount so estimated, subject to the relevant party accounting to the other when the obligation is ascertained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Dispute Rights</u>.**

The provisions of this section 12 shall apply notwithstanding anything to the contrary in the Agreement. In the event that Seller disputes the calculation by the Buyer of the Market Value with respect to any Purchased Securities for which Buyer used a price source other than a Recognized Price Source, and as a result of such dispute Seller also disputes the calculation of the Margin Deficit or Margin Excess as the case may be, Seller will notify Buyer of such dispute. Notwithstanding the foregoing, Seller will transfer to Buyer any undisputed amount of the Margin Deficit (the "**Undisputed Deficit Amount**") or Buyer will transfer to Seller any undisputed amount of the Margin Excess (the "**Undisputed Excess Amount**"), as applicable, no later than the close of business on the day such Margin Deficit or Margin Excess is due to be delivered. Any Recalculated Deficit Amount or Recalculated Excess Amount (each as defined below) shall be delivered in accordance with below.

If Seller disputes Buyer's determination of Market Value and the foregoing condition is satisfied, Seller shall notify Buyer of such dispute by 11:00 a.m. New York time on the day such Margin Deficit or Margin Excess is due to be delivered (which notification shall be in writing and shall identify the Purchased Securities subject to such dispute (the "**Disputed Securities**")). Upon receipt of such notice, Buyer, acting in good faith and a reasonable manner, may solicit at least three (3) actual bids with respect to each of the Disputed Securities on a "Bids Wanted in Competition" (as defined below) basis with respect to each of the Disputed Securities in a principal amount equal to the amount of such Disputed Securities subject to a Transaction hereunder. All actual bids must be from independent Reference Market-makers. Only actual bids received by 2:00 p.m. New York time on the Business Day of receipt by Buyer of notice of dispute by Seller shall qualify for consideration in computing Market Value pursuant to section 2(c). After receiving any Bids Wanted in Competition, Buyer may notify (but in no case later than 3:00 p.m. New York time (the "**Market Value Notification Time**")) Seller of the Market Value of the Disputed Securities as determined below.

If two (2) or more actual bids are received by Buyer with respect to the Disputed Securities, the Market Value of the Disputed Securities shall be the average of such actual bids. If one

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) actual bid is received, the Market Value of the Disputed Securities shall be such actual bid. If no actual bids are received, Seller shall withdraw the dispute and Buyer's original determination of Market Value, which shall have been made in good faith and a commercially reasonable manner, shall be applicable.

In the event such actual bids result in a determination of Market Value either greater than or less than Buyer's original determination of Market Value and Buyer calculates a new Margin Deficit (the "**Recalculated Deficit Amount**") and notifies Seller of such

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Recalculated Deficit Amount and applicable Market Value by the Market Value Notification Time, then (a) in the case that the Seller transferred an Undisputed Deficit Amount to the Buyer, (i) Seller shall be required to transfer the difference between the Recalculated Deficit Amount and any Undisputed Deficit Amount that was transferred to the Buyer, provided this amount is positive, and (ii) Buyer shall be required to transfer the difference between the Undisputed Deficit Amount that was transferred to the Buyer and the Recalculated Deficit Amount, provided this amount is positive, or (b) in the case that the Buyer transferred an Undisputed Excess Amount to the Seller, Seller shall be required to return such Undisputed Excess Amount and transfer the Recalculated Deficit Amount to the Buyer, in both cases by the close of business on the same Business Day in accordance with the terms of the Master Repurchase Agreement.

In the event such actual bids result in a determination of Market Value either greater than or less than Buyer's original determination of Market Value and Buyer calculates a new Margin Excess (the "**Recalculated Excess Amount**") and notifies Seller of such Recalculated Excess Amount and applicable Market Value by the Market Value Notification Time, then (a) in the case that the Buyer transferred an Undisputed Excess Amount to the Seller, (i). Buyer shall be required to transfer the difference between the Recalculated Excess Amount and any Undisputed Excess Amount that was transferred to the Seller, provided this amount is positive, and (ii) Seller shall be required to transfer the difference between the Undisputed Excess Amount that was transferred to the Seller and the Recalculated Excess Amount, provided this amount is positive, or (b) in the case that the Seller transferred an Undisputed Deficit Amount to the Buyer, Buyer shall be required to return such Undisputed Deficit Amount and transfer the Recalculated Excess Amount to the Seller, in both cases by the close of business on the same Business Day in accordance with the terms of the Master Repurchase Agreement.

For purposes of the above provisions, the following definition shall apply:

"Bids Wanted in Competition" shall mean a notice given by Buyer that the Purchased Securities for this Transaction are available for sale and that actionable bids for purchase of the full amount of any or all of the securities will be considered.

"Reference Market-makers" shall mean third party market-makers that are not affiliated with either Buyer or Seller, chosen by the Buyer in good faith and in a commercially reasonable manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Mini Close-Out</u>**. Notwithstanding clauses (i) and (ii) of the introductory paragraph to Paragraph 11 of the Agreement, it will not be an Event of Default if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Seller fails to transfer Purchased Securities on the applicable Purchase Date for a Transaction but Buyer may, by written notice to Seller, (1) if Buyer has paid the Purchase Price to Seller, require Seller to immediately repay the sum so paid; (2) if there exists a Margin Deficit in respect of such Transaction, require Seller to deliver (in accordance with the notice and delivery requirements of Paragraph 4 of the Agreement) margin in an amount equal to such Margin Deficit; and (3) at any time while such failure continues, terminate such Transaction (but only such Transaction) ("**Buyer Mini Close-out**") and upon such termination, the provisions of Paragraph 11 of the Agreement shall apply with respect to the terminated Transaction (but only such Transaction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Buyer fails to transfer Purchased Securities on the applicable Repurchase Date for a Transaction but Seller may, by written notice to Buyer, (1) if Seller has

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paid the Repurchase Price to Buyer, require Buyer to immediately repay the sum so paid; (2) if there exists a Margin Excess in respect of such Transaction, require Buyer to deliver (in accordance with the notice and delivery requirements of Paragraph 4 of the Agreement) margin in an amount equal to such Margin Excess; and (3) at any time while such failure continues, terminate such Transaction (but only such Transaction) ("**Seller Mini Close-out**", and together with Buyer Mini Close-out, "**Mini Close-out**") and upon such termination, the provisions of Paragraph 11 of the Agreement shall apply with respect to the terminated Transaction (but only such Transaction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any transfer of margin pursuant to Clauses (a)(2) or (b)(2) above shall be due and payable within the time period specified in Paragraph 4(c) of the Agreement with respect to cash or Additional Purchased Securities (as if such notice from Buyer or Seller, as the case may be, were a notice requesting the delivery of margin), and any failure to make any such transfer or payment shall be an event that will be an Event of Default under paragraph 11(iii).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)For the avoidance of doubt, it shall be an Event of Default under the Agreement if, with respect to any amount due and payable under Paragraph 11 following any Mini Close-out, such amount is not paid by the defaulting party before the end of the Business Day on which the defaulting party receives notice of such due and payable amount from the non-defaulting party, if the defaulting party receives such notice before the Margin Notice Deadline. If any such notice is given after the Margin Notice Deadline on a Business Day, the party receiving such notice shall transfer such amount due and payable no later than the close of business in the relevant market on the next Business Day following receipt of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Additional Representation</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each party represents and warrants on each date that a Transaction is outstanding that it is a financial participant, a financial institution, a commodity broker, a forward contract merchant, a stockbroker, a repo participant, or a securities clearing agency as such terms are used in Section 546(e) of the Bankruptcy Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Each party represents and warrants on each date that a Transaction is outstanding that unless there is a written agreement with the other party to the contrary, (i) it is not relying on any advice (whether written or oral) of the other party, other than the representations expressly set out in the Agreement and any annex hereunder, (ii) it has made and will make its own decisions regarding the entering into of any Transaction based upon its own judgment and upon advice from such professional advisers as it has deemed it necessary to consult and (iii) it understands the terms, conditions and risks of each Transaction and is willing to assume (financially and otherwise) those risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each party represents and warrants to the other that, in its capacity as Seller delivering Purchased Securities to the Buyer, and in its capacity as Buyer redelivering identical (or equivalent) securities, under any Transaction, such party has the unqualified right to sell, transfer, assign and pledge such Securities; and all such Securities, upon delivery to the other party (or its custodian, as the case may be) will be free and clear of any lien, security interest, charge, encumbrance or other adverse claim, except such as may exist in favor of the other party. Each party shall be deemed to have made the foregoing representations and warranties as of each such delivery or redelivery, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Each party represents to the other on each date that a Transaction is outstanding that it is not an Investment Company under the Investment Company Act of 1940.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Each party represents to the other as of the date on which each Transaction is entered into that it is – and has been for the past year – solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Construction</u>**. Save for the amendments made hereby, the parties agree that the text of the body of the Agreement is intended to conform with the Master Repurchase Agreement dated September 1996 promulgated by The Bond Market Association and shall be construed accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Existing Transactions</u>**. All Transactions constituting repurchase transactions or reverse repurchase transactions entered into between the parties hereto prior to the date of the Agreement which are outstanding at the date of the Agreement are hereby deemed to have been entered into pursuant to the Agreement and are governed by its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Counterparts</u>**. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Limitation of Liability</u>**. Without prejudice to any party's obligations as stipulated hereunder, no party shall be required to pay or be liable to the other party for any consequential, indirect or punitive damages, opportunity costs or lost profits, except as otherwise expressly provided by the Agreement. Additionally, except as otherwise expressly permitted by the Agreement, and without limitation of Party A or Party B's obligations hereunder, (a) no party other than Party A shall have any liability for any of Party A's obligations or liabilities hereunder, and (b) no party other than Party B shall have any liability for any of Party B's obligations or liabilities hereunder.

[*Signature Page Follows*]

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Docusign Envelope ID: CFE45C03-3BDC-4D4C-8A9E-8F091D45B0FB

------

**LUCID MANAGEMENT AND**

![image_8a.jpg](image_8a.jpg)**CAPITAL PARTNERS LP, solely as manager on behalf of Party A and not in its individual corporate capacity**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

**FBRED REIT High Yield Securities, LLC**

![image_7a.jpg](image_7a.jpg)By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: David Carlson Title: President

Name: Title:

[*Signature Page to MRA*]

<br>Jacob Breinholt Authorized Signatory

------

**ANNEX II**

**Names and Addresses for Communications Between Parties**

**<u>LUCID FUNDS</u>**

**LUCID PRIME FUND LLC**

Address:

295 Madison Avenue, 39<sup>th</sup> Floor New York, NY 10017

Please email all notices to: <u>operations@lucidma.com</u>

Other Contacts:

Mr. David Carlson <u>david.carlson@lucidma.com</u> Tel: 212-551-1702

Mr. Mattias Almers <u>mattias.almers@lucidma.com</u> Tel: 212-551-1704

**<u>FBRED REIT High Yield Securities, LLC</u>**

c/o Benefit Street Partners Realty Trust, Inc.

1 Madison Avenue, Suite 1600 New York, NY 10010

Please email all notices to: <u>m.goodman@benefitstreetparters.com</u> <u>crelegal@benefitstreetpartners.com</u>

## Exhibit 10.4

**Guarantee Of**

**FBRED REIT High Yield Securities, LLC**

September 19, 2025

Lucid Management And Capital Partners LP 295 Madison Avenue, 39th Floor

New York, NY 10017

For value received, Franklin BSP Real Estate Debt, Inc. (the "Guarantor"), a corporation organized under the laws of Maryland, hereby unconditionally guarantees the prompt and complete payment and performance when due, whether by acceleration or otherwise, of all obligations and liabilities, whether now in existence or hereafter arising (the "Obligations") of FBRED REIT High Yield Securities, LLC, a limited liability company, organized under the laws of Delaware ("MRA Counterparty") arising out of or under the Master Repurchase Agreement, dated as of September 19, 2025 between the MRA Counterparty and Lucid Prime Fund LLC ("Beneficiary"). This Guaranty is one of payment and not of collection.

The Guarantor hereby waives notice of acceptance of this Guaranty and notice of the Obligations and waives presentment, demand for payment, protest, notice of dishonor or non-payment of the Obligations, suit, or the taking of other action by Beneficiary against, and any other notice to, the MRA Counterparty, the Guarantor or others.

The Beneficiary may at any time and from time to time without notice to or consent of the Guarantor and without impairing or releasing the obligations of the Guarantor hereunder: (1) agree with the MRA Counterparty to make any change in the terms of the Obligations, (2) take or fail to take any action of any kind in respect of any security for the Obligations, (3) exercise or refrain from exercising any rights against the MRA Counterparty or others, or (4) compromise or subordinate the Obligations, including any security therefore. Any other suretyship defenses are hereby waived by the Guarantor.

The Guarantor agrees to pay on demand all reasonable out-of-pocket expenses (including the reasonable out-of-pocket fees and expenses of Beneficiary's attorneys) in any way relating to the enforcement or protection of the rights of Beneficiary hereunder.

Guarantor will not exercise any rights that it may acquire by way of subrogation until all due and unpaid Obligations to Beneficiary shall have been paid in full. Any amount paid to the Guarantor in violation of the preceding sentence shall be held by the Guarantor for the benefit of Beneficiary and shall forthwith be paid to Beneficiary to be credited and applied to the due and unpaid Obligations. Subject to the foregoing, upon payment of such due and unpaid Obligations, the Guarantor shall be subrogated to the rights of Beneficiary against the MRA Counterparty with respect to such Obligations, and Beneficiary agrees to take at the Guarantor's expense such steps as Guarantor may reasonably request to implement such subrogation.

This Guaranty is absolute, unconditional, and irrevocable and shall remain in full force and effect and be binding upon Guarantor, its successors and assigns, until all of the Obligations have been satisfied in full unless and until Beneficiary expressly releases Guarantor in writing. Any attempted revocation or termination by Guarantor without such written release shall be void and of no effect. The Guarantor further agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment or any part thereof, of any Obligations or interest thereon, is rescinded or must otherwise be restored or returned by Beneficiary upon the bankruptcy, insolvency, dissolution or reorganization of the MRA Counterparty.

------

All sums payable by the Guarantor hereunder shall be made in freely transferable, cleared, and immediately available funds without any set-off, deduction or withholding unless such set-off, deduction or withholding is required by an applicable law, judicial or administration decision, or practice of any relevant governmental authority, or by any combination thereof. If the Guarantor is so required to set-off, deduct or withhold, then the Guarantor shall pay to Beneficiary, in addition to the payment to which Beneficiary is otherwise entitled, such additional amount as is necessary to ensure that the net amount actually received by Beneficiary (free and clear of any set-off, deduction or withholding) will equal the full amount which Beneficiary would have received had no such set-off, deduction or withholding been required.

No failure on the part of Beneficiary to exercise, and no delay in exercising, any right, remedy, or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Beneficiary of any right, remedy, or power hereunder preclude any other or future exercise of any right, remedy, or power. Each and every right, remedy, or power hereby granted to Beneficiary or allowed it by law or agreement shall be cumulative and not exclusive of any other, and may be exercised by Beneficiary from time to time.

In the event that any provision of this Guaranty is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction or regulatory authority, the remainder of this Guaranty shall not be affected except to the extent necessary to delete such illegal, invalid, or unenforceable provision unless the deletion of such provision would substantially impair the respective benefits of the remaining portions of this Guaranty.

This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Beneficiary and its successors and permitted assigns. The obligations of Guarantor hereunder shall not be affected by any assignment or transfer of the Master Repurchase Agreement or any interest therein by Beneficiary.

Guarantor represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Guarantor is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation and has full corporate power and authority to execute, deliver, and perform this Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The execution, delivery, and performance of this Guaranty have been and remain duly authorized by all necessary corporate action and do not contravene any provision of Guarantor's certificate of incorporation or bylaws, as amended to date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)All consents, licenses, clearances, authorizations, and approvals of, registrations and declarations with, any governmental or regulatory authority necessary for the due execution, delivery, and performance of this Guaranty have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental or regulatory authority is required in connection with the execution, delivery, or performance of this Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)This Guaranty constitutes the legal, valid, and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Guarantor acknowledges that it has reviewed and is familiar with the terms and conditions of the Master Repurchase Agreement and any related documents referenced therein. Guarantor further agrees that its obligations under this Guaranty shall remain in full force and effect notwithstanding any amendment, restatement, modification, renewal, extension, or assignment of the Master Repurchase Agreement or any related documents, whether or not Guarantor has consented thereto or received notice thereof.

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Docusign Envelope ID: CFE45C03-3BDC-4D4C-8A9E-8F091D45B0FB

**THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA. GUARANTOR FURTHER CONSENTS TO THE ENTRY AND ENFORCEMENT OF ANY JUDGEMENT AGAINST GUARANTOR IN THE COURTS OF THE JURISDICTION IN WHICH AND TO WHICH GUARANTOR OR ANY OF ITS PROPERTY IS PRESENT OR IS SUBJECT.**

Very truly yours,

![image_0a.jpg](image_0a.jpg)Franklin BSP Real Estate Debt, Inc.

By:<u>&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Jacob Breinholt

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Michael A. Comparato, certify that:

 1. I have reviewed this Quarterly Report on Form 10-Q of Franklin BSP Real Estate Debt, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's forth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 7, 2025 | By: | /s/ Michael A. Comparato |
|  |  | Michael A. Comparato |
|  |  | Chief Executive Officer and President |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Jerome S. Baglien, certify that:

 1. I have reviewed this Quarterly Report on Form 10-Q of Franklin BSP Real Estate Debt, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's forth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 7, 2025 | By: | /s/ Jerome S. Baglien |
|  |  | Jerome S. Baglien |
|  |  | Chief Financial Officer and Chief Operating Officer |
|  |  | (Principal Financial Officer) |

---

## Ex-32

**Certification of Principal Executive Officer and Principal Financial Officer**

**Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to**

**Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Quarterly Report on Form 10-Q of Franklin BSP Real Estate Debt, Inc. (the "Company") for the quarterly period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Michael A. Comparato, as Chief Executive Officer and President, and Jerome S. Baglien, as Chief Financial Officer and Chief Operating Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his or her knowledge:

 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: November 7, 2025 | /s/ Michael A. Comparato |
|  | Michael A. Comparato |
|  | Chief Executive Officer and President |
|  | (Principal Executive Officer) |
| Date: November 7, 2025 | /s/ Jerome S. Baglien |
|  | Jerome S. Baglien |
|  | Chief Financial Officer and Chief Operating Officer |
|  | (Principal Financial Officer) |

---

<br>