Expiring management fee waivers and rising interest expense pushed the perpetual-life vehicle into the red even as the industrial portfolio grew by 20 properties year over year.

May 12, 2026

North Haven Net REIT, the perpetual-life, non-listed real estate investment trust advised by a wholly owned subsidiary of Morgan Stanley, reported a sharp jump in rental revenue for the first quarter of 2026 as its industrial portfolio grew, but higher debt service costs and the return of previously waived advisory fees pushed the trust to a small net loss for the period.

The Maryland statutory trust, based at Morgan Stanley’s 1585 Broadway offices in New York, told the Securities and Exchange Commission that rental revenue for the three months ended March 31 climbed to roughly $41.1 million, more than triple the approximately $13.0 million generated in the comparable 2025 quarter. The trust attributed the increase principally to the addition of 20 properties to its portfolio over the past year.

Despite the revenue surge, North Haven posted a net loss of approximately $3.0 million, or five cents per share, reversing net income of roughly $5.6 million, or 15 cents per share, in the prior-year quarter. The shift was driven primarily by a $14.5 million increase in interest expense, the resumption of management fees and performance participation allocations that had been waived during the prior period, and substantially higher depreciation and amortization.

A net lease platform built around mission-critical tenants

Formed in February 2023 and commencing principal operations on April 1, 2024, North Haven Net REIT pursues an investment strategy centered on commercial real estate assets that are long-term leased on a net basis to tenants for whom the properties are essential to ongoing business operations. The trust emphasizes three themes:

• Industrial real estate tied to e-commerce
• Manufacturing facilities linked to on-shoring and near-shoring trends
• Healthcare-oriented properties aligned with aging demographics

To a lesser extent, the trust invests in commercial real estate debt instruments such as first mortgage loans, mezzanine loans, preferred equity, and commercial mortgage-backed securities.

As of March 31, the real estate portfolio carried an aggregate fair value of approximately $2.05 billion. The tenant roster reads like a directory of large industrial occupiers, including Amazon, Tesla, FedEx, Nissan, General Mills, Western Digital, Magna, Assa Abloy, CRH Americas, C&S Wholesale Grocers, Americold, Performance Food Group, and SAIC. Property types span distribution warehouses, manufacturing facilities, cold storage, and industrial outdoor storage assets clustered in major logistics hubs including Atlanta, Chicago, Los Angeles, the Inland Empire, Kansas City, Boston, Dallas, and the New York–New Jersey corridor. Nearly every asset in the portfolio carried an occupancy rate of 100 percent at quarter end.

The balance sheet expanded materially during the quarter. Total assets rose to approximately $2.63 billion from roughly $2.36 billion at year-end 2025, with cash and cash equivalents climbing to about $328.9 million from $102.6 million. Investments in real estate under development reached $124.4 million. Total liabilities ended the quarter at approximately $1.52 billion, of which secured debt accounted for roughly $1.19 billion.

Capital raising and distribution profile

The trust raised about $148.4 million in gross proceeds from the sale of common shares during the quarter, bringing inception-to-date gross proceeds from its private offering to roughly $1.20 billion. The offering, which began in January 2024 under a Regulation D exemption, targets accredited investors and non-U.S. persons and continues on a monthly basis.

Total common shares issued and outstanding rose to approximately 59.4 million at quarter end, up from about 52.1 million at year-end 2025. As of May 11, the trust reported the following share counts across its five classes: 18.27 million Class F-S, 11.68 million Class F-I, 18.67 million Class S, 10.48 million Class I, and 8.25 million Class E shares.

Net distributions declared during the quarter totaled approximately $20.4 million, up from $10.8 million in the year-ago period. About 45 percent was payable in cash, with the balance reinvested in additional shares. Notably, the entire $20.4 million was sourced from cash flows from operating activities, which totaled approximately $21.3 million for the quarter — a meaningful data point given that many non-traded REITs have historically funded distributions in part from offering proceeds or other non-operating sources.

Annualized distribution rates as of quarter end ranged from 5.89 percent for Class S shares to 9.00 percent for Class E shares, with Class F-S, Class I, and Class F-I shares reporting 6.56 percent, 6.75 percent, and 7.41 percent, respectively. Inception-to-date total returns, excluding upfront selling commissions, ranged from approximately 7.40 percent for Class F-S shares to 8.55 percent for Class E shares.

Net asset value, leverage, and financing activity

The trust calculated total net asset value of approximately $1.26 billion as of March 31, with NAV per share or unit ranging from about $20.68 for Class S shares to roughly $20.76 for Class F-S and Class F-I shares. NAV is calculated under valuation guidelines approved by the board of trustees, with real estate held at estimated fair values and depreciation and amortization excluded from the calculation.

During the quarter, North Haven financed two previously acquired net lease investments with a new mortgage loan carrying an aggregate principal balance of $89.1 million, a fixed interest rate of 5.93 percent, and a January 2031 maturity. The weighted-average interest rate across all mortgage loans stood at 5.74 percent at quarter end, with a weighted-average maturity in March 2031.

Expense profile reflects the end of fee waivers

Total expenses for the quarter reached roughly $29.7 million, more than three times the $9.3 million recorded in the year-ago period. Management fees of approximately $2.2 million and a performance participation allocation of about $4.1 million were recorded in the latest quarter, compared with zero in the prior-year period when the adviser and special limited partner had agreed to waive those amounts. The waiver expired at the end of 2025, ending the period during which investors paid no advisory fees. Depreciation and amortization rose to about $18.2 million from $6.7 million, reflecting both the larger property base and lease intangible amortization.

North Haven’s net-lease focus and Morgan Stanley pedigree place it within a competitive cluster of non-traded REIT vehicles raising capital from accredited investors, alongside platforms such as Blue Owl Real Estate Net Lease Trust and Fortress Net Lease. Sponsors in this segment generally pitch the strategy as a way to capture stable, contractual cash flows from long-duration leases while diversifying away from traded REIT volatility.