KKR Real Estate Select Trust SC TO-I/AIssuer tender offer statement (amended)

July 17, 2024

Thank you for your support of KKR Real Estate Select Trust Inc. (“KREST” or the “Fund”) and for entrusting us with your capital. As real estate market dynamics continue to evolve, we remain confident that KREST’s flexible strategy and portfolio construction are well-positioned for the current market environment as we seek to provide access to the potential benefits of high-quality, income-oriented private real estate equity and credit in a single fund. KREST’s portfolio continues to generate attractive cash flows that are growing, driven by rising rents and KREST’s allocation to a high-quality real estate credit portfolio. Today, we believe the outlook for real estate fundamentals is attractive with limited new development, inflated replacement costs and attractive demand and rent growth for the types of assets KREST owns.

To help KREST shareholders maintain confidence and benefit from the prospect of a real estate recovery in the face of continued negative headlines, on June 4, 2024, we announced the KREST Shareholder Priority Plan. The KREST Shareholder Priority Plan supports a net asset value (“NAV”) of up to $27 per share on June 1, 2027 through the commitment by KKR Alternative Assets LLC (“KAA”), an affiliate of the Fund’s Adviser, to continue to hold approximately 7.7 million KAA-owned KREST shares and, to the extent necessary, contribute such shares to the Fund to support a NAV per share of up to $27 per share on June 1, 2027.⁽¹⁾ There are no changes to KREST’s existing subscription or redemption terms in connection with the KREST Shareholder Priority Plan. With the KREST Shareholder Priority Plan in place, we believe that KREST shareholders are particularly well-positioned to benefit from attractive, tax-efficient dividend income and this commitment reflects KKR’s confidence in both KREST and the likelihood of a real estate recovery. We have appreciated the positive early feedback on the KREST Shareholder Priority Plan and we look forward to continuing these conversations. We are confident in KKR’s commitment to KREST, anchored to the contents of KREST’s portfolio, the current state of real estate markets and where we believe we are in the market cycle.

Looking at the last six real estate downturns since World War II, property values bottomed on average after about 1.7 years and the subsequent recoveries presented multiple years of attractive investment outcomes. It has now been over two years since real estate values peaked and this down-cycle has already seen the second largest decline in U.S. property values in the last 80 years, after only the global financial crisis.⁽²⁾ Within KREST, the Fund’s independent valuation agent has widened the exit capitalization rates, which serve as key inputs for mark-to-market valuations, by more than 32% since property values peaked in April 2022.⁽³⁾ However, we believe real estate markets are showing initial signs of recovery. We have seen tightening credit spreads in real estate capital markets, historically a signal of market improvement. Tide changes in real estate markets, coupled with the NAV support of the KREST Shareholder Priority Plan over the next three years, in our view, uniquely provides KREST shareholders with the ability to participate in an eventual real estate recovery with a buffer against share price decline.

For the Fund’s Q3 2024 tender offer period ending July 12, 2024, KREST received repurchase requests of $106 million. KREST’s Q3 2024 tender offer demand primarily consisted of carryover demand and re-submitted tender requests from prior tender offer periods. Notably, new tender requests declined materially from the prior quarter, down more than 50% compared to Q2 2024. In its Q3 2024 tender offer, KREST repurchased common stock equal to 5% of NAV, or $60 million. Accordingly, redemption requests were fulfilled at a prorated amount equal to 56% of each shareholder’s Q3 2024 tender request.

Importantly, KREST maintains a robust and multifaceted liquidity position, representing 33% of NAV as of June 30, 2024.⁽⁴⁾ This should enable the Fund to continue providing a level of liquidity to investors of up to 5% of NAV through quarterly repurchases⁽⁵⁾, while also positioning the Fund to capitalize on the attractive investment opportunities that may arise in the upcoming months and quarters.

Unfulfilled tender requests will not be carried over to the next quarter automatically. Investors will need to resubmit any unsatisfied portion of their Q3 2024 tender request for repurchase in the future. Should you have any questions, please reach out to your KKR Relationship Manager or contact us at PrivateWealthIR@kkr.com. Thank you again for your partnership with us on KREST, and please let us know if there is anything that would be helpful to you as you support your clients.

Sincerely,

Billy Butcher, CEO of KKR Real Estate Select Trust Inc.

Notes:

All figures are approximate and as of June 30, 2024, unless otherwise indicated. The terms “we”, “us” and “our” refer to KREST with reference to portfolio and performance data. In all other instances, including with respect to current and forward-looking views and opinions of the market and KREST’s portfolio and performance positioning, as well as the experience of KREST’s management team, these terms refer to KREST’s adviser, KKR Registered Advisor LLC, which is part of the real estate group of Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”), a leading global investment firm.

Certain information contained in this material constitutes “forward-looking statements” within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “identified,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “confident,” “conviction” or the negative versions of these words or other comparable words thereof. These may include KREST’s financial estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements with respect to acquisitions, statements regarding future performance, and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. KREST believes these factors also include but are not limited to those described under the section entitled “Risk Factors” in its prospectus and most recent annual report, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the annual report (or KREST’s prospectus and other filings). Except as otherwise required by federal securities laws, KREST undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.