As of May 18, 2022, the only assets of NREO REIT Sub I were mezzanine loans that
qualify as mortgages and other liens on and interests in real estate for purposes of Section 3(c)(5)(C) of the 1940 Act (all such qualifying investments, Qualifying Real Estate Assets).18 Because such mezzanine loans are Qualifying Real Estate Assets, the value of NREO REIT Sub Is Qualifying Real Estate Assets is more than 80% of the value of its total assets. Additionally,
NREO REIT Sub I (i) is not engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and (ii) has not been engaged in such
businesses nor does it have any such securities or certificates outstanding. As a result, NREO REIT Sub I is excluded from the definition of investment company by Section 3(c)(5)(C) of the 1940 Act.
NREO REIT Sub II. As of May 18, 2022, NREO REIT Sub IIs assets were comprised of (i) cash items (as that term
has been interpreted for purposes of Section 3(a)(1)(C) of the 1940 Act), (ii) investment securities (as defined in Section 3(a)(2) of the 1940 Act) and (iii) interests in a majority-owned subsidiary (as defined in
Section 2(a)(24) of the 1940 Act) that is not an investment company and is not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (NREO REIT Sub II-A). As of May 18, 2022, the aggregate value of NREO REIT Sub II-A was approximately 88.5% of the value of NREO REIT Sub IIs Adjusted Total Assets. The value of investment securities owned by NREO
REIT Sub II represents approximately 11.5% of NREO REIT Sub IIs Adjusted Total Assets as of May 18, 2022, which is less than 40% of NREO REIT Sub IIs Adjusted Total Assets.
As of May 18, 2022, approximately 67.5% of the aggregate value of NREO REIT Sub II-As
Adjusted Total Assets were mortgage investments, mezzanine loans and assets representing fee interests in real estate, all of which are Qualifying Real Estate Assets, and approximately 32.5% of the aggregate value of NREO REIT Sub II-As Adjusted Total Assets were real estate-type assets.19 Additionally, NREO REIT Sub II-A (i) is not
engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and (ii) has not been engaged in such businesses nor does it have any
such securities or certificates outstanding. As a result, NREO REIT Sub II-A is excluded from the definition of investment company by Section 3(c)(5)(C) of the 1940 Act, and NREO REIT Sub II
is not an investment company within the meaning of Section 3(a)(1)(C) of the 1940 Act since approximately 88.5% of the value of its Adjusted Total Assets consist of its interest in NREO REIT Sub II-A.
Additionally, NREO REIT Sub II is a majority-owned subsidiary through which NREO conducts its business of operating as a REIT; therefore,
the same considerations detailed above with respect to NREOs status as not being an investment company within the meaning of Section 3(a)(1)(A) of the 1940 Act apply to NREO REIT Sub II.
NREO REIT Sub III. As of May 18, 2022, the only assets of NREO REIT Sub III were cash items (as that term has been
interpreted for purposes of Section 3(a)(1)(C) of the 1940 Act) and interests in a majority-owned subsidiary (as defined in Section 2(a)(24) of the 1940 Act) that is not an investment company and is not relying on the exclusion from the definition
of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (NREO REIT Sub III-A).
As of
May 18, 2022, the only assets of NREO REIT Sub III-A were interests in two majority-owned subsidiaries (as defined in Section 2(a)(24) of the 1940 Act), neither of which are an investment company or relying on the exclusion from the definition
of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (NREO REIT Sub III-B and NREO REIT Sub III-C).
As of May 18, 2022, approximately 91.1% of the aggregate value of NREO REIT Sub III-Bs Adjusted Total Assets were mortgage
investments that are Qualifying Real Estate Assets. Additionally, NREO REIT Sub III-B (i) is not engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment
plan certificates, and (ii) has not been engaged in such businesses nor does it have any such securities or certificates outstanding. As a result, NREO REIT Sub III-B is excluded from the definition of investment company by Section
3(c)(5)(C) of the 1940 Act.
As of May 18, 2022, all of NREO REIT Sub III-Cs Adjusted Total Assets were mortgage investments
that are Qualifying Real Estate Assets. Additionally, NREO REIT Sub III-C (i) is not engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan
certificates, and (ii) has not been engaged in such businesses nor does it have any such securities or certificates outstanding. As a result, NREO REIT Sub III-C is excluded from the definition of investment company by Section 3(c)(5)(C)
of the 1940 Act.
Therefore, NREO REIT Sub III-A is not an investment company within the meaning of Section 3(a)(1)(C) of the 1940 Act
since all of its Adjusted Total Assets consist of its interests in NREO REIT Sub III-B and NREO REIT Sub III-C, and NREO REIT Sub III is not an investment company within the meaning of Section 3(a)(1)(C) of the 1940 Act since all of its Adjusted
Total Assets consist of its interests in NREO REIT Sub III-A.
Additionally, each of NREO REIT Sub III and NREO REIT Sub III-A is a
majority-owned subsidiary through which NREO conducts its business of operating as a REIT; therefore, the same considerations detailed above with respect to NREOs status as not being an investment company within the meaning of
Section 3(a)(1)(A) of the 1940 Act apply to each of NREO REIT Sub III and NREO REIT Sub III-A.
NREO REIT Sub IV. As of
May 18, 2022, the only assets of NREO REIT Sub IV were cash items (as that term has been interpreted for purposes of Section 3(a)(1)(C) of the 1940 Act) and interests in a majority-owned subsidiary (as defined in Section 2(a)(24) of
the 1940 Act) that is not an investment company and is not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (NREO REIT Sub IV-A).
As of May 18, 2022, the only assets of NREO REIT Sub IV-A were interests in two majority-owned subsidiaries (as defined in Section
2(a)(24) of the 1940 Act), neither of which are an investment company or relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act (NREO REIT Sub IV-B and
NREO REIT Sub IV-C).
As of May 18, 2022, approximately 90.9% of the aggregate value of NREO REIT Sub IV-Bs
Adjusted Total Assets were mortgage investments that are Qualifying Real Estate Assets. Additionally, NREO REIT Sub IV-B (i) is not engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the
installment type or periodic payment plan certificates, and (ii) has not been engaged in such businesses nor does it have any such securities or certificates outstanding. As a result, NREO REIT Sub IV-B is excluded from the definition of
investment company by Section 3(c)(5)(C) of the 1940 Act.
As of May 18, 2022, all of NREO REIT Sub IV-Cs Adjusted
Total Assets were mortgage investments that are Qualifying Real Estate Assets. Additionally, NREO REIT Sub IV-C (i) is not engaged, or proposing to engage, in the business of issuing redeemable securities, face-amount certificates of the installment
type or periodic payment plan certificates, and (ii) has not been engaged in such businesses nor does it have any such securities or certificates outstanding. As a result, NREO REIT Sub IV-C is excluded from the definition of investment
company by Section 3(c)(5)(C) of the 1940 Act.
Therefore, NREO REIT Sub IV-A is not an investment company within the meaning of
Section 3(a)(1)(C) of the 1940 Act since all of its Adjusted Total Assets consist of its interests in NREO REIT Sub IV-B and NREO REIT Sub IV-C, and NREO REIT Sub IV is not an investment company within the meaning of Section 3(a)(1)(C) of the 1940
Act since all of its Adjusted Total Assets consist of its interests in NREO REIT Sub IV-A.
Additionally, each of NREO REIT Sub IV and
NREO REIT Sub IV-A is a majority-owned subsidiary through which NREO conducts its business of operating as a REIT; therefore, the same considerations detailed above with respect to NREOs status as not being an investment company
within the meaning of Section 3(a)(1)(A) of the 1940 Act apply to each of NREO REIT Sub IV and NREO REIT Sub IV-A.
NREC. As of
May 18, 2022, NRECs assets were comprised of (i) cash items (as that term has been interpreted for purposes of Section 3(a)(1)(C) of the 1940 Act), (ii) investment securities (as defined in
Section 3(a)(2) of the 1940 Act) and (iii) Property Assets. As of May 18, 2022, the aggregate value of the Property Assets owned by NREC was approximately 83% of the value of NRECs Adjusted Total Assets. The value of investment
securities owned by NREC represents approximately 17% of NRECs Adjusted Total Assets as of May 18, 2022, which is less than 40% of NRECs Adjusted Total Assets. NREC is therefore not an investment company within the meaning of
Section 3(a)(1)(C) of the 1940 Act. Rather, NREC is primarily engaged in the business of operating as a REIT.
Because Property
Assets represent approximately 83% of NRECs Adjusted Total Assets as of May 18, 2022, NREC derives its income primarily from Property Assets. For the year ended December 31, 2021, NREC derived approximately 100% of its net income
after taxes from Property Assets.
NSP. As of May 18, 2022, NSPs assets were comprised of (i) cash items (as
that term has been interpreted for purposes of Section 3(a)(1)(C) of the 1940 Act), (ii) investment securities (as defined in Section 3(a)(2) of the 1940 Act) and (iii) Property Assets. As of May 18, 2022, the
aggregate value of the Property Assets owned by NSP was approximately 81% of the value of NSPs Adjusted Total Assets. The value of investment securities owned by NSP represents approximately 10% of NSPs Adjusted Total Assets as of
May 18, 2022, which is less than 40% of NSPs Adjusted Total Assets.20 NSP is therefore not an investment company within the meaning of Section 3(a)(1)(C) of the 1940 Act. Rather,
NSP is primarily engaged in the business of operating as a real estate platform focused on the self-storage sector.
Because Property
Assets represent approximately 81% of NSPs Adjusted Total Assets as of May 18, 2022, NSP derives its income primarily from Property Assets. For the year ended December 31, 2021, NSP derived approximately 70% of its net income after
taxes from Property Assets.
18 |
See generally Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments, 1940
Act Release No. 29778 (Aug. 31, 2011). |
20 |
The remainder of NSPs Adjusted Total Assets consists principally of goodwill booked in connection with a
portfolio transaction. |
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