BREIT 2017 Annual Report

F-19 Share Repurchase Plan We have adopted a share repurchase plan whereby, subject to certain limitations, stockholders may request on a monthly basis that we repurchase all or any portion of their shares. For the year ended December 31, 2017, we repurchased 66,888 shares of common stock. We had no unfulfilled repurchase requests during the year ended December 31, 2017. Distributions The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to its stockholders each year to comply with the REIT provisions of the Code. Beginning March 2017, the Company declared a monthly distribution to stockholders of record as of the last day of each applicable month. Each class of our common stock receives the same gross distribution per share. 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 following table details the aggregate distributions declared for each applicable class of common stock for the year ended December 31, 2017 ($ in thousands, except share and per share data): Class S Class T Class D Class I Aggregate gross distributions declared per share of common stock $ 0.4782 $ 0.3567 $ 0.4008 $ 0.4782 Stockholder servicing fee per share of common stock (0.0823) (0.0511) (0.0173) — Net distributions declared per share of common stock $ 0.3959 $ 0.3056 $ 0.3835 $ 0.4782 The Company did not sell any Class D or Class T shares prior to May 2017 and June 2017, respectively, thus no distributions were declared for Class D or Class T shares prior to such date. Distributions for the year ended December 31, 2017, were characterized, for federal income tax purposes, as 34.15% ordinary income and 65.85% return of capital. Of the 34.15%, 32.55% and 1.6% of the distributions paid in 2017 were non-qualified and qualified, respectively. 11. Related Party Transactions Management Fee and Performance Participation Allocation On August 7, 2017, the Company renewed the advisory agreement between the Company, BREIT OP and the Adviser for an additional one-year period ending August 31, 2018. The Adviser is entitled to an annual management fee equal to 1.25% of the Company’s NAV, payable monthly, as compensation for the services it provides to the Company. The management fee can be paid, at the Adviser’s election, in cash, shares of common stock, or BREIT OP units. The Adviser has elected to receive the management fee in shares of the Company’s common stock to date. The Adviser waived the management fee for the period January 1, 2017 to June 30, 2017. During the year ended December 31, 2017, the Company incurred a management fee of $8.9 million. The Company issued 664,411 unregistered Class I shares to the Adviser as payment for the management fee and also had a payable of $1.9 million related to management fees as of December 31, 2017, which is included in Due to Affiliates on the Company’s Consolidated Balance Sheets. During January 2018, the Adviser was issued 180,215 unregistered Class I shares as payment for the $1.9 million management fee accrued as of December 31, 2017. The shares issued to the Adviser for payment of the management fee were issued at the applicable NAV per share at the end of each month for which the fee was earned. Additionally, the Special Limited Partner holds a performance participation interest in BREIT OP that entitles it to receive an allocation of BREIT OP’s total return to its capital account. Total return is defined as distributions paid or accrued plus the change in NAV. Under the BREIT OP agreement, the annual total return will be allocated solely to the Special Limited Partner after the other unit holders have received a total return of 5% (after recouping any loss carryforward amount) and such allocation will continue until the allocation between the Special Limited Partner and all other unit holders is equal to 12.5% and 87.5%, respectively. Thereafter, the Special Limited Partner will receive an allocation of 12.5% of the annual total return. The allocation of the performance participation interest is ultimately determined at the end of each calendar year and will be paid in cash or Class I units of BREIT OP, at the election of the Special Limited Partner. During the year ended December 31, 2017, the Company had recognized $17.0 million of Performance Participation Allocation Expense in the Company’s Consolidated Statement of Operations. The performance participation allocation became payable on December 31, 2017 and in January 2018, the Company issued approximately 1.6 million Class I units in BREIT OP to the Special Limited Partner as payment for the 2017 performance participation allocation. Such Class I units were issued at the NAV per unit as of December 31, 2017.