Fidelity Core Real Estate Fund: $627M Assets, Fees, Class F Change

What the fund is, and what changed in 2026

Fidelity Core Real Estate Fund is not a Fidelity mutual fund and not an interval fund. It is a private REIT: "a Maryland statutory trust" that runs "a continuous private offering" under Rule 506(b) of Regulation D, and shares can be bought "only" by accredited investors (Form 10). It started selling on February 1, 2023, is managed by Fidelity Diversifying Solutions LLC, an affiliate of FMR LLC, and had 2,208 holders of record at May 31, 2026.

It became an SEC reporting company only this year, by filing a Form 10 in April 2026, so its first 10-Q (for June 30, 2026) was filed on August 12, 2026. That is why almost nothing on the internet quotes its balance sheet. It is a different issuer from the Fidelity Private Credit Fund, which is a business development company.

Three things changed in the last ten weeks:

• August 20, 2026: the Declaration of Trust created Class I, Class S and Class F shares and converted "all issued and outstanding common shares" into Class I. A new Investment Management Agreement, share repurchase plan and dealer manager agreement followed.
• Late summer: distributions moved from quarterly to monthly. The September 9 shareholder webinar said so, and the fund has declared $0.0864 (August 28), $0.0434 (September 29) and $0.0480 (October 29) per Class I share. The August 8-K does not say which months the $0.0864 covers.
• October 28, 2026: the Declaration of Trust was amended and restated again, this time on the Class I to Class F conversion.

Growth, leverage and the balance sheet

Sources: Form 10-12G/A (accession 0001193125-26-280945) and Form 10-Q for June 30, 2026 (accession 0001193125-26-346615). Total assets grew 31% in six months and 82% in 18 months (our arithmetic).

The six months to June 30 were an acquisition spree. The fund paid $120.9 million for two properties, Vineyard Towne Center, a retail center in Queen Creek, Arizona ($69.5 million, April 21, 2026), and Copper Point, a medical office building in Gilbert, Arizona ($51.5 million, June 11, 2026). It funded them with $60.6 million of new share sales and $95.9 million of new mortgages.

Debt is the part a holder should understand. The 10-Q lists 13 fixed-rate mortgages and one floating-rate loan (Copper Point, SOFR plus 1.63%) with $249.0 million of principal at a 5.28% weighted-average rate. Nothing falls due until 2029, when $26.9 million does; $84.3 million is due in 2031 and $129.8 million after that. The fund also has a $50 million revolving credit line from FMR LLC, its sponsor's parent, at 3-month term SOFR plus 1.75%, undrawn at June 30. Fidelity's fund-level leverage ratio, which nets cash against debt, was 31% at June 30; the monthly fact sheets show 31% (July), 30% (August) and 28% (September 30, 2026), because new share sales are coming in faster than new debt. The Form 10 states a target of "approximately 40% to 50%" and that "there is no limit" on borrowing. Measured on properties alone, the webinar shows 42% (debt over property assets).

The income statement: loss under GAAP, positive under the fund's own measures

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-346615), statements of operations and cash flows and the FFO reconciliation. FAD adds back the management fee that the manager takes in shares ($2.0 million in the first half).

Net loss is mostly depreciation: $11.1 million in the first half against $21.0 million of revenue. FFO adds it back. The relevant coverage question is how distributions compare with FFO and FAD, and the answer is that neither covered them in full: first-half distributions of $9.3 million were covered 66% by FFO and 83% by FAD (our arithmetic: $6.1 million and $7.7 million over $9.3 million). The 10-Q nevertheless lists "Cash Flows from operating activities" as 100% of the source, because operating cash flow of $11.0 million includes the non-cash fee add-back and working-capital timing. The September webinar shows a third view, "distributable cash from operations" of $4.898 million against a $4.905 million second-quarter distribution. Three measures, three answers: read the definition before you trust a "covered" label.

Most of the money also never leaves the fund. Of $9.3 million declared in the first half, 69% was reinvested in shares and 31% ($2.9 million) paid in cash; cash actually paid out in the cash flow statement was $2.5 million. The fund paid $7.9 million for repurchases and took in $60.6 million of new money over the same period.

The distribution itself is small relative to the headline returns. The latest filings show $0.0480 per Class I share for October (record date October 30, paid on or about November 20, 2026), which is $0.576 annualized, or 4.97% of the $11.60 NAV (our arithmetic), after $0.0434 for September, which Fidelity annualizes to 4.50%. The 10-Q shows the earlier quarterly pattern: $0.1314 (March) and $0.1361 (June 2026).

NAV, returns and what the appraisal assumes

NAV per share rose from $9.98 in February 2023 to $11.55 at June 30, 2026 and was $11.60 at September 30, 2026 (fact sheet). Fidelity reports calendar-year net total returns of 10.29% for 2024 and 7.03% for 2025, 4.80% for January to September 2026, and 9.02% annualized since inception at June 30, 2026, against -3.02% for the ODCE index over the same period. The fact sheet says the ODCE figure is "net of average advisory fee of the constituent funds", while the fund's figures are net of fund expenses, so the comparison is not like for like, and a perpetual vehicle that started in February 2023 and the index since January 2023 begin at different points.

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-346615), portfolio table and NAV valuation assumptions.

Two numbers show how far NAV sits from the accounting book. NAV was $416.3 million, while GAAP equity plus redeemable shares was $330.4 million, about $85.9 million or 26% lower (our arithmetic). Per share that is $11.55 of NAV against about $9.17 of book value (our arithmetic). The gap comes from marking real estate to appraisal: the NAV statement carries real estate at $598.2 million, the GAAP balance sheet at $493.5 million net of depreciation. A 0.25-point rise in exit cap rates would cut property values by 2.3% to 3.0% according to the 10-Q's own table. NAV is also set by the manager: the fund says the Investment Manager "is ultimately responsible for the determination of the Company's NAV", with annual third-party appraisals and monthly interim valuations by Altus Group.

Tenant concentration is worth knowing. One tenant at the Thurmon Tanner logistics center in Flowery Branch, Georgia, accounted for 11% of revenue and 50% of accounts receivable at June 30, 2026, and leases expiring in 2033 are 21% of the portfolio's annualized base rent. The portfolio was 99% leased.

Repurchases: the number that matters for exit

The plan was locked for three years from the initial closing and began on February 1, 2026. Under it, "the aggregate NAV of total repurchases of shares in a quarter" is capped at 5% of aggregate NAV. Repurchases are capped at 5% of aggregate NAV per calendar quarter, measured on the average of the three preceding month-ends, and shares held under a year are repurchased at 98% of the transaction price.

Source: Form 10-Q for June 30, 2026 (accession 0001193125-26-346615), Note 10. The September 30, 2026 repurchase date is not yet reported; it will appear in the 10-Q for the third quarter.

At the June NAV, 5% of the fund would be about $20.8 million a quarter (our arithmetic, using June 30 NAV as a proxy for the three-month average), so the June repurchases used less than half of the cap. Redemptions equalled 26% of the $36.1 million raised in the second quarter, and 29% of the $60.6 million raised in the half (our arithmetic). That is a fund still absorbing more new money than it pays out.

What the plan says should not be skipped:

• The fund can pay none. "The Company may repurchase fewer Shares than have been requested in any particular quarter to be repurchased under this Plan, or none at all, in its discretion at any time."
• Pro rata if the cap is reached. If requests exceed the limit, they "will be repurchased on a pro rata basis". As our illustration (our arithmetic): with a $20.8 million cap and $30 million of requests, each holder receives about 69% of the request.
• The manager's fee shares are outside the plan. The plan excludes "Shares held by the Investment Manager acquired as payment of the Management Fee or the Incentive Fee" from its limits, and the Investment Management Agreement lets the manager have those shares repurchased later without repurchase limits or early repurchase deduction. At June 30 there were 607,463 redeemable shares of that kind on the balance sheet, and affiliates held 3,134,878 shares (8.70%).
• Funding can come from debt or new sales. The plan allows repurchases to be funded from "the sale of assets, borrowings, return of capital or offering proceeds", with no limit.
• Class exchanges do not count. A holder exchanging one class for another of equal NAV is not counted against the quarterly cap and pays no early repurchase deduction.
• The deadline is early. Requests must reach the transfer agent by 4:00 p.m. Eastern on the second to last business day of the quarter.

Fidelity's September 30 fact sheet also says shares "should be considered as having only limited liquidity and at times may be illiquid." For how this compares with other perpetual non-traded vehicles, see our NAV REIT redemption status page and the redemption suspension tracker.

The Class I to Class F amendment of October 28, 2026

The 8-K of October 28, 2026 (Items 1.01 and 5.03) says the amended Declaration of Trust "provides for, among other things, certain modifications to the terms upon which Class I Shares acquired by certain shareholders and the clients of certain financial intermediaries convert into Class F Shares". The filing does not quantify anything. The exhibits do, because we can compare Section 6 of the August 20 text with the October 28 text.

Sources: Amended and Restated Declarations of Trust, Article VI Section 6, Exhibit 3.1 to the 8-Ks of August 20, 2026 (accession 0001193125-26-357818) and October 28, 2026 (accession 0001193125-26-435413).

Why it matters: Class F shares carry a 0.70% management fee against 1.0% for Class I and Class S, with a $25 million minimum and a $500 million issuance limit (fact sheet and Investment Management Agreement). On $25 million that is $75,000 a year less in management fee for the fund (our arithmetic). Under the original text, only intermediaries that gathered $25 million could earn that rate for their clients. Under the amended text, the Trustee can decide that a specific shareholder qualifies, at a lower threshold, earlier. The Trustee, per the text, "shall in its sole discretion interpret and apply the foregoing terms of this section."

What the filings do not say: how many shares have converted (the September 30 fact sheet states "no class S or Class F shares were outstanding"), which holders the Trustee considers eligible, or whether a smaller Class I holder can ever use the route. It also does not change the 2% early repurchase deduction or the 5% cap. A holder cannot assume the conversion applies to them, and it is not a way to leave: it moves you to a cheaper class of the same fund.

Fees, in one table

Sources: Third Amended and Restated Investment Management Agreement (Exhibit 10.1, 8-K of August 20, 2026, accession 0001193125-26-357818) and the fact sheet as of September 30, 2026 (Exhibit 99.1, accession 0001193125-26-437325).

In the first half of 2026 the management fee was $2.0 million and the incentive fee $1.8 million, both expenses in a period when GAAP net income was negative. An incentive fee can accrue on total return even when net income under GAAP is a loss, because it is computed on NAV changes plus distributions. The fund also pays its administrator 0.08% of NAV on the first $200 million, 0.07% from $200 to $400 million and 0.06% above that.

A worked example (our arithmetic): a $500,000 Class I holding at $11.60 is about 43,103 shares. The 1.0% management fee on that holding is roughly $5,000 a year, borne by the fund and so by NAV; the October distribution annualizes to about $24,800 a year; and a holder who sold in the first year would receive 98% of NAV, $490,000, a $10,000 haircut before any change in NAV.

What a reader can do with this

• Check which class you hold. All existing shares were converted to Class I on August 20, 2026. Ask your intermediary whether your clients' combined Class I subscriptions are near $25 million, and whether the Trustee can designate you under the October 28 text.
• Read the repurchase date, not the headline. Repurchases are capped at 5% of aggregate NAV per calendar quarter. The next request deadline is the second to last business day of the quarter, and the Q3 result will appear in the November 10-Q.
• Compare the distribution with FFO and FAD, not with GAAP income. The fund lost $4.8 million under GAAP in the first half; its own coverage measures give 66% (FFO) and 83% (FAD).
• Look at the manager's own shares. The manager takes its management fee in shares and can ask for them to be repurchased outside the cap. A shrinking queue is a signal; a queue where the manager sells first is a different one.
• Tax treatment: distributions are reported on Form 1099-DIV. Ordinary REIT dividends may qualify for the Section 199A deduction; see our 199A explainer for non-traded REIT dividends. The fund's figures on a "tax equivalent yield" assume the top 37% bracket and are Fidelity's own.
• If you are choosing between vehicles, the big-brand NAV REIT comparison lists the public-filing numbers for other sponsor-backed funds, and the private REIT Form D census shows who else raises money under Regulation D.

FAQ

All figures are from the filings cited, read on EDGAR on October 29, 2026; the most recent filing is dated October 29, 2026. Growth rates, coverage ratios, the NAV-to-book gap, the repurchase cap in dollars, annualized distribution, the fee example and the pro rata illustration are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.