USQ Core Real Estate Fund (USQIX) Is Liquidating: What Holders Have Been Paid, and the $125.7 Million Still Inside

What the fund was

USQ Core Real Estate Fund launched in 2017 as a way for individual investors to own a slice of the big open-end "core" real estate funds that pension plans use, the ones tracked by the NFI-ODCE index, with a target of paying out 1% of NAV every quarter and quarterly repurchase offers of at least 5% of shares. It is advised by Union Square Capital Partners, LLC of Kennett Square, Pennsylvania. In 2024 it absorbed PREDEX (ticker PRDEX), another interval fund with the same adviser: USQ issued 4,455,474 Class I shares worth $100.2 million to PREDEX holders, which is why net assets jumped from $147.8 million in March 2024 to $222.1 million a year later.

The strategy did what core real estate did. Class I NAV peaked at $29.86 at March 31, 2022, and the fund lost 3.5% and then 13.2% in the next two fiscal years as private real estate values were marked down.

Source: financial highlights, Form N-CSR for the year ended March 31, 2026 (accession 0001398344-26-010165). The shareholder letter gives Class I a 2026 return of +0.99%, measured on the published NAV rather than the GAAP NAV used in the table.

The liquidation, step by step

• October 29, 2025: the board approves the plan "based upon the recommendation of the Adviser"; share sales are suspended.
• October 31, 2025: a prospectus supplement tells holders the fund "will not pursue its stated investment objective", "will not conduct quarterly repurchase offers", ends the dividend and the reinvestment plan, and warns that "liquidation of the portfolio is expected to take over a year". Shareholders representing a majority of shares had approved dropping the interval-fund and 80%-real-estate policies. The same day the expense cap ended: the adviser had been holding expenses at 0.85% of net assets; it waived voluntarily until November 30.
• November 19, 2025: the fund terminates its RBC credit line and has no obligations left under it.
• December 12, 2025: Class L shares are converted into Class I.
• December 30, 2025: first liquidating payment, $0.56 a share.
• March 6, 2026: second payment, $4.886 a share. The manager expects "a majority of these distributions will be treated as a return of capital for tax purposes".

The last three repurchase offers before the plan paid out $33.7 million: $12.6 million in April 2025, $10.7 million in July and $10.4 million in October, each for up to 5% of shares. After that, the only way out is the pro-rata payments.

What is still inside

At March 31, 2026 the fund held $136.2 million in 24 private funds (93.6% of net assets) and $1.6 million in money market funds. The manager's letter says it had "placed full redemption requests for the entire portfolio", had "successfully exited eight investments" during the year, and was "receiving partial redemption payments from the remaining investments, except for the U.S. Government Building Fund which is currently gated".

Sources: schedule of investments, Form N-CSR (accession 0001398344-26-010165); Form N-PORT for June 30, 2026 (accession 0001193125-26-370361). "Nine other funds" and the June total are our sums of the lines in each filing; the CSV has every fund.

The pattern is the one a holder of these funds lives with: the big ODCE managers pay out redemption queues slowly and pro rata, so the fund receives cash in pieces, a few funds leave entirely each quarter, and the gated one stays at its carrying value. The US Government Building Fund position, bought for $4.8 million in November 2018 and marked at $5.28 million, has not moved since March.

The payment the filings don't itemize

Between March 31 and June 30, 2026, net assets fell from $145.4 million to $125.7 million. In the same quarter the fund reported monthly returns of +0.37%, +0.24% and +0.57% and no share sales, reinvestments or redemptions (N-PORT). Compounding those returns on the March figure gives about $147.1 million; the difference, about $21.4 million, or roughly $2.41 a share on 8.9 million shares, left the fund in some other way. A third liquidating distribution is the obvious candidate, but that is our inference: interval funds don't file 8-Ks, and the payment will only be itemized in the semi-annual report for September 30, due around December. The fund's website and statements to holders are the place to confirm it.

If you hold USQIX, or held PRDEX

• You don't have to act, and acting won't speed anything up. There are no repurchase offers and "no secondary market". Payments are pro rata.
• Track your basis. Most of what you receive is being characterized as return of capital; it reduces your cost basis rather than showing up as income, until basis runs out.
• Expect a slow tail. The manager says holders "should be prepared for the possibility that final liquidation may not occur until 2027, or later". The gated fund, and the smallest positions, will be the last.
• Plan for the cash. Each payment is money coming back into your account, and the decision on what to do with it is yours. Compare what other real estate interval funds still pay and how they handle exits in our interval fund comparison and NAV REIT vs interval fund; the Yieldstreet fund wind-down is another interval fund that ended in 2026, by merger rather than liquidation.

FAQ

All figures are from the filings cited, read on EDGAR on September 27, 2026. Sums of holdings, the unexplained decline in net assets and the per-share estimate are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.