Forum Real Estate Income Fund (FORFX) Review 2026: Net Assets $497M at June 30, Leverage Cut to 18.3%, and a Distribution the Fund Over-Earned

Why this review exists: the interval fund that is growing while its twin shrinks

CrowdfundedWealth's 2026 cluster keeps asking one question of every non-traded real estate vehicle: when the 2022-onward rate shock hit, could you get out? The interval funds gave a wide range of answers — from Versus Capital's VCMIX, pro-rated for 13 consecutive quarters, to PIMCO's REFLX, whose gate never had to bite. The Forum Real Estate Income Fund belongs firmly on the comfortable end of that spectrum, and it is most useful read directly against CIM's RACR fund: two interval funds with nearly identical legal wrappers and similar credit-tilted strategies, whose outcomes could hardly be more different. CIM's RACR was oversubscribed and pro-rated every quarter for two full fiscal years while its assets shrank; Forum's fund quadrupled in size and filled its repurchase offers with room to spare. The difference is not the structure — it is the same Rule 23c-3 structure — but the life stage and the marks. This review is built from primary EDGAR filings under CIK 1857314, chiefly the FY2025 and FY2024 annual reports on Form N-CSR, the 2025 prospectus, and — for this September 22, 2026 update — the semi-annual report on Form N-CSRS for the period ended June 30, 2026, filed September 2, 2026, which supplies every June 2026 figure below.

A real estate fund that is mostly real estate debt

Start with what the fund actually owns, because the name "real estate income fund" buries the most important fact. As of December 31, 2025, the portfolio looked like this (percentages of net assets; they sum above 100% because the fund levers via reverse repos):

Add the CMBS lines and you get roughly 76% commercial mortgage-backed securities. There is essentially no direct common-equity ownership of buildings here — the "equity" sleeve is real estate preferred equity, which behaves much more like debt. This is a credit fund wearing a real estate label, far closer in DNA to a CRE-credit REIT like FS Credit or to PIMCO's credit-tilted REFLX than to an equity vehicle like BREIT. The fund's own primary benchmark is the Bloomberg US CMBS BBB index — which tells you the credit posture honestly: this is a sub-investment-grade-to-BBB CRE credit book, not a Treasury substitute.

That single design choice explains the stable-ish NAV, the fully-earned distribution, and the risk that actually matters here: CRE credit, not office equity.

The liquidity record: a gate that ran below the cap

This is the centerpiece, and it is the mirror image of CIM's RACR fund. An interval fund offers to repurchase a set percentage of shares each quarter — here at least 5% of NAV. When investors tender more than the offer, repurchases are pro-rated and rejected holders must re-queue; when they tender less, everyone who asked gets out in full.

For Forum, the filings show redemptions running well under the 5% ceiling. In fiscal 2025 the fund repurchased about $24.7 million of shares in total — against net assets that grew from about $194 million to about $400 million over the year, with about 21.3 million net new shares added. Sales of new shares vastly exceeded redemptions; the fund was in a strong accumulation phase, the opposite of a redemption spiral.

The June 2026 semi-annual report, filed September 2, 2026, extends the record by two more quarters and improves the disclosure. It breaks the repurchases out by class for the first time in this level of detail: in the six months to June 30, 2026 the fund repurchased $5,125,610 of Founders shares, $13,663,100 of Class I shares and $0 of Class K — $18,788,710 in total. Two quarterly offers of at least 5% each, on an asset base that ran from about $400 million to $497.1 million, means something on the order of $45-50 million of repurchase capacity was made available. Roughly 40% of it was used (our arithmetic), and net assets still rose 24% over the half. There is no proration when the offer is used at that rate.

One honest caveat, and it is important. Forum's N-CSR discloses aggregate annual repurchase dollars, not the per-quarter ratio of shares tendered versus shares accepted. So unlike PIMCO's REFLX (which publishes the exact tendered percentage each quarter) or CIM's RACR (which states plainly that each offer "exceeded the limit" and was pro-rated), Forum's "no proration" is a reasoned inference from strong net inflows and sub-ceiling redemption volume — not an explicit per-quarter statement. The inference is well-supported by the asset growth, but a buyer should know it is an inference, not a disclosed figure.

Here is the two-sided read. The good news is real: a 2021-2026 Forum investor who wanted out had no trouble, because the fund was taking in far more than it was paying out. The caution is the same as for every accumulation-phase fund: inflows mask the gate. A never-stressed gate tells you nothing about behavior under a redemption wave, and inflows can stop — as CIM's RACR demonstrates with the identical structure.

Why the NAV is flat: a credit book that earns its return in income

The NAV line tells the real story of a credit fund. Founders shares moved like this:

The pattern is the signature of a levered credit fund: the NAV dipped about 8% in the 2022 rate shock, then ground back up — and at June 30, 2026 it is $9.70, still 3.0% below the $10.00 inception price five years in, though it did rise five cents over the half. Every dollar of the double-digit total returns came from income (and from recovering marks off the 2022 low), not from price appreciation. That is a feature, not a bug, for an income buyer who wants a high, steady payout — but it is the honest framing: you are buying a roughly 9% coupon on a sub-investment-grade CRE credit book, not a growth vehicle. The high Level-3 share — 34.2% of net assets at June 30, 2026 ($170.2 million), down from about 40% — means the NAV's smoothness also partly reflects model-based marks that can lag a real downturn. That it fell is the right direction; a third of the book still being manager-marked is why Portfolio Quality stays at 3.0.

Distribution quality: zero return of capital, two years running

On distributions, Forum is near the top of the cluster, and the proof is in the tax-character table, not the marketing. The fund pays monthly, about 9.06% in 2025 (about $0.88 per Founders share: about $0.82 of net investment income plus about $0.06 of realized gains). Crucially, the SEC filings show the distribution was 0% return of capital in both fiscal 2024 and fiscal 2025 — entirely ordinary income and capital gains, with a net investment income ratio of about 8.75% comfortably covering the payout.

Put that next to the peers. CIM's RACR ran about 50% return of capital in fiscal 2025 (up from 38%); Apollo's and Bluerock's real estate interval funds ran 90%-plus; NexPoint's ran about 99%. Forum is handing investors income it actually earned, which is the single most important quality signal for an income-oriented buyer — and it clears it cleanly, in a still-benign credit environment. The prospectus carries the standard "distributions may include return of capital" warning, but the realized tax character shows the fund has not had to rely on it.

The first half of 2026 is the strongest reading yet, and it comes with a caveat on the rate. The Financial Highlights show $0.44 of net investment income per Founders share against $0.39 of distributions — the fund earned about 13% more than it paid. Nothing was returned. But $0.39 over six months on the $9.65 opening NAV annualises to about 8.1% (our arithmetic), against 9.15% for the whole of 2025: the payout per share is drifting down as the fund grows and rates come off. An income buyer should model the coupon at about 8%, not 9%.

Fees: reasonable structure, high absolute cost

The fee structure has two genuine positives: no sales load on any class, and no incentive fee — which immediately distinguishes Forum from CIM's RACR, whose 15% incentive fee on net investment income (including non-cash PIK income) helped push its net expense ratio to 5.16% in fiscal 2025 (4.75% annualized in the six months to March 31, 2026). Forum charges a 1.50% management fee on net assets (not on "managed assets," a borrower-friendlier base).

The catch is the all-in number. For Founders shares the gross expense ratio is about 3.76% and the net about 2.93%; the cheaper classes still run near 3% net, and Class K runs near 3.93% gross. The bulk of the gap above the 1.50% fee is leverage interest (about 1.12%) and other operating expenses — the cost of running a levered private-credit book. A 0.83% fee waiver via the expense-limitation agreement holds the net figure down, but it runs only through October 31, 2026, auto-renews annually, and carries a 3-year recoupment clawback — so the adviser can recover previously waived fees in later years. For a fund delivering about 9%, a roughly 3% net drag is heavy, even if it is typical for the levered-CRE-credit category.

Sponsor and the affiliate-conflict footnote

The sponsor is Forum Investment Group, a Denver multifamily and structured-finance platform founded in 2007 by Darren Fisk (sole founder and CEO), with Nuveen Asset Management lending institutional credibility on the CMBS sleeve. Across more than 20 searches we found no SEC enforcement action, AWC, or disciplinary matter tied to Forum Investment Group, Forum Capital Advisors, the fund, or Darren Fisk — though, as always, the absence of a found action is not proof of none, and a definitive Form ADV disciplinary-history pull would be the next check.

The one governance item worth flagging: in January 2026 the SEC granted Forum a co-investment exemptive order (IC-35899, file 812-15907) permitting the fund to co-invest with affiliates including Forum Structured Finance LP and other adviser-managed vehicles. This formalizes a real conflict — the adviser allocates the same private CRE deals across affiliated funds — but it is now SEC-conditioned with board and compliance oversight, which is the routine, governance-positive way these conflicts get resolved rather than a red flag in itself. Combined with the roughly 40% Level-3, adviser-marked book, it is a reminder that you are trusting the manager's judgment on both allocation and valuation.

How it sits in the cluster

Forum lands at 3.5 — squarely in the upper-middle of the real estate interval funds, and half a point nearer the top than at our June read, because the June 2026 semi-annual report cut leverage, cut the Level-3 share and lifted the NAV at the same time. It sits clearly above the stressed and gated cohort: CIM's RACR (2.3), NexPoint's NRSAX (2.0), Bluerock's former TIPRX (2.5), Apollo's GIREX (3.0), and Versus Capital's VCMIX (3.0), on the strength of its growth, its filled repurchase offers, and its 0% return of capital. It sits just below its closest analogs, the credit-tilted FS Credit REIT (3.6) and PIMCO's REFLX (3.7) — a notch lower for its smaller scale, its heavier Level-3 reliance, its flat-to-inception NAV, and the fact that, unlike REFLX, it does not publish the per-quarter tender ratios that would let an outsider verify the no-proration record directly. For the category-wide liquidity picture, see our real estate crowdfunding liquidity analysis.

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