Oaktree Real Estate Opportunities Fund VII, L.P.
OAKTREE REAL ESTATE OPPORTUNITIES FUND VII, L.P.
Appendix VI: Legal Information
Confidential
An investment in the Fund is speculative and involves a high degree of risk. Such risks include, but are not limited to, those described below. An investment should only be made after consultation with independent qualified
sources of investment, tax and legal advice. Please refer to the PPM for a more complete description of the Fund's investment practices, terms and conditions, restrictions and other factors relevant to a decision to invest, as
well as certain tax information and risk disclosures that are important to any investment decision.
Important Information About Investment Case Studies
The investment case studies presented herein are for informational purposes only. The purpose of these cases studies is to give an illustrative example of the types of investments made as well as an understanding of the
amounts invested, the investment thesis and the related returns. The investments shown may be more favorable than, and not representative of, all of the investments that will be made by the Fund. As a result, these materials
are not intended to be, and should not be read as, full and complete descriptions of each investment transaction within any particular Oaktree strategy. If you would like additional information regarding any other investments of
the Fund not presented herein, please contact an Oaktree marketing representative. Neither Oaktree nor its affiliates make any representation, and it should not be assumed, that past investment performance is an indication of
future returns, and there can be no assurance that the Fund will be able to earn the rates of return indicated in the case studies. Wherever there is the potential for profit there is also the possibility of loss.
Sabal
Sabal Financial Group, L.P. ("Sabal U.S.") and Sabal Financial Europe, LLC ("Sabal Europe" and, together with Sabal U.S., "Sabal") together comprise an international diversified financial services firm specializing in the
valuation, management and servicing of commercial real estate and commercial and residential acquisition, development and construction loans and mortgages, as well as in providing assistance with bid submissions and other
aspects of the acquisition process for such loans and mortgages. Sabal provides credit advisory services and loan portfolio management and performance assessments for investment and commercial banks and also has a lending
operation for small- to mid-size real estate loans. Sabal currently provides services to portfolios of commercial NPLs and REO properties owned by certain Oaktree funds and oversees loan origination platforms for certain
Oaktree funds. An affiliate of Oaktree owns a 50% interest in Sabal U.S. and will own a 90% interest in Sabal Europe, but does not profit from amounts paid by Oaktree funds to Sabal. (See "Overlaps of the Fund with Other
Oaktree Funds and Accounts and Other Conflicts of Interest" in the PPM.)
Investments
The Fund will invest in securities and obligations that entail substantial risk. There can be no assurance that such investments will increase in value, that significant losses will not be incurred or that the objectives of the Fund
will be achieved. In addition, investing in such securities and obligations may result in the incurrence of significant costs, fees and expenses, including legal, advisory and consulting fees and expenses, costs of regulatory
compliance and costs of defending third-party litigation.
Investment Environment
Many factors affect the demand for and supply of the types of investments that the Fund may target and their valuations. Interest rates and general levels of economic activity may affect the value and number of investments
made by the Fund or considered for investment. The Fund and its investments could be materially adversely affected by instability in global financial markets or changes in market, economic, political or regulatory conditions,
as well as by other factors outside the control of Oaktree or its affiliates.
Investments in Real Estate
The value of real estate and real estate-related securities and investments can be seriously affected by interest rate fluctuations, bank liquidity and the availability of financing, as well as by regulatory or governmentally imposed
factors such as a zoning change, an increase in property taxes, the imposition of height or density limitations, the requirement that buildings be accessible to disabled persons, the requirement for environmental impact studies,
the potential costs of remediation of environmental contamination or damage, the imposition of special fines to reduce traffic congestion or to provide for housing, competition from other investors, changes in laws, wars and
earthquakes, typhoons, terrorist attacks or similar events. Income from income-producing real estate may be adversely affected by general economic conditions, local conditions such as oversupply or reduction in demand for
space in the area, competition from other available properties, inadequate maintenance and inadequate coverage by insurance. Certain significant expenditures associated with real estate (such as mortgage payments (to the
extent leveraged), real estate taxes and maintenance costs) have no relationship with, and thus do not diminish in proportion to, a reduction in income from the property. Reductions in value or cash flow could impair the
Fund's ability to make distributions to investors, adversely impact its investment policy and reduce overall returns on investments.
Debt Securities
Investments in debt instruments entail normal credit risks (i.e., the risk of non-payment of interest and principal) and market risks (i.e., the risk that certain market factors will cause the value of the instrument to decline). A
default on a loan or a sudden and extreme increase in prevailing interest rates may cause a decline in a portfolio holding such investments.
Fixed income securities may be subject to redemption at the option of the issuer. If a fixed income security is called for redemption, the holder may be required to permit the issuer to redeem the security, which could have an
adverse effect on the holder's ability to achieve its investment objectives.
Floating rate instruments such as bank loans pay interest based on EURIBOR or LIBOR. As a result, a significant decline in EURIBOR or LIBOR could negatively impact the expected return on such loans. While loans with
EURIBOR or LIBOR interest rates are available at lower prices (ignoring those with EURIBOR or LIBOR floors), there can be no guarantee that such prices will offset losses in current income. Although the prices of floating
rate instruments may be less sensitive to interest rate changes than the prices of fixed-rate obligations, interest rates on bank loans only reset periodically and may not perfectly correlate with prevailing interest rates, potentially
subjecting floating-rate loans to the same fluctuations as fixed-rate obligations during the period in which their interest rates are fixed.
46View entire presentation