☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

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Title of each class

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Name of each exchange on which registered

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐o No☒x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐o No☒x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes☒x No ☐o

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes☒x No ☐o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐ o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒x

There is no established public market for the registrant’s shares of common stock. On March 29, 2017, the board of directors of the registrant determined an estimated per share net asset value of the registrant’s common stock of $22.63. Based on this estimated per share net asset value, the aggregate value of the registrant’s common stock held by non-affiliates as of June 30, 2017 (the last business day of the registrant’s most recently completed second fiscal quarter) was $801,423,971. As of March ~~8, 2018,~~12, 2024, there were ~~35,600,624~~36,152,049 shares of the registrant’s common stock outstanding.

~~DOCUMENTS INCORPORATED BY REFERENCE~~Auditor Name: KPMG LLP Auditor Location: Chicago, IL Auditor Firm ID: 185

The registrant incorporates by reference portions of its Definitive Proxy Statement for the 2018 Annual Meeting of Stockholders, which is expected to be filed no later than 120 days after the end of the fiscal year, into Part III of this Form 10-K to the extent stated herein.

Our board of directors may change our investment policies without stockholder approval, which could alter the nature of our ~~stockholders’ investment.~~investments.

Our ~~charter requires our independent directors to review our~~ investment ~~policies at least annually to determine that the policies we are following are in the best interest of our stockholders. These~~ policies may change over time. The methods of implementing our investment policies may also vary, as new investment techniques are developed. Our investment policies, including the strategic plan, the methods for implementing them, and our other objectives, policies and procedures may be altered by a majority of the directors (which must include a majority of the independent directors), without the approval of our stockholders. As a result, the nature of our ~~stockholders’ investment~~investments could change without ~~their~~stockholder consent. A change in our investment strategy may, among other things, increase our exposure to interest rate risk, default risk and commercial real property market fluctuations, all of which could materially adversely affect our ability to achieve our investment objectives.

We may not be successful in completely implementing the strategic plan and it is not clear if or when we will complete a liquidity event.

There is no assurance that we will be able to sell assets at acceptable prices and redeploy proceeds from properties sold to acquire suitable investments on financially attractive terms, if at all. We have evaluated and, in the future, expect to evaluate the possibility of redeveloping certain of our assets as part of the strategic plan. There is no assurance that we will redevelop any of our assets or that doing so will generate positive returns. There can be no assurance that we will be able to successfully implement the strategic plan or that the execution of the strategic plan will positively impact the value of our common stock. The adverse effects of high inflation and high interest rates on the economy and the retail commercial real estate market could delay any additional material asset purchases or sales and the execution of a liquidity event. We cannot provide any assurance that we will be able to sell properties, issue new securities or further increase our borrowings to raise capital when we would like, for example, to increase the proportion of grocery-anchored or shadow-anchored properties or increase the size of our portfolio of properties, or under terms that would be acceptable to us considering factors such as the anticipated use of the proceeds. The strategic plan has evolved and may continue to change over time, for example in light of any unexpected developments with the high rate of inflation and measures taken to control it, and there is no assurance we will be able to successfully achieve our board’s objectives under the strategic plan, including increasing the size of our portfolio, making strategic sales or purchases of properties or completing a liquidity event, within any timeframe we might expect or would prefer or at all. The timing of the execution of the strategic plan cannot be predicted with certainty.

As part of our strategic plan, we have analyzed and may, in the future, further analyze redeveloping certain assets or developing new assets. Redeveloping or developing assets present uncertainties and risks relating to the cost of the redevelopment or development activities and the amount and timing of returns as well as other risks including, but not limited to:

Further, during the period of time we are developing or redeveloping an asset or assets, our rental income from such properties may be reduced. Delays in completing development may also impact leases with existing tenants or our ability to secure new tenants. Occurrence of any of these events would likely have a material adverse effect on the estimated value of our common stock, our cash flow from operations, ability to pay distributions and ability to pursue a liquidity event for our stockholders. In addition, development costs for a project may increase, which may result in reduced returns, or even losses. In deciding whether to develop or redevelop a particular property, we make certain assumptions regarding the expected future performance of that property. If the property does not perform as expected, our financial performance may be materially and adversely affected, or an impairment charge could occur.

Competition with other non-traditional grocery retailers may reduce our profitability.

Tenants in the grocery industry face potentially changing consumer preferences and increasing competition from other forms of retailing, such as online grocery retailers and non-traditional grocery retailers such as prepared meal and fresh food delivery services, mass merchandisers, super-centers, warehouse club stores and drug stores. Other retail centers within the market area of our properties and meal and food delivery services both inside and outside these market areas compete with our properties for customers, affecting our tenants’ cash flows and thus affecting their ability to pay rent.

We have entered into in the past, may ~~continue to~~again in the future enter into, joint ventures with third parties. Our organizational documents do not limit the amount of funds that we may invest in these joint ventures. We ~~intend to~~may develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. The venture partners may share certain approval rights over major decisions and these investments may involve risks not otherwise present with other methods of investment in real estate, including, but not limited to:

~~The failure of any bank in which we deposit~~We depend on our ~~funds could reduce~~management team, particularly our president and chief executive officer, and the ~~amount of cash we have available to fund our capital and operating needs and distributions.~~

The Federal Deposit Insurance Corporation, or “FDIC,” generally only insures limited amounts per depositor per insured bank. The FDIC insures up to $250,000 per depositor per insured bank account. At December 31, 2017, we had cash and cash equivalents exceeding ~~these federally insured levels. If~~ ~~any of the banking institutions in which we have deposited funds ultimately fail, we may lose our deposits over the federally insured levels. The~~ loss of one of these key personnel or an inability to attract and retain highly skilled personnel could adversely affect our ~~deposits would reduce~~business.

Our future success depends on the ~~amount~~continuing efforts of ~~cash we~~our executive officers and other key personnel, including Mr. Zalatoris, our president and chief executive officer. We rely on the leadership, knowledge, and experience that our executive officers provide. They foster our corporate culture, which has been instrumental to our ability to attract and retain new talent. Personnel turnover, including changes in our management team or failure to manage executive succession effectively, could disrupt our business. We have ~~available~~entered into the Agreement with Mr. Zalatoris to ~~fund~~compensate him for performing services as our ~~capital~~president and ~~operating needs~~chief executive officer. The Agreement is for an initial term of one year, beginning on February 1, 2024, and ~~distributions.~~may be terminated by us at any time for “Cause”, as defined in the Agreement, immediately upon written notice of termination to Mr. Zalatoris, or at any time by us other than for Cause or by Mr. Zalatoris for any reason or no reason upon ninety (90) days’ written notice. Future leadership transitions and management changes may cause uncertainty in, or a disruption to, our business, and may increase the likelihood of senior management or key personnel turnover.

We rely on IREIC and its affiliates and subsidiaries to manage and conduct our operations. Any material adverse change in IREIC’s financial condition or our relationship with IREIC could have a material adverse effect on our business and ability to achieve our investment ~~objectives.~~objectives, and we may incur substantial costs if we decide to terminate this relationship.

We depend on IREIC and its affiliates and subsidiaries to manage and conduct our operations. IREIC, through one or more of its subsidiaries, owns and controls our Business Manager and Real Estate ~~Manager.~~Manager, and we would incur substantial costs to terminate our business management agreement with our Business Manager, which would include our Business Manager’s right to be paid the amount of its business management fee in one lump sum for the remainder of the term ending on March, 31, 2027, in addition to any incentive fee to which the Business Manager might be entitled in the event of Qualifying Internalization as defined in the business management agreement. IREIC has sponsored numerous public and private programs and through its affiliates or subsidiaries has provided offering, asset, property and other management and ancillary services to these entities. From time to time, IREIC or the applicable affiliate or subsidiary has waived or deferred fees or made capital contributions to support these public or private ~~programs. IREIC or its applicable affiliates or subsidiaries~~programs and may again waive or defer fees or make capital contributions in the future. Further, IREIC and its affiliates or subsidiaries may from time to time be parties to litigation or other claims arising from sponsoring these entities or providing these services. As such, IREIC and these other entities may incur costs, liabilities or other expenses arising from litigation or claims that are either not reimbursable or not covered by insurance. Future waivers or deferrals of fees, additional capital contributions or costs, liabilities or other expenses arising from litigation or claims could have a material adverse effect on IREIC’s financial condition and ability to fund our Business Manager or Real Estate Manager to the extent necessary.

In addition, increasing governmental and societal attention to environmental, social, and governance (“ESG”) matters, including expanding mandatory and voluntary reporting, diligence and disclosure on ESG topics such as climate change, carbon emissions, water usage, waste management, human capital and risk oversight, could expand the nature, scope and complexity of matters that we or IREIC is required to control, assess and report. We may face reputational damage in the event that our or IREIC’s corporate responsibility procedures or standards do not meet the standards set by various constituencies, which may negatively impact our tenants and our ability to lease our properties to tenants. If ~~our Business Manager~~we or ~~Real Estate Manager lose~~IREIC elects not to or are unable to ~~obtain key personnel,~~satisfy new ESG criteria or do not meet the criteria of a specific third-party provider, some investors or tenants may conclude that our ~~ability~~policies with respect to ~~implement~~corporate responsibility are inadequate. If we or IREIC fails to satisfy the expectations of investors, tenants and other stakeholders or our ~~investment strategies~~initiatives are not executed as planned, our reputation and financial results could be ~~hindered.~~

Our success depends to a significant degree upon the contributions of certain of our executive officers and other key personnel of our Business Manager and Real Estate Manager. Neither we nor our Business Manager or Real Estate Manager has employmentadversely affected.

agreements with these persons, and we cannot guarantee that all, or any particular one, will continue to be available to provide services to us. If any of the key personnel of our Business Manager or Real Estate Manager were to cease their employment or other relationship with our Business Manager or Real Estate Manager, respectively, our results and ability to pursue our business plan could suffer. Further, we do not intend to separately maintain “key person” life insurance that would provide us with proceeds in the event of death or disability of these persons. We believe our future success depends, in part, upon the ability of our Business Manager and Real Estate Manager to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure our stockholders that our Business Manager or Real Estate Manager will be successful in attracting and retaining skilled personnel. If our Business Manager or Real Estate Manager lose or are unable to obtain the services of key personnel, our ability to implement our investment strategies could be delayed or hindered, and the value of our stockholders’ investment could decline.

If we become self-managed by internalizing our management functions, we may be unable to retain key personnel, and our ability to achieve our investment objectives could be delayed or hindered, which could adversely affect our ability to pay distributions to our stockholders and the value of their investments.

At some point in the future, we may consider becoming self-managed by internalizing the functions performed for us by our Business Manager. Even if we become self-managed, we may not be able to hire certain key employees of the Business Manager and its affiliates, even if we are allowed to offer them positions with our Company. Although we are generally restricted from soliciting these persons pursuant to certain provisions set forth in the business management agreement, during the one-year period after the Business Manager’s receipt of an internalization notice the Business Manager will permit us to solicit for hire the “key” employees of the Business Manager and its affiliates, including all of the persons serving as the executive officers of our Company or the Business Manager who do not also serve as directors or officers of any other IREIC-sponsored REITs. However, at any given moment, many or all of the executive officers of the Company and the Business Manager may also be serving as a director or officer of one or more other IREIC-sponsored REITs. Failure to hire or retain key personnel could result in increased costs and deficiencies in our disclosure controls and procedures or our internal control over financial reporting. These deficiencies could cause us to incur additional costs and divert management’s attention from most effectively managing our investments, which could result in us being sued and incurring litigation-associated costs in connection with the internalization transaction.

If we seek to internalize our management functions other than as provided for under our business management agreement, we could incur greater costs and lose key personnel.

Our board may decide that we should pursue an internalization by hiring our own group of executives and other employees or entering into an agreement with a third party, such as a merger, instead of by transitioning the services performed by, and hiring the persons providing services for, our Business Manager. The costs that we would incur in this case are uncertain and may be ~~substantial. Further,~~substantial and will include our Business Manager’s right to be paid the amount of its business management fee in one lump sum for the remainder of the term ending on March, 31, 2027, in addition to any incentive fee to which the Business Manager might be entitled in the event of Qualifying Internalization as defined in the business management agreement, and we would lose the benefit of the experience of our Business Manager.

Further, if we seek to internalize the functions performed for us by our Real Estate Manager, the purchase price will be separately negotiated by our independent directors, or a committee thereof, and will not be subject to the transition procedures described in our business management agreement.

Our stockholders’ return on investment in our common stock may be reduced if we are required to register as an investment company under the Investment Company Act.

The Company is not registered, and does not intend to register itself or any of its subsidiaries, as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If we become obligated to register the Company or any of its subsidiaries as an investment company, the registered entity would have to comply with regulation under the Investment Company Act with respect to capital structure (including the registered entity’s ability to use ~~borrowings)~~leverage), management, operations, transactions with affiliated persons (as defined in the Investment Company Act) and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would limit our ability to make certain investments and require us to significantly restructure our operations and business plan. The costs we would incur and the limitations that would be imposed on us as a result of such compliance and restructuring would negatively affect the value of our common stock, our ability to make distributions and the sustainability of our business and investment strategies.

~~The Company conducts its~~We intend to continue conducting our operations, directly and through wholly or majority-owned subsidiaries, so that ~~none of the Company and its~~neither we nor our subsidiaries isare registered or will be required to register as an investment company under the Investment Company Act. Section 3(a)(1) of the Investment Company Act, in relevant part, defines an investment company as (i) any issuer that is, or holds itself out as being, engaged primarily in the business of investing, reinvesting or trading in securities, or (ii) any issuer that is engaged, or proposes

to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns, or proposes to acquire, “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” The term “investment securities” generally includes all securities except government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exemption from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. We believe we are not considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we do not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we and our subsidiaries are primarily engaged in the business of investing in real property. We also conduct our operations and the operations of our subsidiaries in a manner designed so that we do not come within the definition of an investment company under Section 3(a)(1)(C) because less than 40% of the value of our adjusted total assets on an unconsolidated basis consist of “investment securities.” This requirement limits the types of businesses in which we may engage through our subsidiaries. Furthermore, the assets

we and our subsidiaries may originate or acquire are limited by the provisions of the Investment Company Act and the rules and regulations promulgated under the Investment Company Act, which may adversely affect our business.

~~We and~~If we or any of our wholly or majority-owned subsidiaries ~~also may~~would ever inadvertently fall within one of the definitions of “investment company,” we intend to rely ~~upon~~on the exemption from registration as an investment company pursuant to Section 3(c)(5)(C) of the Investment Company Act,, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real ~~estate~~.estate.” As reflected in no-action letters, the SEC staff's position on Section 3(c)(5)(C) generally requires that at least 55% of an entity’s assets comprise qualifying real estate assets and that at least 80% of its assets must comprise qualifying real estate assets and real estate-related assets under the Investment Company Act. Specifically, we expect ~~each~~any of our subsidiaries relying on Section 3(c)(5)(C) to invest at least 55% of its assets in mortgage loans, certain mezzanine loans and other interests in real estate that constitute qualifying real estate assets in accordance with SEC staff guidance, and ~~approximately~~ an additional 25% of its assets in other types of mortgages, securities of REITs and other real estate-related assets such as debt and equity securities of companies primarily engaged in real estate businesses and securities issued by pass-through entities of which substantially all of the assets consist of qualifying real estate assets and/or real estate-related assets. The remaining 20% of the entity’s assets can consist of miscellaneous assets. These criteria may limit what we buy, sell and hold.

We classify our assets for purposes of Section 3(c)(5)(C) based in large measure upon no-action letters issued by the SEC staff and other interpretive guidance provided by the SEC and its staff or on our analysis of such guidance published with respect to other types of assets to determine which assets are qualifying real estate assets and real estate-related assets. However, the SEC’s guidance was issued in accordance with factual situations that may be substantially different from the factual situations we may encounter. No assurance can be given that the SEC will concur with how we classify our assets or the assets of our subsidiaries. The SEC may in the future take a view different than or contrary to our analysis with respect to the types of assets we have determined to be qualifying real estate assets or real estate-related assets. For example, on August 31, 2011 the SEC issued a concept release and request for comments regarding the Section 3(c)(5)(C) exemption (Release No. IC-29778) in which it contemplated the possibility of issuing new rules or providing new interpretations of the exemption that might, among other things, define the phrase “liens on and other interests in real estate” or consider sources of income in determining a company’s “primary business.” To the extent that the SEC or its staff provides more specific or different guidance, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC or its staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen. If we are required to re-classify our assets, we may no longer be in compliance with the exclusion from the definition of an “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act. There can be no assurance that the laws and regulations governing the Investment Company Act status of REITs, including the SEC or its staff providing more specific or different guidance regarding these exemptions, will not change in a manner that adversely affects our operations.

Certain of our subsidiaries may rely on the exemption provided by Section 3(c)(6) to the extent that they hold mortgage assets through majority-owned subsidiaries that rely on the exemption provided by Section 3(c)(5)(C). The SEC staff has issued little interpretive guidance with respect to Section 3(c)(6) and any guidance published by the staff could require us to adjust our strategy accordingly.

A change in the value of any of our assets could cause us to fall within the definition of “investment company” and negatively affect our ability to be free from registration and regulation under the Investment Company Act. To avoid being required to register the Company or any of its subsidiaries as an investment company under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. Sales may be required during adverse market conditions, and we could be forced to accept a price below that which we would otherwise consider appropriate. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy. Furthermore, if the value of securities issued by our subsidiaries that are exempted from the definition of “investment company” by Sections 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we own, exceeds 40% of our adjusted total assets on an unconsolidated basis, or if one or more of such subsidiaries fail to maintain an

exemption from registration under the Investment Company Act, we could, among other things, be required to substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so or register as an investment company. Any of these activities could negatively affect the value of our common stock, our ability to make distributions and the sustainability of our business and investment strategies, which may have a material adverse effect on our business, results of operations and financial condition.

If we were required to register the Company or any of its subsidiaries as an investment company but failed to do so, we or the applicable subsidiary would be prohibited from engaging in our or its business, and criminal and civil actions could be brought against us or the applicable subsidiary. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

~~The occurrence of cyber incidents,~~We are subject to risks associated with a pandemic, epidemic or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential information. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Our three primary risks that could directly result from the occurrenceoutbreak of a ~~cyber incident include operational interruption, damage~~contagious disease, which can cause severe disruptions in the U.S., and global economy.

Another pandemic in the future could have repercussions across many sectors and areas of the global economy and financial markets, leading to ~~our relationship with~~significant adverse impacts on economic activity as well as significant volatility and lack of liquidity in financial markets, including commercial lending markets. COVID-19 impacted, and new variants or other potential pandemics could impact, in-person commerce impacting the revenues generated by our tenants and ~~private data exposure.~~their ability to pay their rent to us when due. We ~~have implemented processes, procedures and controls to help mitigate these risks, but these measures, as well as our increased awareness of~~may also potentially experience a ~~risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.~~

~~A failure~~negative impact on the health of our ~~information technology (IT) infrastructure~~personnel, particularly if a significant number of them are impacted, which could ~~adversely~~result in a deterioration in our ability to ensure business continuity during this disruption.

Additionally, a continuing or permanent impact resulting from a pandemic on the retail business could make it difficult for us to renew or re-lease our properties at rental rates equal to or above historical rates. We could also incur more significant re-leasing costs, and the re-leasing process could take longer. Because substantially all of our income is derived from rentals of commercial real property, our business, income, cash flow, results of operations, financial condition, liquidity and ~~operations.~~

~~We rely~~ability to comply with the terms of, draw upon or increase the ~~capacity, reliability and security~~size of our ~~information technology infrastructure~~Credit Facility, prospects and ability to service our debt obligations, our ability to consummate future property acquisitions and our ability to ~~expand and continually update this infrastructure in response to changing needs of our business. We face the challenge of supporting older systems and hardware and implementing necessary upgrades~~pay future distributions to our ~~IT infrastructure. We may not~~stockholders could be ~~able~~materially adversely affected if a significant number of tenants become unable to ~~successfully implement these upgrades in an effective manner. In addition, we may incur significant increases in costs and extensive delays in the implementation and rollout~~meet their obligations to us as a result of any upgrades or new systems. If there are technological impediments, unforeseen complications, errors or breakdowns in implementation, the disruptions could have an adverse effect on our business and financial condition.another pandemic.

Investments in real estate assets are subject to varying degrees of risk. For example, an investment in real estate cannot generally be quickly sold, limiting our ability to promptly vary our portfolio in response to changing economic, financial and investment conditions. Investments in real estate assets also are subject to adverse changes in general economic conditions which, for example, reduce the demand for rental space.

Among the factors that could impact our real estate assets and the value of an investment in us are:

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the impact of the coronavirus on the U.S. economy and, in particular, on business and consumer demand that may diminish the demand and rents for our properties and impact the ability of our tenants to pay rent;

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~~acts of God, such as earthquakes, floods or other uninsured losses; and~~

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acts of God, such as earthquakes, floods or other uninsured losses; and

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changes or increases in interest rates and availability of financing.

In addition, periods of economic slowdown or recession, or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or increased defaults under existing leases.

Our real estate assets and other investments may be subject to impairment charges.

~~Periodically, we~~We assess in accordance with GAAP whether there are any indicators that the value of our real estate properties and other investments may be ~~impaired.~~impaired and have in the past recognized impairment charges on several properties then held for sale. Under ~~U.S.~~ GAAP, a property’s value is impaired only if the estimate of the aggregate future cash flows to be generated by the property is less than the carrying value of the property. The valuation and possible subsequent impairment of real estate properties and other investments is a significant estimate that can change based on our continuous process of analyzing each property and reviewing assumptions about inherently uncertain ~~inherent~~ factors, as well as the economic condition of the property at a particular point in time. We are required to make subjective assessments as to whether there are impairments in the value of our real estate properties and other investments.

Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. There can be no assurance that we will not take charges in the future related to the impairment of our assets. Because the strategic plan contemplates asset sales, we have recognized, and may continue to recognize, greater impairment charges than if we were to continue to hold and operate these properties. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken. ~~For the year ended December 31, 2017, we recognized an impairment charge related~~

E-commerce is likely to ~~an investment property of $8.5 million. During the years ended~~ ~~December 31, 2016 and 2015, we incurred~~ no impairment charges. For further information related to impairment provision, reference is made to Note 15 – “Fair Value Measurements” which is included in our December 31, 2017 Notes to Consolidated Financial Statements in Item 8.

~~Economic conditions in the United States have had, and may~~ continue to have an adverse impact on ~~the retail industry generally. Slow or negative growth in the retail industry could result in defaults by retail~~our tenants ~~which could have an adverse impact on our financial operations.~~

Economic conditions in the United States have had an adverse impact on the retail industry generally. As a result, the retail industry is facing reductions in sales revenues and increased bankruptcies throughout the United States. The continuation of adverse economic conditions may result in an increase in distressed or bankrupt retail companies, which in turn would result in an increase in defaults by tenants at our commercial properties. Additionally, slow economic growth is likely to hinder new entrants into the retail market which may make it difficult for us to fully lease space at our retail properties or retail properties we plan to acquire. Tenant defaults and decreased demand for retail space would have an adverse impact on the value of our retail properties and any additional retail properties we acquire and our ~~results of operations.~~business.

~~E-commerce can have an impact on our business.~~

The use of the internet by consumers ~~continues~~ to ~~gain popularity. The migration towards e-commerce~~shop, including online orders for immediate delivery or pickup in store, has grown and is expected to ~~continue.~~continue to expand. This increase in internet sales could result in a further downturn in the ~~business~~businesses of certain of our current tenants in their “brick and mortar” locations and could affect the way future tenants lease space. Certain of our grocery tenants are also incorporating e-commerce concepts through home delivery or curbside pickup, which could reduce foot traffic at our properties and reduce the demand for space at these properties. While we devote considerable effort and resources to analyze and respond to tenant trends, preferences and consumer spending patterns, we cannot predict with certainty what future tenants will want, what future retail spaces will look like and how much revenue will be generated at traditional “brick and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market, our occupancy levels and rental amounts and the value of our properties may decline.

We face significant competition in the leasing market, which may decrease or prevent increases in the occupancy and rental rates of our properties.

As of December 31, ~~2017,~~2023, we owned 5952 properties located in 24 states. We compete with numerous developers, owners and operators of commercial properties, many of which own properties similar to, and in the same market areas as, our properties. If our competitors offer space at rental rates below ~~current market rates, or below~~ the rental rates we currently charge our tenants, for example, as a result of decreased demand for space, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge in order to attract new tenants or retain existing tenants when their leases expire. To the extent we are unable to renew leases or re-let space as leases expire, it would result in decreased cash flow from tenants and reduce the income produced by our properties. Excessive vacancies (and related reduced shopper traffic) at one of our properties may hurt sales of other tenants at that property and may discourage them from renewing leases. Also, if our competitors develop additional properties in locations near our properties, there may be increased competition for creditworthy tenants, which may require us to make capital improvements to properties that we would not have otherwise made.

We depend on tenants for our revenue, and accordingly lease terminations, tenant default, and bankruptcies have adversely affected and could in the future adversely affect the income produced by our properties.

The success of our investments depends on the financial stability of our tenants. Certain economic conditions, such as the decreased demand for certain products or services, high inflation and high interest rates, have adversely affected and may continue to adversely affect ~~one or more of~~ our tenants. ~~For example, business~~Business failures and downsizings may contribute to reduced consumer demand for retail products and services which would impact tenants of our retail properties. In addition, our retail shopping center properties typically are anchored by large, nationally recognized tenants that may lease space at more than one of our properties, and any of ~~which~~these tenants may experience a downturn in their business that may weaken significantly their financial condition. For example, Bed Bath & Beyond has filed for bankruptcy protection and closed and rejected their leases at all four of its stores at our properties. Additionally, Rite Aid, who leases space at two of our properties, has filed for bankruptcy protection and has closed and rejected the lease at our Valencia, CA property. Their store at our Yardley, PA property is still open and operating. Further, mergers or consolidations among large retail establishments could result in the closure of existing stores or duplicate or geographically overlapping store locations, which could include tenants at our retail properties.

As a result of these factors, our tenants may delay lease commencements, decline to extend or renew their leases upon expiration, fail to make rental payments, or declare bankruptcy. Any of these actions could result in the termination of the tenants' leases, the expiration of existing leases without renewal, or the loss of rental income attributable to the terminated or expired leases. In the event of a tenant default or bankruptcy, we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment and re-leasing our property.

Our revenue is impacted by the success and economic viability of our anchor retail ~~tenants.~~tenants, some of whom have been struggling to compete with internet retailers. Our reliance on single or significant tenants, insuch as big box or anchor tenants, at certain ~~buildings~~properties may decrease our ability to lease vacated space and adversely affect the returns on our stockholders’ investment.

In the retail sector, a tenant occupying all or a large portion of the gross leasable area of a retail center, commonly referred to as an anchor tenant, may become insolvent, may suffer a downturn in business, for example, because of increased competition from internet

retailers, or may decide not to renew its lease. ~~Any of~~For example, REI vacated its space at Settlers Ridge in February 2021, and the space formerly used by Austin Liquors at White City has been dark since December 2022. The aforementioned events at these ~~events would~~properties and other properties have resulted and could result again in a reduction or cessation in rental payments to us and would adversely affect our results of operations and financial condition. A lease termination by an anchor tenant could result in lease terminations or reductions in rent by other tenants whose leases may permit cancellation or rent reduction if another tenant’s lease is terminated. For example, Bed Bath & Beyond vacated its anchor space at Harris Plaza upon the expiration of its lease on January 31, 2021, and vacated four other spaces in the first quarter of 2023, and several spaces at MidTowne Shopping Center were vacated by other tenants in the first quarter of 2022. We have re-leased the Bed Bath & Beyond space at Harris Plaza to American Freight, which upon opening will satisfy and cure the current tenant at the property who is paying us rent as a percentage of its gross sales that is less rent than what it was paying and would otherwise be obligated to pay us. We have not re-leased the spaces at MidTowne Shopping Center, and tenant rights under co-tenancy provisions in seven leases there have been triggered. These tenants will be entitled to pay reduced rental while such co-tenancy failure continues and some may be able to terminate their leases if the vacated spaces are not re-leased. Similarly, the leases of some ~~anchor~~ tenants may permit the ~~anchor~~ tenant to transfer its lease to another retailer. The transfer to a new ~~anchor~~ tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center. A lease transfer to a new ~~anchor~~ tenant could also allow other tenants to make reduced rental payments or to terminate their leases in accordance with lease terms. In the event that we are unable to re-lease the vacated ~~space~~spaces to a new ~~anchor tenant,~~qualified tenants, we may incur additional expenses in order to remodel the space to be able to re-lease the space to more than one tenant.

~~If a tenant declares bankruptcy, we~~Tenant bankruptcies, particularly tenants that occupy multiple spaces at our properties, may ~~be unable to collect balances due under relevant leases.~~have material adverse effects on us.

~~Any of~~Bankruptcy filings by our tenants or any guarantor of a tenant’s lease ~~obligations could be subject to~~obligation can occur in the course of operations, and in recent years, a ~~bankruptcy proceeding~~number of companies in ~~pursuit~~the retail industry, including certain of ~~Title 11 of the bankruptcy laws of the United States.~~our tenants, have declared bankruptcy. A bankruptcy filing of our tenants or any guarantor of a tenant’s lease obligations would bar all efforts to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently. If a lease is assumed, all pre-bankruptcy balances owing under it must be paid in full. IfLeases have been rejected by some tenants in the past, and if a lease is rejected by a tenant in bankruptcy in the future, we would only have a general unsecured claim for damages. If a lease is rejected, it is unlikely we would receive any payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid. This claim could be paid only if the funds were available, and then only in the same percentages as that realized on other unsecured claims.

A tenant or lease guarantor bankruptcy has delayed and could again delay efforts to collect past due balances under the relevant leases, and could ultimately preclude full collection of these sums. A tenant or lease guarantor bankruptcy could cause a decrease or cessation of rental payments that would mean a reduction in our cash flow and the amount available for distributions to our stockholders. In the event of a bankruptcy there can be no assurance that the tenant or its trustee will assume our lease. If a given lease or guaranty of a lease is not assumed, our cash flow and the amounts available for distributions to our stockholders may be adversely affected.

~~Our portfolio included three stores leased to Sports Authority, which filed for bankruptcy~~Inflation and continuing increases in ~~2016. Two of our three Sports Authority leases were rejected on June 30, 2016, and~~ the third one was rejected July 29, 2016. The annualized rent and reimbursements under these leases would have totaled approximately $2.2 million. We executed a lease agreement with Ross Dress for Less on December 29, 2017 for 22,322 square feet of the former Sports Authority store located at our Omaha, Nebraska asset. In addition, we have signed a letter of intent with a regional fitness operator for our Mansfield, Texas location. Lastly, we have a temporary tenant occupying space at our Lake St. Louis, Missouri asset while we continue to seek a quality replacement tenant for that space.

~~Inflation~~inflation rate may adversely affect our financial condition and results of operations.

Increases in the rate of inflation, both real and anticipated, may adversely affect our net operating income from leases with stated fixed rent increases or limits on the tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time. Increased inflation could also increase our general and administrative expenses and, as a result of an increase in market interest rate in response to higher than anticipated inflation rate, increase our mortgage and debt interest costs, and these costs could increase at a rate higher than our rents increase. Property taxes are also impacted by inflationary changes as taxes are typically regularly reassessed in most states based on changes in the fair value of our properties. An increase in our expenses, or expenses paid or incurred by our Business Manager or its affiliates that are reimbursed by us pursuant to the Business Management Agreement, or a failure of revenues to increase at least with inflation could adversely impact our results of operations.

Only some of our leases contain annual rental rate escalations based on increases in the Consumer Price Index. Some others contain fixed annual rent escalations. If the fixed rent increases begin to lag behind inflation, and our expenses increase with or greater than the inflation rate, then our profitability would be negatively impacted. Future leases may not contain escalation provisions, and even those that do include rent escalation provisions may not be sufficient to protect our revenues from the adverse effects of inflation. Moreover, if we are not able to increase rents at a rate that keeps pace with inflation, the purchasing power of the dollars that we receive will be lower that it would have been in the absence of inflation.

Most leases require our tenant to reimburse us for the tenant’s pro rata share of certain, but not all, operating expenses, but increases in operating expenses passed through to our tenants, without a corresponding increase in our tenants’ profitability, may place pressure on our ability to grow base rent as tenants look to manage their total occupancy costs. Renewals of leases or future leases for our properties may not be negotiated on a basis requiring the tenants to pay some of the operating expenses, in which event we may have to pay those

costs. If we are unable to lease properties on a basis requiring the tenants to pay all or some of such expenses, or if tenants fail to pay required tax, utility and other impositions, we could be required to pay those costs.

Inflation could also have an adverse effect on consumer spending, which may impact our tenants’ sales and ability to pay rent and, with respect to those leases including percentage rent clauses, our average rents. Additionally, if inflation increases prices of properties at a rate that is greater than inflation increases rents that we can charge to tenants at those properties, this will have a negative effect on our opportunities to acquire real estate by making what would otherwise be lucrative investment opportunities less profitable to us and adversely impacting the yields on acquisitions.

We may be restricted from re-leasing space at our retail ~~properties.~~properties by provisions such as exclusivity provisions in other tenants’ leases.

Leases with retail tenants may contain provisions giving the particular tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center. These provisions may limit the number and types of prospective tenants interested in leasing space in a particular retail property.

We have entered into long-term leases with some of our retail tenants, ~~and those leases~~which may not result in fair ~~value~~market rental rates over time ~~which~~and could adversely affect our revenues and ability to make distributions.

We have entered into long-term leases with some of our retail tenants. Long-term leases do not allow for significant changes in rental payments and do not expire in the near term. If we do not accurately judge the potential for increases in market rental rates when negotiating these long-term leases, significant increases in future property operating costs could result in receiving less than fair ~~value~~market rental rates from these leases. These circumstances would adversely affect our revenues and funds available for distribution.

Retail conditions may adversely affect our income.

A retail property’s revenues and value may be adversely affected by a number of factors, many of which apply to real estate investment generally, but which also include trends in the retail industry and perceptions by retailers or shoppers of the safety, convenience and attractiveness of the retail property. Our properties are located in public places, and any incidents of crime or violence, including acts of protest or terrorism, would result in a reduction of business traffic to tenant stores in our properties. Any such incidents may also expose us to civil liability. In addition, to the extent that the investing public has a negative perception of the retail sector, the value of our retail properties may be negatively impacted.

A number of our retail leases are based on tenant gross sales. Under those leases, ~~which are based on the gross sales of our tenants,~~ our revenue from tenants ~~may increase~~increases as the sales of our tenants increase. Generally, retailers face declining revenues during downturns in the economy. As a result, the portion of our revenue which may derive from percentage rent leases could be adversely affected by a general economic downturn.

Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.

From time to time, we have acquired multiple properties in a single transaction. Portfolio acquisitions typically are more complex and expensive than single property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions may also result in us owning investments in geographically dispersed markets, placing additional demands on our Business Manager and Real Estate Manager in managing the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. We also may be required to accumulate a large amount of cash to fund such acquisitions. We would expect the returns that we earn on such cash to be less than the returns on real property. Therefore, acquiring multiple properties in a single transaction may reduce the overall yield on our portfolio.

Short-term leases may expose us to the effects of declining market rent.

Some of our properties have short-term leases with tenants. There is no assurance that we will be able to renew these leases as they expire or attract replacement tenants on comparable terms, if at all. Therefore, the returns we earn on this type of investment may be more volatile than the returns generated by properties with longer term leases.

We do not own ~~or control~~ the land ~~in any~~when we are the lessee under a ground lease, so properties that we ~~have or may acquire.~~operate pursuant to a ground lease are subject to unique risks.

We have and may continue to acquire ~~property~~long-term leaseholds commonly known as ground leases to operate properties that are on land owned by a third ~~party known as a “leasehold interest.”~~parties. Although we have a right to use the property on land leased to us pursuant to a ground lease, we do not ~~retain fee ownership in~~own the underlying land. Accordingly, we will have no economic interest in the land ~~or building~~ at the expiration of the ~~leasehold interest. As a result, we~~ground lease and will not share in any increase in value of the land ~~associated with~~or the ~~underlying~~improvements once our ground lease ends. If we are found to be in breach of a ground lease, and that breach cannot be cured, we could lose our interest in the improvements and the right to operate the property. Further, because we do not ~~control~~own the underlying land, the lessor could take certain actions to disrupt our ~~rights in~~use of the property or our ~~tenants’~~tenant’s operation of the ~~properties.~~

property.

We may be unable to sell assets if or when we decide to do so.

Maintaining our REIT qualification and continuing to avoid registration under the Investment Company Act as well as many other factors, such as general economic conditions, the availability of financing, interest rates and the supply and demand for the particular asset type, may limit our ability to sell real estate assets. Many of these factors are beyond our control. We cannot predict whether we will be able to sell any real estate asset on favorable terms and conditions, if at all, or the length of time needed to sell an asset.

Sale leaseback transactions may be re-characterized in a manner unfavorable to us.

We may from time to time enter into a sale leaseback transaction where we purchase a property and then lease the property to the seller. The transaction may, however, be characterized as a financing instead of a sale in the case of the seller’s bankruptcy. In this case, we would not be treated as the owner of the property but rather as a creditor with no interest in the property itself. The seller may have the ability in a bankruptcy proceeding to restructure the financing by imposing new terms and conditions. The transaction also may be re-characterized as a joint venture. In this case, we would be treated as a joint venture with liability, under some circumstances, for debts incurred by the seller relating to the property.

Operating expenses may increase in the future and to the extent these increases cannot be passed on to our tenants, our cash flow and our operating results would decrease.

Operating expenses, such as expenses for fuel, utilities, labor, building materials and insurance, are not fixed and may fluctuate from time to time. The U.S. Bureau of Labor Statistics reported in February 2024 that the consumer price index, a commonly referenced measure of inflation, rose by 3.1% over the 12 months ended January 2024. Unless specifically provided for in a lease, there is no guarantee that we will be able to pass increases on to our tenants. To the extent these increases cannot be passed on to our tenants, any increases would cause our cash flow and our operating results to decrease, which could have a material adverse effect on our ability to pay or sustain distributions.

~~We may incur costs associated with the termination of our membership interest in the insurance association captive.~~

We were a member of an insurance association captive (“Captive”) that terminated its operations in March 2016 and dissolved in the fourth quarter 2017. We may, however, be liable for unidentified costs associated with the termination of the Captive.

~~We depend on the availability of public utilities and services, especially for water and electric power. Any reduction, interruption or cancellation of these services may adversely affect us.~~

Public utilities, especially those that provide water and electric power, are fundamental for the operation of our assets. The delayed delivery or any material reduction or prolonged interruption of these services could allow certain tenants to terminate their leases or result in an increase in our costs, as we may be forced to use backup generators, which also could be insufficient to fully operate our facilities and could result in our inability to provide services. Accordingly, any interruption or limitation in the provision of these essential services may adversely affect us.

An increase in real estate taxes may decrease our income from properties.

Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisition of the property. Generally, from time to time our property taxes will increase as property values or assessment rates change or for other reasons deemed relevant by the assessors. In fact, property taxes may increase even if the value of the underlying property declines. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property. Although some tenant leases may permit us to pass through the tax increases to the tenants for payment, there is no assurance that renewal leases or future leases will be negotiated on the same basis. Increases not passed through to tenants will adversely affect our cash flow from operations and our ability to pay distributions.

Potential development and construction delays and resulting increased costs and risks may reduce cash flow from operations.

~~From time to time we~~We have acquired, and may again acquire, unimproved real property or properties that are under development or construction. Investments in these properties ~~will be~~are subject to the uncertainties generally associated with real estate development and construction, including those related to re-zoning land for development, environmental concerns of governmental entities or community groups and the developers’ ability to complete the property in conformity with plans, specifications, budgeted costs and timetables. If a developer fails to perform, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A developer’s performance may also be affected or delayed by conditions beyond the developer’s control. Delays in completing construction could also give tenants the right to terminate leases. We may incur additional risks when we make periodic progress payments or other advances to developers before they complete construction. Despite management’s planning and cost-mitigation efforts, inflation could have an effect on our construction costs necessary to complete development and redevelopment projects. Additionally, labor shortages and supply chain issues could extend the time to completion. These and other factors can result in increased

costs of a project or loss of

our investment. In addition, we will be subject to lease-up risks associated with newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a purchase price at the time we acquire the property. If our projections are inaccurate, we may pay too much for a property, and the return on our investment could suffer.

If we contract with a development company for newly developed property, our earnest money deposit made to the development company may not be fully refunded.

We may enter into one or more contracts, either directly or indirectly through joint ventures with third parties, to acquire real property from a development company that is engaged in construction and development of commercial real estate. We may be required to pay a substantial earnest money deposit at the time of contracting with a development entity. At the time of contracting and the payment of the earnest money deposit by us, the development company typically will have only a contract to acquire land, a development agreement to develop a building on the land and an agreement with one or more tenants to lease all or part of the property upon its completion. If the development company fails to develop the property or all or a specified portion of the pre-leased tenants fail to take possession under their leases for any reason, we may not be able to obtain a refund of our earnest money deposit.

We may obtain only limited warranties when we purchase a property and ~~would~~therefore have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property.

~~The seller of a property often sells the property~~We have acquired, and may again acquire, properties in ~~its~~ “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental income from that property.

Uninsured losses or premiums for insurance coverage may adversely affect our returns.

The nature of the activities at certain properties may expose us and our tenants or operators to potential liability for personal injuries and, in certain instances, property damage claims. In addition, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorist acts or increasingly severe weather could sharply increase the premiums we pay for coverage against property and casualty claims. These policies may or may not be available at a reasonable cost, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We cannot provide any assurance that we will have adequate coverage for these losses. In the event that any of our properties incurs a casualty loss that is not fully covered by insurance, the value of the particular asset will likely be reduced by the uninsured loss. In addition, we cannot provide any assurance that we will be able to fund any uninsured losses.

The costs of complying with environmental laws and other governmental laws and regulations may adversely affect us.

All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. These laws and regulations generally govern water usage, wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, and the remediation of contamination associated with disposals. We also are required to comply with various local, state and federal fire, health, life-safety and similar regulations. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators for the costs of investigating or remediating contaminated properties. These laws and regulations often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. The cost of removing or remediating could be substantial. In addition, the presence of these substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent a property or to use the property as collateral for borrowing.

Environmental laws and regulations also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures by us. Environmental laws and regulations provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. Compliance with new or more stringent laws or regulations or stricter interpretations of existing laws may require material expenditures by us. For example, various federal, regional and state laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other

things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy

usage and efficiency, and waste management. These requirements could increase the costs of maintaining or improving our existing properties or developing new ~~properties.~~properties and could also result in increased compliance costs or additional operating restrictions that could adversely impact the businesses of our tenants and their ability to pay rent.

We may acquire properties in regions that are particularly susceptible to natural disasters, which may make us susceptible to ~~adverse climate developments from~~ the effects of these natural disasters in those ~~areas.~~areas from adverse climate developments or other causes.

Our properties are located in certain geographical areas that may be impacted by adverse events such as hurricanes, floods, wildfires, earthquakes, blizzards or other natural disasters, which could cause a loss of revenues at our real estate properties. In addition, according to some experts, global climate change could result in heightened severe weather, thus further impacting these geographical areas. Natural disasters in these areas may cause damage to our properties beyond the scope of our insurance coverage, thus requiring us to make substantial expenditures to repair these properties and resulting in a loss of revenues from these properties. Any properties located near either coast will be exposed to more severe weather than properties located inland. These losses may not be insured or insurable at an acceptable cost. Elements such as water, wind, hail, fire damage and humidity in these areas can increase or accelerate wear on the properties’ weatherproofing and mechanical, electrical and other systems, and cause mold issues over time. As a result, we may incur additional operating costs and expenditures for capital improvements at properties in these areas.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

The presence of mold at any of our properties could require us to undertake a costly program to remediate, contain or remove the mold. Mold growth may occur when moisture accumulates in buildings or on building materials. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing because exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. The presence of mold could expose us to liability from our tenants, their employees and others if property damage or health concerns arise.

We may incur significant costs to comply with the Americans With Disabilities Act or similar laws.

Our properties generally are subject to the Americans With Disabilities Act of 1990, as amended, which we refer to as the Disabilities Act. Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities.

The requirements of the Disabilities Act could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We attempt to acquire properties that comply with the Disabilities Act or place the burden on the seller or other third party, such as a tenant, to ensure compliance with these laws. However, we cannot assure our stockholders that we will be able to acquire properties or allocate responsibilities in this manner. We may incur significant costs to comply with these laws.

~~Terrorist attacks and other acts of violence or war may affect the markets in which we operate our operations and our profitability.~~

We may acquire properties located in areas that are susceptible to attack. These attacks may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur. Risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Further, certain losses resulting from these types of events are uninsurable or not insurable at reasonable costs.

More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the United States and worldwide financial markets and economy.

~~Risks Associated with Investments in Securities~~

~~Through owning real estate-related equity securities, we will be subject to the risks impacting each entity’s assets.~~

We may invest in real estate-related securities. Equity securities are always unsecured and subordinated to other obligations of the issuer. Investments in real estate-related equity securities are subject to the risks associated with investing directly in real estate assets and numerous additional risks including: (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities; (2) substantial market price volatility resulting from, among other things, changes in prevailing interest rates in the overall

market or related to a specific issuer, as well as changing investor perceptions of the market as a whole, REIT or real estate securities in particular or the specific issuer in question; (3) subordination to the liabilities of the issuer; (4) the possibility that earnings of the issuer may be insufficient to meet its debt service obligations or to pay distributions; and (5) with respect to investments in real estate-related preferred equity securities, the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to redeem the securities. In addition, investments in real estate-related securities involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Investing in real estate-related securities will expose our results of operations and financial condition to the factors impacting the trading prices of publicly-traded entities.

~~Recent market conditions and the risk of continued market deterioration may reduce the value of any real estate-related securities in which we may invest.~~

Mortgage loans experienced higher than historical rates of delinquency, foreclosure and loss during the dislocations in the world credit markets in recent years. These and other related events significantly impacted the capital markets associated not only with mortgage-backed securities, asset-backed securities and collateralized debt obligations, but also the world credit and financial markets as a whole. Investing significant amounts in real estate-related securities, including CMBS, will expose our results of operations and financial condition to the volatility of the credit markets.

Because there may be significant uncertainty in the valuation of, or in the stability of the value of, certain securities holdings, the fair values of these investments might not reflect the prices that we would obtain if we sold these investments. Furthermore, these investments are subject to rapid changes in value caused by sudden developments that could have a material adverse effect on the value of these investments, and cause us to incur impairment charges or unrealized losses.

~~Investments in CMBS are subject to all of the risks of the underlying mortgage loans and the risks of the securitization process.~~

CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Accordingly, these securities are subject to all of the risks of the underlying mortgage loans. In a changing interest rate environment, the value of CMBS may be adversely affected when payments on underlying mortgages do not occur as anticipated, resulting in the extension of the security’s effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. The value of CMBS may also change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole. In addition, CMBS are subject to the credit risk associated with the performance of the underlying mortgage properties. In certain instances, third-party guarantees or other forms of credit support designed to reduce credit risk may not be effective due, for example, to defaults by third party guarantors.

CMBS are also subject to several risks created through the securitization process. Generally, CMBS are issued in classes or tranches similar to mortgage loans. To the extent that we invest in a subordinate class or tranche, we will be paid interest only to the extent that there are funds available after paying the senior class. To the extent the collateral pool includes delinquent loans, subordinate classes will likely not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. Further, the ratings assigned to any particular class of CMBS may prove to be inaccurate. Thus, any particular class of CMBS may be riskier and more volatile than the rating may suggest, all of which may cause the returns on any CMBS investment to be less than anticipated.

Risks Associated with Debt Financing

The financial covenants under our credit agreement may restrict our ability to make distributions and our operating and acquisition activities. If we breach the financial covenants we could be held in default under the credit agreement, which could accelerate our repayment date and materially adversely affect our liquidity and financial condition.

We entered into a second amended and restated credit agreement in February 2022 for a $475.0 million credit facility (the “Credit Facility”) consisting of a revolving credit facility providing initial revolving credit commitments in an aggregate amount of $200.0 million (the “Revolving Credit Facility”) and a term loan facility providing initial term loan commitments in an aggregate amount of $275.0 million (the “Term Loan”). On May 17, 2022, we entered into a First Amendment to Credit Agreement Regarding Incremental Term Loans (the “First Amendment”), amending the terms of the Credit Agreement primarily to draw an additional $300.0 million to fund the acquisition of investment properties during May 2022 discussed in “Note 4 – Acquisitions.” The credit agreement provides us with the ability from time to time to increase the size of the Credit Facility in an amount not to exceed $1.2 billion, subject to certain conditions. Our performance of the obligations under the credit agreement, including the payment of any outstanding indebtedness, is secured by a minimum pool of 15 unencumbered properties with an unencumbered pool value of $300.0 million or above and by a guaranty by certain of our subsidiaries. At March 13, 2024, we had $134 million outstanding of the $200 million available under the Credit Facility. Our maximum availability under the Credit Facility was $66 million as of March 13, 2024, subject to the terms and conditions, including compliance with the covenants, of the Amended and Restated Credit Agreement that governs the Credit Facility. Although $66 million is the maximum available, covenant limitations, particularly the leverage ratio, affect what we can actually draw or otherwise undertake as additional debt. Our leverage ratio generally cannot exceed 65%. As of December 31, 2023, our leverage ratio as defined in the credit agreement was 56.4%. There has been substantially less available to actually draw or undertake as additional debt than the maximum amount available, and there may be additional periods during which the amount we can actually draw or otherwise undertake as additional debt is considerably less than the maximum amount available, for example, if new variants of the coronavirus, high inflation or high interest rates were to negatively affect our tenants.

The credit agreement requires compliance with certain financial covenants, including, among other conditions, a Consolidated Tangible Net Worth requirement, restrictions on indebtedness, a distribution limitation and other material covenants. Compliance with these covenants could inhibit our ability to make distributions to our stockholders and to pursue certain business initiatives or effect certain transactions that might otherwise be beneficial to us. For example, without lender consent, we may not declare and pay distributions or honor any redemption requests if any default under the agreement then exists or if distributions, excluding any distributions reinvested through our DRP, for the then-current quarter and the three immediately preceding quarters would exceed 95% of our Funds from Operations, or “FFO,” excluding acquisition expenses, or “adjusted FFO,” for that period.

The credit agreement provides for several customary events of default, including, among other things, the failure to comply with our covenants under the credit agreement, such as the Consolidated Tangible Net Worth covenant, and the failure to pay when amounts outstanding under the credit agreement become due or defaulting by us or our subsidiaries in the payment of an amount due under, or in the performance of any term, provision or condition contained in, any agreement providing for another debt arrangement, such as a mortgage, beyond certain dollar thresholds specified in our Credit Facility. Due to the reduced level of operations of our tenants and the negative effect on their ability to pay rent during the COVID-19 pandemic, we negotiated a waiver of compliance with the Consolidated Tangible Net Worth covenant for three quarters that ended on March 31, 2021, that imposed certain costs and temporary restrictions on us. Tenant bankruptcies negatively impact our compliance with the Consolidated Tangible Net Worth covenant even if the tenant continues to pay rent. There is no guarantee that our lenders under the credit agreement will grant another waiver of this covenant or any other covenant that we might be in danger of violating or required representation that we cannot make. Defaults under the credit agreement could restrict our ability to borrow additional monies and could cause all amounts to become immediately due and payable, which would materially adversely affect our liquidity and financial condition.

Volatility in the financial markets and challenging economic conditions could adversely affect our ability to secure debt financing on attractive terms and our ability to service any future indebtedness that we may incur.

We have funded our capital needs almost exclusively through cash flow from operations (to the extent positive) and through the credit facility, if needed. The domestic and international commercial real estate debt markets ~~continue to be challenging~~have been volatile resulting in, ~~among other things,~~from time to time, the tightening of underwriting standards by lenders and credit rating agencies, which ~~could limit~~limits the availability of credit and increase costs for what is available. We may also face a heightened level of interest rate risk, for example, if as the U.S. Federal Reserve Board increases interest rates further to combat high inflation. All of these actions will likely lead to increases in our borrowing costs and may impact our ability to access capital on favorable terms, in a timely manner, or at all, which could adversely affect our ability to obtain funding for our capital needs, such as future acquisitions. For example, the weighted average interest rate on our indebtedness increased 0.39% from 4.40% per annum as of December 31, 2022, to 4.79% per annum at December 31, 2023, including the positive effects of our interest rate swaps. If the overall cost of borrowing increases, either by increases in the index rates or by increases in lender spreads, the increased costs may result in existing or future acquisitions generating lower overall economic returns and potentially reducing future cash flow available ~~for distribution. If these disruptions~~to us. Volatility in the debt markets ~~persist,~~may negatively impact our ability to borrow monies to finance the purchase

of, or other activities related to, real estate ~~assets will be negatively impacted.~~assets. In addition, we may find it difficult, costly or impossible to refinance indebtedness which is maturing. If we are unable to borrow monies on terms and conditions that we find acceptable, the return on our properties may be lower.

Further, economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio and in the collateral securing any loan investments we may make, which could have various negative impacts. Specifically, the value of collateral securing any loan investment we may make could decrease below the outstanding principal amounts of such loans, requiring us to pledge more collateral.make.

Borrowings may reduce the funds available for distribution and increase the risk of loss since defaults may cause us to lose the properties securing the ~~loans.~~loans and may result in defaults under other agreements, including our Credit Facility.

We have acquired properties by either borrowing monies or, in some instances, by assuming existing financing. We typically borrow money to finance a portion of the purchase price of assets we acquire. In some instances, we have acquired properties by borrowing monies in an amount equal to the purchase price of the acquired properties. We may also borrow money for other purposes to, among other things, satisfy the requirement that we distribute at least 90% of our “REIT annual taxable income,” subject to certain adjustments and excluding any net capital gain, or as is otherwise necessary or advisable to assure that we continue to qualify as a REIT for federal income tax purposes. Over the long term, however, payments required on any amounts we borrow reduce the funds available for, among other things, acquisitions, capital expenditures for existing properties or distributions to our stockholders because cash otherwise available for these purposes is used to pay principal and interest on this debt.

If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt secured by a property, then the amount of cash flow from operations available for distributions to stockholders ~~may~~will be reduced. Many of the mortgages on our properties contain provisions which under certain circumstances require that cash received from tenants be paid into a cash maintenance escrow account or a lockbox or other account controlled by the lender, for example, when the borrower is not in compliance with certain covenants in the mortgage. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In such a case, we could lose the property securing the loan that is in default, thus reducing the value of our ~~stockholders’ investment.~~investments. For federal income tax purposes, a foreclosure is treated as a sale of the property or properties for a purchase price equal to the outstanding balance of the debt secured by the property or properties. If the outstanding balance of the debt exceeds our tax basis in the property or properties, we would recognize taxable gain on the foreclosure action and we would not receive any cash proceeds. In this event, we may be unable to pay the amount of distributions required in order to maintain our REIT status. We also may fully or partially guarantee any monies that subsidiaries borrow to purchase or operate properties. In these cases, we will likely be responsible to the lender for repaying the loans if the subsidiary is unable to do so. ~~If any mortgage~~Our Credit Facility contains a cross-default provision that could be triggered if certain defaults by our subsidiary borrowers were to occur under their mortgages, and mortgages themselves could contain cross-collateralization or cross-default provisions, so the Company or more than one property may be materially adversely affected by a mortgage default.

~~If we are unable to borrow at favorable~~Increases in interest rates we may ~~not be able~~make it difficult for us to acquire new properties.

If we are unable to borrow money at favorable rates, we may be unable to acquire additional real estate assets or refinance existing loans at maturity. Further, we have obtained and may continue to enter into loan agreements or other credit arrangements that require us to pay interest on amounts we borrow at variable or “adjustable” rates. Increases in interest rates will increase our interest costs. If interest rates are higher when we refinance our loans, our expenses will increase and we may not be able to pass on this added cost in the form of increased rents, thereby reducing our cash flow and the amount available for distribution to our stockholders. Further, during periods of rising interest rates, we may be forced to sell one or more of our properties in order to repay existing loans, which may not permit us to maximize the return on the particular properties being sold. At December 31, ~~2017,~~2023, we had ~~$138.0~~$184.0 million or ~~19.9%~~21.7% of our total debt that bore interest at variable rates and not fixed by swap agreements with a weighted average interest rate equal to ~~3.2%~~6.55%. We had variable rate debt subject to swap agreements fixing the rate of ~~$383.5~~$551.0 million or ~~55.3%~~65.1% of our total debt at December 31, ~~2017.~~2023.

Interest-only indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to our stockholders.

We have obtained, and may continue to enter into, mortgage indebtedness that does not require us to pay principal for all or a portion of the life of the debt instrument. During the period when no principal payments are required, the amount of each scheduled payment is less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan is not reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal required during this period. After the interest-only period, we may be required either to make scheduled payments of principal and interest or to make a lump-sum or “balloon” payment at or prior to maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan if we do not have funds available or are unable to refinance the obligation.

Investing in subordinated debt involves greater risks of loss than senior loans secured by the same properties.

~~Our loan documents~~

We have invested in, and may ~~restrict certain aspects~~continue to invest in, mezzanine debt and other subordinated debt. These types of investments carry a higher degree of risk of loss than senior secured debt investments because in the event of default and foreclosure, holders of senior liens will be paid in full before subordinated investors and, depending on the value of the underlying collateral, there may not be sufficient assets to pay all or any part of amounts owed to subordinated investors. Moreover, mezzanine debt and other subordinated debt investments may have higher loan-to-value ratios than conventional senior lien financing, resulting in less equity in the collateral and increasing the risk of loss of principal. If a borrower defaults or declares bankruptcy, we may be subject to agreements restricting or eliminating our ~~operations, which could, among other things, limit our ability~~rights as a creditor, including rights to ~~make distributions to our stockholders.~~

~~The terms and conditions contained~~call a default, foreclose on collateral, accelerate maturity or control decisions made in ~~certain of our loan documents require us to maintain cash reserves,~~bankruptcy proceedings. In addition, senior lenders may limit the ~~aggregate~~ amount ~~we may borrow on a~~or timing of interest and principal payments while the senior secured and unsecured basis, require us to satisfy restrictive financial covenants, prevent us from entering into certain business transactions, such as a merger, sale of assets or other business combination, restrict our leasing operations, require us

debt is outstanding.

to obtain consent from the lender to complete transactions or make investments that are ordinarily approved only by our board of directors or impose limits on our ability to pay distributions. In addition, secured lenders may restrict our ability to discontinue insurance coverage on a mortgaged property even though we may believe that the insurance premiums paid to insure against certain losses, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, are greater than the potential risk of loss.

We entered into a credit agreement, as amended, with KeyBanc Capital Markets Inc. for a $110 million revolving credit facility (the “Credit Facility”). The credit agreement provides us with the ability from time to time to increase the size of the Credit Facility, subject to certain conditions. Our performance of the obligations under the credit agreement, including the payment of any outstanding indebtedness, is secured by a minimum pool of five unencumbered properties with an unencumbered pool value of $110 million or above and by a guaranty by certain of our subsidiaries. As of December 31, 2017, we have borrowed $83.8 million of the $110 million available.

The credit agreement requires compliance with certain financial covenants, including, among other conditions, a minimum tangible net worth requirement, restrictions on indebtedness, a distribution limitation and other material covenants. These covenants could inhibit our ability to make distributions to our stockholders and to pursue certain business initiatives or effect certain transactions that might otherwise be beneficial to us. For example, without lender consent, we may not declare and pay distributions or honor any redemption requests if any default under the agreement then exists or if distributions, excluding any distributions reinvested through our DRP, for the then-current quarter and the three immediately preceding quarters would exceed 95% of our Funds from Operations, or “FFO,” excluding acquisition expenses, or “adjusted FFO,” for that period. For the fiscal quarters ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017, distributions did not exceed 95% of our adjusted FFO.

The credit agreement also provides for several customary events of default, including, among other things, the failure to comply with our covenants and the failure to pay when amounts outstanding under the credit agreement become due. Declaration of a default by the lenders under the credit agreement could restrict our ability to borrow additional monies and could cause all amounts to become immediately due and payable, which would materially adversely affect our liquidity and financial condition.

We may acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.

The terms and conditions contained in certain of our loan documents preclude us from pre-paying the principal amount of the loan or could restrict us from selling or otherwise disposing of or refinancing properties. For example, lock-out provisions prohibit us from reducing the outstanding indebtedness secured by certain of our properties, refinancing this indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness secured by our properties. Lock-out provisions could impair our ability to take other actions during the lock-out period. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.

Increasing interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions.

At December 31, 2023, we had $184.0 million of debt or 21.7% of our total debt bearing interest at variable rates indexed to the Secured Overnight Financing Rate (“SOFR”) and not fixed by a swap with a weighted average interest rate equal to 6.55% per annum. We had variable rate debt indexed to SOFR and subject to swap agreements fixing the rate of $551.0 million or 65.1% of our total debt at December 31, 2023. If interest rates on all debt which bears interest at variable rates as of December 31, 2023 increased by 1% (100 basis points), the increase in interest expense on all debt would decrease earnings and cash flows by $1.8 million annually. If interest rates on all debt which bears interest at variable rates as of December 31, 2023 decreased by 1% (100 basis points), interest expense would increase earnings and cash flows by the same amount.

To hedge against interest rate fluctuations, we may use derivative financial instruments that may be costly and turn out to be ineffective.

From time to time, we have used, and may continue to use, derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions will be determined in light of the facts and circumstances existing at the time of the hedge and may differ from our current hedging strategy. There is no assurance that our hedging strategy will achieve our objectives. We may be subject to costs, such as transaction fees or breakage costs, if we terminate these arrangements.

~~To the extent that we~~23

We use derivative financial instruments to hedge against interest rate fluctuations ~~we will be~~and are exposed to credit risk, basis risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract, increasing the risk that we may not realize the benefits of these instruments. There is a risk that counterparties could fail, shut down, file for bankruptcy or be unable to pay out contracts. The failure of a counterparty that holds collateral that we post in connection with an interest rate swap agreement could result in the loss of that collateral.

We may be contractually obligated to purchase property even if we are unable to secure financing for the acquisition.

We expect to finance a portion of the purchase price for each property that we acquire. However, to ensure that our offers are as competitive as possible, we do not expect to enter into contracts to purchase property that include financing contingencies. Thus, we may be contractually obligated to purchase a property even if we are unable to secure financing for the acquisition. In this event, we may choose to close on the property by using cash on hand, which would result in less cash available for our operations and distributions to stockholders. Alternatively, we may choose not to close on the acquisition of the property and default on the purchase contract. If we default on any purchase contract, we could lose our earnest money and become subject to liquidated or other contractual damages and remedies.

~~The total amount we may borrow is limited by our charter.~~

We may borrow up to 300% of our net assets, equivalent to 75% of the cost of our assets. We may exceed this limit only if our board of directors (including a majority of our independent directors) determines that a higher level is appropriate. This limit could adversely affect our business, including:

~~limiting our ability to purchase real estate assets;~~

~~causing us to lose our REIT status if we cannot borrow to fund the monies needed to satisfy the REIT distribution requirements;~~

~~causing operational problems if there are cash flow shortfalls for working capital purposes; and~~

~~causing the loss of a property if, for example, financing is necessary to cure a default on a mortgage.~~

Risks Related to Conflicts of Interest

IREIC may face a conflict of interest in allocating personnel and resources between its affiliates, our Business Manager and our Real Estate Manager.

We do not have any employees. We rely on persons performing services for our Business Manager and Real Estate Manager and their affiliates to manage our day-to-day operations. Some of these persons also provide services to one or more investment programs currently or previously sponsored by IREIC. These individuals face competing demands for their time and service, and are required to allocate their time between our business and assets and the business and assets of IREIC, its affiliates and the other programs formed and organized by IREIC. Certain of these individuals have fiduciary duties to both us and our stockholders. If these persons are unable to devote sufficient time or resources to our business due to the competing demands of the other programs, they may violate their fiduciary duties to us and our stockholders, which could harm our business and ~~we may~~cause us to be unable to maintain or increase the value of our assets, and our operating cash flows and ability to pay distributions could be adversely affected.

In addition, if another investment program sponsored by IREIC decides to internalize its management functions in the future, it may do so by hiring and retaining certain of the persons currently performing services for our Business Manager and Real Estate Manager, and if it did so, it would ~~likely~~ not allow these persons to perform services for us.

We do not have arm’s-length agreements with our Business Manager, our Real Estate Manager or any other affiliates of IREIC.

The agreements and arrangements with our Business Manager, our Real Estate Manager and any other affiliates of IREIC were not negotiated at arm’s-length. These agreements may contain terms and conditions that are not in our best interest or would not be present if we entered into arm’s-length agreements with third parties.

Our Business Manager, our Real Estate Manager and other affiliates of IREIC face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

We pay fees, which may be significant, to our Business Manager, Real Estate Manager and other affiliates of IREIC for services provided to us. Our Business Manager receives fees based on the aggregate book value, including acquired intangibles, of our invested assets and is entitled to receive its business management fee for the ~~contract purchase price~~remainder of ~~our assets.~~the term ending March 31, 2027 in one lump sum upon termination of the business management agreement by the Company except for cause. Further, our Real Estate Manager receives fees based on the gross income from properties under management and may also receive leasing and construction management fees. Other parties related to, or affiliated with, our Business Manager or Real Estate Manager may also receive fees or cost reimbursements from us. These compensation arrangements may cause these entities to take or not take certain actions. For example, these arrangements may provide an incentive for our Business Manager to: (1) borrow more money than prudent to increase the amount we can invest; or (2) retain instead of sell assets, even if our stockholders may be better served by a sale or other disposition of the assets. ~~Further, the fact that~~

~~we pay the Business Manager an acquisition fee based on the contract purchase price of an asset may cause our~~ ~~Business Manager to negotiate a higher price for an asset than we otherwise would, or to purchase assets that may not otherwise be in our best interests. Ultimately, the~~The interests of these parties in receiving fees may conflict with the interest of our stockholders in earning income on their investment in our common stock.

We rely on entities affiliated with IREIC to identify real estate assets.

We rely on the real estate professionals employed by IREA and other affiliates of our Sponsor to source potential investments in properties, real estate-related assets and other investments in which we may be interested. Our Sponsor and its affiliates maintain an investment committee (“Investment Committee”) that reviews each potential investment and determines whether an investment is acceptable for acquisition. In determining whether an investment is suitable, the Investment Committee considers investment objectives, portfolio and criteria of all programs currently advised by our Sponsor or its affiliates (collectively referred to as the “Programs”). Other factors considered by the Investment Committee may include cash flow, the effect of the acquisition on portfolio diversification, the estimated income or unrelated business tax effects of the purchase, policies relating to leverage, regulatory restrictions and the capital available for investment. Our Business Manager will not recommend any investments for us unless the investment is approved for consideration in advance by the Investment Committee. Once an investment has been approved for consideration by the Investment Committee, the Programs are advised and provided an opportunity to elect to acquire the investment. If more than one Program is interested in acquiring an investment, then the Program that has had the longest period of time elapse since it was allocated and invested in a contested investment is awarded the investment by the allocation committee. We may not, therefore, be able to acquire properties that we otherwise would be interested in acquiring.

Our properties may compete with the properties owned by other programs sponsored by IREIC or IPCC.

Certain programs sponsored by IREIC or Inland Private Capital Corporation (“IPCC”) own and manage the type of properties that we own or seek to acquire, including in the same geographical areas. Therefore, our properties, especially those located in the same geographical area, may compete for tenants or purchasers with other properties owned and managed by other IREIC- or IPCC-sponsored programs. Persons performing services for our Real Estate Manager may face conflicts of interest when evaluating tenant leasing opportunities for our properties and other properties owned and managed by IREIC- or IPCC-sponsored programs, and these conflicts of interest may have an adverse impact on our ability to attract and retain tenants. In addition, a conflict could arise in connection with the resale of properties in the event that we and another IREIC- or IPCC-sponsored program were to attempt to sell similar properties at the same time, including in particular in the event another IREIC- or IPCC-sponsored program engages in a liquidity event at approximately the same time as us, thus impacting our ability to sell the property or complete a proposed liquidity event.

Risks Related to Our Corporate Structure

Our rights, and the rights of our stockholders, to recover claims against our officers, directors, Business Manager and Real Estate Manager are limited.

Under our charter, no director or officer will be liable to us or to any stockholder for money damages to the extent that Maryland law permits the limitation of the liability of directors and officers of a corporation. We ~~may~~ generally indemnify our directors, officers, employees, if any, Business Manager, Real Estate Manager and their respective affiliates for any losses or liabilities suffered by any of them as long as: (1) the directors have determined in good faith that the course of conduct that caused the loss or liability was in our best interest; (2) these persons or entities were acting on our behalf or performing services for us; (3) the loss or liability was not the result of the negligence or misconduct of the directors (gross negligence or willful misconduct of the independent directors), officers, employees, Business Manager, Real Estate Manager or their respective affiliates; and (4) the indemnity or agreement to hold harmless is recoverable only out of our net assets and not from our stockholders.them. As a result, we and our stockholders may have more limited rights against our directors, officers and employees, our Business Manager, the Real Estate Manager and their respective affiliates, than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors, officers and employees or our Business Manager and the Real Estate Manager and their respective affiliates in some cases.

Our board of directors may, in the future, adopt certain measures under Maryland law without stockholder approval that may have the effect of making it less likely that a stockholder would receive a “control premium” for his or her shares.

Corporations organized under Maryland law with a class of registered securities and at least three independent directors are permitted to protect themselves from unsolicited proposals or offers to acquire the company by electing to be subject, by a charter or bylaw provision or a board of directors resolution and notwithstanding any contrary charter or bylaw provision, to any or all of five provisions:

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~~staggering the board of directors into three classes;~~

requiring a two-thirds vote of stockholders to remove directors;

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providing that only the board can fix the size of the board;

•

providing that all vacancies on the board, regardless of how the vacancy was created, may be filled only by the affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; and

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requiring that special stockholders meetings be called only by holders of shares entitled to cast a majority of the votes entitled to be cast at the meeting.

These provisions may discourage an extraordinary transaction, such as a merger, tender offer or sale of all or substantially all of our assets, all of which might provide a premium price for stockholders’ shares. Our charter does not prohibit our board from opting into any of the above provisions.

Further, under the Maryland Business Combination Act, we may not engage in any merger or other business combination with an “interested stockholder” or any affiliate of that interested stockholder for a period of five years after the most recent date on which the interested stockholder became an interested stockholder. After the five-year period ends, any merger or other business combination with the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least:

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80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and

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two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other than those shares owned or held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder unless, among other things, our stockholders receive a minimum payment for their common stock equal to the highest price paid by the interested stockholder for its common stock.

Our directors have adopted a resolution exempting any business combination involving us and The Inland Group or any affiliate of The Inland Group, including our Business Manager and Real Estate Manager, from the provisions of this law.

Our charter places limits on the amount of common stock that any person may own without the prior approval of our board of directors.

No more than 50% of the outstanding shares of our common stock may be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year (other than the first taxable year for which an election to be a REIT has been made). Our charter prohibits any persons or groups from owning more than 9.8% in value of our outstanding stock or more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding common stock without the prior approval of our board of directors. These provisions may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction such as a merger, tender offer or sale of all or substantially all of our assets that might involve a premium price for holders of our common stock. Further, any person or group attempting to purchase shares exceeding these limits could be compelled to sell the additional shares and, as a result, to forfeit the benefits of owning the additional shares.

We have a classified board, which may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.

Our board of directors is divided into three classes of directors. At each annual meeting, directors of one class are elected to serve until the annual meeting of stockholders held in the third year following the year of their election and until their successors are duly elected and qualify. The classification of our board of directors may have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any transaction that could result from such offers, even if the acquisition would be in our stockholders' best interests, and may therefore prevent our stockholders from receiving a premium price for their stock in connection with a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets).

Maryland law limits, in some cases, the ability of a third party to vote shares acquired in a “control share acquisition.”

The Maryland Control Share Acquisition Act provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers of the acquirer or by employees who are directors of the ~~corporation,~~acquirer, are excluded from shares entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting

power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of issued and outstanding control shares. The control share acquisition statute does not apply: (1) to shares acquired in a merger, consolidation or share exchange if the Maryland corporation is a party to the transaction; or (2) to acquisitions approved or exempted by the charter or bylaws of the Maryland corporation. Our bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Federal Income Tax Risks

If we fail to remain qualified as a REIT, our operations and distributions to stockholders will be adversely affected.

We elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013 and intend to operate in a manner that would allow us to continue to qualify as a REIT for U.S. federal income tax purposes. However, we may terminate our REIT qualification, if our board of directors determines that not qualifying as a REIT is in the best interests of our stockholders, or inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We have structured and intend to continue structuring our activities in a manner designed to satisfy all the requirements for qualification as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, including tax counsel, as to our eligibility to remain qualified as a REIT is not binding on the Internal Revenue Service (the “IRS”) and is not a guarantee that we will continue to qualify as a REIT. Accordingly, we cannot be certain that we will be successful in operating so we can remain qualified as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income or quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the IRS, such recharacterization would jeopardize our ability to satisfy all requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

If we were to fail to remain qualified as a REIT, without the benefit of certain statutory relief provisions, in any taxable year:

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we would not be allowed to deduct ~~distributions~~dividends paid to stockholders when computing our taxable income;

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we would be subject to federal and state income tax on our taxable income atas a regular ~~corporate rates;~~

“C corporation” and may be subject to additional state and local taxes;

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we would be disqualified from being taxed as a REIT for the four taxable years following the year during which we failed to qualify, unless entitled to relief under certain statutory provisions;

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we would have less cash to pay distributions to stockholders; and

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we may be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations we may incur as a result of being disqualified.

In addition, if we were to fail to qualify as a REIT, we would not be required to pay distributions to stockholders, and all distributions to stockholders that we did pay would be subject to tax as regular corporate dividends to the extent of our current and accumulated earnings and profits. This means that our U.S. stockholders who are taxed as individuals generally would be taxed on our dividends at ~~long-term~~ capital gains rates and that our corporate stockholders would be entitled to the dividends received deduction with respect to such dividends, subject, in each case, to applicable limitations under the Internal Revenue Code.

~~The taxation of distributions to our stockholders can be complex; however, distributions that we make to our stockholders generally will be taxable as ordinary income.~~

Distributions that we make to our taxable stockholders out of current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. For tax years beginning after December 31, 2017, noncorporate stockholders are entitled to a 20% deduction with respect to these ordinary REIT dividends which would result in a maximum effective federal income tax rate on them of 29.6% (or 33.4% including the 3.8% surtax on net investment income). However, a portion of our distributions may: (1) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us; (2) be designated by us as qualified dividend income, taxable at capital gains rates, generally to the extent they are attributable to dividends we receive from any taxable REIT subsidiaries or certain other taxable C corporations in which we own shares of stock; or (3) constitute a return of capital generally to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital is generally not taxable, but has the effect of reducing the tax basis of a stockholder’s investment in our common stock. Distributions that exceed our current and accumulated earnings and profits and a stockholder’s tax basis in our common stock generally will be taxable as capital gain.

~~To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions to make distributions to our stockholders.~~

To qualify as a REIT, we must distribute to our stockholders each year 90% of our taxable income, subject to certain adjustments and excluding any net capital gain. At times, we may not have sufficient funds to satisfy these distribution requirements and may need to borrow funds to make these distributions and maintain our REIT status and avoid the payment of income and excise taxes. These borrowing needs could result from: (1) differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes; (2) the effect of non-deductible capital expenditures; (3) the creation of reserves; or (4) required debt amortization payments. We may need to borrow funds at times when market conditions are unfavorable. Further, if we are unable to borrow funds when needed for this purpose, we would have to find alternative sources of funding or risk losing our status as a REIT.

~~Certain of our business activities are potentially subject to the prohibited transaction tax.~~

Our ability to dispose of property during the first two years following acquisition is restricted to a substantial extent as a result of our REIT status. Under applicable provisions of the Internal Revenue Code regarding prohibited transactions by REITs, we will be subject to a 100% tax on any gain realized on the sale or other disposition of any property (other than foreclosure property) we own, directly or through any wholly owned subsidiary (or entity in which we are treated as a partner), excluding our taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of trade or business. Determining whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. We cannot provide assurance that any particular property we own, directly or through any wholly owned subsidiary (or entity in which we are treated as a partner), excluding our taxable REIT subsidiaries, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business. The Internal Revenue Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax; however, there is no assurance that we will be able to qualify for the safe harbor. Even if we do not hold property for sale in the ordinary course of a trade or business, there is no assurance that our position will not be challenged by the Internal Revenue Service, especially if we make frequent sales or sales of property in which we have short holding periods.

~~Certain fees paid to us may affect our REIT status.~~

Income received in the nature of rental subsidies or rent guarantees, in some cases, may not qualify as rental income from real estate and could be characterized by the Internal Revenue Service as non-qualifying income for purposes of satisfying the 75% and 95% gross income tests required for REIT qualification. If the aggregate of non-qualifying income under the 95% gross income test in any taxable year ever exceeded 5% of our gross revenues for the taxable year or non-qualifying income under the 75% gross income test in any taxable year ever exceeded 25% of our gross revenues for the taxable year, we could lose our REIT status for that taxable year and the four taxable years following the year of losing our REIT status.

~~Complying with the REIT requirements may force us to liquidate otherwise attractive investments.~~

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, certain government securities and qualified real estate assets, including shares of stock in other REITs, certain mortgage loans and mortgage-backed securities. The remainder of our investment in securities (other than qualified government securities, qualified real estate assets and taxable REIT subsidiaries) generally may not include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than qualified government securities, qualified real estate assets and taxable REIT subsidiaries) may consist of the securities of any one issuer, no more than 25% of the value of our total assets may be securities excluding government securities, stock issued by our qualified REIT subsidiaries and other securities that qualify as real estate assets and no more than 20% of the value of our total assets may consist of stock or securities of one or more taxable REIT subsidiaries. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within thirty days after the end of the calendar quarter, or otherwise qualify to cure the failure under a relief provision, to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

~~Our ability to dispose of some of our properties may be constrained by their tax attributes.~~

Our ability to dispose of some of our properties is constrained by their tax attributes. Properties which we own for a significant period of time often have low tax bases. If we dispose of low-basis properties outright in taxable transactions, we may recognize a significant amount of taxable gain that we must distribute to our stockholders in order to avoid tax, and potentially, if the gain does not qualify as a net capital gain, in order to meet the minimum distribution requirements of the Internal Revenue Code for REITs, which in turn would impact our cash flow. To dispose of low basis properties efficiently we may use like-kind exchanges, which qualify for non-recognition of taxable gain, but can be difficult to consummate and result in the property for which the disposed assets are exchanged inheriting their low tax bases and other tax attributes (including tax protection covenants).

~~Our stockholders may have tax liability on distributions that they elect to reinvest in our common stock.~~

If our stockholders participate in our DRP, they will be deemed to have received, and for income tax purposes will be taxed on, the fair market value of the share of our common stock that they receive in lieu of cash distributions. As a result, unless a stockholder is a tax-exempt entity, it will have to use funds from other sources to pay its tax liability.

In certain circumstances, we may be subject to federal, state and ~~state~~local income taxes as a REIT, which would reduce our cash available to pay distributions.

Even ~~if we maintain our status~~ as a REIT, we may ~~become~~be subject to federal, ~~income taxes~~state and ~~related state~~local income taxes. For example, if we have net income from a “prohibited transaction,” we will incur taxes equal to the full amount of the net income from the prohibited transaction. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We also may decide to retain income we earn from the sale or other disposition of our property and pay income tax directly on this income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have to file income tax returns to receive a refund of the income tax paid on their behalf. We also may be subject to state and local taxes on our income, property or net worth, either directly or at the level of the other companies through which we indirectly own our assets. Any ~~federal~~taxes we pay directly or ~~state taxes paid by us~~indirectly will reduce our cash available to pay distributions.

The taxation of distributions to our stockholders can be complex; however, distributions that we make to our stockholders generally will be taxable as ordinary income.

Distributions that we make to our taxable stockholders out of current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. Noncorporate stockholders are entitled to a 20% deduction with respect to these ordinary REIT dividends which would result in a maximum effective federal income tax rate of 29.6% (or 33.4% including the 3.8% surtax on net investment income); however, the 20% deduction will end after December 31, 2025. However, a portion of our distributions may: (1) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us; (2) be designated by us as qualified dividend income, taxable at capital gains rates, generally to the extent they are attributable to dividends we receive from any taxable REIT subsidiaries or certain other taxable “C corporations” in which we own shares of stock; or (3) constitute a return of capital generally to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable but has the effect of reducing the tax basis of a stockholder’s investment in our common stock. Distributions that exceed our current and accumulated earnings and profits and a stockholder’s tax basis in our common stock generally will be taxable as capital gain.

To maintain our REIT status, we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our investment objectives and reduce our stockholders’ overall return.

To qualify as a REIT, we must distribute to our stockholders each year at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain. We will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we make with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. At times, we may not have sufficient funds to satisfy these distribution requirements and may need to borrow funds or sell assets to fund these distributions, maintain our REIT status and avoid the payment of income and excise taxes.

Certain of our business activities are potentially subject to the prohibited transaction tax.

Our ability to dispose of property during the first two years following acquisition is restricted to a substantial extent as a result of our REIT status. Under applicable provisions of the Internal Revenue Code regarding prohibited transactions by REITs, while we qualify as a REIT and provided we do not meet a safe harbor available under the Internal Revenue Code, we will be subject to a 100% penalty tax on the net income from the sale or other disposition of any property (other than foreclosure property) that we own, directly or indirectly through any subsidiary entity, but generally excluding taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of a trade or business. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. We intend to avoid the 100% prohibited transaction tax by (1) conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary (but such taxable REIT subsidiary will incur corporate rate income taxes with respect to any income or gain recognized by it), (2) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or indirectly through any subsidiary, will be treated as a prohibited transaction or (3) structuring certain dispositions of our properties to comply with the requirements of the prohibited transaction safe harbor available under the Internal Revenue Code for properties that, among other requirements, have been held for at least two years. Despite our present intention, no assurance can be given that any particular property we own, directly or indirectly through any subsidiary entity, but generally excluding taxable REIT subsidiaries, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

To continue to qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, certain government securities and qualified real estate assets, including shares of stock in other REITs, certain mortgage loans and mortgage-backed securities. The remainder of our investment in securities (other than securities that qualify for the 75% asset test and securities of qualified REIT subsidiaries and taxable REIT subsidiaries) generally cannot exceed 10% of the outstanding voting securities of any one issuer, 10% of the total value of the outstanding securities of any one issuer, or 5% of the value of our assets as to any one issuer. In addition, no more than 25% of the value of our total assets may be securities (other than securities that qualify for the 75% asset test and securities of qualified REIT subsidiaries), no more than 20% of the value of our total assets may consist of stock or securities of one or more taxable REIT subsidiaries and no more than 25% of our assets may be represented by publicly offered REIT debt instruments that do not otherwise qualify under the 75% asset test. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Internal Revenue Code may limit our ability to hedge the risks inherent to our operations. Under current law, any income that we generate from derivatives or other transactions intended to hedge risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made, or to be made, to acquire or carry real estate assets or in certain cases to hedge previously acquired hedges entered into to manage risks associated with property that has been disposed of or liabilities that have been extinguished, if properly identified under applicable Treasury Regulations, generally will not constitute gross income for purposes of the 75% and 95% income requirements applicable to REITs. ~~However,~~To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may ~~be required~~need to limit ~~the~~our use of advantageous hedging techniques ~~that might otherwise~~or implement those hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because taxable REIT subsidiaries would be ~~advantageous, which could result in~~subject to tax on gains or expose us to greater risks associated with changes in interest ~~rate or other changes~~rates than we would otherwise ~~incur.~~want to bear. In addition, losses in a taxable REIT subsidiary generally will not provide any tax benefit, except for being carried forward against future taxable income of such taxable REIT subsidiary.

Legislative or regulatory action could adversely affect investors.

Changes to the tax laws ~~are likely to~~may occur, and ~~these changes may adversely affect the taxation of a stockholder. Any~~any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. Our stockholders are urged to consult with ~~their own~~an independent tax ~~advisors~~advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares.

~~Future~~Although REITs generally receive more favorable tax treatment than entities taxed as “C corporations,” it is possible that future legislation ~~might~~would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be ~~taxed,~~treated for federal income tax purposes as a “C corporation.” As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a “C corporation,” without the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders.

Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.

Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 23.8%, including the 3.8% surtax on net investment income. Dividends payable by REITs, however, generally are not eligible for this reduced rate and, as described above, through December 31, 2025, will be subject to an effective rate of 33.4%, including the 3.8% surtax on net investment income. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our shares. Tax rates could be changed in future legislation.

General Risks

Our stockholders may have tax liability on distributions that they elect to reinvest in our common stock.

~~Item 1B.~~

~~Unresolved Staff Comments~~

~~None.~~The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential information. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Our three primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, and private data exposure. We have implemented processes, procedures and controls to help mitigate these risks, but these measures, as well as our increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.

Failure by us, our Business Manager or our service providers (including our transfer agent) or tenants to implement effective information and cybersecurity policies, procedures and capabilities could disrupt our business and harm our results of operations.

We, the Business Manager and our service providers (including our transfer agent) or tenants are dependent on the effectiveness of our respective information and cybersecurity policies, procedures and capabilities to protect our computer and telecommunications systems and the data that resides on or is transmitted through them. An externally caused information security incident, such as a hacker attack, virus or worm, or an internally caused issue, such as failure to control access to sensitive systems or insufficient policies or procedures, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential information and could result in material financial loss, loss of competitive position, regulatory actions, breach of contracts, reputational harm or legal liability.

Our operations may be subject to an increasing number of cyber incidents, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our success depends in part on our ability to provide effective cybersecurity protection in connection with our business, and the digital technologies and internal digital infrastructure we utilize. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by the Business Manager, service providers (including our transfer agent), tenants, or other third parties. We may also utilize software and other digital products and services that store, retrieve, manipulate, and manage our information and data, external data, personal data of our Business Manager, service providers (including our transfer agent), tenants, stockholders or other third parties, and our own information and data.

Our digital technologies, as well as third-party products, services and technologies that we rely on, are subject to the risk of cyberattacks and, given the nature of such attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Cyberattacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools (including artificial intelligence) that circumvent controls, evade detection and even remove forensic evidence of the infiltration. There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect material consequences arising from such incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur. We have experienced and will continue to experience varying degrees of cyber events in the normal conduct of our business, including defending against attacks from social engineering such as phishing. Even if we successfully defend our own digital technologies and internal digital infrastructure, we also rely on providers of third-party products, services, and networks, with whom we may share data, and who may be unable to effectively defend their digital technologies, services and internal digital infrastructure against attack.

Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to data of our Business Manager, service providers (including our transfer agent), tenants, stockholders or other third parties, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of control of our operations could result in significant damage to our reputation or disruption to our business and to our Business Manager, service providers (including our transfer agent), tenants, or other third parties. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer using our services, which could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects.

In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to any of our intellectual property, proprietary or confidential information; loss of data or disruption to our Business Manager, service providers (including the transfer agent), tenants, or other third parties; breach of personal data; interruption of our business operations; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees (if any), our Business Manager, service providers, tenants, stockholders or other third parties, and may result in claims against us.

Disruptions in our information technology systems or a compromise of security with respect to our systems could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives.

We rely on our information technology systems to be able to monitor and control our operations, adjust to changing market conditions, and implement strategic initiatives, and, in connection with our use of these systems, we rely on the cybersecurity strategy and policies implemented by Inland. Any disruptions in these systems or the failure of these systems to operate as expected could in the future adversely affect, our ability to access and use certain applications and could, depending on the nature and magnitude of the problem, adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions and implement strategic initiatives. We cannot guarantee that disruptions will not be material in the future. In addition, the security measures we employ to protect our systems have in the past not detected or prevented, and may in the future not detect or prevent, all attempts to hack our systems, denial-of-service attacks, viruses, malicious software (malware), employee error or malfeasance, phishing attacks, security breaches, disruptions during the process of upgrading or replacing computer software or hardware or integrating systems of acquired assets or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by the sites, networks and systems that we otherwise maintain, which include cloud-based networks and data center storage.

We have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks in the normal course of business. Our Business Manager is continuously developing and enhancing our controls, processes and practices designed to protect our systems, computers, software, data and networks from attack, damage, or unauthorized access. This continued development and enhancement requires us to expend resources. However, we may not anticipate or combat all types of future attacks until after they have been launched. If any of these breaches of security occur or are anticipated in the future, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, and engage third-party experts and consultants. Our response to attacks, and our investments in our technology and our controls, processes and practices, may not be sufficient to shield us from significant losses or liability. Further, given the increasing sophistication of bad actors and complexity of the techniques used to obtain unauthorized access or disable systems, a breach or attack could potentially persist for an extended period of time before being detected. As a result, we may not be able to anticipate the attack or respond adequately or timely, and the extent of a particular incident, and the steps that we may need to take to investigate the incident, may not be immediately clear. It could take a significant amount of time before an investigation can be completed and full, reliable information about the incident becomes known. During an investigation, it is possible we may not necessarily know the extent of the harm or how to remediate it, which could further adversely impact us, and new regulations could result in us being required to disclose information about a material cybersecurity incident before it has been mitigated or resolved, or even fully investigated. We also face cybersecurity risks due to our reliance on internet technology, which could strain our technology resources or create additional opportunities for cybercriminals to exploit vulnerabilities.

We may become subject to greater liability due to changing regulations and laws regarding cybersecurity, which could materially adversely effect our business, operations, results of operations and profitability.

Because our systems sometimes retain information about our Business Manager, service providers (including our transfer agent), tenants, stockholders or other third parties, our failure to appropriately maintain the security of the data we hold, whether as a result of our own error or the malfeasance or errors of others, could in the future lead, to disruptions in our services or other data systems, and could lead to unauthorized release of confidential or otherwise protected information or corruption of data. Our failure to appropriately maintain the security of the data we hold could also violate applicable privacy, data security and other laws and subject us to lawsuits, fines and other means of regulatory enforcement. Regulators have been imposing new data privacy and security requirements, including new and greater monetary fines for privacy violations. These laws and regulations may be broad in scope and subject to evolving interpretations and increasing enforcement, and we may incur costs to monitor compliance and alter our practices. Moreover, certain new and existing data privacy laws and regulations could diverge and conflict with each other in certain respects, which makes compliance increasingly difficult. Complying with new regulatory requirements could require us to incur substantial expenses or require us to change our business practices, either of which could harm our business. As regulators have become increasingly focused on information security, data collection and use and privacy, we may be required to devote significant additional resources to modify and enhance our information security controls and to identify and remediate vulnerabilities, which could adversely impact our results of operations and profitability. Any compromise or breach of our systems could result in adverse publicity, harm our reputation, lead to claims against us and affect

our relationships with our Business Manager, service providers (including our transfer agent), tenants, stockholders or other third parties, any of which could have a material adverse effect on our business, operations, results of operations and profitability.

A failure of our Business Manager’s information technology (IT) infrastructure could adversely impact our business and operations.

We rely upon the capacity, reliability and security of our Business Manager’s information technology infrastructure and its ability to expand and continually update this infrastructure in response to changing needs of our business. Our Business Manager faces the challenge of supporting older systems and hardware and implementing necessary upgrades to its IT infrastructure. Our Business Manager may not be able to successfully implement these upgrades in an effective manner, which could adversely affect our operations. In addition, our Business Manager may incur significant increases in costs and extensive delays in the implementation and rollout of any upgrades or new systems. If there are technological impediments, unforeseen complications, errors or breakdowns in implementation, the disruptions could have an adverse effect on our business and financial condition.

If our Business Manager or Real Estate Manager lose or are unable to obtain key or other skilled personnel, our ability to implement our investment strategies could be hindered.

Our success depends to a significant degree upon the contributions of certain of our executive officers and other key personnel that we engage such as Mr. Zalatoris or that we access through our Business Manager and Real Estate Manager. The Agreement we have entered into with Mr. Zalatoris is for a term of one year beginning on February 1, 2024, subject to renewal. Neither the Business Manager nor the Real Estate Manager has employment agreements with any of the other persons that serve as executive officers of the Company, the Business Manager or the Real Estate Manager. We cannot guarantee that all, or any of these persons, will continue to be available to provide services to us. If any of these individuals were to cease their employment or other relationship with our Business Manager or Real Estate Manager, respectively, our results and ability to pursue our business plan could suffer. Further, we do not intend to separately maintain “key person” life insurance that would provide us with proceeds in the event of death or disability of these persons. We believe our future success depends, in part, upon the ability of our Business Manager and Real Estate Manager to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure our stockholders that our Business Manager or Real Estate Manager will be successful in attracting and retaining skilled personnel. If our Business Manager or Real Estate Manager loses or is unable to obtain the services of key or other skilled personnel due to, among other things, an overall labor shortage, lack of skilled labor, increased turnover or increased labor costs, or as a result of other general macroeconomic factors, our ability to implement our investment strategies could be delayed or hindered, and a perception of reduced management capabilities could cause the market value of our investments to decline.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to fund our capital and operating needs and distributions.

The Federal Deposit Insurance Corporation, or “FDIC,” generally only insures limited amounts per depositor per insured bank. The FDIC insures up to $250,000 per depositor per insured bank account. We have cash and cash equivalents at banks exceeding these federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fail, we may lose our deposits over the federally insured levels. The loss of our deposits would reduce the amount of cash we have available to fund our capital and operating needs and distributions.

An economic downturn could have an adverse impact on the retail industry generally. Slow or negative growth in the retail industry could result in defaults by retail tenants which could have an adverse impact on our financial operations.

An economic downturn could have an adverse impact on the real estate industry generally. As a result, the retail industry could face reductions in sales revenues and increased bankruptcies. The continuation of adverse economic conditions may result in an increase in distressed or bankrupt retail companies, which in turn would result in an increase in defaults by tenants at our commercial properties. Additionally, slow economic growth is likely to hinder new entrants into the retail market which may make it difficult for us to fully lease space at our retail properties or retail properties we plan to acquire. Tenant defaults and decreased demand for retail space would have an adverse impact on the value of our retail properties and any additional retail properties we acquire and our results of operations.

Actual or threatened terrorist attacks and other acts of violence or war may affect the markets in which we operate our business and our profitability.

We may own or acquire properties located in areas that are susceptible to attack or damage. These attacks may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur. Risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Further, certain losses resulting from these types of events are uninsurable or not insurable at reasonable costs. More generally, any actual or threatened terrorist attack, other act of violence

or war, including armed conflicts, could result in increased volatility in, or damage to, the United States and worldwide financial markets and economy.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Assessment, Identification and Management of Material Risks from Cybersecurity

We rely on the cybersecurity strategy and policies implemented by Inland. Inland’s cybersecurity strategy prioritizes detection and analysis of and response to known, anticipated or unexpected threats, effective management of security risks and resilience against cyber incidents. Inland’s cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, tools and related services, which include tools and services from third-party providers, and management oversight to assess, identify and manage risks from cybersecurity threats. Inland has implemented and continues to implement risk-based controls designed to prevent, detect and respond to information security threats and we rely on those controls to help us protect our information, our information systems, and the information of our investors, and other third parties who entrust us with their sensitive information.

Inland’s cybersecurity program includes physical, administrative and technical safeguards, as well as plans and procedures designed to help our sponsor and Business Manager to prevent and timely and effectively respond to cybersecurity threats and incidents, including threats or incidents that may impact us and our Business Manager. Inland’s cybersecurity risk management process seeks to monitor cybersecurity vulnerabilities and potential attack vectors, evaluate the potential operational and financial effects of any threat and mitigate such threats. The assessment of cybersecurity risks, including those which may impact us and our Business Manager, is integrated into Inland’s risk management program. In addition, Inland periodically engages with third-party consultants and key vendors to assist it in assessing, enhancing, implementing, and monitoring its cybersecurity risk management programs, including performing penetration testing of Inland’s networks, and security assessments of the effectiveness of Inland’s information technology environment to identify potential vulnerabilities.

Inland’s cybersecurity risk management and awareness programs include periodic identification and testing of vulnerabilities as well as regular phishing simulations for all of the employees of the Business Manager and its affiliates. Inland undertakes periodic internal security reviews of its information systems and related controls, including systems affecting personal data and the cybersecurity risks of our Business Manager and our critical third-party vendors (including the transfer agent) and other partners.

Inland has established a Computer Security Incident Response Team (“Inland CSIRT”), which aims to manage and mitigate the impact of cybersecurity breach events, including those arising from or impacting our Business Manager and service providers (including the transfer agent), tenants, and other business contacts. Members of the Inland CSIRT include Inland’s VP Director of IT Infrastructure & Information Security, who has more than 19 years of experience in information technology security and leads Inland’s cybersecurity program, and its Head of Technology Strategy, as well as members of the firm’s legal, risk, and communications groups. Inland has established a notification decision framework to determine when the Inland CSIRT will provide notifications regarding certain cybersecurity incidents, with different severity thresholds triggering notifications to different recipient groups, including members of our Business Manager’s management, and our Board and Audit Committee, as appropriate.

Oversight of Cybersecurity Risks

The board and our audit committee oversee our cybersecurity risk exposures and the steps taken by management to identify, monitor and mitigate cybersecurity risks to align our risk exposure with our strategic objectives. With respect to such cybersecurity risk oversight, our board and/or our audit committee receive periodic reports and/or updates from management on the primary cybersecurity risks facing us and the Business Manager and the measures we, and the Business Manager are taking to mitigate such risks. In addition to such reports and updates, our board and/or our audit committee receive updates from management as to changes to our and the Business Manager’s cybersecurity risk profile or certain newly identified risks. In the event of an incident, we intend to follow Inland’s incident response plan, which outlines the steps to be followed from incident identification, mitigation, recovery and notification to legal counsel, senior leadership and the board or audit committee, as appropriate.

Impact of Cybersecurity Risks

As of the date of this filing, we have not experienced a material information security breach incident and the expenses we have incurred from information security breach incidents have been immaterial, and we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business. However, we may not be successful in preventing or mitigating a cybersecurity incident that

could have a material adverse effect on our business, financial condition, results of operations, or cash flows. See “Part I, Item 1A, Risk Factors, General Risks” for more information regarding cybersecurity risks.

~~Item 2.~~

~~Properties~~

The table below presents a summary of our investment properties as of December 31, ~~2017~~2023 and ~~2016.~~2022.

As of December 31, ~~2017~~2023 and ~~2016,~~2022, ABR per square foot averaged ~~$17.16~~$19.61 and ~~$17.25,~~$19.10, respectively, for all properties owned. ABR is calculated by annualizing the ~~current, in-place~~ monthly base rent for leases in-place as of the applicable date, including any tenant concessions, such as rent abatement or allowances, which may have been granted and excluding ground leases. ABR per square foot including ground leases averaged ~~$14.81~~$16.79 and ~~$15.13,~~$16.42, as of December 31, ~~2017~~2023 and ~~2016,~~2022, respectively.

During the year ended December 31, 2023, we did not purchase or sell any properties. On May 17, 2022, we acquired a portfolio of eight properties from certain subsidiaries of Inland Retail Property Fund, LP for a purchase price of $278,153.

The table below presents information for each of our investment properties as of December 31, ~~2017.~~2023.

The following table presents information regarding the top ten tenants in our portfolio based on annualized base rent for leases in-place as of December 31, ~~2017.~~2023:

The following table sets forth a summary of our tenant diversity for our entire portfolio and is based on leases in-place at December 31, ~~2017.~~2023:

The following table sets forth a summary of our property type based on annualized base rent in-place for leases as of December 31, 2023:

The following table sets forth a summary, as of December 31, ~~2017,~~2023, of the percent of total annualized base rent and the weighted average lease expiration by size of ~~tenant.~~tenant:

With respect to our locations affected by the Bed Bath and Beyond bankruptcy, we have executed a lease for two out of our four locations that closed and are in active lease negotiations with national tenants to re-lease the remaining two spaces.

With respect to our locations affected by the Rite Aid bankruptcy, one of our two locations has closed and that lease was rejected. We are in possession of this space and are currently marketing it for backfill. Our other location is still open and operating and is not on the initial closure list.

The following table sets forth a summary, as of December 31, ~~2017,~~2023, of lease expirations scheduled to occur during each of the calendar years from ~~2018~~2024 to ~~2027~~2033 and thereafter, assuming no exercise of renewal options or early termination rights for leases commenced on or prior to December 31, ~~2017.~~2023. Annualized base rent represents the rent in place for the applicable property at December 31, ~~2017.~~2023. The table below includes ground leases. If ground leases are excluded, annualized base rent would equal ~~$86,755,~~$100,877, or ~~$17.16~~$19.61 per square foot for total expiring leases.

We are not a party to, and none of our properties are subject to, any material pending legal proceedings.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

There is no established public trading market for our shares of common stock. Our board will determine when, and if, to apply to have our shares of common stock listed for trading on a national securities exchange, subject to satisfying existing listing requirements. ~~There~~Pursuant to our strategic plan, we plan to consider a future liquidity event, including possibly through a listing on a national securities exchange. However, there is no assurance that we will list our shares. Further, there is no assurance that stockholders will be able to sell their shares at a time or price acceptable to them. We publish an estimated per share value of our common stock to assist broker dealers that sold our common stock in the Offering to comply with the rules published by FINRA. On March ~~29, 2017,~~4, 2024, our board established an Estimated Per Share NAV of our common stock as of December 31, ~~2016~~2023 equal to ~~$22.63~~$19.17 per share. The previously established estimated per share ~~($9.05 prior to the Reverse Stock Split).~~

We engaged CBRE Capital Advisors, Inc., a FINRA registered broker dealer firm that specializes in providing real estate financial services (“CBRE Cap”), to assist our board in establishing an Estimated Per Share NAV as of December 31, 2016. CBRE Cap provided an analysis of our assets and liabilities (including individual property-level analysis), all of which was used to estimate a range of Estimated Per Share NAVs. The engagement of CBRE Cap was based on a number of factors, including CBRE Cap’s expertise in valuation services and its, and its affiliates, breadth and depth of experience in real estate services. CBRE Cap engaged CBRE Valuation & Advisory Services, an affiliate of CBRE Cap that conducts appraisals and valuations of real properties (the “MAI Appraisals”), to perform cash flow projections and unlevered, ten-year discounted cash flow analyses from restricted-use appraisals for each of our wholly-owned operating assets as of December 31, 2016 (the “Valuation Date”). Based, in part, on the MAI Appraisals, CBRE Cap developed a valuation analysis of our assets and liabilities and provided that analysis to our board in a report dated March 29, 2017 that contained, among other information, a range of per share net asset values for our common stock as of ~~the Valuation Date (the “Valuation Report”). There were no changes between~~ December 31, 2016 and the date of the Valuation Report that our Business Manager believes would have materially impacted the overall Estimated Per Share NAV. We are not affiliated with CBRE, CBRE Cap or any of their affiliates. While we and affiliates or related parties of our Business Manager have engaged and may engage CBRE Cap or its affiliates in the future for valuations and commercial real estate-related services of various kinds, we believe that there are no material conflicts of interest with respect2022 was equal to ~~our engagement of CBRE Cap.~~

~~To estimate our~~$19.86 per ~~share value, CBRE Cap utilized the “net asset value” or “NAV” method, also known as the appraised value methodology, which is based~~share. For additional information on the ~~fair value~~determination of real estate, real estate related investments and all other assets, less the fair value of total liabilities. The fair value estimate of our real estate assets is equal to the sum of their individual real estate values. Generally, CBRE Cap estimated the value of our real estate assets using several methodologies, including a discounted cash flow, or “DCF,” of projected net operating income, less capital expenditures, for each property, for the ten-year period ending December 31, 2026, and applied a discount rate which it believed was consistent with the inherent level of risk associated with the asset. The other methodologies considered consisted of the “direct cap rate” and “sales comparison” approaches. CBRE Cap believed use of the DCF approach was more appropriate because of the large percentage of multi-tenant assets owned by us. For all other assets, including cash and other current assets, fair value was determined separately based on book value. CBRE Valuation & Advisory Services estimated the fair value of our debt by comparing current market interest rates to the contract rates on our long-term debt and discounting to present value the difference in future payments. The fair market value of our debt was reviewed by CBRE Cap for reasonableness and utilized in the Valuation Report. CBRE Cap determined NAV in a manner consistent with the definition of fair value under U.S. GAAP set forth in FASB’s Topic ASC 820, ~~Fair Value Measurements and Disclosures~~.

Net asset value per share was estimated by subtracting the fair value of our total liabilities from the fair value of our total assets and dividing the result by the number of common shares outstanding on a fully diluted basis as of the Valuation Date. CBRE Cap then applied a discount rate and terminal capitalization rate sensitivity analysis on the weighted average discount and terminal capitalization rates used to value all wholly-owned real estate assets, resulting in a value range equal to $21.55 to $23.70 per share. The mid-point in that range was $22.63. A valuation range was calculated by varying the discount rates and terminal capitalization rates by 2.5% in either direction, which represents a 5% sensitivity on the discount rate and terminal capitalization rate ranges. Terminal capitalization rates were sourced from the MAI Appraisals and varied by location, asset quality and supply and demand metrics. The estimated value of our real estate assets reflects an overall increase of 4.2% compared to our original cost of the real estate assets plus any capital expenditures invested by us.

The terminal capitalization rate and discount rate have a significant impact on the estimated value under the net asset value method. The following chart presents the impact of changes to our share price based on variations in the terminal capitalization and discount rates within the range of values determined by CBRE Cap.

~~The following table summarizes the individual components presented to our board to estimate per share values as of the dates presented:~~

~~The main factors that impacted~~ our Estimated Per Share NAV, ~~as compared to~~please see the disclosures under Item 8.01 of our prior NAV determination as of December 31, 2015 are (i) an increase in the property cash flows utilized in the discounted cash flow analysis and (ii) an increase in the fair market value of debt due to higher interest rates.

~~Our board reviewed the Valuation~~Current Report met with representatives from CBRE Cap in person and considered the material assumptions and valuation methodologies applied and described therein. On March 29, 2017, our board unanimously adopted $22.63 as our Estimated Per Share NAV. The Valuation Report contained a range for our Estimated Per Share NAV of $21.55 to $23.70. Taking into consideration the reasonableness of the valuation methodologies, assumptions, and the conclusions contained in the Valuation Report, our board determined our estimated net asset value to be approximately $797.8 million, or $22.63 per share, based on ~~a share count of approximately 35.3 million shares issued and outstanding as of the Valuation Date. The Estimated Per Share NAV is the mid-point of the range of values provided by CBRE Cap.~~

Our board’s determination of the Estimated Per Share NAV was undertaken in accordance with our valuation policy and the recommendations and methodologies of the Investment Program Association, a trade association for non-listed direct investment vehicles (“IPA”), as set forth in IPA Practice Guideline 2013-01 “Valuations of Publicly Registered Non-Listed REITs” (the “IPA Practice Guideline”). In accordanceForm 8-K filed with the ~~valuation policy and the IPA Practice Guideline, the Estimated Per Share NAV excludes any value adjustments due to the size and diversification of our portfolio of assets.~~SEC on March 5, 2024.

In performing its analyses, CBRE Cap made numerous assumptions as of various points in time with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are necessarily subject to change and beyond the control of CBRE Cap and us. The analyses performed by CBRE Cap are not necessarily indicative of actual values, trading values or actual future results of our common stock that might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. The analyses do not purport to be appraisals or to reflect the prices at which the properties may actually be sold, and such estimates are inherently subject to uncertainty. The actual value of our common stock may vary significantly depending on numerous factors that generally impact the price of securities, our financial condition and the state of the real estate industry more generally. Accordingly, with respect to the Estimated Per Share NAV, neither we nor CBRE Cap can give any assurance that:

The Estimated Per Share NAV represents a snapshot in time, will likely change, and does not necessarily represent the amount a stockholder would receive now or in the future for his or her shares of our common stock. Stockholders should not rely on the Estimated Per Share NAV in making a decision to buy or sell shares of our common stock. The Estimated Per Share NAV is based on a number of assumptions, estimates and data that are inherently imprecise and susceptible to uncertainty and changes in circumstances, including changes to the value of individual assets as well as changes and developments in the real estate and capital markets, changes in interest rates, and changes in the composition of our portfolio.

We continue to engage CBRE Cap to perform appraisals of our properties and report a range of possible net asset values per share for our common stock. We intend to publish an updated estimated value of our shares no later than March 30, 2018.

As of March ~~8, 2018,~~12, 2024, we had ~~16,657~~16,047 stockholders of record.

~~During the years ended December 31, 2017, 2016 and 2015, we declared~~We currently pay distributions based upon a daily record date, totaling approximately $53.3 million, $52.4 million and $44.9 million, respectively. The distributions declared for 2017 and 2015 were equal to a daily amount of $0.00410959 per share based upon a 365-day period. The distributions declared for 2016 were equal to a daily amount of $0.00409836 per share based upon a 366-day period.

~~On November 17, 2017, our board approved a change to our distribution policy to transition the payment of cash distributions from a monthly basis to~~on a quarterly ~~basis, effective January 1, 2018. The~~basis. However, the actual amount and timing of distributions, if any, is determined by our board of directors in its discretion, based on its analysis of our actual and expected cash flow, capital expenditures and investments, as well as general financial conditions.

During both the years ended December 31, 2023 and 2022, we declared quarterly distributions in an amount equal to $0.135600 per share.

The following table shows the sources for the payment of distributions to common stockholders for the periods indicated (Dollar amounts in thousands):

The following table compares cumulative distributions paid to cumulative net loss (in accordance with ~~U.S.~~ GAAP) for the period from August 24, 2011 (date of inception) through December 31, ~~2017~~2023 (Dollar amounts in thousands):

We adopted ~~a share repurchase program~~the SRP effective October 18, 2012, under which was subsequently amended effective January 1, 2018 to change the processing of repurchase requests from a monthly to a quarterly basis to align with the move to quarterly distributions. Under the SRP, we are authorized ~~in our discretion,~~ to purchase shares from stockholders who purchased their shares from us or received their shares through a non-cash transfer and who have held their shares for at least one ~~year, if requested. Under the SRP, we may make “ordinary repurchases,” which~~year. Purchases are defined as all repurchases other than “exceptional repurchases,” which are defined as repurchases upon the death or qualifying disability of a stockholder, at prices ranging from 92.5% of the “share price,” as defined in the SRP, for stockholders who have owned their shares continuously for at least one year, but less than two years, to 100% of the “share price” for stockholders who have owned their shares continuously for at least four years.our sole discretion. In the case of ~~“exceptional repurchases,” we may repurchase shares at a repurchase price equal to 100% of the “share price.”~~

As used in the SRP, “share price” means: (1) prior to our initial valuation date, the offering price of our shares in the Offering (unless the shares were purchased at a discount from that price, and then that purchase price), reduced by any distributions of net sale proceeds that we designate as constituting a return of capital; and (2) on and after our initial valuation date, the lesser of: (A) the share price determined in (1); or (B) the most recently disclosed estimated value per share.

Subject to funds being available, we limit the number of shares repurchased during any calendar year to 5% of the number of shares outstanding on December 31st of the previous calendar year, as adjusted by the Reverse Stock Split. Funding for the SRP is limited to the proceeds we receive from the DRP during the same period. In the case of exceptional repurchases,Exceptional Repurchases, the one year holding period does not apply.

The SRP was amended and restated effective January 1, 2018 to change the processing of repurchase requests from a monthly to a quarterly basis to align with the move to quarterly distributions. On February 11, 2019, our board adopted a second amended and restated SRP, which became effective on March 21, 2019. On March 3, 2020, our board adopted the Third SRP, which became effective on April 10, 2020. On June 29, 2021, our board adopted the Fourth SRP, which became effective on August 12, 2021.

On November 7, 2023, our board authorized and approved the Fifth SRP, which became effective on December 27, 2023. Under the revised program, the requirement that funding for share repurchases be limited to a percentage of the net proceeds received by us from the issuance of shares of common stock under our DRP has been eliminated. The board has the discretion to establish the proceeds available to fund repurchases each quarter and may use proceeds from all sources available to us, in the board’s sole discretion. The board will, however, continue to have discretion to determine the amount of repurchases, if any, to be made each quarter based on its evaluation of our business, cash needs and any other requirements of applicable law.

The SRP will immediately terminate if our shares are listed on any national securities exchange. In addition, our board of directors, in its sole discretion, may amend, suspend (in whole or in part), or terminate our SRP. ~~In the event that~~If we amend, suspend or terminate the SRP, however, we will send stockholders notice of the change at least thirty days prior to the change, and we will disclose the change in a report filed with the SEC on either Form 8-K, Form 10-Q or Form 10-K, as appropriate. Further, our board reserves the right in its sole discretion, at any time, and from time to time to reject any requests for repurchases.

The following table summarizes the repurchases of shares of our common stock under the SRP during the year ended December 31, ~~2017~~2023 (Dollar amounts in thousands except per share amounts):

(1) Total shares requested to be repurchased in January 2023 includes requests that rolled over from the prior year.

For information regarding the securities authorized for issuance under our equity compensation plan, reference is made to Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” which is included in this Annual Report on Form 10-K.

On October 2, 2017, we issued 331 restricted common shares and 110 restricted share units to our independent directors pursuant to our Employee and Director Restricted Share Plan, which become vested in equal installments of 33-1/3% on each of the first three anniversaries of October 2, 2017, subject to certain exceptions. No sales commissions or other consideration was paid in connection with such issuances, which were made without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act as transactions not involving any public offering.

~~The following table shows our selected financial data relating to our consolidated historical financial condition and results of operations. This selected data should be read in conjunction with~~ Item ~~7, “Management’s~~7. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations” and the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. (Dollar amounts in thousands, except per share amounts):~~Operations

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “may,” “could,” “should,” “expect,” “intend,” “plan,” “goal,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “variables,” “potential,” “continue,” “expand,” “maintain,” “create,” “strategies,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions, are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Annual Report on Form 10-K , which include the risks described below:

Forward-looking statements in this Annual Report on Form 10-K reflect our management’s view only as of the date of this Report and may ultimately prove to be incorrect or false. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

The following discussion and analysis is based on the consolidated financial statements for the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015.~~2021. Our stockholders should read the following discussion and analysis along with our ~~accompanying~~ consolidated financial statements and the related notes thereto.

We were formed as a Maryland corporation on August 24, 2011 and elected to be taxed as a ~~REIT~~real estate investment trust under Sections 856 through 860 of the Internal Revenue Code, commencing with the year ended December 31, 2013. We have no employees. We are managed by our business manager, IREIT Business Manager & Advisor, Inc.

, referred to herein as our “Business Manager.” We have also entered into an agreement with Mark Zalatoris, (the “Agreement”) to, among other things, compensate him for performing services as our president and chief executive officer. In connection with entering into the Agreement, we entered into the Fourth Amended and Restated Business Management Agreement (“Fourth Business Management Agreement”) with the Business Manager to, among other things, reduce the business management fee payable to the Business Manager by the amount of any payments made to Mr. Zalatoris under the Agreement. Mr. Zalatoris is not an employee of the Company and is not an officer or director of the Business Manager but has the authority under the Agreement and the Fourth Business Management Agreement to direct the day-to day operations of the Business Manager.

We are primarily focused on acquiring and owning retail ~~properties.~~properties and intend to target a portfolio substantially all of which would be comprised of grocery-anchored properties as described below. We have invested in joint ventures and, to the extent we have available capital, may ~~continue to~~ invest again in additional joint ventures or acquire other real estate assets such as office and medical office buildings, multi-family properties and industrial/distribution and warehouse facilities if management believes the expected returns from those investments exceed that of retail properties. We also may invest in real estate-related equity securities of both publicly traded and private real estate companies, as well as commercial mortgage-backed securities.

At December 31, ~~2017,~~2023, we had total assets of ~~approximately $1.4~~$1.3 billion and owned 5952 properties located in 24 states containing ~~approximately 6.9~~7.2 million square feet. A majority of our properties are multi-tenant, necessity-based retail shopping centers primarily located in major regional markets and growing secondary markets throughout the United States. ~~The~~At December 31, 2023, grocery-anchored or grocery shadow-anchored shopping center properties represented 87% of our annualized base rent. A grocery shadow-anchored shopping center is a shopping center which we own that is located near a grocery store that we do not own but that we believe generates traffic for the shopping center. As of December 31, 2023, the portfolio properties have an economic occupancy of 92.0% and staggered lease maturity ~~dates and anchor tenants generally with strong credit ratings.~~dates.

On January 16, 2018, we effected a 1-for-2.5 Reverse Stock Split whereby every 2.5 shares of our issued and outstanding common stock were converted into one share of our common stock. As a result of the Reverse Stock Split, the number of our outstanding shares was reduced from approximately 88,746,109 to approximately 35,498,444. In accordance with U.S. GAAP, all share information presented has been retroactively adjusted to reflect the Reverse Stock Split.

We commenced ~~our Offering~~an initial public “best efforts” offering on October 18, 2012, ~~which~~and concluded it on October 16, 2015. We sold 33,534,022 shares of common stock in the Offering generating gross proceeds of $834.4 ~~million from~~million. As of December 31, 2023, we have issued 6,502,851 shares through the ~~Offering.~~DRP generating aggregate proceeds of $143.1 million. On March ~~29, 2017,~~4, 2024, our board of directors determined an Estimated Per Share NAV of our common stock as of ~~$22.63 ($9.05 prior to the Reverse Stock Split).~~December 31, 2023 of $19.17. The previously estimated per share net asset value ~~of $22.55 ($9.02 prior to the Reverse Stock Split) was established on April 7, 2016. We intend to publish an Updated Estimated Per Share NAV no later than March 30, 2018.~~

Our board of directors approved a change to our distribution policy to transition the payment of cash distributions from a monthly basis to a quarterly basis, effective January 1, 2018. Management anticipates this amended policy will result in reducing transactional costs related to the administration of distributions. We intend to continue to comply with the REIT distribution requirements and distribute no less than 90% of our taxable income. Stockholders who have elected to participate in our DRP will continue to have their cash distributions reinvested to purchase additional shares of our common stock but on a quarterly basis beginning with the first quarter 2018 distribution declared. Our board of directors adopted an amended and restated share repurchase program, effective January 1, 2018, which changes the processing of repurchase requests from a monthly to a quarterly basis to align with the move to quarterly distributions.

We intend to engage an investment bank to assist us in exploring and evaluating potential strategies to better position us for future growth and enhanced stockholder value. We have not set a definitive timetable for completion of our evaluation, and there can be no assurances that this process will result in any change in strategy or any specific transaction being announced or completed.

We acquired 3 investment properties in 2017 totaling approximately 0.5 million square feet for approximately $68.6 million (Wilson Marketplace, Pentucket Shopping Center and Coastal North Town Center-Phase II).

In 2017, we entered into, through a wholly owned taxable REIT subsidiary, a joint venture agreement with a third party developer and its affiliates to develop three transitional care/rapid recovery centers in Texas which will be licensed skilled nursing facilities. Our aggregate equity commitment is approximately $8.5 million, excluding costs and legal fees incurred in connection with this investment. As of December 31, 2017, we have funded approximately $7.1 million of this commitment with cash on hand and proceeds from our Credit Facility.

In conjunction with this equity investment, we also agreed to provide subsidiaries of the joint venture mezzanine loans, in the aggregate amount of approximately $5.4 million. The loan term is for 48 months. We will earn interest at a rate of 14.5% per annum and will receive monthly interest payments based on a 10% pay rate. The remaining unpaid interest will be due at maturity or upon certain defined events. The loan is guaranteed by one of the other members of the joint venture. The borrowers may draw on the mezzanine loans from time to time in connection with the construction of the rapid recovery centers and are not expected to draw on the mezzanine loans until such time as we have fully funded our equity commitment to the joint venture. At December 31, 2017, we have not funded any mezzanine loans.

We borrowed $39.2 million secured by mortgages on five properties in 2017. These borrowings bear interest at a weighted average interest rate of 3.91% per annum and have a weighted average maturity of 5.0 years.

The retail industry is changing, and changing quickly. If you only focused on the headlines in 2017, it appeared to be all bad news for retail, with numerous store closings and highly visible bankruptcies. While some forms of retail real estate may become obsolete or less effective in certain markets, the reasons for failed or failing retailers may be less about the retail industry and more about retailers whose strategy has not kept pace with the changing preferences of consumers. Large retailers, such as TJX Companies, Ross Stores and Ulta Beauty have shown exciting growth, opening 260, 96 and 86 new stores, respectively, in 2017. Smaller retailers are expanding rapidly, as well. For each retailer closing a store, 2.7 retailers opened a store in 2017, according to IHL Group’s Debunking the Retail Apocalypse report. Despite this evolving retail landscape, grocery-anchored retail real estate, which is the primary focus of our company, has had solid relative performance. Yet, the 2016 bankruptcy of retailer Sports Authority, which significantly impacted three of our properties, illustrates that no retail real estate portfolio is entirely insulated from the changing retail industry. Having said that, our shopping centers are more diverse than ever, with exciting dining and service-oriented options included in the tenant mix, proving our initiative to meet the needs and demands of today’s consumers.

~~The macro economy and real estate markets performed well in 2017 and boded well for U.S. consumers. GDP growth, along with unemployment holding at a 17-year low of 4.1 percent~~ as of December 31, ~~2017 per Business Insider, raised~~2022 equal to $19.86 was established on March 2, 2023.

Inflationary pressures and rising interest rates could result in reductions in consumer ~~confidence~~spending and retailer profitability that impacts our ability to grow rents and tenant demand for new and existing store locations. Regardless of accelerating inflation levels, base rent under most of our long-term anchor leases will remain constant (subject to tenants’ exercise of renewal options at pre-negotiated rent increases) until the ~~end~~expiration of their lease terms. While many of these leases require tenants to pay their share of shopping center operating expenses (including common area maintenance, real estate tax and insurance expenses), our ability to collect the expense increases passed through to tenants is dependent on their ability to absorb and pay these increases. Inflation may also impact other aspects of our operating costs, including fees paid to service providers, the cost to complete redevelopments and build-outs of recently leased vacancies and interest rate costs relating to variable rate loans and refinancing of lower fixed-rate indebtedness. While we have not been significantly impacted by any of these items to date, no assurances can be provided that these inflationary pressures will not have a material adverse effect on our business in the future.

We have a strategic plan that includes the goals of providing a future liquidity event to investors and creating long-term stockholder value. The strategic plan centers around owning a portfolio of grocery-anchored properties with lower exposure to big box retailers. As part of this strategy, our management team continually evaluates possibilities for the opportunistic sale of certain assets with the goal of redeploying capital into the acquisition of strategically located grocery-anchored centers. Of our 953 leasable spaces, there are 122 non-grocery big box (anchor spaces of at least 10,000 square feet) in the portfolio, and of those 11 are vacant, and zero are dark (meaning that the tenant is still obligated by their lease to pay rent but has vacated the space and left it unused) as of February 29, 2024. We are not actively marketing any properties for sale as of the ~~year. Retailers~~date of this Annual Report on Form 10-K. We believe increasing our size and profitability would enhance our ability to complete a successful liquidity event. Although we are ~~riding~~not actively pursuing any new acquisitions as of the date of this Annual Report on Form 10-K, we may seek and evaluate potential acquisitions and, if we have the requisite capital and financing available to us, opportunistically acquire retail properties that we believe complement our existing portfolio in terms of relevant characteristics such as tenant mix, demographics and geography and are consistent with our plan to try to own a portfolio substantially all of which is comprised of grocery-anchored or shadow-anchored properties. We have considered and may in the future consider other transactions, such as redeveloping certain of our properties or portions of certain of our properties, for example, big-box spaces, to repurpose them for alternative commercial or multifamily residential uses. The board has considered and will continue to consider liquidity events, such as listing our common stock on a national securities exchange. There is no assurance if or when we will complete such liquidity event. Our consideration of a liquidity event is influenced by our intention to opportunistically grow the portfolio and execute strategic sales and acquisitions. Likewise, we are continually impacted by (i) evolving retail market conditions and other complex factors such as (ii) competition for our tenants from evolving internet businesses, (iii) the state of the commercial real estate market and financial markets, (iv) our ability to raise capital or borrow on terms that are acceptable to us in light of the use of the proceeds and (v) changes in general economic conditions such as high ~~after enthusiastic U.S. consumers spent 5.5 percent more than expected during~~interest rates, among other factors. The timing of the ~~2017 holiday season,~~completion of the strategic plan has already extended beyond our original expectations and cannot be predicted with ~~CNN Money reporting~~certainty. There is no assurance that ~~it marked~~we will be able to successfully implement our strategic plan, for example by making strategic sales or purchases of properties or listing our common stock, within the ~~biggest increase since 2010.~~

subject to the terms and conditions, including compliance with the covenants, of the Credit Agreement that governs the Credit Facility. Although $66 million is the maximum available, covenant limitations affect what we can actually draw, and we expect to have substantially less than $66 million actually available to draw or otherwise incur. By “additional debt,” we mean debt in addition to existing debt such as existing mortgages. The properties comprising the borrowing base for the Credit Facility are not available to be used as collateral for other debt unless removed from the borrowing base, which would shrink availability under the Credit Facility. Our leverage ratio generally cannot exceed 60%, provided however that two times during the term of our Revolving Credit Facility our leverage ratio may be 65% for two consecutive quarters. Our leverage ratio was 56.4% as of December 31, 2023, as defined in the Revolving Credit Facility’s agreement.

As of December 31, ~~2017,~~2023, we had total debt outstanding of ~~approximately $693.3~~$847.0 million, excluding ~~mortgage premiums and~~ unamortized debt issuance costs, which bore interest at a weighted average interest rate of ~~3.63%~~4.79% per annum. As of December 31, ~~2017~~2023, the weighted average years to maturity for our debt was 2.8 years. As of December 31, 2023 and December 31, ~~2016,~~2022, our borrowings were ~~49%~~52% and ~~45%~~53%, respectively, of the purchase price of our investment properties. ~~As of December 31, 2017, we had borrowed $83.8 million of the $110 million available under our Credit Facility.~~ At December 31, ~~2017~~2023 our cash and cash equivalents balance was $6.0 million.

As of March 13, 2024, in the next twelve months, we do not have any mortgage loans maturing.

In the year ended December 31, 2023, we spent $10.4 million on capital expenditures and tenant improvements, which is ~~$12 million.~~

The acquisition of certain of the Company’s properties included an earnout component to the purchase price that was recorded as a deferred investment property acquisition obligation. The maximum potential earnout payment wasapproximately $2.0 million atless than we did in the year ended December 31, ~~2017.~~2022. We expect to materially increase spending on tenant improvements in connection with new or renewed leases and capital expenditures in 2024 but do not anticipate a material effect on our liquidity from this increase, assuming the businesses of our tenants, including those that were negatively affected by the COVID-19 pandemic, remain steady or improve or they otherwise continue to pay their rent and fulfill their lease obligations.

~~For information related to our debt maturities reference is made to Note 7 – “Debt and Derivative Instruments” which is included in our~~As of December 31, ~~2017 Notes to Consolidated Financial Statements~~2023, we have paid all interest and principal amounts when due, and were in ~~Item 8.~~compliance with all financial covenants under the Credit Facility, as amended.

Cash provided by operating activities ~~increased approximately $14.7~~decreased $5.4 million during ~~2017~~2023 compared to ~~2016~~2022 and ~~approximately $9.1~~decreased $3.4 million during ~~2016~~2022 compared to ~~2015.~~2021. The ~~increase~~decrease from ~~2015~~2022 to ~~2016 and from 2016 to 2017 is~~2023 was primarily due to higher interest payments, the ~~growth~~timing of ~~our real estate portfolio (acquisition of two properties~~payments to related parties and a decrease in ~~2016~~prepaid rent. The decrease from 2021 to 2022 was due to an increase in deferred costs and ~~three properties~~a decrease in ~~2017)~~collections in 2022 (due to pandemic-related deferrals from 2020 that were collected in 2021).

During the years ended December 31, 2017 and 2016, cash was used primarily for acquisition related activities and capital improvements at certain of our properties. We used less cash in our investing activities during the years ended December 31, 2017 and 2016 than the year ended December 31, ~~2015 primarily due to the decrease in acquisitions from 23 properties in 2015 to 2 properties in 2016 and 3 properties in 2017. The~~2023, there was a decrease in cash used in investing activities compared to 2022 primarily due to the fact that we did not acquire any properties in ~~2017 was partially offset with our investment~~2023 as compared to acquisition of the IRPF properties during the year ended December 31, 2022. The acquisition in ~~an unconsolidated joint venture.~~2022 increased the use of cash compared to that used in the year ended December 31, 2021.

During 2023, cash was used to pay down debt. During 2022, cash was drawn on debt to finance the acquisition of the IRPF properties for a purchase price of approximately $278 million, accounting for the majority of the flux from 2021. During the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015,~~2021, we generated proceeds from the sale of shares ~~net~~pursuant to the DRP of ~~offering costs paid~~$7.0 million, $7.3 million and $3.7 million, respectively. For the years ended December 31, 2023, 2022 and 2021, share repurchases ~~of approximately $7.1~~were $6.0 million, ~~$18.9~~$3.6 million and ~~$396.6~~$2.8 million, respectively. During the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015,~~2021, we ~~generated approximately $135.0~~paid $19.6 million, ~~$222.3~~$19.6 million and ~~$342.4 million, respectively, from borrowings. During the years ended December 31, 2017, 2016 and 2015, we paid approximately $53.3 million, $52.4 million and $42.5~~$9.8 million, respectively, in distributions. We also paid off mortgage debt, reduced the amount outstanding on our Credit Facility and paid debt issuance costs in the amount $49.5 million, $199.5 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Our organizational documents permit us to pay distributions from sources other than cash flow from operations. Specifically, some or all of our distributions may be paid from retained cash flow, from borrowings and from cash flow from investing activities, including the net proceeds from the sale of our assets, or from the net proceeds of the Offering and DRP. Accordingly, until such time as we are generating cash flow from operations sufficient to cover distributions, we have and will likely continue to pay distributions from the proceeds of the DRP. We have not established any limit on the extent to which we may use alternate sources, including borrowings and DRP proceeds, to pay distributions.Twenty four percent (24%) of the distributions paid to stockholders, or approximately $38.8 million through December 31, 2017, were paid from the net proceeds of our Offering and the DRP. Our Offering concluded on October 16, 2015. Thus, we will not have any additional proceeds from the Offering available to pay distributions. To the extent we continue to pay cash distributions, or a portion thereof, from sources other than cash flow from operations, we will have less capital available to invest in properties and other real estate-related assets, the book value and estimated value per share may decline, and there is no assurance that we will be able to sustain distributions at that level.

A summary of the distributions declared, distributions paid and cash flows provided by operations ~~for~~during the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021 follows (Dollar amounts in thousands, except per share amounts):

See “Distributions” under “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” above for the number of shares requested for repurchase and other information regarding our distributions to stockholders.

The following discussion is based on our consolidated financial statements for the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015.~~ 2021.

This section describes and compares our results of operations for the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015.~~2021. We generate primarily all of our net operating income from property operations. In order to evaluate our overall portfolio, management analyzes the net operating income of properties that we have owned and operated for the periods presented, in their entirety, referred to herein as “same store” properties. By evaluating the property net operating income of our ~~"same store"~~“same store” properties, management is able to monitor the operations of our existing properties for comparable periods to measure the performance of our current portfolio and determine the effects of ~~our new~~any acquisitions or dispositions on net income. ~~(Dollar amounts~~

We consider property net operating income an important financial measure because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, reflects the impact on operations from trends in ~~thousands)~~

occupancy rates, rental rates and operating expenses. Although property net operating income is a widely used measure among REITs, there can be no assurance that property net operating income presented by us is comparable to similarly titled metrics used by other REITs.

We calculate property net operating income using net income and excluding adjustments to straight-line income (expense), that are calculated in accordance with GAAP, on operating leases, amortization of intangibles and lease incentives, general and administrative expenses, acquisition related costs, the business management fee, provisions for impairment, depreciation and amortization, interest expense, gains on sale of investment properties, gains on termination of interest rate swap agreements, losses on extinguishment of debt, and interest or other income.

Comparison of the Years ended December 31, ~~2017~~2023 and ~~2016~~2022 (Dollar amounts in thousands)

A total of 5444 investment properties that were acquired on or before January 1, ~~2016~~2022 and classified as held and used at December 31, 2023 and 2022 represent our “same store” properties during the years ended December 31, ~~2017~~2023 and ~~2016.~~2022. “Non-same store,” as reflected in the table below, consists of properties acquired after January 1, ~~2016.~~2022. For the ~~year~~years ended December 31, ~~2017, 5~~2023 and 2022, eight properties that were acquired on May 17, 2022 constituted non-same store ~~properties and for the year ended December 31, 2016, 2 properties constituted non-same store~~ properties.

The following table presents the property net operating income broken out between same store and non-same store, prior to straight-line income, net, amortization of intangibles, interest, and depreciation and amortization for the years ended December 31, ~~2017~~2023 and ~~2016,~~2022, along with a reconciliation to net loss, calculated in accordance with ~~U.S.~~ GAAP.

Net loss. Net loss was ~~$19,102~~$15,123 and ~~$7,961~~$12,618 for the years ended December 31, ~~2017~~2023 and ~~2016,~~2022, respectively.

Total property net operating income. On a “same store” basis, comparing the results of operations of investment properties owned during the year ended December 31, ~~2017,~~2023 with the results of the same investment properties owned during the year ended December 31, ~~2016~~,2022, property net operating income ~~decreased~~ ~~$653~~,increased $1,814, total property income increased ~~$154,~~$5,006, and total property operating expenses including real estate tax expense increased ~~$807 for the~~ ~~year ended December 31, 2017 compared to the year ended December 31, 2016~~.$3,192.

The increase in “same store” ~~total~~ property net operating income is primarily due to an increase in ~~tenant~~rental income and an increase in recovery income due to higher recoverable expenses, partially offset by ~~a decrease in other property income and a slight decrease in rental income.~~

~~The increase in “same store” total property operating expenses is primarily due to~~ an increase in ~~current~~non-recoverable expenses during the year ~~real estate tax expense.~~ended December 31, 2023.

“Non-same store” total property net operating income increased ~~$5,506~~$6,471 during ~~2017~~2023 as compared to ~~2016.~~2022. The increase is a result of acquiring 5eight retail properties ~~after January 1, 2016.~~on May 17, 2022. On a “non-same store” basis, total property income increased ~~$7,425~~$9,507 and total property operating expenses increased ~~$1,919~~$3,036 during the year ended December 31, ~~2017~~2023 as compared to 2022 as a result of ~~these acquisitions.~~

Straight-line income (expense), net. Straight-line income ~~decreased $486~~(expense), net increased $448 in ~~2017~~2023 compared to ~~2016.~~2022. This ~~decrease is due to certain tenant rent abatements in 2016 that increased straight-line rental income.~~

~~Intangible amortization.~~ ~~Intangible amortization income increased $593 in 2017 compared to 2016. The~~ increase is primarily ~~attributable to changes in intangible assets and liabilities as a result of recent acquisitions.~~

~~General and administrative expenses.~~ ~~General and administrative expenses decreased $708 in 2017 compared to 2016. This decrease is primarily due to lower stock administration expenses.~~

~~Acquisition related costs.~~ ~~Acquisition related expenses increased $2,819 in 2017 compared to 2016. The increase is attributed to adjustments to deferred investment property acquisition obligations.~~

~~Business management fee.~~ ~~Business management fees increased $616 in 2017 compared to 2016. The increase is~~ due to the acquisition of ~~real estate which increased assets under management.~~

~~Provision for impairment of investment property.~~ ~~Based on the results of our evaluations for impairment, we recorded impairment charges of $8,530 for~~IRPF Properties during the year ended December 31, ~~2017.~~2022.

~~Depreciation~~Amortization of intangibles and ~~amortization.~~ ~~Depreciation~~lease incentives. Income from the amortization of intangibles and ~~amortization~~lease incentives increased ~~$1,944~~$1,426 in ~~2017, as~~2023 compared to ~~2016.~~2022. The increase is primarily due to ~~acquisitions~~the acquisition of IRPF Properties during 2022 and an increase in ~~2016 and 2017.~~

~~Interest expense.~~ ~~Interest expense increased $2,946 in 2017~~write-offs of below market lease intangibles from early lease terminations during the year ended December 31, 2023 compared to ~~2016.~~the year ended December 31, 2022.

General and administrative expenses. General and administrative expenses decreased $163 in 2023 compared to 2022 primarily due to lower legal and stock administration costs partially offset by an increase in reimbursements for salaries during the year ended December 31, 2023.

Business management fee. Business management fees decreased $580 in 2023 compared to 2022. The decrease is primarily due to an amendment to the agreement that reduced the base fee, partially offset by the acquisition of IRPF Properties which increased the amount

Interest expense. Interest expense increased $9,382 in 2023 compared to 2022. The increase is primarily due to an increase in average outstanding debt resulting from the ~~Credit Facility~~acquisition of IRPF Properties completed in May 2022 and ~~higher~~rising interest rates on ~~our floating rate debt.~~the unhedged variable portion of the credit facility.

Interest and other income. Interest and other income ~~decreased $231. The decrease is~~increased $198 in 2023 compared to 2022 primarily due to ~~lower settlement income and~~ interest earned ~~as a result of lower~~on cash ~~balances~~held in ~~2017 compared to 2016.~~

Comparison of the Years ended December 31, ~~2016~~2022 and ~~2015~~2021 (Dollar amounts in thousands)

A total of 3144 investment properties that were acquired on or before January 1, ~~2015~~2021 and classified as held and used at December 31, 2022 and 2021 represent our “same store” properties during the years ended December 31, ~~2016~~2022 and ~~2015.~~2021. “Non-same store,” as reflected in the table below, consists of properties acquired after January 1, ~~2015.~~2021. For the ~~year~~years ended December 31, ~~2016, 25~~2022 and 2021, eight properties that were acquired on May 17, 2022 constituted non-same store ~~properties and for the year ended December 31, 2015, 23 properties were non-same store~~ properties.

The following table presents the property net operating income broken out between same store and non-same store, prior to straight-line income, net, amortization of intangibles, interest, and depreciation and amortization for the years ended December 31, ~~2016~~2022 and ~~2015,~~2021, along with a reconciliation to net loss, calculated in accordance with ~~U.S.~~ GAAP.

Net loss. Net loss was ~~$7,961~~$12,618 and ~~$13,436~~$2,503 for the years ended December 31, ~~2016~~2022 and ~~2015,~~2021, respectively.

Total property net operating income. On a “same store” basis, comparing the results of operations of investment properties owned during the year ended December 31, ~~2016,~~2022 with the results of the same investment properties owned during the year ended December 31, ~~2015~~,2021, property net operating income ~~increased~~ ~~$649~~,decreased $1,380, total property income ~~increased~~ ~~$191,~~decreased $425, and total property operating expenses including real estate tax expense ~~decreased $458 for the~~ ~~year ended December 31, 2016 compared to the year ended December 31, 2015~~.increased $955.

The ~~increase~~decrease in “same store” total property income is primarily due to ~~termination fee income collected in 2016 offset with~~ a ~~reduction in average occupancy from 97.0% to 95.2%.~~

~~The~~ decrease in ~~“same store” total~~recovery income due to lower recovery percentage and an increase in property operating expenses ~~is primarily due to a decrease in real estate tax expense and bad debt expense~~ during ~~2016 as compared to 2015.~~the year ended December 31, 2022.

“Non-same store” total property net operating income increased ~~$28,872~~$9,286 during ~~2016~~2022 as compared to ~~2015.~~2021. The increase is a result of acquiring ~~25 retail~~eight properties ~~after January 1, 2015.~~on May 17, 2022. On a “non-same store” basis, total property income increased ~~$43,672~~$14,640 and total property operating expenses increased ~~$14,800~~$5,354 during the year ended December 31, ~~2016 as a result of these acquisitions.~~

Straight-line income (expense), net. Straight-line income (expense), net increased ~~$428~~$325 in ~~2016~~2022 compared to ~~2015. This increase is due to purchases of investment properties after January 1, 2015.~~

~~Intangible amortization.~~ ~~Intangible amortization income increased $133 in 2016 compared to 2015. The increase is primarily attributable to changes in intangible assets and liabilities due to acquisitions.~~

~~General and administrative expenses.~~ ~~General and administrative expenses increased $947 in 2016 compared to 2015.~~2021. This increase is primarily due to the ~~growth~~acquisition of eight properties on May 17, 2022, partially offset by lower rent abatements during the year ended December 31, 2022.

Intangible amortization. Income from the amortization of intangibles and lease incentives increased $29 in ~~our real estate portfolio.~~

~~Acquisition related costs.~~ ~~Acquisition related expenses decreased $15,459 in 2016~~2022 compared to 2015. The decrease is attributed to fewer acquisitions and adjustments to deferred investment property acquisition obligations in 2016 compared to 2015. These expenses include acquisition, dead deal and transaction related costs and relate to both closed and potential transactions. These costs include third party due diligence costs such as appraisals, environmental studies, and legal fees as well as acquisition fees and time and travel expense reimbursements to the Sponsor and its affiliates.

~~Business management fee.~~ ~~Business management fees increased $3,079 in 2016 compared to 2015. The increase is due to the acquisition of real estate which increased assets under management.~~

~~Depreciation and amortization.~~ ~~Depreciation and amortization increased $25,287 in 2016 compared to 2015. This increase is due to the acquisition of additional retail properties after January 1, 2015.~~

~~Interest expense.~~ ~~Interest expense increased $11,296 in 2016 compared to 2015.~~2021. The increase is primarily due to ~~financing additional properties after January 1, 2015~~the acquisition of the IRPF Properties.

General and ~~amounts drawn under the Credit Facility.~~administrative expenses. General and administrative expenses increased $616 in 2022 compared to 2021 primarily due to higher legal and professional fees.

~~Interest and other income.~~ ~~Interest and other income~~Business management fee. Business management fees increased ~~$173.~~$1,262 in 2022 compared to 2021. The increase is primarily due to ~~settlement income~~the acquisition of IRPF Properties.

Depreciation and amortization. Depreciation and amortization increased $6,413 in ~~2016.~~

~~Equity in earnings (loss) of unconsolidated entity.~~ ~~Equity in earnings (loss) of unconsolidated entity increased $370~~2022 compared to 2021. The increase is primarily due to the ~~performance~~acquisition of eight properties on May 17, 2022, partially offset by fully amortized assets in 2022 compared to 2021.

Interest expense. Interest expense increased $9,829 in 2022 compared to 2021. The increase is primarily due to an increase in average debt outstanding driven by the ~~Captive.~~acquisition of IRPF Properties and an increase in average interest rates.

Interest and other income. Interest and other income decreased $255 in 2022 compared to 2021 primarily due to a decrease in non-operating income.

The following table sets forth leasing activity during the year ended December 31, ~~2017.~~2023. Leases with terms of less than 12 months have been excluded from the table.

Accounting for real estate assets in accordance with ~~U.S.~~ GAAP assumes the value of real estate assets is reduced over ~~time.~~time due primarily to non-cash depreciation and amortization expense. Because real estate values may rise and fall with market conditions, operating results from real estate companies that use ~~U.S.~~ GAAP accounting may not present a complete view of their performance. We use Funds from Operations, or “FFO”, a widely accepted metric to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or “NAREIT”, has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. ~~As defined~~On November 7, 2018, NAREIT’s Executive Board approved the White Paper restatement, effective December 15, 2018. The purpose of the restatement was not to change the fundamental definition of FFO but to clarify existing guidance. The restated definition of FFO by NAREIT ~~FFO means~~is net income (loss) computed in accordance with ~~U.S.~~ GAAP, excluding depreciation and amortization related to real estate, excluding gains (or losses) from sales of certain real estate assets, excluding impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable ~~properties, plus depreciation~~real estate and ~~amortization~~excluding gains and ~~impairment charges on depreciable~~

~~property after adjustments for unconsolidated entities~~losses from change in ~~which the REIT holds an interest.~~control. We have adopted the restated NAREIT definition for computing FFO. Previously presented periods were not impacted.

Under ~~U.S.~~ GAAP, acquisition related costs are treated differently if the acquisition is a business combination or an asset acquisition. An acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and acquisition related costs will be capitalized rather than expensed when incurred. Publicly registered, non-listed REITs typically engage in a significant amount of acquisition activity in the early years of their operations, and thus incur significant acquisition related costs, during these initial years. Although other start up entities may engage in significant acquisition activity during their initial years, publicly registered, non-listed REITs ~~such as us that are not listed on an exchange~~ are unique in that they typically have a limited timeframe during which they acquire a significant number of properties and thus incur significant acquisition related costs. Due to the above factors and other unique features of publicly registered, non-listed REITs, the ~~IPA,~~Institute for Portfolio Alternatives, or “IPA”, an industry trade group, published a standardized measure known as Modified Funds from Operations, or “MFFO”, which the IPA has promulgated as a supplemental measure for publicly registered non-listed REITs and which may be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT. We believe it is appropriate to use MFFO as a supplemental measure of operating performance because we believe that, when compared year-over-year, it reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

MFFO excludes expensed costs associated with investing activities, some of which are acquisition related costs that affect our operations only in periods in which properties are acquired, and other non-operating items that are included in ~~FFO.~~FFO, such as straight-lining of rents as required by GAAP. By excluding costs that we consider more reflective of acquisition ~~related costs,~~activities and other non-operating items, the use of MFFO provides another measure of our operating ~~performance.~~performance once our portfolio is stabilized. Because MFFO may be a recognized measure of operating performance within the non-listed REIT industry, MFFO and the adjustments used to calculate it may be useful in order to evaluate our performance against other non-listed REITs. Like FFO, MFFO is not equivalent to our net income or loss as determined under ~~U.S.~~ GAAP, as detailed in the table below, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to acquire a significant amount of properties. MFFO should only be used as a measurement of our operating performance while we are acquiring a significant amount of properties because it excludes, among other things, acquisition costs incurred during the periods in which properties were acquired.

We believe our definition of MFFO, a ~~non-U.S. GAAP~~non-GAAP measure, is consistent with the IPA's Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the “Practice Guideline,” issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of ~~U.S.~~ GAAP net income: acquisition fees and expenses; amounts relating to straight-line rents and amortization of above and below market lease assets and liabilities, accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis.

Our presentation of FFO and MFFO may not be comparable to other similarly titled measures presented by other REITs. We believe that the use of FFO and MFFO provides a more complete understanding of our operating performance to stockholders and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs. Neither FFO nor MFFO is intended to be an alternative to “net income” or to “cash flows from operating activities” as determined by ~~U.S.~~ GAAP as a measure of our capacity to pay distributions. Management uses FFO and MFFO to compare our operating performance to that of other REITs and to assess our operating performance.

Our FFO and MFFO for the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021 are calculated as follows (Dollar amounts in thousands):

Our accounting policies have been established to conform with ~~U.S.~~ GAAP. The preparation of financial statements in conformity with ~~U.S.~~ GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. Our significant accounting policies are described in Note 2 – “Summary of Significant Accounting Policies” which is included in our December 31, ~~2017~~2023 Notes to Consolidated Financial Statements in Item 8.15. We have identified ~~three significant accounting policies~~ Impairment of Investment Properties as a critical accounting ~~policies.~~policy.

We consider ~~these policies~~this policy to be critical because ~~they require~~it requires our management to use judgment in the application of accounting ~~policies,~~policy, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses.

~~Prior to the adoption of ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~, all costs related to finding, analyzing and negotiating a transaction were expensed as incurred as acquisition related costs, whether or not the acquisition was completed. These expenses would include acquisition fees, if any, paid to our Business Manager. We early adopted the ASU effective October 1, 2016.

We allocate the purchase price of each acquired business between tangible and intangible assets at full fair value at the date of the transaction. Such tangible and intangible assets include land, building and improvements, acquired above market and below market leases, in-place lease value, customer relationships (if any), and any assumed financing that is determined to be above or below market terms. The allocation of the purchase price is an area that requires judgment and significant estimates. We use the information contained in independent appraisals, valuation reports or other market sources as the basis for the allocation to land and building improvements.

We assess the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed the carrying value, we will be required to record an impairment loss to the extent that the carrying value exceeds fair value. The valuation and possible subsequent impairment of investment properties will be a significant estimate that can change based on our continuous process of analyzing each property and reviewing assumptions about inherently uncertain ~~inherent~~ factors, as well as the economic condition of the property at a particular point in time.

We also evaluate our equity method investments for impairment indicators. The valuation analysis considers the investment positions in relation to the underlying business and activities of our investment and identifies potential declines in fair value. An impairment loss should be recognized if a decline in value of the investment has occurred that is considered to be other than temporary, without ability to recover or sustain operations that would support the value of the investment.

We commence revenue recognition on our leases based on a number of factors. In most cases, revenue recognition under a lease will begin when the lessee takes possession of or controls the physical use of the leased asset. Generally, this will occur on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If we are the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete.

We recognize rental income on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rent receivable in the accompanying consolidated balance sheets. Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to materially differ from the estimated reimbursement.

We recognize lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met, collectability is reasonably assured and the tenant is no longer occupying the property. Upon early lease termination, we provide for losses related to unrecovered intangibles and other assets.

~~As a lessor, we defer the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved.~~

For information related to recently issued accounting pronouncements, reference is made to Note 2 – “Summary of Significant Accounting Policies” which is included in our December 31, ~~2017~~2023 Notes to Consolidated Financial Statements in Item 8.15.

Our mortgages payable are generally non-recourse to us. We have, however, guaranteed the full amount of each of the mortgages payable by our subsidiaries in the event that the applicable subsidiary fails to provide access or information to the properties or fails to obtain a lender’s prior written consent to any liens on or transfers of any of the properties, and in the event of any losses, costs or damages incurred by a lender as a result of fraud or intentional misrepresentation of the subsidiary borrower, gross negligence or willful misconduct, material waste of the properties and the breach of any representation or warranty concerning environmental laws, among other things.

From time to time, we acquire properties subject to the obligation to pay the seller additional monies depending on the future leasing and occupancy of the property. These earnout payments are based on a predetermined formula. Each earnout agreement has a time limit of generally one to three years and other parameters regarding the obligation to pay any additional monies. If at the end of the time period, certain space has not been leased and occupied, we will not have any further obligation. As of December 31, 2017 and 2016, we had liabilities of $1.1 million and $6.9 million, respectively, recorded on the consolidated balance sheets as deferred investment property acquisition obligations. The maximum potential payment is $2.0 million at December 31, 2017.

The table below presents, on a consolidated basis, our obligations and commitments to make future payments under debt obligations (including interest) and ground leases as of December 31, 2017. Debt obligations under debt which is subject to variable rates reflect interest rates as of December 31, 2017 (Dollar amounts in thousands).

We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

We are exposed to various market risks, including those caused by changes in interest rates and commodity prices. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and commodity prices. We do not enter into derivatives or other financial instruments for trading or speculative purposes. We have entered into, and may continue to enter into, financial instruments to manage and reduce the impact of changes in interest rates. The counterparties are, and are expected to continue to be, major financial institutions.

We are exposed to interest rate changes primarily as a result of long-term debt and the revolving credit facility used to purchase properties or other real estate assets and to fund capital expenditures.

As of December 31, ~~2017,~~2023, we had outstanding debt of ~~approximately $693.3~~$847.0 million, excluding ~~mortgage premium and~~ unamortized debt issuance costs, bearing interest rates ranging from ~~2.95%~~3.70% to ~~5.95%~~7.36% per annum. The weighted average interest rate was ~~3.63%~~4.79%, which includes the effect of interest rate swaps. As of December 31, ~~2017,~~2023, the weighted average years to maturity for our mortgages and credit facility payable was ~~approximately 4.2~~2.8 years.

As of December 31, ~~2017,~~2023, our fixed-rate debt consisted of secured mortgage financings with a carrying value of ~~$171.9~~$112.0 million and a fair value of ~~$171.0~~$106.3 million. C~~hanges~~Changes in interest rates do not affect interest expense incurred on our fixed-rate debt until their maturity or earlier repayment, but interest rates do affect the fair value of our fixed rate debt obligations. IfIf market interest rates were to increase by 1% (100 basis points), the fair market value of our fixed-rate debt would decrease by ~~$9.0~~$2.1 million at December 31, ~~2017.~~ If2023. If market interest rates were to decrease by 1% (100 basis points), the fair market value of our fixed-rate debt would increase by ~~$9.7~~$2.1 million at December 31, ~~2017.~~2023.

At December 31, ~~2017,~~2023, we had ~~$138.0~~$184.0 million of debt or ~~19.90%~~21.7% of our total debt, excluding unamortized debt issuance costs, bearing interest at variable rates with a weighted average interest rate equal to ~~3.23%~~6.55% per annum. We had variable rate debt subject to swap agreements of ~~$383.5~~$551.0 million, or ~~55.32%~~65.1 % of our total debt, excluding unamortized debt issuance costs, at December 31, ~~2017.~~2023.

If interest rates on all debt which bears interest at variable rates as of December 31, ~~2017~~2023 increased by 1% (100 basis points), the increase in interest expense on all debt would decrease earnings and cash flows by ~~approximately $1.4~~$1.8 million annually. If interest rates on all debt which bears interest at variable rates as of December 31, ~~2017~~2023 decreased by 1% (100 basis points), ~~the decrease in~~ interest expense would increase earnings and cash flows by the same amount.

With regard to variable rate financing, our ~~Business Manager~~management assesses our interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. ~~Our Business Manager maintains~~We utilize risk management control systems implemented by our Business Manager to monitor interest rate cash flow risk attributable to both of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions.

We use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions are determined in light of the facts and circumstances existing at the time of the hedge. We have used derivative financial instruments, specifically interest rate swap contracts, to hedge against interest rate fluctuations on variable rate debt, which exposes us to both credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us because the counterparty may not perform. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We seek to manage the market risk associated with interest-rate contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. There is no assurance we will be successful.

~~Derivatives~~In July 2017, the Financial Conduct Authority, the authority which regulates LIBOR, announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the SOFR as its preferred alternative to LIBOR in derivatives and other financial contracts. Subsequently, in November 2020, the Intercontinental Exchange (“ICE”) Benchmark Administration Limited (“IBA”), the administrator of LIBOR, announced that it would consult on its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021 and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. The IBA has been compelled by the Financial Conduct Authority to publish the one-, three- and six-month USD LIBOR settings through September 30, 2024.

On February 3, 2022, we refinanced our Credit Facility and the interest rate benchmark used in this agreement changed from LIBOR to SOFR. On December 1, 2022, we amended our Credit Facility and the interest rate benchmark used in this agreement changed from LIBOR to SOFR. On the same date, we also amended the mortgage and associated interest swap agreements for one of the two remaining

mortgages that was indexed to LIBOR to now be indexed to SOFR. The last remaining mortgage that was indexed to LIBOR was paid off on April 28, 2023 and the corresponding interest rate swap was also terminated on the same date.

For information related to derivatives, reference is made to Note 76 – “Debt and Derivative Instruments” which is included in our December 31, ~~2017~~2023 Notes to Consolidated Financial Statements in Item 8.15.

~~All schedules other than the one listed in the Index have been omitted as the required information is inapplicable or the information is presented in the~~Our consolidated financial statements ~~or related notes.~~and the accompanying notes to our consolidated financial statements are included under Item 15 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The Company’s management has evaluated, with the participation of the Company’s principal executive and principal financial officers, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the principal executive and principal financial officers have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of ~~Independent Registered Public Accounting Firm~~

~~The Board~~our management, including our principal executive officer and principal financial officer, we conducted an evaluation of ~~Directors and Stockholders~~

~~Opinion~~the effectiveness of our internal control over financial reporting based on the ~~Consolidated Financial Statements~~

~~We have audited~~framework in Internal Control - Integrated Framework issued by the ~~accompanying consolidated balance sheets~~Committee of ~~Inland Real Estate Income Trust, Inc. and subsidiaries (the Company)~~Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control - Integrated Framework (2013) issued by the COSO, our management concluded that our internal control over financial reporting was effective as of December 31, 2017 and 2016, the related consolidated statements of operations and comprehensive loss, equity, and cash flows for each of the years in the three‑year period ended December 31, 2017, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.2023.

~~These consolidated financial statements are the responsibility~~This Annual Report does not include an attestation report of the Company’s ~~management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a~~independent registered public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of itsregarding internal control over financial reporting. ~~As part of our audits, we are required~~Management’s report was not subject to ~~obtain an understanding of internal control~~attestation by the Company’s independent registered public accounting firm pursuant to permanent rules adopted by the SEC, permitting the Company to provide only management’s report in this Annual Report.

There have not ~~for the purpose of expressing an opinion on the effectiveness of~~been any changes in the Company’s internal control over financial ~~reporting. Accordingly, we express no such opinion.~~

~~Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures~~reporting that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~See accompanying notes~~2023 that have materially affected, or are reasonably likely to ~~consolidated financial statements.~~

Inland Real Estate Income Trust, Inc. (the “Company”) was formed on August 24, 2011 to acquire and manage a portfolio of commercial real estate investments located in the United States. The Company has primarily focused on acquiring retail properties. The Company has invested in joint ventures and may continue to invest in additional joint ventures or acquire other real estate assets such as office and medical office buildings, multi-family properties and industrial/distribution and warehouse facilities if its management believes the expected returns from those investments exceed that of retail properties. The Company also may invest in real estate-related equity securities of both publicly traded and private real estate companies, as well as commercial mortgage-backed securities.

The Company entered into a Business Management Agreement with IREIT Business Manager & Advisor, Inc. (the “Business Manager”), an indirect wholly owned subsidiary of Inland Real Estate Investment Corporation (the “Sponsor”), to be the Business Manager to the Company.

At December 31, 2017, the Company owned 59 retail properties, totaling 6,860,923 square feet. The properties are located in 24 states. At December 31, 2017, the portfolio had a weighted average physical occupancy of 93.9% and economic occupancy of 94.8%. Economic occupancy excludes square footage associated with an earnout component.

On January 16, 2018, the Company effected a 1-for-2.5 reverse stock split of its issued and outstanding common stock whereby every 2.5 shares of issued and outstanding common stock were converted into one share of its common stock (the “Reverse Stock Split”). In accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), all share information presented has been retroactively adjusted to reflect the Reverse Stock Split.

~~The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that~~materially affect, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. In the opinion of management, all adjustments necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods are presented. Actual results could differ from those estimates.

The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries. Wholly owned subsidiaries generally consist of limited liability companies (“LLCs”). All intercompany balances and transactions have been eliminated in consolidation. Each property is owned by a separate legal entity which maintains its own books and financial records and each entity’s assets are not available to satisfy the liabilities of other affiliated entities.

Upon acquisition of real estate investment properties, the Company allocates the total purchase price of each property that is accounted for as an asset acquisition based on the relative fair value of the tangible and intangible assets acquired and liabilities assumed based on Level 3 inputs, such as comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions, from a third party appraisal or other market sources. The acquisition date is the date on which the Company obtains control of the real estate investment property and transaction costs are capitalized.

allocated to above market lease values are included in acquired lease intangible assets, net and is amortized on a straight-line basis over the term of the related lease as a reduction to rental income. The portion allocated to below market lease values are included in acquired intangible liabilities, net and is amortized as an increase to rental income over the term of the lease including any renewal periods with fixed rate renewals. The portion of the purchase price allocated to acquired in-place lease value is included in acquired lease intangible assets, net and is amortized on a straight-line basis over the acquired leases’ weighted average remaining term.

The Company determines the fair value of the tangible assets consisting of land and buildings by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land and buildings. The Company determines the fair value of assumed debt by calculating the net present value of the mortgage payments using interest rates for debt with similar terms and maturities. Differences between the fair value and the stated value is recorded as a discount or premium and amortized over the remaining term using the effective interest method.

~~Certain of the~~ Company’s properties included earnout components to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The Company is not obligated to settle the contingent portion of the purchase price unless space which was vacant at the time of acquisition is later leased by the seller within the time limits and parameters set forth in the related acquisition agreements. The Company’s policy is to record earnout components when estimable and probable.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that clarified the definition of a business and assists in the evaluation of whether a transaction should be accounted for as an acquisition of an asset or a business combination. The Company early adopted the new guidance and modified its accounting policy effective October 1, 2016. Prior to October 1, 2016, the Company expensed all acquisition expenses as incurred whether or not the acquisition was completed, and assets acquired and liabilities assumed were measured at their fair values rather than at their relative fair values as described above. Additionally, earnouts were recorded as additional purchase price of the related property and as a liability included in deferred investment property acquisition obligations on the accompanying consolidated balance sheets. The amount recorded was based on the Company’s best estimate of the potential future earnout payments at the date of an acquisition. The Company recorded the effect of changes in the underlying liability assumptions in acquisition related costs on the accompanying consolidated statements of operations and comprehensive loss.

The Company assesses the carrying values of its respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review its assets for recoverability, the Company considers current market conditions, as well as its intent with respect to holding or disposing of the asset. If the Company’s analysis indicates that the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third party appraisals, where considered necessary (Level 3 inputs).

The Company estimates the future undiscounted cash flows based on management’s intent as follows: (i) for real estate properties that the Company intends to hold long-term, including land held for development, properties currently under development and operating buildings, recoverability is assessed based on the estimated future net rental income from operating the property and termination value; and (ii) for real estate properties that the Company intends to sell, including land parcels, properties currently under development and operating buildings, recoverability is assessed based on estimated net proceeds, including net rental income during the holding period, from disposition that are estimated based on future net rental income of the property and utilizing expected market capitalization rates.

The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows, including comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions which impact the discounted cash flow approach to determining value are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analysis could impact these assumptions and result in future impairment charges of real estate properties.

During the year ended December 31, 2017, the Company recorded an impairment charge of $8,530 which is included in provision for impairment of investment property on the accompanying consolidated statements of operations and comprehensive loss. During the years ended ~~December 31, 2016 and 2015, the Company incurred~~ no ~~impairment charges.~~

The Company has qualified and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2013. As a result, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its REIT taxable income (subject to certain adjustments and excluding any net capital gain) to its stockholders. The Company will monitor the business and transactions that may potentially impact its REIT status. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.

The Company considers all demand deposits, money market accounts and all short term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.

The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding and payment history of the tenant, which taken as a whole determines the valuation. Allowances are taken for those balances that the Company deems to be uncollectible, including any amounts relating to straight-line income receivables.

~~Real estate acquisitions are recorded at cost less accumulated depreciation. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred.~~

Cost capitalization and the estimate of useful lives require judgment and include significant estimates that can and do change. Depreciation expense is computed using the straight-line method. The Company anticipates the estimated useful lives of its assets by class to be generally:

~~Depreciation expense was approximately $39,497, $35,086 and $21,309 for the years ended December 31, 2017, 2016 and 2015, respectively.~~

The Company will consolidate the operations of a joint venture if the Company determines that it is either the primary beneficiary of a variable interest entity (VIE) or has substantial influence and control of the entity. In instances where the Company determines that it is not the primary beneficiary of a VIE or the Company does not control the joint venture but can exercise influence over the entity with respect to its operations and major decisions, the Company will use the equity method of accounting. Under the equity method, the operations of a joint venture will not be consolidated with the Company’s operations but instead its share of operations will be reflected as equity in earnings (loss) of unconsolidated entity on its consolidated statements of operations and comprehensive loss. Additionally, the Company’s net investment in the joint venture will be reflected as investment in unconsolidated entity on the consolidated balance sheets.

Debt issuance costs are amortized on a straight-line basis, which approximates the effective interest method, over the term, or anticipated repayment date, of the related agreements as a component of interest expense. These costs are reported as a direct deduction to the Company’s outstanding mortgages and credit facility payable. The adoption of Accounting Standards Update (“ASU”) No. 2015-03, ~~Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt issuance Costs~~ ~~issued by the FASB resulted in the reclassification of $4,467 from deferred expenses, net to mortgages and credit facility payable, net on the consolidated balance sheets as of December 31, 2015.~~

The Company has estimated fair value using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

The Company defines fair value based on the price that it believes would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

The Company’s cash equivalents, accounts receivable and payables and accrued expenses all approximate fair value due to the short term nature of these financial instruments. The Company’s financial instruments measured on a recurring basis include derivative interest rate instruments.

The Company uses derivative instruments, such as interest rate swaps, primarily to manage exposure to interest rate risks inherent in variable rate debt. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. The Company’s interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and market rate on the settlement date. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging.

The Company commences revenue recognition on its leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of, or controls the physical use of, the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded by the Company under the lease are treated as lease incentives which reduce revenue recognized over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes.

Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rent receivable in the accompanying consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally will be greater than the cash collected in the early years and will decrease in the later years of a lease.

Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. The Company does not expect the actual results to materially differ from the estimated reimbursement.

The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and amounts due are considered collectible. Upon early lease termination, the Company provides for gains or losses related to unrecovered intangibles and other assets.

~~As a lessor, the Company defers the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved.~~

The Company has restricted shares and units outstanding at December 31, 2017 and 2016. The Company recognizes expense related to the fair value of equity-based compensation awards as general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss. The Company primarily recognizes expense based on the fair value at the grant date on a straight-line basis over the vesting period representing the requisite service period. See Note 8 - "Equity-Based Compensation" for further information.

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities.~~ ~~The update, among other things,~~

The amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the update. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this update. The amended presentation and disclosure guidance is required only prospectively. The Company continues to evaluate ASU No. 2017-12 to determine the impact on its consolidated financial statements and related disclosures.

~~In November 2016, the FASB issued ASU No. 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash.~~ ~~The new update~~ will require that amounts described as restricted cash and restricted cash equivalents be included in beginning and ending-of-period reconciliation cash shown on the statement of cash flows. The amendment is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. At December 31, 2017, restricted cash of $4,940 was recorded as other assets on the Company’s consolidated balance sheets and the Company does not believe that the adoption of ASU No. 2016-18 will have a material impact on its consolidated financial statements and related disclosures.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230).~~ The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The issues addressed in the new guidance include the cash flow classification of: debt prepayment and debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investments, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The standard will be effective for fiscal years beginning after December 15, 2017, for public companies. The Company intends to adopt the new accounting standard by making a policy election to classify distributions received from an equity method investee as operating cash inflows up to its cumulative equity in earnings and any excess as investing inflows. The Company does not believe that ASU No. 2016-15 will have a material impact on its consolidated financial statements and related disclosures.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842).~~ The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU No. 2016-02 supersedes the previous leases standard, ~~Leases~~ (Topic 840). The Company has identified its lease revenues and non-lease revenues under the guidance. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company expects to adopt the guidance on a modified retrospective basis and upon adoption of the Leases guidance, non-lease components of new, extended or modified leases, including common area maintenance reimbursements, will be accounted for under the Revenue from Contracts with Customers guidance as described below. The Company is also the lessee under a ground lease, which it will be required to recognize right of use asset and a related lease liability on its consolidated balance sheets upon adoption.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective, although it will not affect the accounting for rental related revenues. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. The Company anticipates selecting the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and will adopt the new standard effective January 1, 2018, when effective. The Company has evaluated the specific revenue streams that could be most significantly impacted by this ASU and expects that the revenue recognition from these activities and other miscellaneous income will be generally consistent with current recognition methods, and therefore does not expect material changes to the consolidated financial statements as a result of adoption. The Company’s remaining implementation items include calculating the cumulative effect adjustment, if any, to be recorded upon adoption, drafting revised disclosures in accordance with the new standard and implementing changes to internal control policies and procedures, if any. Common area maintenance reimbursements to be impacted by ASU No. 2014-09 will not be addressed until the Company's adoption of ASU No. 2016-02, considering its revisions to accounting for common area maintenance described above.over financial reporting.

The Company commenced an initial public “best efforts” offering (the “Offering”) on October 18, 2012, which concluded on October 16, 2015. The Company sold 33,534,022 shares of common stock generating gross proceeds of $834,399 from the Offering. On March 29, 2017, the Company’s board of directors determined an estimated per share net asset value (the “Estimated Per Share NAV”) of the Company’s common stock of $22.63 ($9.05 prior to the Reverse Stock Split). The previously estimated per share net asset value of $22.55 ($9.02 prior to the Reverse Stock Split) was established on April 7, 2016.

~~The Company provides the following programs to facilitate additional investment in the Company’s shares and to provide limited liquidity for stockholders.~~

On October 19, 2015, the Company registered 25,000,000 shares of common stock to be issued under its distribution reinvestment plan (“DRP”) pursuant to a registration statement on Form S-3D. The Company provides stockholders with the option to purchase additional shares from the Company by automatically reinvesting cash distributions through the DRP, subject to certain share ownership restrictions. The Company does not pay any selling commissions or a marketing contribution and due diligence expense allowance in connection with the DRP. Pursuant to the DRP, the price per share for shares of common stock purchased under the DRP is equal to the estimated value of a share, as determined by the Company’s board of directors and reported by the Company from time to time, until the shares become listed for trading, if a listing occurs, assuming that the DRP has not been terminated or suspended in connection with such listing. On March 30, 2017, the Company reported a new Estimated Per Share NAV of $22.63 ($9.05 prior to the Reverse Stock Split).

~~Distributions reinvested through the DRP were approximately $27,069, $27,831 and $20,828 for the years ended December 31, 2017, 2016 and 2015, respectively.~~

The Company adopted a share repurchase program effective October 18, 2012 which was subsequently amended effective January 1, 2018 to change the processing of repurchase requests from a monthly to a quarterly basis to align with the move to quarterly distributions. Under the amended and restated share repurchase program (“SRP”), the Company is authorized to purchase shares from stockholders who purchased their shares from the Company or received their shares through a non-cash transfer and who have held their shares for at least one year, if requested, if the Company chooses to purchase them. Subject to funds being available, the Company limits the number of shares repurchased during any calendar year to 5% of the number of shares outstanding on December 31^st of the previous calendar year, as adjusted by the Reverse Stock Split. Funding for the SRP comes from proceeds the Company receives from the DRP during the same period. In the case of repurchases made upon the death of a stockholder or qualifying disability, as defined in the SRP, the one year holding period does not apply. The SRP will immediately terminate if the Company’s shares become listed for trading on a national securities exchange. In addition, the Company’s board of directors, in its sole direction, may, at any time, amend, suspend or terminate the SRP.

Pursuant to the SRP, the Company may repurchase shares at prices ranging from 92.5% of the “share price,” as defined in the SRP, for stockholders who have owned shares for at least one year to 100% of the “share price” for stockholders who have owned shares for at least four years. For repurchases sought upon a stockholder’s death or qualifying disability, the Company may repurchase shares at a price equal to 100% of the “share price.” As used in the SRP, “share price” means the lesser of (1) the offering price of the Company’s shares in the Offering (unless the shares were purchased at a discount from that price, and then that purchase price), as adjusted by the Reverse Stock Split, reduced by any distributions of net sale proceeds that the Company designates as constituting a return of capital; or (2) the most recently disclosed estimated value per share.

Repurchases through the SRP were approximately $21,066, $9,724 and $3,810 for the years ended December 31, 2017, 2016 and 2015, respectively. At December 31, 2017 and 2016, the liability related to the SRP was $2,530 and $1,448, respectively, recorded in other liabilities on the Company’s consolidated balance sheets.

~~During the year ended~~ ~~December 31, 2017~~, the Company acquired, through its wholly owned subsidiaries, the three properties listed below from unaffiliated third parties. The acquisitions were financed with proceeds from the Company’s credit facility (the “Credit Facility”).

The above acquisitions were accounted for as asset acquisitions. For the year ended December 31, 2017, the Company incurred $2,213 of total acquisition costs and fees, $1,459 of which are capitalized as the acquisition of net investment properties in the accompanying consolidated balance sheets. An adjustment to the deferred investment property acquisition obligation of $574 and $180 of acquisition and dead deal costs are included in acquisition related costs in the accompanying consolidated statements of operations and comprehensive loss.

~~During the year ended~~ ~~December 31, 2016, the Company acquired, through its wholly owned subsidiaries, the two properties listed below~~ ~~and~~ ~~financed Coastal North Town Center by obtaining a mortgage loan in the amount of $43,680.~~

For the year ended December 31, 2016, the Company recorded a reduction in deferred investment property acquisition obligation of $2,066, net of acquisition costs of $510 in acquisition related costs in the consolidated statements of operations and comprehensive loss. The Company incurred $~~13,903 for the year ended~~ ~~December 31, 2015~~, of acquisition, dead deal and transaction related costs that were related to both closed and potential transactions and deferred obligation adjustments. These costs include third party due diligence costs such as appraisals, environmental studies, and legal fees as well as acquisition fees and time and travel expense reimbursements to the Sponsor and its affiliates. For the year ended December 31, 2015, the Business Manager permanently waived acquisition fees of $2,510. No fees were waived for 2017 or 2016.

For properties acquired during the year ended December 31, 2017, the Company recorded total income of $5,202 and property net income of $325, which excludes expensed acquisition related costs. For properties acquired during the year ended December 31, 2016, the Company recorded total income of $4,218 and property net income of $269, which excludes expensed acquisition related costs.

The following table presents certain additional information regarding the Company’s acquisitions during the years ended December 31, 2017 and 2016. The amounts recognized for major assets acquired and liabilities assumed as of the acquisition date are as follows:

~~The following table summarizes the Company’s unconsolidated joint ventures:~~

~~The following table summarizes~~During the three months ended December 31, 2023, none of the Company’s ~~identified intangible assets~~directors or officers adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

Our directors and executive officers and their positions and ages are as follows:

Robert D. Parks, 81. Director and the chair of our board since January 2024. Mr. Parks was elected as a director and chairman of the board to fill the vacancy resulting from the passing of our former director and chairman of the board, Daniel L. Goodwin. Mr. Parks will serve on the board until the Company’s 2024 annual meeting of stockholders and until his successor is duly elected and qualified, and it is anticipated that Mr. Parks will stand for reelection to the board at the 2024 Annual Meeting. Mr. Parks is a manager of The Inland Real Estate Companies, LLC and one of the original principals of The Inland Group, LLC. Mr. Parks has served as a director on multiple boards, including as chairman of IREIC from November 1984 to December ~~31,~~2016; chairman of the board of Inland Diversified Real Estate Trust, Inc. from June 2008 to July 2014; director of Inland Investment Advisors, Inc. from June 1995 to May 2013; chairman of the board of Retail Properties of America, Inc. from March 2003 to October 2010; director of Inland Securities Corporation from August 1984 to June 2009; director of Inland Real Estate Corporation from 1994 to June 2008, serving as chairman of the board from May 1994 to May 2004 and as president and chief executive officer from 1994 to April 2008; and chairman of the board of Inland Retail Real Estate Trust, Inc. from September 1998 to March 2006, serving as chief executive officer until December 2004. Mr. Parks earned his undergraduate degree from Northeastern Illinois University and his Master of Arts degree from the University of Chicago.

Our board believes that Mr. Parks’ significant experience in the non-listed real estate trust industry will greatly benefit the board and the Company.

Lee A. Daniels, 81. Independent director since February 2012 and lead independent director since September 2017. Mr. Daniels serves as a member of the nominating and corporate governance committee and the audit committee. Mr. Daniels served on the Board of Trustees of Kite Realty Group from 2014 to 2021. Mr. Daniels served on the board of directors of Inland Diversified Real Estate Trust, Inc. (“Inland Diversified”) from its inception in 2008 until its merger with Kite in 2014.

In February 2007, Mr. Daniels founded Lee Daniels & Associates, LLC, a consulting firm for government and community relations. Prior to that, Mr. Daniels was an equity partner at the Chicago law firm of Bell Boyd & Lloyd from 1992 to 2006, an equity partner at Katten, Muchin & Zavis from 1982 to 1991, and an equity partner at Daniels & Faris from 1967 to 1982. Mr. Daniels served as Special Assistant Attorney General for the State of Illinois from 1971 to 1974. He served as a member of the Illinois House of Representatives from 1975 to 2007, was the Republican Leader from 1983 to 1995 and 1998 to 2003, and was Speaker of the Illinois House of Representatives from 1995 to 1997.

Mr. Daniels currently serves as chair of the Board of Directors of Haymarket Center, a nonprofit behavioral health treatment center located in Chicago, Illinois. He served as the chair of the Presidential Search Committee for the College of DuPage from 2015 to 2016. He previously served on the Elmhurst Memorial Healthcare Board of Trustees from 1981 to 2013, the Board of Governors from 1990 to 2013, and the Elmhurst Memorial Hospital Foundation Board from 1980 to 1984 and 2013. Other boards Mr. Daniels has served on include the Suburban Bank and Trust Company of Elmhurst Board of Directors from 1994 to 1996, the Elmhurst Federal Savings and Loan Association Board of Directors from 1991 to 1994, and the DuPage Easter Seals Board of Directors from 1970 to 1973.

Mr. Daniels received his bachelor’s degree from the University of Iowa and his law degree from The John Marshall Law School in Chicago. He received a Distinguished Alumni Award from both The John Marshall Law School and the University of Iowa, and an Honorary Doctor of Laws from Elmhurst College.

Our board believes that Mr. Daniels’ depth of knowledge and experience, based on his over 50 years of legal practice and his service as a board member of REITs make him well qualified to serve as a member of our board of directors.

Stephen L. Davis, 66. Independent director since February 2012. Mr. Davis serves as a member of the audit committee and the chair of the nominating and corporate governance committee. Mr. Davis has served as a member of the board of directors of Heska Corporation (NASDAQ: HSKA) since August 2020 and as a member of that company’s audit committee and as the chair of its corporate governance committee in each case since February 2021. Mr. Davis has served as a member of the board of directors of PMI Energy Solutions, LLC since 2013. Additionally, Mr. Davis serves on the Board of the Trust Company of Illinois since 2016. Mr. Davis has over 30 years of experience in real estate development. Mr. Davis has been the president of The Will Group, Inc., a construction company, since founding the company in 1986. In his position with The Will Group, Mr. Davis was instrumental in the construction of Kennedy King College campus, located in Chicago, Illinois, and the coordination of the "Plan For Transformation" for Altgeld Gardens, a public housing development located in Chicago, Illinois. Since October 2003, Mr. Davis has also overseen property management operations for several properties owned by a family-owned real estate trust.

Mr. Davis has served as commissioner of aviation (board chair) of the DuPage County Airport Authority, in DuPage County, Illinois, which oversees management of the DuPage County Airport, Prairie Landing Golf Course and the 500-acre DuPage County Business Park since March 2005. From 2006 to 2016, Mr. Davis served as a director of Wheaton Bank & Trust, where he was a member of the loan committee, which was responsible for reviewing and analyzing residential and commercial loan portfolios, developer credentials and viability, home builders and commercial and industrial loans. Mr. Davis obtained his bachelor degree from the University of Tennessee, located in Knoxville.

Our board believes that Mr. Davis’s prior real estate development experience, his experience as a director of another public company and his leadership qualities make him well qualified to serve as a member of our board of directors.

Gwen Henry, 83. Independent director since February 2012. Ms. Henry serves as chair of the audit committee and a member of the nominating and corporate governance committee. Ms. Henry currently serves as the Treasurer of DuPage County, Illinois, a position she has held since December 2006. In this position, Ms. Henry is responsible for the custody and distribution of DuPage County funds. In addition, from April 1981 to 2019, Ms. Henry was a partner at Dugan & Lopatka, a regional accounting firm, and a member of the firm’s controllership and consulting services practice, where she specialized in financial consulting and tax and business planning for privately-held companies. Since December 2009, Ms. Henry has served as a member of the Illinois Municipal Retirement Fund, a $52 billion fund which has investments in excess of $1.2 billion allocated to real estate. She currently serves as chair of the investment committee, and is a member of the audit committee and the legislative committee of the fund.

Ms. Henry previously served as DuPage County Forest Preserve Commissioner (from December 2002 to November 2006) and as chair to the special committee responsible for the DuPage County Budget (from December 2002 to November 2004), and was a member of the DuPage County Finance Committee (from November 1996 to November 2002). Ms. Henry also has held a number of board and chair positions for organizations such as the Marianjoy Rehabilitation Hospital (as treasurer from June 2002 to May 2008), the Central DuPage Health System (as chairperson of the board from October 1995 to September 1999), and the Central DuPage Hospital Foundation (as director from October 2002 to present). She was elected and served as Mayor of the City of Wheaton, Illinois from March 1990 to December 2002.

Ms. Henry received her bachelor degree from the University of Kansas, located in Lawrence, Kansas. She is a certified public accountant, a designated certified public funds investment manager and a certified public finance administrator.

Our board believes that Ms. Henry’s over 35 years of public accounting experience makes her well qualified to serve as a member of our board of directors.

Bernard J. Michael, 64. Independent director since September 2014. Mr. Michael serves as a member of the audit committee and, since September 2017, the nominating and ~~2016:~~ corporate governance committee. Mr. Michael founded AWH Partners, LLC, a privately held real estate investment, development and management firm. He served as managing partner of the firm until 2018 and now owns a minority interest. Under Mr. Michael’s leadership, AWH acquired in excess of $1.4 billion of hotel investments and was managing or completed hotel redevelopment projects totaling more than $300 million. In early 2012, AWH acquired Lane Hospitality, which it rebranded as Spire Hospitality, a top-tier national hospitality platform formed in 1980. Mr. Michael is also the chairman and chief executive officer and president of the Center for Jewish History, a not-for-profit museum and archive in New York.

Mr. Michael also has over 25 years of experience as a practicing lawyer specializing in real estate with a focus on sophisticated real estate transactions across all asset classes for some of the world's largest property owners, developers and lenders. Mr. Michael was the founder and senior partner of Michael, Levitt & Rubenstein, LLC, a law firm focusing on real estate sales, acquisitions, development, leasing and financing. Mr. Michael and his team worked on some of the largest transactions in New York City, including the

development of Time Warner Center and the Hudson Yards projects for The Related Companies. In addition, Mr. Michael and his firm represented developers on major multi-family, retail, office and hospitality projects in China, Saudi Arabia, and in most major cities across the United States.

Prior to forming Michael, Levitt & Rubenstein LLC, Mr. Michael was a partner in the Real Estate Group at Proskauer Rose, LLP. Prior to that, Mr. Michael was an attorney at Weil, Gotschal & Manges and Shea & Gould. Mr. Michael is a graduate of Brown University and New York University School of Law.

Our board believes that Mr. Michael’s prior business experience and his leadership qualities make him well qualified to serve as a member of our board of directors.

Mark E. Zalatoris, 66. Director, president and chief executive officer since February 2024. Mr. Zalatoris was elected to serve as the Company’s Director, President and Chief Executive Officer effective February 1, 2024. Since 2018, Mr. Zalatoris has been the lead independent director of Parkway Bancorp and wholly-owned subsidiary, Parkway Bank. Mr. Zalatoris also served in multiple positions at IRC Retail Centers, including as a member of the board of directors, chief executive officer and president from 2008 to 2017; executive vice president and chief operating officer from 2004 to 2008; and senior vice president, chief financial officer and treasurer from 2000 to 2004. IRC Retail Centers was a REIT originally formed and sponsored by affiliates of the Business Manager. Mr. Zalatoris earned his undergraduate degree from University of Illinois, Urbana-Champaign and his Master of Accounting Science degree from University of Illinois, Urbana-Champaign.

Our board believes that Mr. Zalatoris’s extensive finance and real estate experience make him well qualified to serve as a member of our board of directors.

Catherine L. Lynch, 65. Our chief financial officer since April 2014 and treasurer since April 2018, and a director of the Business Manager since August 2011. Ms. Lynch joined Inland in 1989 and has been a director of The Inland Group LLC since June 2012. She serves as the treasurer and secretary (since January 1995), the chief financial officer (since January 2011) and a director (since April 2011) of IREIC and as a director (since July 2000) and chief financial officer and secretary (since June 1995) of Inland Securities. She also served as the chief financial officer of IRPT and the IRPT business manager from December 2013 until October 2019. She also served as the treasurer of the IRPT business manager from December 2013 to October 2014. Ms. Lynch also serves as the chief financial officer and treasurer (since October 2016) of InPoint and as the chief financial officer and treasurer of the InPoint advisor (since August 2016). Ms. Lynch also has served as a director of IPCC since May 2012. Ms. Lynch served as the treasurer of Inland Capital Markets Group, Inc. from January 2008 until October 2010, as a director and treasurer of Inland Investment Advisors, LLC from June 1995 to December 2014 and as a director and treasurer of Inland Institutional Capital, LLC from May 2006 to December 2014. Ms. Lynch worked for KPMG Peat Marwick LLP from 1980 to 1989. Ms. Lynch received her bachelor degree in accounting from Illinois State University in Normal. Ms. Lynch is a member of the Illinois CPA Society. Ms. Lynch also is registered with the Financial Industry Regulatory Authority, Inc. (“FINRA”) as a financial operations principal.

Daniel Zatloukal, 43. Our senior vice president since December 2021, Mr. Zatloukal also serves as executive vice president and head of asset and portfolio management for all investment programs sponsored by IREIC, positions he has held since 2015. He also serves as senior vice president of IPCC, an affiliate of IREIC, a position he has held since 2014. As of December 31, 2023, IPCC has sponsored 313 private placement programs and has approximately $12 billion in assets under management. In addition, Mr. Zatloukal has been an executive vice president of IPC Alternative Real Estate Income Trust, Inc. (“Alt REIT”) since its inception in June 2023. Alt REIT is a monthly NAV REIT focused on alternative real estate sectors including self-storage facilities, student housing properties and healthcare-related properties. Mr. Zatloukal was president of Inland Investment Real Estate Services, Inc. from October 2015 through June 2017 and was responsible for overseeing all of IREIC’s real estate services group, which includes property management, leasing and asset management for commercial and residential portfolios owned or managed by IREIC and its affiliates. Prior to rejoining Inland at IPC in 2013, Mr. Zatloukal served as vice president of capital markets at Jones Lang LaSalle in Atlanta. Mr. Zatloukal received his bachelor’s degree in finance from the ~~weighted average amortization periods~~University of Illinois at Urbana-Champaign.

Judith Fu, 62. Our vice president of administration since December 2021, and the vice president of the Business Manager since January 2022. Ms. Fu joined the Company in 2005 and currently also serves as a vice president of IREIC, a position she has held since August 2018. As chief of staff of IREIC, Ms. Fu provides organizational support to the executive management team of IREIC Ms. Fu also served as chief compliance officer for ~~acquired in-place lease,~~the registered investment advisor subsidiaries of Inland Mortgage Corporation from August 2008 to August 2010. In 2010, Ms. Fu began working for IREIC as the executive assistant to its then chief executive officer. While holding this position, she also acted as the chief compliance officer for Inland Institutional Capital Partners from March 2012 to September 2014. Ms. Fu holds FINRA Series 24, 63, 65 and 7 licenses and previously was a licensed managing real estate broker in the State of Illinois. Ms. Fu has a bachelor’s of science degree from Loyola University Chicago.

Cathleen M. Hrtanek, 47. Our corporate secretary and the secretary of the Business Manager since August 2011. Ms. Hrtanek joined Inland in 2005 and is currently an Associate General Counsel and Senior Vice President of The Inland Real Estate Group, LLC. Ms. Hrtanek has served as a Director of Inland Securities Corporation, Inland Private Capital Corporation and a Manager of IPC Alternative Real Estate Advisor, LLC respectively since February 2024. Ms. Hrtanek has served as the Secretary of InPoint Commercial Real Estate Income, Inc. (“InPoint”) since March 2022, its Assistant Secretary from August 2016 to March 2022 and Secretary of its advisor since August 2016. Ms. Hrtanek is also the Secretary of Inland Venture Partners, LLC, IVP MHC Fund III, LLC, MH Ventures Fund II, Inc., Inland Ventures MHC Manager, LLC and MH Ventures II Business Manager, LLC, and has served as the Secretary of Inland Opportunity Business Manager & Advisor, Inc. since April 2009. Ms. Hrtanek also served as the Secretary of Inland Diversified Real Estate Trust, Inc. from September 2008 through July 2014 and its business manager from September 2008 through March 2016, and as the Secretary of IPC from August 2009 to May 2017. Prior to joining Inland, Ms. Hrtanek had been employed by Wildman Harrold Allen & Dixon LLP in Chicago, Illinois since September 2001. Ms. Hrtanek has been admitted to practice law in the State of Illinois and holds a B.A. in Political Science and French from the University of Notre Dame and a J.D. from Loyola University Chicago School of Law.

We have separated the roles of the president and chairman of the board in recognition of the differences between the two roles. Effective January 31, 2024, Mitchell A. Sabshon resigned from his position as the Company’s president and chief executive officer. The board subsequently elected Mr. Zalatoris to serve as president and chief executive officer. Mr. Zalatoris, in his role as both our president and chief executive officer, is responsible for setting the strategic direction for the Company and for providing the day-to-day leadership of the Company. On January 23, 2024, the board elected Robert D. Parks as a director and chairman of the board to fill the vacancy resulting from the passing of Daniel L. Goodwin. Mr. Parks, as chairman of the board, organizes the work of the board and ensures that the board has access to sufficient information to carry out its functions. Mr. Parks presides over meetings of the board of directors and stockholders, works with the lead independent director to establish the agenda for each meeting and oversees the distribution of information to directors.

Lee A. Daniels currently serves as our lead independent director. Although each board member is kept apprised of our business and developments impacting our business, our board determined to designate a lead independent director to coordinate the activities of the independent directors and serve as the principal liaison between the independent directors and the chairman of the board.

The lead independent director presides at meetings when the chairman of the board is absent; works with the chairman of the board to establish board meeting agendas in collaboration with the chairman of the board and the various committee chairs and recommends matters for the board and committees to consider; advises the chairman of the board as to the quality, quantity and timeliness of the information submitted to the directors that is appropriate for the directors to effectively perform their duties and approves the information submitted to them; calls meetings of the independent directors or calls for executive sessions during board meetings; and presides at meetings of the independent directors or executive sessions of the board. The lead independent director also performs such other responsibilities as the board may determine.

Our board believes that its lead independent director structure, including the duties and responsibilities described above, provides the same independent leadership, oversight, and benefits for the Company and the board that would be provided by an independent chairman of the board. Our full board of directors, including our independent directors, is responsible for approving all material transactions, and each transaction between us and the Business Manager or its affiliates must be approved by the affirmative vote of a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction. In addition, each board member is kept apprised of our business and developments impacting our business and has complete and open access to the members of our management team, the Business Manager and our real estate manager, Inland Commercial Real Estate Services LLC (our “Real Estate Manager”).

Our board is actively involved in overseeing risk management for the Company. Our board of directors oversees risk through: (1) its review and discussion of regular periodic reports to the board of directors and its committees, including management reports and studies on existing market ~~lease intangibles, below market lease intangibles~~conditions, leasing activity and ~~above market ground lease are 10, 14, 19~~property operating data, as well as actual and ~~55 years, respectively.~~projected financial results, and various other matters relating to our business; (2) the required approval by the board of directors of material transactions, including, among others, acquisitions and dispositions of properties, financings and our agreements with the Business Manager, our Real Estate Manager and the ancillary service providers; (3) the oversight of our business by the audit committee; and (4) its review and discussion of regular periodic reports from our independent registered public accounting firm and other outside consultants regarding various areas of potential risk, including, among others, those relating to the qualification of the Company as a REIT for tax purposes and our internal control over financial reporting.

Stockholders wishing to communicate with our board and the individual directors may send communications by letter, e-mail or telephone, in care of our corporate secretary, who will review and forward all correspondence to the appropriate person or persons for a response.

Our non-retaliation policy, also known as our “whistleblower” policy, prohibits us from retaliating or taking any adverse action against our employees (if we ever have employees), or the employees of the Business Manager or its affiliates, for raising a concern, including concerns about accounting, internal controls or auditing matters. Employees may raise their concerns by contacting our compliance officer at (630) 218-8000. In addition, confidential complaints involving the Company’s accounting, auditing, and internal auditing controls and disclosure practices may be raised anonymously via email or mail as described in our non-retaliation policy. A complete copy of our non-retaliation policy may be found on our website at www.inland-investments.com/inland-income-trust under the “Corporate Governance” tab.

The insider trading policy of IREIC and its affiliated entities, including our Business Manager and Real Estate Manager, prohibits officers, directors and employees of these entities, including our executive officers, from engaging, without the prior written consent of the applicable employer, in hedging or monetization transactions such as zero-cost collars and forward sale contracts that allow a person to lock in a portion of the value of his or her shares in any Inland entity or any entity sponsored by or advised by IREIC or by any of its direct or indirect subsidiaries. This includes shares of our common stock. Because there is no established public trading market for our common stock and we do not have any employees, the Company itself has not separately adopted any specific practices or policies regarding the ability of our directors, officers or employees to purchase ~~price allocated~~financial instruments or otherwise engage in transactions that hedge or offset, or are designed to ~~acquired above~~hedge or offset, any decrease in the market ~~lease~~ value of our common stock or any other securities that we might issue.

Audit Committee. Our board has formed a separately-designated standing audit committee, comprised of Ms. Henry and ~~acquired below market lease value~~Messrs. Daniels, Davis and Michael, each of whom is ~~amortized on a straight-line basis over~~“independent” within the ~~term~~meaning of the ~~related lease~~applicable listing standards of the NYSE. Ms. Henry serves as the chairperson of this committee, and our board has determined that Ms. Henry qualifies as an ~~adjustment~~“audit committee financial expert” as defined by the SEC. The audit committee assists the board in fulfilling its oversight responsibility relating to, ~~rental income. For below market lease values,~~among other things: (1) the ~~amortization period includes~~integrity of our financial statements; (2) our compliance with legal and regulatory requirements; (3) the qualifications and independence of our independent registered public accounting firm; and (4) the performance of our internal audit function and independent registered public accounting firm.

Nominating and Corporate Governance Committee. Our board has formed a nominating and corporate governance committee consisting of Ms. Henry and Messrs. Daniels, Davis and Michael, each of whom is “independent” within the meaning of the applicable listing standards of the NYSE. Mr. Davis serves as the chairman of this committee. The nominating and corporate governance committee is responsible for, among other things: (1) identifying individuals qualified to serve on the board and the nominating and corporate governance committee and recommending to the board a slate of director nominees for election by the stockholders at the annual meeting; (2) periodically reevaluating any ~~renewal periods with fixed rate renewals.~~corporate governance policies and principles adopted by the board, including recommending any amendments thereto if appropriate; and (3) overseeing an annual evaluation of the board. The ~~acquired above market ground lease~~nominating and corporate governance committee is ~~amortized on a straight-line basis~~also responsible for considering director nominees submitted by stockholders.

The committee considers all qualified candidates identified by members of the committee, by other members of the board of directors, by the Business Manager and by stockholders. In recommending candidates for director positions, the committee takes into account many factors and evaluates each director candidate in light of, among other things, the candidate’s knowledge, experience, judgment and skills such as an ~~adjustment to property operating expense over the term~~understanding of the ~~lease~~real estate industry or financial industry or accounting or financial management expertise. Other considerations include the candidate’s independence from conflict with the Company, the Business Manager and ~~includes renewal periods. The portion~~the Sponsor and the ability of the ~~purchase price allocated~~candidate to ~~acquired in-place lease value~~devote an appropriate amount of effort to board duties. The committee also focuses on persons who are actively engaged in their occupations or professions or are otherwise regularly involved in the business, professional or academic community. The committee also considers diversity in its broadest sense, including persons diverse in geography, gender and ethnicity as well as representing diverse experiences, skills and backgrounds. The committee evaluates each individual candidate by considering all of these factors as a whole, favoring active deliberation rather than the use of rigid formulas to assign relative weights to these factors.

Other Committees. Our board does not have a compensation committee or charter that governs the compensation process. Instead, the full board of directors performs the functions of a compensation committee, including reviewing and approving all forms of compensation for our independent directors that have been reviewed and recommended by our nominating and corporate governance committee. In addition, our independent directors determine, at least annually, that the compensation that we contract to pay to the

Business Manager is ~~amortized~~reasonable in relation to the nature and quality of services performed or to be performed, and is within the limits prescribed by our charter and applicable law. Our board does not believe that it requires a separate compensation committee at this time because we neither separately compensate our executive officers for their service as officers, nor do we reimburse either the Business Manager or our Real Estate Manager for any compensation paid to their employees who also serve as our executive officers.

Our board has adopted a code of ethics applicable to our directors, officers and employees (if we ever have employees) which is available on ~~a straight-line basis over~~our website at www.inland-investments.com/inland-income-trust under the ~~acquired leases’ weighted average remaining term.~~

~~Amortization pertaining to acquired in-place lease value, above market ground lease, above market lease value and below market lease value is summarized below:~~

~~Estimated amortization~~“Corporate Governance” tab. In addition, printed copies of the ~~respective intangible lease assets and liabilities as~~code of ~~December 31, 2017 for each~~ethics are available to any stockholder, without charge, by writing us at 2901 Butterfield Road, Oak Brook, Illinois 60523, Attention: Investor Services.

~~As of December 31, 2017 and 2016, the Company had the following mortgages and credit facility payable:~~

The Company’s indebtedness bore interest at a weighted average interest rate of 3.63% per annum at December 31, 2017, which includes the effects of interest rate swaps. The Company estimates the fair value of its total debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying valueprovisions of the ~~Company’s debt excluding mortgage premium and unamortized debt issuance costs was $693,321 and $607,836 as~~code of ~~December 31, 2017 and 2016, respectively, and its estimated fair value was $684,621 and $595,404 as~~ethics for executive officers or directors may be granted only in exceptional circumstances by our board or a committee of ~~December 31, 2017 and 2016, respectively.~~

~~As of December 31, 2017, scheduled principal payments and maturities on the Company’s debt were as follows:~~

~~The Company’s Credit Facility in the amount of $110,000 has an accordion feature that allows for an increase in available borrowings up to~~ ~~$400,000,~~ ~~subject to certain conditions. The Credit Facility matures on September 30, 2019 and the Company has a~~ ~~one~~ ~~year extension option which it may exercise as long as certain conditions are met.~~

~~At December 31, 2017, the interest rate on the Credit Facility was~~ ~~3.21%.~~ ~~As of December 31, 2017, the Company had $26,200 available for borrowing under the Credit Facility.~~

The Credit Facility requires compliance with certain covenants, as amended, including a minimum tangible net worth requirement, a distribution limitation, restrictions on indebtedness and investment restrictions, as defined. It also contains customary default provisions including the failure to comply with the Company's covenants and the failure to pay when amounts outstanding under the Credit Facility become due. The Company is in compliance with all financial covenants relatedour board. Any waivers will be promptly disclosed to the ~~Credit Facility.~~

~~The mortgage loans require compliance with certain covenants, such as debt service ratios, investment restrictions and distribution limitations. As~~extent required by law. Any amendments to the code of ~~December 31, 2017,~~ethics must also be approved by our board. If we make any substantive amendments to the ~~Company was current on all~~code of ethics or grant any waiver, including any implicit waiver, from a provision of the ~~payments and in compliance with all~~code of ethics to our chief executive officer, chief financial ~~covenants. All of~~officer, chief accounting officer or controller or persons performing similar functions, we may, rather than filing a Current Report on Form 8-K, satisfy the ~~Company’s mortgage loans are secured~~disclosure requirement by ~~first mortgages~~posting such information on ~~the respective real estate assets. As of December 31, 2017, the weighted average years to maturity for the Company’s mortgages payable was approximately 4.2 years.~~

The Company entered into interest rate swaps to fix certain of its floating LIBOR based debt under variable rate loans to a fixed rate to manage its risk exposure to interest rate fluctuations. The Company will generally match the maturity of the underlying variable rate debt with the maturity date on the interest swap. See Note 15 - "Fair Value Measurements" for further information.

~~The following table summarizes the Company’s interest rate swap contracts outstanding~~our website as ~~of December 31, 2017.~~

~~(a)~~

~~Receive floating rate index based upon one month LIBOR. At December 31, 2017, the one month LIBOR equaled 1.56%.~~

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the unrealized gain or loss on the derivative is reported as a component of comprehensive income (loss). The ineffective portion of the change in fair value, if any, is recognized directly in earnings. The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive loss for the years ended December 31, 2017, 2016 and 2015.

Year Ended December 31,

Derivatives in Cash Flow Hedging Relationships:

2017

2016

2015

Effective portion of derivatives

$
1,043

$
1,861

$
(4,612
)
Reclassification adjustment for amounts included in net gain or loss (effective portion)

$
2,405

$
4,038

$
2,546

Ineffective portion of derivatives

$
7

$
233

$
365

~~The amount that is expected to be reclassified from accumulated other comprehensive income into income in the next twelve months is approximately ($124).~~

Item 11. Executive Compensation

~~NOTE 8 – EQUITY-BASED COMPENSATION~~Compensation of Executive Officers

~~Under~~In connection with the Agreement entered into with Mr. Zalatoris, we pay Mr. Zalatoris an annual fee (payable pro rata on a monthly basis) equal to $350,000 per year to compensate him for performing services as our president and chief executive officer. Mr. Zalatoris is not employed by and has no position with IREIC. The rest of our executive officers are officers of IREIC or one or more of its affiliates and are compensated by those entities, in part, for services rendered to us. The amount we pay Mr. Zalatoris reduces the amount we pay to the Business Manager under the Business Management Agreement on a dollar-for-dollar basis. We do not reimburse either the Business Manager or Real Estate Manager for any compensation paid to individuals who also serve as our executive officers, or the executive officers of the Business Manager, our Real Estate Manager or their respective affiliates; provided that our corporate secretary is not considered an “executive officer.” As a result, historically, we did not have, and our board of directors did not consider, a compensation policy or program for our executive officers and has not previously included a “Compensation Discussion and Analysis,” a report from our board of directors with respect to executive compensation, a non-binding stockholder advisory vote on compensation of executives, a non-binding stockholder advisory vote on the frequency of the stockholder vote on executive compensation or the pay ratio between employees and our principal executive officer. Because of the Agreement entered into with Mr. Zalatoris, our board will now consider these programs or policies and will include a non-binding advisory vote on his compensation as well as an advisory vote on the frequency of the advisory vote on Mr. Zalatoris’ compensation in the future. The fees we pay to the Business Manager and Real Estate Manager under the business management agreement or the real estate management agreement, respectively, are described in more detail under “Certain Relationships and Related Transactions.”

In the future, our board may continue to decide to pay annual compensation or bonuses or long-term compensation awards to one or more persons for services as officers. We also may, from time to time, grant restricted shares of our common stock to one or more of our officers. If we decide to pay our named executive officers in the future, the board of directors will review all forms of compensation and approve all stock option grants, warrants, stock appreciation rights and other current or deferred compensation payable to the executive officers with respect to the current or future value of our shares. In addition, the board will include the non-binding stockholder advisory votes on executive compensation and on the frequency of stockholder votes on executive compensation in the relevant proxy statement as required pursuant to Section 14A of the Exchange Act.

Independent Director Compensation

The following table summarizes compensation earned by the independent directors for the year ended December 31, 2023 (Dollar amounts in thousands):


Name	Fees Earned or Paid in Cash		Stock Awards(1)		Options Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation(2)		Total Compensation
Lee A. Daniels	$	79	$	24	$	—	$	—	$	—	$	3	$	106
Stephen L. Davis	$	65	$	24	$	—	$	—	$	—	$	3	$	92
Gwen Henry	$	78	$	24	$	—	$	—	$	—	$	3	$	105
Bernard J. Michael	$	65	$	24	$	—	$	—	$	—	$	3	$	92

(1)

Represents 1,208 restricted shares granted on November 7, 2023 to each director. The number of restricted shares granted was calculated based on the estimated per share NAV as of December 31, 2022.

(2)

Represents the value of distributions received during the year ended December 31, 2023 on all stock awards received through December 31, 2023.

Cash Compensation

We pay our independent directors an annual fee of $50,000 plus $2,000 for each in-person meeting or meeting of the board by video conference and $750 for each meeting of the board by telephone; we also pay our independent directors $1,400 for each in-person meeting or meeting by video conference of each committee of the board and $550 for each meeting of each committee of the board by telephone. We pay the chairperson of the nominating and corporate governance committee of our board an annual fee of $8,500 and the chairperson of the audit committee of our board an annual fee of $13,200. We pay the lead independent director an annual fee of $5,000.

We reimburse all of our directors for any out-of-pocket expenses incurred by them in attending meetings. Each independent director may elect to receive payment of all or a portion of his or her fee in the form of unrestricted shares in lieu of cash pursuant to our employee

and director restricted share plan (the “RSP”) and may elect to defer the receipt of all or a portion of his or her fee pursuant to our director deferred compensation plan (the “DDCP”). We do not pay any person that also is an employee of the Business Manager or its affiliates or an executive officer of the Company any fees for serving on the board.

Stock Compensation

On March 21, 2016 the board of directors approved the RSP, which was subsequently approved by the Company’s ~~Employee and Director Restricted Share Plan (“RSP”),~~stockholders at the annual stockholders’ meeting on June 16, 2016. The RSP provides us with the ability to grant awards of restricted shares and restricted share units ~~generally vest over a one~~ to ~~three year vesting period from~~directors, officers and employees (if we ever have employees) of us, our affiliate or the Business Manager. Under the RSP, on the date of the ~~grant, subject to the specific terms~~annual stockholders’ meeting in 2023, each independent director received an award of ~~the grant. On June 13, 2017, we issued 1,326~~ restricted shares ~~and 442 restricted share units to our independent directors pursuant to the automatic grant provisions~~ of ~~the RSP, which become vested in equal installments of 33-1/3% on each of the first three anniversaries of June 13, 2017, subject to~~

~~INLAND REAL ESTATE INCOME TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~(Dollar amounts in thousands, except per share amounts)~~

certain exceptions. On October 2, 2017, we issued 331 restricted shares and 110 restricted share units to our independent directors pursuant to the RSP, which become vested in equal installments of 33-1/3% on each of the first three anniversaries of October 2, 2017, subject to certain exceptions. Each restricted share and restricted share unit entitle the holder to receive one common share when it vests. Restricted shares and ~~restricted~~ ~~share~~ ~~units are included in~~ common stock ~~outstanding on~~having a fair market value as of the date of ~~vesting.~~ The grant-date value of the restricted shares and restricted share units is amortized over the vesting period representing the requisite service period. Compensation expense associated with the restrictedgrant equal to $24,000. Restricted shares and restricted share units issued to independent directors pursuant to these grants vest over a three-year period following the ~~non-employee~~respective date of grant in increments of 33-1/3% per annum, subject to their continued service as directors ~~was $33~~until each vesting date, and ~~$14,~~become fully vested earlier upon a liquidity event or upon the termination of a director by reason of his or her death or disability. The total number of common shares granted under the RSP may not exceed 5.0% of our outstanding shares on a fully diluted basis at any time (as such number may be adjusted to reflect any increase or decrease in the ~~aggregate,~~number of outstanding shares resulting from a stock split, stock dividend, reverse stock split or similar change in our capitalization).

Other restricted share awards entitle the recipient to receive shares of common stock from us under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the ~~year ended December 31, 2017~~unvested shares upon the termination of the recipient’s employment or service as a director for any reason other than death or disability or, if applicable, the termination of the business management agreement with the Business Manager. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and ~~2016, respectively.~~the shares have vested. Holders of restricted shares have the right to vote such shares and may receive distributions prior to the time that the restrictions on the restricted shares have lapsed. As of December 31, ~~2017 and 2016, the Company had $44 and $26, respectively, of unrecognized compensation expense related to the~~2023, there were 9,477 unvested restricted shares and no unvested restricted share units outstanding under the RSP.

Deferred Compensation Plan

Effective November 9, 2016, we adopted the DDCP approved by our board that provides a deferred compensation arrangement to our independent directors and their beneficiaries. Under the DDCP, independent directors may elect to defer the receipt of all or a portion of their cash and stock compensation. Eligible cash compensation that is deferred is credited to a book entry account established for each participant in an amount equal to the ~~aggregate. The weighted average remaining period that~~amount deferred, and restricted share units are issued under the RSP in lieu of all or a portion of stock compensation ~~expense related~~otherwise payable in restricted shares. A participant has a fully vested right to his cash deferral amounts, and the deferred share unit awards will vest on the same terms and schedule as the underlying eligible stock compensation would have otherwise been subject if granted in restricted shares. Unless otherwise determined by the board, while restricted share units are unvested, participants will be credited with dividend equivalents equal in value to those declared and paid on shares of Company common stock, on all restricted ~~shares~~share units granted to them. These dividend equivalents will be regarded as having been reinvested in restricted share units, and will only be paid to the extent the underlying restricted share units vest. Payment of restricted share units will be ~~recognized is 1.5 years.~~

~~A summary table of the status of the restricted shares and restricted share units is presented below:~~

Restricted Shares

Restricted Share Units

Weighted
Average
Grant Date
Fair Value

Aggregate
Intrinsic
Value

Outstanding at December 31, 2015

—

—

$
—

$
—

Granted

1,330

460

40

40

Vested

—

—

—

—

Converted

—

—

—

—

Forfeited

—

—

—

—

Outstanding at December 31, 2016

1,330

460

40

40

Granted

1,657

600

51

51

Vested

(444
)

(156
)

(13
)

(13
)
Converted

—

—

—

—

Forfeited

—

—

—

—

Outstanding at December 31, 2017

2,543

904

$
78

$
78

~~NOTE 9 – INCOME TAX AND DISTRIBUTIONS~~

The Company paid distributions based on daily record dates, payable in arrears the following month, equal to a daily amount of $0.00410959 per share, based upon a 365-day period for 2017 and 2015. The Company paid distributions based on daily record dates, payable in arrears the following month, equal to a daily amount of $0.00409836 per share, based upon a 366-day period for 2016. The table below presents the distributions paid and declared for the years ended December 31, 2017, 2016 and 2015.

December 31,

2017

2016

2015

Distributions paid

$
53,315

$
52,358

$
42,537

Distributions declared

$
53,364

$
52,449

$
44,908

~~For federal income tax purposes, distributions may consist of ordinary dividend income, qualified dividend income, non-taxable return of capital, capital gains or a combination thereof. Distributions~~made, to the extent vested, in shares of ~~the Company’s current and accumulated earnings and profits for federal income tax purposes are taxable to the recipient as either ordinary dividend income or, if so declared~~Company common stock, unless otherwise determined by the board. Except as otherwise determined by the board, account balances under the DDCP will not be credited with interest or any other credits, although the Company ~~qualified dividend income~~may permit an account to be credited with earnings with respect to restricted share units.

The DDCP provides our board with the discretion to amend, suspend or ~~capital gain dividends. Distributions in excess~~terminate the DDCP at any time, provided that any amendment, suspension or termination will not be made if it would substantially impair the rights of ~~these earnings~~any participant under the DDCP.

Compensation Committee Interlocks and ~~profits (calculated~~Insider Participation

We have no employees and do not compensate our executive officers. See the discussion under “Compensation of Executive Officers” above for ~~income tax purposes) constitute~~additional detail regarding compensation and the discussion under “Certain Relationships and Related Transactions” above for disclosures called for by Item 404 of Regulation S-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Stock Owned by Certain Beneficial Owners and Management

Based on a ~~non-taxable return~~review of ~~capital rather than ordinary dividend income or a capital gain distribution and reduce~~filings with the ~~recipient’s tax basis in~~SEC, the ~~shares to the extent thereof. Distributions in excess of earnings and profits that reduce a recipient’s tax basis in the shares have the effect of deferring taxation of~~following table reflects the amount of ~~the distribution until the sale~~common stock beneficially owned (unless otherwise indicated) by (1) persons that beneficially own more than 5% of the ~~stockholder’s~~outstanding shares of our common stock; (2) our directors and each nominee for director; (3) our executive officers; and (4) our directors and executive officers as a group. All information is as of March 12, 2024.


Name and Address of Beneficial Owner(1)	Amount and Nature of Beneficial Ownership(2)		Percent of Class
Lee A. Daniels, Lead Independent Director(3)		9,752	*
Gwen Henry, Independent Director(4)		8,102	*
Stephen L. Davis, Independent Director(5)		7,745	*
Bernard J. Michael, Independent Director(6)		7,614	*
Robert D. Parks, Director and Chair of the Board(7)		4,000	*
Mitchell A. Sabshon, Former President and Chief Executive Officer(8)		2,654	*
Mark E. Zalatoris, President and Chief Executive Officer		—	*
Catherine L. Lynch, Chief Financial Officer(9)		957	*
Judith Fu, Vice President(10)		642	*
Cathleen M. Hrtanek, Secretary(11)		222	*
Daniel Zatloukal, Senior Vice President		—	*
All officers and directors as a group (11 persons)		41,688	*
____________

* Less than 1%

(1)

The business address of each person listed in the table is c/o Inland Real Estate Income Trust, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523.

(2)

All fractional ownership amounts have been rounded to the nearest whole number.

(3)

Includes 2,369 unvested restricted shares. ~~If the recipient's tax basis is reduced to zero, distributions in excess~~Mr. Daniels has sole voting and investment power over all of the ~~aforementioned earnings~~shares that he beneficially owns.

(4)

Includes 2,369 unvested restricted shares. Ms. Henry shares voting and ~~profits (calculated~~investment power with her husband over all of the shares that they own.

(5)

Includes 2,369 unvested restricted shares. Mr. Davis has sole voting and investment power over all of the shares that he beneficially owns.

(6)

Includes 2,369 unvested restricted shares. Mr. Michael has sole voting and investment power over all of the shares that he beneficially owns.

(7)

Mr. Parks shares voting and investment power with his wife over all of the shares that they own.

(8)

Mr. Sabshon has sole voting and investment power over all of the shares that he beneficially owns.

(9)

Ms. Lynch shares voting and dispositive power with her husband over all of the shares that they own.

(10)

Ms. Fu has sole voting and investment power over all shares that she beneficially owns.

(11)

Ms. Hrtanek has sole voting and investment power over all of the shares that she beneficially owns.

Securities Authorized for ~~income tax purposes) constitute taxable gain.~~Issuance under the RSP

In order to maintain the Company’s status as a REIT, the Company must annually distribute at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, to its stockholders. For the years ended December 31, 2017, 2016 and 2015, the Company’s taxable income was $10,045 (unaudited), $9,890 (unaudited) ~~and $13,123 (unaudited), respectively~~.

~~INLAND REAL ESTATE INCOME TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~(Dollar amounts in thousands, except per share amounts)~~

The following table sets forth information regarding securities authorized for issuance under the ~~taxability of distributions on common shares, on a per share basis, paid in 2017,~~ ~~2016 and 2015~~:

2017

2016

2015 (a)

Ordinary income

$
0.29

$
0.29

$
0.50

Nontaxable return of capital

$
1.21

$
1.21

$
1.18

~~(a)~~

~~On February 19, 2015, the Company paid an aggregate special distribution of $3,283 to stockholders of record~~RSP as ~~of January 30, 2015.~~

~~NOTE 10 – EARNINGS (LOSS) PER SHARE~~

Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus common share equivalents. The Company excludes antidilutive restricted shares and units from the calculation of weighted-average shares for diluted EPS. As a result of a net loss for the year ended December 31, 2017 and 2016, 1,507 shares and 1,214 shares, respectively, were excluded from the computation of diluted EPS, because they would have been antidilutive. As of December 31, ~~2015, the Company did not have any dilutive common share equivalents outstanding.~~2023:


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
	(a)		(b)		(c)
Equity Compensation Plans approved by security holders		—		—		1,780,741
Equity Compensation Plans not approved by security holders		—		—		—
Total		—		—		1,780,741

~~NOTE 11 – COMMITMENTS AND CONTINGENCIES~~Item 13. Certain Relationships and Related Transactions, and Director Independence

~~The acquisition of certain~~Set forth below is a summary of the ~~Company’s~~material transactions between the Company and various affiliates of IREIC, including the Business Manager and Real Estate Manager, that have occurred since January 1, 2023, or are currently proposed. IREIC is an indirect wholly-owned subsidiary of The Inland Group LLC. Please see the biographical information of our directors and executive officers elsewhere in this Annual Report for information regarding their relationships to Inland, including IREIC and The Inland Group LLC.

Business Management Agreement through March 31, 2023

We entered into a Second Amended and Restated Business Management Agreement on October 15, 2021 (the “Second Business Management Agreement”), with IREIT Business Manager & Advisor Inc., which serves as the Business Manager with responsibility for overseeing and managing our day-to-day operations. This agreement is described in this section of the Annual Report and was effective until April 1, 2023, whereupon a Third Amended and Restated Business Management Agreement entered into on March 23, 2023, took effect.

Subject to satisfying the criteria described below, we paid the Business Manager an annual business management fee equal to 0.65% of our “average invested assets,” payable quarterly in an amount equal to 0.1625% of our average invested assets as of the last day of the immediately preceding quarter; provided that the Business Manager may decide, in its sole discretion, to be paid an amount less than the total amount to which it is entitled in any particular quarter, and the excess amount that is not paid may, in the Business Manager’s sole discretion, be waived permanently or deferred or accrued, without interest, to be paid at a later point in time.

As used herein, “average invested assets” means, for any period, the average of the aggregate book value of our assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, ~~included an earnout component~~as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter.

If the business management agreement had been terminated, including in connection with the internalization of the functions performed by the Business Manager, the obligation to pay this business management fee would have terminated.

Upon a “triggering event,” we will pay the Business Manager a subordinated incentive fee equal to 10% of the amount by which (1) the “liquidity amount” (as defined below) exceeds (2) the “aggregate invested capital,” plus the total distributions required to be paid to our stockholders in order to pay them a 7% per annum cumulative, pre-tax non-compounded return on the aggregate invested capital, all measured as of the triggering event. If we have not satisfied this return threshold at the time of the applicable triggering event, the fee will be paid at the time of any future triggering event, provided that we have satisfied the return requirements. We did not experience a “triggering event,” and thus did not incur a subordinated incentive fee, during the year ended December 31, 2023.

As used herein, a “triggering event” means any sale of assets (excluding the sale of marketable securities) in which the net sales proceeds are specifically identified and distributed to our stockholders, or any liquidity event, such as a listing or any merger, reorganization, business combination, share exchange or acquisition, in which our stockholders receive cash or the securities of another issuer that are listed on a national securities exchange. “Aggregate invested capital” means the aggregate original issue price paid for the shares of our common stock, before reduction for organization and offering expenses, reduced by any distribution of sale or financing proceeds.

For purposes of this subordinated incentive fee, the “liquidity amount” will be calculated as follows:

•

In the case of the sale of our assets, the net sales proceeds realized by us from the sale of assets since inception and distributed to stockholders, in the aggregate, plus the total amount of any other distributions paid by us from inception until the date that the liquidity amount is determined.

•

In the case of a listing or any merger, reorganization, business combination, share exchange, acquisition or other similar transaction in which our stockholders receive cash or the securities of another issuer that are listed on a national securities exchange, as full or partial consideration for their shares, the “market value” of the shares, plus the total distributions paid by us from inception until the date that the liquidity amount is determined. “Market value” means the value determined as follows: (1) in the case of the listing of our shares, or the common stock of our subsidiary, on a national securities exchange, by taking the average closing price over the period of 30 consecutive trading days during which our shares, or the shares of the common stock of our subsidiary, as applicable, are eligible for trading, beginning on the 180th day after the applicable listing, multiplied by the number of our shares, or the shares of the common stock of our subsidiary, as applicable, outstanding on the date of measurement; or (2) in the case of the receipt by our stockholders of securities of another entity that are trading on a national securities exchange prior to, or that become listed concurrent with, the consummation of the liquidity event, as follows: (a) in the case of shares trading before consummation of the liquidity event, the value ascribed to the ~~purchase~~shares in the transaction giving rise to the liquidity event, multiplied by the number of those securities issued to our stockholders in respect of the transaction; and (b) in the case of shares which become listed concurrent with the closing of the transaction giving rise to the liquidity event, the average closing price over the period of 30 consecutive trading days during which the shares are eligible for trading, beginning on the 180th day after the applicable listing, multiplied by the number of those securities issued to our stockholders in respect of the transaction. In addition, any distribution of cash consideration received by our stockholders in connection with any liquidity event will be added to the market value determined in accordance with clause (1) or (2).

If the business management agreement is terminated pursuant to an internalization in accordance with the transition process set forth in that ~~was recorded~~agreement, the Business Manager, or its successor or designee, will continue to be entitled to receive the subordinated incentive fee, on a prorated basis based on the duration of the Business Manager’s service to us. Specifically, in this case, the Business Manager, or its successor or designee, will be entitled to a fee equal to the product of: (1) the amount of the fee to which the Business Manager otherwise would have been entitled had the agreement not been terminated; and (2) the quotient of the number of days elapsed from the effective date of the agreement through the closing of the internalization, and the number of days elapsed from the effective date of the agreement through the date of the closing of the applicable triggering event.

Business Management Agreement through February 1, 2024

(Note: capitalized terms used below but not defined in this Annual Report have the definitions ascribed to them in the applicable business management agreement, each of which is filed with our Annual Report as exhibits 10.1 and 10.23, respectively)

On March 23, 2023, we entered into a ~~deferred investment property acquisition obligation (“Earnout liability”~~Third Amended and Restated Business Management Agreement (the “Third Business Management Agreement”)~~. The maximum potential earnout payment was $2,040 at December~~ with the Business Manager effective April 1, 2023, which amended and restated the Second Business Management Agreement to make the following changes, among others:

•

decreased the annual business management fee (the “Business Management Fee”) payable to the Business Manager by the Company from 0.65% of Average Invested Assets to 0.55% of Average Invested Assets;

•

changed the termination date of the agreement to March 31, ~~2017.~~

~~The table below presents~~2027, and removed the ~~change~~provisions regarding one year renewal terms;

•

deleted the provision, formerly included to conform to provisions in the Company’s ~~Earnout~~Third Articles of Amendment and Restatement, which has since been amended and restated, requiring the Business Manager to reimburse the Company, subject to certain exceptions, for any amount by which the Total Operating Expenses (including the Business Management Fee and other fees payable hereunder) of the Company for the Fiscal Year just ended exceeded the greater of (i) two percent (2%) of the total of the Average Invested Assets for the just ended Fiscal Year; or (ii) twenty-five percent (25%) of the Net Income for the just ended Fiscal Year; and

•

amended the indemnification section to remove certain conditions to, and limitations on, the Company’s ability to indemnify the Business Manager and the Business Manager’s officers, directors, employees and agents, which conditions and limitations were formerly included to conform to provisions in the Company’s Third Articles of Amendment and Restatement that has since been amended and restated, and to provide that indemnification will be provided to the full extent permitted by law.

The above description is qualified by reference to the Third Business Management Agreement in its entirety, a copy of which is included with our Annual Report as exhibit 10.23.

Business Management Agreement effective February 1, 2024

On January 19, 2024, we entered into the Fourth Amended and Restated Business Management Agreement (the “Fourth Business Management Agreement”) with the Business Manager effective February 1, 2024, to, among other things, provide the Company with the authority to engage a person not affiliated with or employed by the Business Manager to serve as president and chief executive officer of the Company and to reduce the business management fee payable to the Business Manager by the amount of any payment made to any third-party person as compensation for service as the Company’s president and chief executive officer. In connection with the Agreement entered into with Mr. Zalatoris, the Business Management Fee will be reduced by the amount of any payments made to Mr. Zalatoris under the Agreement. The foregoing description is qualified by reference to the Fourth Business Management Agreement in its entirety, a copy of which is included with our Annual Report as exhibit 10.24.

For the year ended December 31, 2023, the Business Manager was entitled to a business management fee of approximately $9.6 million, of which approximately $2.3 million remained unpaid as of December 31, 2023.

Real Estate Management Agreement

We have entered into a real estate management agreement with our Real Estate Manager under which our Real Estate Manager and its affiliates manage or oversee each of our real properties. For each property that is managed directly by our Real Estate Manager or its affiliates, we pay the Real Estate Manager a monthly management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and up to 3.9% of the gross income from any other type of property. The Real Estate Manager determines, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. For each property that is managed directly by the Real Estate Manager or its affiliates, we pay the Real Estate Manager a separate leasing fee based upon

prevailing market rates applicable to the geographic market of that property. If we engage our Real Estate Manager to provide construction management services for a property, we also pay a separate construction management fee based upon prevailing market rates applicable to the geographic market of that property. We also reimburse our Real Estate Manager and its affiliates for property-level expenses that they pay or incur on our behalf, including the salaries, bonuses and benefits of persons performing services for our Real Estate Manager and its affiliates (excluding the executive officers of our Real Estate Manager). For the year ended December 31, 2023, we incurred real estate management fees, construction management fees and leasing fees in an aggregate amount equal to approximately $8.6 million, of which approximately $0.2 million remained unpaid as of December 31, 2023.

Other Fees and Expense Reimbursements

We reimburse the Business Manager, Real Estate Manager and entities affiliated with each of them, such as Inland Real Estate Acquisitions, LLC (“IREA”), Inland Institutional Capital, LLC and their respective affiliates, as well as third parties, for any investment-related expenses they pay in connection with selecting, evaluating or acquiring any investment in real estate assets, regardless of whether we acquire a particular real estate asset. Examples of reimbursable expenses include but are not limited to legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, third-party broker or finder’s fees, title insurance expenses, survey expenses, property inspection expenses and other closing costs. We do not reimburse acquisition expenses in connection with an investment in marketable securities, except that we may reimburse expenses incurred on our behalf and payable to a third party, such as third-party brokerage commissions. For the year ended December 31, 2023, we incurred no acquisition expenses.

We reimburse IREIC, the Business Manager and their respective affiliates, including the service providers, for any expenses that they pay or incur on our behalf in providing services to us, including all expenses and the costs of salaries and benefits of persons performing services for these entities on our behalf (except for the salaries and benefits of persons who also serve as one of our executive officers or as an executive officer of the Business Manager or its affiliates) and expenses ultimately paid to third parties. Expenses include, but are not limited to: expenses incurred in connection with any sale of assets or any contribution of assets to a joint venture; expenses incurred in connection with any liquidity event; taxes and assessments on income or real property and taxes; premiums and other associated fees for insurance policies including director and officer liability insurance; expenses associated with investor communications including the cost of preparing, printing and mailing annual reports, proxy statements and other reports required by governmental entities; administrative service expenses charged to, or for the benefit of, us by third parties; audit, accounting and legal fees charged to, or for the benefit of, us by third parties; transfer agent and registrar’s fees and charges paid to third parties; and expenses relating to any offices or office facilities maintained solely for our benefit that are separate and distinct from our executive offices. During the year ended December 31, 2023, IREIC, the Business Manager and their respective affiliates incurred on our behalf approximately $1.7 million of these expenses, of which approximately $0.3 million had not been reimbursed by us as of December 31, 2023.

For more information on the related party transactions, including the fees paid to related parties, see “Note 12 – Transactions with Related Parties” in the notes to consolidated financial statements in Part IV Item 15.

Policies and Procedures with Respect to Related Party Transactions

Our board has adopted a First Amended and Restated Related Party Transactions policy effective January 11, 2022, which prohibits us from engaging in the following types of transactions with IREIC-affiliated entities unless a majority of the independent directors, not otherwise interested in the transaction, acting as a group, determines in accordance with Section 2-419 of the Maryland General Corporation Law, or any successor provision thereto, that the transaction is fair and reasonable to the Company:

•

purchasing real estate assets from, or selling real estate assets to, any IREIC-affiliated entities (excluding circumstances where an entity affiliated with IREIC, such as IREA, enters into a purchase agreement to acquire a property and then assigns the purchase agreement to us);

•

making loans to, or borrowing money from, any IREIC-affiliated entities (excluding expense advancements under existing agreements and the deposit of monies in any banking institution affiliated with IREIC); and

•

investing in joint ventures with any IREIC-affiliated entities.

The current version of the policy does not impact agreements or relationships between us and IREIC and its affiliates that already existed when this version of the policy was adopted by our board in January 2022.

Director Independence

Our business is managed under the direction and oversight of our board. The members of our board are Lee A. Daniels, Stephen L. Davis, Robert D. Parks, Gwen Henry, Bernard J. Michael and Mark E. Zalatoris.

Although our shares are not listed for trading on any national securities exchange, our board has evaluated the independence of our board members according to the director independence standard of the New York Stock Exchange (“NYSE”). The NYSE standards provide that to qualify as an independent director, among other things, the board of directors must affirmatively determine that the director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).

After reviewing any relevant transactions or relationships between each director, or any of his or her family members, and the Company, our management and our independent registered public accounting firm, and considering each director’s direct and indirect association with IREIC, the Business Manager or any of their affiliates, the board has determined that Messrs. Daniels, Davis and Michael and Ms. Henry qualify as independent directors.

In making its independence determination with respect to Mr. Michael, the board considered the relationship between AWH Partners, LLC and Inland Private Capital Corporation (IPC), an affiliate of IREIC, and Mr. Michael’s interest in AWH and its affiliated hotel management company. In December 2019, AWH and its affiliates completed a transaction pursuant to which an affiliate of AWH agreed to manage a DoubleTree Hotel in downtown Nashville, Tennessee, owned by third-party investors and controlled by an affiliate of IPC, and to provide disposition and construction management services in exchange for negotiated fees customary in the industry. An affiliate of AWH also made a minority equity investment in the hotel. Mr. Michael has only an indirect interest in this relationship through his minority ownership of AWH and its affiliated management company and is not expected to participate directly in the management of the hotel or AWH’s investment in it. AWH and IPC had also considered a possible similar arrangement with respect to three secondary market select-service hotels, and AWH may enter into similar hotel transactions with affiliates of IPC in the future. Given the small size of the Nashville transaction relative to the size of AWH, the size of Mr. Michael’s indirect financial interest and lack of a direct management role, and the fact that the nature and size of future transactions between AWH and IPC, if any, are uncertain and unknown, the board concluded that Mr. Michael has no material relationship with IPC or IREIC and continues to be an independent director of the Company.

Item 14. Principal Accountant Fees and Services

Fees to Independent Registered Public Accounting Firm

The following table presents fees for professional services rendered by KPMG for the audit of our annual financial statements for the years ended December 31, ~~2017~~2023 and ~~2016.~~

December 31,

2017

2016

Earnout liability-beginning of period

$
6,856

$
18,871

Increases:

Acquisitions

—

—

Amortization expense

35

531

Decreases:

Earnout payments

(6,415
)

(9,067
)
Other:

Adjustments to acquisition related costs

574

(3,479
)
Earnout liability – end of period

$
1,050

$
6,856

~~The Company may be subject, from time to time, to various legal proceedings~~2022, together with fees for audit-related services and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the consolidated financial statements of the Company.

In conjunction with its equity investment in the Mainstreet JV, the Company also agreed to provide subsidiaries of the Mainstreet JV mezzanine loans, in the aggregate amount of approximately $5,400. The loan term is for 48 months. The Company will earn interest at a rate of 14.5% per annum and will receive monthly interest payments based on a 10% pay rate. The remaining unpaid interest will be due at maturity or upon certain defined events. The mezzanine loans are guaranteedtax services rendered by one of the other members of the joint venture. The borrowers may draw on the mezzanine loans from time to time in connection with the construction of the rapid recovery healthcare facilities and are not expected to draw on the mezzanine loans until such time as the Company has fully funded its equity commitment to the Mainstreet JV. At December 31, 2017, the Company has not loaned any funds related to the mezzanine loans.

~~INLAND REAL ESTATE INCOME TRUST, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~December 31, 2017~~

~~(Dollar amounts in thousands, except per share amounts)~~

~~NOTE 12 – SEGMENT REPORTING~~

~~The Company has one reportable segment, retail real estate, as defined by U.S. GAAP~~KPMG for the years ended December 31, ~~2017, 2016~~2023 and ~~2015.~~2022 respectively (Dollar amounts in thousands).


	Year Ended December 31, 2023		Year Ended December 31, 2022
Audit fees(1)	$	697	$	769
Audit-related fees		—		—
Tax fees(2)		129		109
All other fees		—		—
Total	$	826	$	878
____________

(1)

Audit fees consist of fees incurred for the audit of our annual financial statements and the review of our financial statements included in our quarterly reports on Form 10-Q.

(2)

Tax fees are comprised of tax compliance and tax consulting fees incurred and billed during the respective years.

Approval of Services and Fees

Our audit committee has reviewed and approved all of the fees charged by KPMG, and actively monitors the relationship between audit and non-audit services provided by KPMG. The audit committee concluded that all services rendered by KPMG during the years ended December 31, 2023 and 2022, respectively, were consistent with maintaining KPMG’s independence. Accordingly, the audit committee has approved all of the services provided by KPMG. As a matter of policy, the Company will not engage its primary independent registered public accounting firm for non-audit services other than “audit-related services,” as defined by the SEC, certain tax services and other permissible non-audit services except as specifically approved by the chairperson of the audit committee and presented to the full committee at its next regular meeting. The Company also follows limits on hiring partners of, and other professionals employed by, KPMG to ensure that the SEC’s auditor independence rules are satisfied.

The audit committee must pre-approve any engagements to render services provided by the Company’s independent registered public accounting firm and the fees charged for these services including an annual review of audit fees, audit-related fees, tax fees and other fees with specific dollar value limits for each category of service. During the year, the audit committee will periodically monitor the levels of fees charged by KPMG and compare these fees to the amounts previously approved. The audit committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved. Any proposed

engagement that does not fit within the definition of a pre-approved service may be presented to the chairperson of the audit committee for approval.

Part IV

~~NOTE 13 – TRANSACTIONS WITH RELATED PARTIES~~Item 15. Exhibits and Financial Statement Schedules

(a)

List of documents filed as part of this report:

(1)

Financial Statements:

Report of Independent Registered Public Accounting Firm

The ~~Company was a member~~consolidated financial statements of ~~a limited liability company formed as an insurance association captive, which was owned by~~ the Company ~~IRC Retail Centers LLC, InvenTrust Properties Corp. and Retail Properties~~are contained herein on pages 77 – 102 of America, Inc. The Company recorded its investment in investment in unconsolidated entities in the accompanying consolidated balance sheets. The Company’s share of net income from its investment was basedthis Annual Report on ~~the ratio of each member’s premium contribution to the venture. The Company received its original capital investment of $100 and was allocated income of $21, income of $252 and a loss of $118~~Form 10-K.

(2)

Financial Statement Schedules:

Financial statement schedule for the ~~years~~year ended December 31, ~~2017, 2016 and 2015, respectively. The Captive terminated its operations in March 2016 and dissolved in the fourth quarter of 2017 after all regulatory reports were filed. However, there~~2023 is ~~no assurance the Company will not be liable for any additional proportional costs associated with the termination of the Captive which have not been previously identified and paid.~~submitted herewith.

~~The Company owns 1,000 shares of common stock in The Inland~~ Real Estate ~~Group~~and Accumulated Depreciation (Schedule III).

(3)

Exhibits:

The list of ~~Companies, Inc. with a recorded value~~exhibits filed as part of ~~$1 at December 31, 2017, 2016 and 2015. This amount~~this Annual Report is ~~included~~set forth on the Exhibit Index attached hereto.

(b)

Exhibits:

The exhibits filed in ~~other assets in~~response to Item 601 of Regulation S-K are listed on the ~~accompanying consolidated balance sheets.~~Exhibit Index attached hereto.

(c)

Financial Statement Schedules:

Refer to Index to Consolidated Financial Statements contained herein on page 74 of this Annual Report on Form 10-K.

~~The following table summarizes the Company’s related party transactions for the~~ ~~years ended December 31,~~ ~~2017, 2016 and 2015~~. ~~Certain compensation and fees payable to the Business Manager for services to be provided to the Company are limited to maximum amounts.~~

Item 16. Form 10-K Summary

None.

Year ended
December 31,

Unpaid amounts as of

2017

2016

2015

December 31,
2017

December 31,
2016

General and administrative reimbursements

(a)

$
1,608

$
1,975

$
1,367

$
203

$
274

Affiliate share purchase discounts

(b)

—

—

28

—

—

Total general and administrative expenses

$
1,608

$
1,975

$
1,395

$
203

$
274

Acquisition related costs

$
274

$
409

$
1,388

$
—

$
88

Acquisition fees

1,266

1,327

9,580

51

—

Total acquisition costs and fees

(c)

$
1,540

$
1,736

$
10,968

$
51

$
88

Real estate management fees

$
4,800

$
4,473

$
2,762

$
—

$
—

Construction management fees

113

121

135

35

53

Leasing fees

214

168

40

51

89

Total real estate management related costs

(d)

$
5,127

$
4,762

$
2,937

$
86

$
142

Offering costs

(e)

$
—

$
—

$
41,180

$
—

$
—

Business management fees

(f)

$
9,196

$
8,580

$
5,501

$
2,325

$
2,159

Sponsor contribution

(g)

$
—

$
—

$
3,283

$
—

$
—

EXHIBIT INDEX


~~(a)~~Exhibit No.	~~The Business Manager~~	Description

3.1		Third Articles of Amendment and ~~its related parties are entitled~~Restatement of Inland Real Estate Income Trust, Inc. (incorporated by reference to ~~reimbursement for certain general and administrative expenses incurred~~Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed by the ~~Business Manager~~Registrant with the Securities and ~~its related parties~~Exchange Commission on January 10, 2022 (file number 000-55146))

3.2		Articles Supplementary relating to the Company’s ~~administration. Such costs are included in general~~election to be subject to Section 3-803 of the MGCL (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.Exchange Commission on July 28, 2022 (file number 000-55146))

~~(b)~~	~~The Company established a discount stock purchase policy for related parties~~
3.3		Fourth Amended and ~~related parties~~Restated Bylaws of Inland Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on March 6, 2023 (file number 000-55146))

4.1		Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 9, 2015 (file number 000-55146))

4.2		Fifth Amended and Restated Share Repurchase Program effective December 27, 2023 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on November 13, 2023 (file number 000-55146))

4.3		Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 23, 2023 (file number 000-55146))

10.1		Second Amended and Restated Business Management Agreement, dated as of October 15, 2021, by and between Inland Real Estate Income Trust, Inc. and IREIT Business Manager ~~that enabled~~& Advisor, Inc. (incorporated by reference to Exhibit 10.1 to the ~~related parties~~Registrant's Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 16, 2022 (file number 000-55146))

10.2		Master Real Estate Management Agreement, dated as of October 18, 2012, by and between Inland Real Estate Income Trust, Inc. and Inland National Real Estate Services, LLC (incorporated by reference to ~~purchase shares~~Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 24, 2012 (file number 333-176775))

10.3		Assignment and Assumption of ~~common stock at $22.50 per share in~~Master Management Agreement, effective January 1, 2016, by and between Inland National Real Estate Services, LLC and Inland Commercial Real Estate Services LLC (incorporated by reference to Exhibit 10.3 to the ~~Offering. The Company sold 11,252 shares to related parties during~~Registrant’s Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2015, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2016 (file number 000-55146))

10.4		Investment Advisory Agreement, dated as of October 18, 2012, by and between Inland Real Estate Income Trust, Inc., IREIT Business Manager & Advisor, Inc. and Inland Investment Advisors, Inc. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 24, 2012 (file number 333-176775))

10.5		License Agreement, by and between The Inland Real Estate Group, Inc. and Inland Real Estate Income Trust, Inc., effective as of August 24, 2011 (incorporated by reference to Exhibit 10.5 to Amendment No. 4 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the Securities and Exchange Commission on September 25, 2012 (file number 333-176775))

10.6		Loan Agreement, dated December 3, 2015, by and between IREIT Pittsburgh Settlers Ridge, L.L.C. and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.7		Promissory Note, dated December 3, 2015, issued by IREIT Pittsburgh Settlers Ridge, L.L.C. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.8		Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, effective December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. for the benefit of Metropolitan Life Insurance Company (incorporated


		by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.9		Assignment of Leases, effective December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.10		Guaranty of Recourse Obligations, dated December 3, 2015, by Inland Real Estate Income Trust, Inc. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.11		Unsecured Indemnity Agreement, dated December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. and Inland Real Estate Income Trust, Inc. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

10.12		Employee and Director Restricted Share Plan of Inland Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on June 17, 2016 (file number 000-55146))

10.13		Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.78 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

10.14		Form of Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.79 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

10.15		Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the Securities and Exchange Commission on August 8, 2018 (file number 000-55146))

10.16		Form of Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the Securities and Exchange Commission on August 8, 2018 (file number 000-55146))

10.17		Inland Real Estate Income Trust, Inc. Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.80 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

10.18		Form of Deferred Compensation Election – Eligible Cash Compensation (incorporated by reference to Exhibit 10.81 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

10.19		Form of Deferred Compensation Election – Eligible Stock Compensation (incorporated by reference to Exhibit 10.82 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))


10.20		Second Amended and Restated Credit Agreement, dated as of February 3, 2022, by and among Inland Real Estate Income Trust, Inc., as borrower, KeyBank National Association, individually and as administrative agent, KeyBanc Capital Markets Inc., PNC Capital Markets LLC and BofA Securities, Inc., as joint lead arrangers, and other lenders parties thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 9, 2022 (file number 000-55146))

10.21		Subsidiary Guaranty, dated as of February 3, 2022, by certain subsidiaries of Inland Real Estate Income Trust, Inc. parties thereto for the benefit of KeyBank National Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on February 9, 2022 (file number 000-55146))

10.22		Notes, dated February 3, 2022, by Inland Real Estate Income Trust, Inc. for the benefit of Lenders under the Second Amended and Restate Credit Agreement, dated as of February 3, 2022, by and among Inland Real Estate Income Trust, Inc., as borrower, KeyBank National Association, individually and as administrative agent, KeyBanc Capital Markets Inc., PNC Capital Markets LLC and BofA Securities, Inc., as joint lead arrangers, and other lenders parties thereto (incorporated by reference to Exhibit 10.22 to the Registrant's Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 16, 2022 (file number 000-55146))

10.23		Third Amended and Restated Business Management Agreement, effective April 1, 2023, by and between Inland Real Estate Income Trust, Inc. and IREIT Business Manager & Advisor, Inc. (incorporated by reference to Exhibit 10.25 to the Registrant's Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 23, 2023 (file number 000-55146))

10.24		Fourth Amended and Restated Business Management Agreement, effective February 1, 2024, by and between Inland Real Estate Income Trust, Inc. and IREIT Business Manager & Advisor, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on January 19, 2024 (file number 000-55146))

10.25		Agreement, dated as of January 19, 2024, by and between Inland Real Estate Income Trust, Inc. and Mark E. Zalatoris (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on January 19, 2024 (file number 000-55146))

14.1		Code of Ethics (incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed by the Registrant with the Securities and Exchange Commission on April 1, 2013 (file number 000-55146))

21.1*		Subsidiaries of the Registrant

23.1*		Consent of KPMG LLP

31.1*		Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1		Form of Letter to Stockholders (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on November 13, 2023 (file number 000-55146))

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents

104		Inline XBRL Taxonomy Extension Schema Document

		* Filed as part of this Annual Report on Form 10-K.

71SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INLAND REAL ESTATE INCOME TRUST, INC.

~~NOTES~~


By:		/s/ Mark E. Zalatoris
Name:		Mark E. Zalatoris
		President and Chief Executive Officer
Date:		March 13, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


By:	/s/ Robert D. Parks	Director and Chairman of the Board	March 13, 2024
Name:	Robert D. Parks

By:	/s/ Mark E. Zalatoris	Director, President and Chief Executive Officer (principal executive officer)	March 13, 2024
Name:	Mark E. Zalatoris

By:	/s/ Catherine L. Lynch	Chief Financial Officer and Treasurer	March 13, 2024
Name:	Catherine L. Lynch	(principal financial officer)

By:	/s/ Lee A. Daniels	Director	March 13, 2024
Name:	Lee A. Daniels

By:	/s/ Stephen Davis	Director	March 13, 2024
Name:	Stephen Davis

By:	/s/ Gwen Henry	Director	March 13, 2024
Name:	Gwen Henry

By:	/s/ Bernard J. Michael	Director	March 13, 2024
Name:	Bernard J. Michael

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


		Page

Report of Independent Registered Public Accounting Firm		75

Financial Statements:

Consolidated Balance Sheets at December 31, 2023 and 2022		77

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021		78

Consolidated Statements of Equity for the years ended December 31, 2023, 2022 and 2021		79

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021		80

Notes to Consolidated Financial Statements		82

Real Estate and Accumulated Depreciation (Schedule III)		101

Schedules not filed:

All schedules other than the one listed in the Index have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors

Inland Real Estate Income Trust, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Inland Real Estate Income Trust, Inc. and subsidiaries (the Company) as of December 31, ~~2017~~2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Identification of impairment triggering events for its investment properties held and used

The Company assesses the carrying values of its respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. As discussed in Note 2 to the consolidated financial statements, recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review its assets for recoverability, the Company considers current market conditions, as well as its intent with respect to the holding or disposing of the asset. Investment properties held and used, net as of December 31, 2023 was $1.205 billion or 90% of total assets.

We identified the Company’s identification of events or changes in circumstances that indicate the carrying value of investment properties held and used may not be recoverable as a critical audit matter. Subjective and challenging auditor judgement, as well as knowledge and experience in the industry, was required to evaluate the Company’s identification of indicators of potential impairment. In particular, as part of its evaluation of indicators of potential impairment for investment properties held and used, judgements include 1) the likelihood that an asset will be sold before the end of its previously estimated holding period and 2) changes in market conditions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the Company’s consideration of certain individual real estate properties for potential impairment indicators by:

▪

Inquiring of Company officials and inspecting meeting minutes of the board of directors to evaluate the likelihood that a property will be sold before the end of its previously estimated useful life.

▪

Inquiring and obtaining representation from the Company regarding the status and evaluation of any potential disposal of properties. We corroborated that information with others in the organization who are responsible for, and have authority over, disposition activities.

▪

Examining the Company’s analysis of internal financial information for indications of a decrease in the fair value of the Company’s properties resulting from continued decline in operating performance of the Company’s properties.

/s/ KPMG LLP

We have served as the Company’s auditor since 2011.

Chicago, Illinois

March 13, 2024

INLAND REAL ESTATE INCOME TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share amounts)


	December 31, 2023			December 31, 2022
ASSETS
Assets:
Investment properties held and used:
Land	$	330,456		$	330,456
Building and other improvements		1,209,740			1,198,309
Total		1,540,196			1,528,765
Less accumulated depreciation		(335,700	)		(288,863	)
Net investment properties held and used		1,204,496			1,239,902
Cash and cash equivalents		5,975			4,857
Restricted cash		479			477
Accounts and rent receivable		23,645			20,114
Acquired lease intangible assets, net		61,827			76,961
Operating lease right-of-use asset, net		13,745			14,153
Other assets		33,873			42,774
Total assets	$	1,344,040		$	1,399,238

LIABILITIES AND EQUITY
Liabilities:
Mortgages and credit facility payable, net	$	843,890		$	852,345
Accounts payable and accrued expenses		11,182			10,265
Operating lease liability		24,992			24,716
Distributions payable		4,905			4,907
Acquired intangible liabilities, net		37,420			43,339
Due to related parties		2,796			4,034
Other liabilities		10,500			8,574
Total liabilities		935,685			948,180

Commitments and contingencies (Note 10)

Stockholders’ equity:
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding		—			—
Common stock, $.001 par value, 1,460,000,000 shares authorized, 36,163,852 and 36,184,058 shares issued and outstanding as of December 31, 2023 and 2022, respectively		36			36
Additional paid in capital		816,047			814,949
Accumulated distributions and net loss		(432,854	)		(398,097	)
Accumulated other comprehensive income		25,126			34,170
Total stockholders’ equity		408,355			451,058
Total liabilities and stockholders’ equity	$	1,344,040		$	1,399,238

See accompanying notes to consolidated financial statements.

~~(c)~~

The Company pays the Business Manager or its affiliates a fee equal to 1.5% of the “contract purchase price,” as defined, of each asset acquired. The Business Manager and its related parties are also reimbursed for acquisition and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition activities, regardless of whether the Company acquires the real estate assets. Of the $1,540 related party acquisition costs incurred during the year ended December 31, 2017, $1,260 are capitalized as the acquisition of net investment properties in the accompanying consolidated balance sheets, $134 are capitalized as investment in unconsolidated entities in the accompanying consolidated balance sheets, and $146 of such costs are included in acquisition related costs in the accompanying consolidated statements of operations and comprehensive loss. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. Of the $1,736 related party acquisition costs incurred during the year ended December 31, 2016, $74 are capitalized as the acquisition of net investment properties in the accompanying consolidated balance sheets, and $1,662 of such costs are included in acquisition related costs in the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2015, all expenses are included in acquisition related costs in the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2015, the Business Manager permanently waived acquisition fees of $2,510. No acquisition fees were waived for 2017 or 2016.

~~(d)~~

For each property that is managed by Inland Commercial Real Estate Services LLC (the “Real Estate Manager”) (and its predecessor), the Company pays a monthly real estate management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and up to 3.9% of the gross income from any other property type. The Real Estate Manager determines, in its sole discretion, the amount of the fee with respect to a particular property, subject to the limitations. For each property that is managed directly by the Real Estate Manager or its affiliates, the Company pays the Real Estate Manager a separate leasing fee. Further, in the event that the Company engages its Real Estate Manager to provide construction management services for a property, the Company pays a separate construction management fee. Leasing fees are included in deferred costs, net and construction management fees are included in building and other improvements in the accompanying consolidated balance sheets. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses and benefits of persons performing services for the Real Estate Manager and its affiliates except for the salaries, bonuses and benefits of persons who also serve as an executive officer of the Real Estate Manager or the Company. Real estate management fees and reimbursable expenses are included in property operating expenses in the accompanying consolidated statements of operations and comprehensive loss.

~~(e)~~

A related party of the Business Manager received selling commissions equal to 7.0% of the sale price for each share sold and a marketing contribution equal to 3.0% of the gross offering proceeds from shares sold in the Offering, the majority of which was re-allowed (paid) to third party soliciting dealers. The Company also reimbursed a related party of the Business Manager and the third party soliciting dealers for bona fide, out-of-pocket itemized and detailed due diligence expenses in amounts up to 0.5% of the gross offering proceeds.��The Company reimbursed the Sponsor, its affiliates and third parties for costs and other expenses of the Offering that they paid on the Company’s behalf, in an amount not to exceed 1.5% of the gross offering proceeds from shares sold in the Offering. The Company does not pay selling commissions or the marketing contribution or reimburse issuer costs in connection with shares of common stock issued through the DRP. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.

~~(f)~~

The Company pays the Business Manager an annual business management fee equal to 0.65% of its “average invested assets”. The fee is payable quarterly in an amount equal to 0.1625% of its average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter.

~~(g)~~

During the year ended December 31, 2015, the Sponsor contributed $3,283 to the Company. The Sponsor has not received, and will not receive, any additional shares of the Company’s common stock for making this contribution. There is no assurance that the Sponsor will continue to contribute any additional monies.

INLAND REAL ESTATE INCOME TRUST, INC.

~~NOTES TO~~ CONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

~~December 31, 2017~~

(Dollar amounts in thousands, except per share amounts)

~~NOTE 14 – OPERATING LEASES~~

~~Minimum lease payments to be received under operating leases including ground leases, as of~~ For the years ended December 31, ~~2017~~ ~~for the years indicated, assuming no expiring leases are renewed, are as follows:~~2023, 2022 and 2021


	2023			2022			2021
Income:
Rental income	$	149,636		$	133,432		$	118,957
Other property income		336			214			183
Total income		149,972			133,646			119,140

Expenses:
Property operating expenses		30,088			25,073			21,649
Real estate tax expense		18,362			17,210			14,388
General and administrative expenses		5,237			5,400			4,784
Business management fee		9,632			10,212			8,950
Depreciation and amortization		59,542			55,319			48,906
Total expenses		122,861			113,214			98,677

Other Income (Expense):
Interest expense		(42,451	)		(33,069	)		(23,240	)
Interest and other income		217			19			274
Net loss	$	(15,123	)	$	(12,618	)	$	(2,503	)

Net loss per common share, basic and diluted	$	(0.42	)	$	(0.35	)	$	(0.07	)

Weighted average number of common shares outstanding, basic and diluted		36,196,672			36,134,801			36,031,088

Comprehensive income (loss):
Net loss	$	(15,123	)	$	(12,618	)	$	(2,503	)
Unrealized gain on derivatives		6,934			40,902			2,445
Reclassification adjustment for amounts included in net loss		(15,978	)		737			7,654
Comprehensive (loss) income	$	(24,167	)	$	29,021		$	7,596

See accompanying notes to consolidated financial statements.

Minimum Lease
Payments

2018

$
92,365

2019

85,756

2020

79,083

2021

73,330

2022

63,477

Thereafter

236,458

Total

$
630,469

The remaining lease terms range from less than one year to 19 years. Most of the revenue from the Company’s properties consists of rents received under long-term operating leases. Most leases require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the Company and recoverable under the terms of the lease. Under these leases, the Company pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid.

Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed base rent as well as all costs and expenses associated with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the consolidated statements of operations and comprehensive loss. Under leases where all expenses are paid by the Company, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in tenant recovery income on the consolidated statements of operations and comprehensive loss.

~~NOTE 15 – FAIR VALUE MEASUREMENTS~~

~~Fair Value Hierarchy~~

~~Level 1 −~~		~~Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.~~

~~Level 2 −~~		Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

~~Level 3 −~~		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes.

~~Recurring Fair Value Measurements~~

For assets and liabilities measured at fair value on a recurring basis, the table below presents the fair value of the Company’s cash flow hedges as well as their classification on the consolidated balance sheets as of December 31, 2017 and 2016, respectively.

INLAND REAL ESTATE INCOME TRUST, INC.

~~NOTES TO~~ CONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF EQUITY

~~December 31, 2017~~

(Dollar amounts in thousands, except per share amounts)

Fair Value

Level 1

Level 2

Level 3

Total

December 31, 2017

Interest rate swap agreements - Other assets

$
—

$
6,136

$
—

$
6,136

Interest rate swap agreements - Other liabilities

$
—

$
340

$
—

$
340

December 31, 2016

Interest rate swap agreements - Other assets

$
—

$
4,250

$
—

$
4,250

Interest rate swap agreements - Other liabilities

$
—

$
1,909

$
—

$
1,909

~~The fair value of derivative instruments was estimated based on data observed in~~For the forward yield curve which is widely observed in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the counterparty's nonperformance risk in the fair value measurements which utilize Level 3 inputs, such as estimates of current credit spreads. The Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative interest rate swap agreements and therefore has classified these in Level 2 of the hierarchy.

~~Non-recurring Fair Value Measurements~~

The table below presents activity for the Company’s assets measured at fair value on a non-recurring basis. The Company recognized an impairment charge to reflect an investment at its estimated fair value for the yearyears ended December 31, ~~2017, which is included in provision for impairment of investment property on the~~2023, 2022 and 2021


	Number of Shares			Common Stock		Additional Paid in Capital			Accumulated Distributions and Net Loss			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2020		36,022,368		$	36	$	810,210		$	(348,719	)	$	(17,568	)	$	443,959

Distributions declared ($0.406800 per share)		—			—		—			(14,655	)		—			(14,655	)
Proceeds from distribution reinvestment plan		207,373			—		3,749			—			—			3,749
Shares repurchased		(192,023	)		—		(2,777	)		—			—			(2,777	)
Unrealized gain on derivatives		—			—		—			—			2,445			2,445
Reclassification adjustment for amounts included in net loss		—			—		—			—			7,654			7,654
Equity based compensation		3,210			—		51			—			—			51
Net loss		—			—		—			(2,503	)		—			(2,503	)
Balance at December 31, 2021		36,040,928			36		811,233			(365,877	)		(7,469	)		437,923

Distributions declared ($0.542400 per share)		—			—		—			(19,602	)		—			(19,602	)
Proceeds from distribution reinvestment plan		371,457			—		7,287			—			—			7,287
Shares repurchased		(232,273	)		—		(3,645	)		—			—			(3,645	)
Unrealized gain on derivatives		—			—		—			—			40,902			40,902
Reclassification adjustment for amounts included in net loss		—			—		—			—			737			737
Equity based compensation		3,946			—		74			—			—			74
Net loss		—			—		—			(12,618	)		—			(12,618	)
Balance at December 31, 2022		36,184,058			36		814,949			(398,097	)		34,170			451,058

Distributions declared ($0.542400 per share)		—			—		—			(19,634	)		—			(19,634	)
Proceeds from distribution reinvestment plan		349,804			—		6,976			—			—			6,976
Shares repurchased		(374,539	)		—		(5,966	)		—			—			(5,966	)
Unrealized gain on derivatives		—			—		—			—			6,934			6,934
Reclassification adjustment for amounts included in net loss		—			—		—			—			(15,978	)		(15,978	)
Equity based compensation		4,529			—		88			—			—			88
Net loss		—			—		—			(15,123	)		—			(15,123	)
Balance at December 31, 2023		36,163,852		$	36	$	816,047		$	(432,854	)	$	25,126		$	408,355

See accompanying notes to consolidated ~~statements of operations and comprehensive loss. During the years ended~~ ~~December 31, 2016 and 2015, the Company incurred~~ no ~~impairment charges.~~

financial statements.

Fair Value

Level 1

Level 2

Level 3

Total

Total Impairment Loss

Investment property

$
—

$
—

$
5,557

$
5,557

$
8,530

Total

$
—

$
—

$
5,557

$
5,557

$
8,530

As of December 31, 2017, the Company identified indicators of impairment at one of its investment properties. Such indicators included a low occupancy rate, difficulty in leasing space, declining market rents and the related cost of re-leasing. The fair value of this investment property was estimated using the 10-year discounted cash flow model, w~~hich includes estimated inflows and outflows over a specific holding period and estimated net disposition proceeds at the end of the 10-year period. The Company utilized a capitalization rate of 7.50% and a discount rate of 8.50% which it believes are reasonable based on current market rates.~~

~~NOTE 16 – QUARTERLY SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED)~~

~~The following represents the results of operations, for each quarterly period, during 2017 and 2016.~~

2017

Dec 31

Sept 30

Jun 30

Mar 31

Total income

$
32,529

$
32,110

$
32,911

$
31,607

Net loss

$
(10,811
)

$
(2,856
)

$
(3,631
)

$
(1,804
)
Net loss per common share, basic and diluted (1)

$
(0.30
)

$
(0.08
)

$
(0.10
)

$
(0.05
)
Weighted average number of common shares outstanding,
basic and diluted (1)

35,615,539

35,657,535

35,580,556

35,428,360

2016

Dec 31

Sept 30

Jun 30

Mar 31

Total income

$
30,921

$
30,903

$
30,295

$
29,379

Net loss

$
(459
)

$
(961
)

$
(2,300
)

$
(4,241
)
Net loss per common share, basic and diluted (1)

$
(0.01
)

$
(0.03
)

$
(0.07
)

$
(0.12
)
Weighted average number of common shares outstanding,
basic and diluted (1)

35,255,079

35,074,161

34,867,650

34,654,004

~~(1)~~

~~Quarterly net loss per common share amounts may not total the annual amounts due to rounding and the changes in the number of weighted common shares outstanding.~~

INLAND REAL ESTATE INCOME TRUST, INC.

~~Schedule III~~CONSOLIDATED STATEMENTS OF CASH FLOWS

~~Real Estate and Accumulated Depreciation~~

~~December 31, 2017~~

(Dollar amounts in thousands)

For the years ended December 31, 2023, 2022 and 2021


	2023			2022			2021
Cash flows from operating activities:
Net loss	$	(15,123	)	$	(12,618	)	$	(2,503	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		59,542			55,319			48,906
Amortization of debt issuance costs and mortgage premiums, net		1,219			2,966			898
Amortization of acquired market leases, net		(2,323	)		(818	)		(773	)
Amortization of equity based compensation		88			74			51
Reduction in the carrying amount of the right-of-use asset		408			417			443
Straight-line income, net		(1,091	)		(705	)		(442	)
Other non-cash adjustments		184			122			103
Changes in assets and liabilities:
Accounts payable and accrued expenses		957			721			112
Accounts and rent receivable		(2,440	)		(849	)		3,733
Other assets		(2,477	)		(3,697	)		(983	)
Due to related parties		(1,267	)		1,452			(2,807	)
Operating lease liability		276			320			361
Other liabilities		1,448			2,083			1,051
Net cash flows provided by operating activities		39,401			44,787			48,150

Cash flows from investing activities:
Purchase of investment properties		—			(277,880	)		—
Capital expenditures		(10,351	)		(12,404	)		(5,883	)
Other assets		—			(221	)		—
Net cash flows used in investing activities		(10,351	)		(290,505	)		(5,883	)

Cash flows from financing activities:
Payment of credit facility		(12,576	)		(24,444	)		(8,097	)
Proceeds from credit facility		44,576			422,444			72,097
Payment of mortgages payable		(41,674	)		(138,250	)		(98,074	)
Proceeds from the distribution reinvestment plan		6,976			7,287			3,749
Shares repurchased		(5,966	)		(3,645	)		(2,777	)
Distributions paid		(19,636	)		(19,583	)		(9,767	)
Payment of debt issuance costs		—			(5,913	)		—
Early termination of interest rate swap agreements, net		370			(227	)		—
Net cash flows (used in) provided by financing activities		(27,930	)		237,669			(42,869	)

Net increase (decrease) in cash, cash equivalents and restricted cash		1,120			(8,049	)		(602	)
Cash, cash equivalents and restricted cash, at beginning of the year		5,334			13,383			13,985
Cash, cash equivalents and restricted cash, at end of the year	$	6,454		$	5,334		$	13,383

See accompanying notes to consolidated financial statements.

Initial cost (A)

Gross amount carried
at end of period (B)

Property Name

Encum-
brance

Land

Buildings
and
Improve-
ments

Cost
Capita-
lized
Subse-
quent to
Acquisi-
tions

Land(C)

Buildings
and
Improve-
ments
(C)

Total
(C)

Accumu-
lated
Deprecia-
tion
(E)

Date
Con-
structed

Date
Acquired

Depre-
ciable
Lives
2727 Iowa St (D)

$
—

$
2,154

$
16,079

$
49

$
2,154

$
16,128

$
18,282

$
(1,520
)

2014-2015

2015

15-30
Lawrence, KS

Blossom Valley Plaza (D)

—

9,515

11,142

437

9,515

11,579

21,094

(966
)

1988

2015

15-30
Turlock, CA

Branson Hills Plaza

—

3,787

6,039

—

3,787

6,039

9,826

(694
)

2005

2014

15-30
Branson, MO

Coastal North Town Center

43,680

13,725

49,673

(744
)

13,725

48,929

62,654

(2,982
)

2014

2016

15-30
Myrtle Beach, SC

Coastal North Town Center - Phase II

—

365

3,034

—

365

3,034

3,399

(54
)

2016

2017

15-30
Myrtle Beach, SC

Dixie Valley

6,798

2,807

9,053

949

2,807

10,002

12,809

(1,181
)

1988

2014

15-30
Louisville, KY

Dogwood Festival

24,352

4,500

41,865

1,472

4,500

43,337

47,837

(5,654
)

2002

2014

5-30
Flowood, MO

Dollar General

558

159

857

—

159

857

1,016

(160
)

2012

2012

15-30
Brooks, GA

Dollar General

481

69

761

—

69

761

830

(142
)

2012

2012

15-30
Daleville, AL

Dollar General

520

148

780

—

148

780

928

(150
)

2012

2012

15-30
East Brewton, AL

Dollar General (Hamilton)

621

100

986

—

100

986

1,086

(183
)

2012

2012

15-30
LaGrange, GA

Dollar General (Wares
Cross)

681

248

943

—

248

943

1,191

(176
)

2012

2012

15-30
LaGrange, GA

Dollar General

695

273

939

—

273

939

1,212

(181
)

2012

2012

15-30
Madisonville, TN

Dollar General

631

249

841

—

249

841

1,090

(157
)

2012

2012

15-30
Maryville, TN

Dollar General

601

208

836

—

208

836

1,044

(156
)

2012

2012

15-30
Mobile, AL

Dollar General

586

200

818

—

200

818

1,018

(149
)

2012

2012

15-30
Newport, TN

Dollar General

847

324

1,178

—

324

1,178

1,502

(226
)

2012

2012

15-30
Robertsdale, AL

Dollar General

531

119

805

—

119

805

924

(150
)

2012

2012

15-30
Valley, AL

Dollar General

692

272

939

—

272

939

1,211

(181
)

2012

2012

15-30
Wetumpka, AL

Eastside Junction

6,223

2,411

8,393

—

2,411

8,393

10,804

(895
)

2008

2015

15-30
Athens, AL

Fairgrounds Crossing

13,453

6,069

22,637

—

6,069

22,637

28,706

(2,257
)

2008

2015

15-30
Hot Springs, AR

Fox Point Plaza

10,837

3,518

12,681

717

3,518

13,398

16,916

(1,599
)

2008

2014

15-30
Neenah, WI

Frisco Marketplace (D)

—

6,618

3,315

—

6,618

3,315

9,933

(419
)

2002

2015

15-30

INLAND REAL ESTATE INCOME TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Dollar amounts in thousands)

For the years ended December 31, 2023, 2022 and 2021


Supplemental disclosure of cash flow information:	2023		2022			2021
In conjunction with the purchase of investment properties, the Company acquired assets and assumed liabilities as follows:
Land	$	—	$	62,510		$	—
Building and improvements		—		192,722			—
Acquired lease intangible assets		—		33,285			—
Acquired intangible liabilities		—		(9,654	)		—
Assumed liabilities, net		—		(983	)		—
Purchase of investment properties	$	—	$	277,880		$	—

Cash paid for interest, net of amounts capitalized	$	40,397	$	27,421		$	22,456

Supplemental schedule of non-cash investing and financing activities:

Accrued capital expenditures	$	1,080	$	253		$	199

See accompanying notes to consolidated financial statements.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

NOTE 1 – ORGANIZATION

Inland Real Estate Income Trust, Inc. (the “Company”) was formed on August 24, 2011 to acquire and manage a portfolio of commercial real estate investments located in the United States. The Company is primarily focused on acquiring and owning retail properties and targets a portfolio substantially all of would be comprised of grocery-anchored properties. The Company has invested in joint ventures and may continue to invest in additional joint ventures or acquire other real estate assets if its management believes the expected returns from those investments exceed that of retail properties. The Company also may invest in real estate-related equity securities of both publicly traded and private real estate companies, as well as commercial mortgage-backed securities.

The Company has no employees. The Company is managed by IREIT Business Manager & Advisor, Inc. (the “Business Manager”), an indirect wholly owned subsidiary of Inland Real Estate Investment Corporation (the “Sponsor”), pursuant to a Business Management Agreement with the Business Manager. The Company has entered into an agreement with Mark Zalatoris (the “Agreement”) to, among other things, compensate him for performing services as the Company’s president and chief executive officer. In connection with entering into the Agreement, the Company entered into the Fourth Amended and Restated Business Management Agreement (the “Fourth Business Management Agreement”) with the Business Manager to, among other things, provide the Company with the authority to engage a person not affiliated with or employed by the Business Manager to serve as president and chief executive officer of the Company and to reduce the business management fee payable to the Business Manager by the amount of any payments made to Mr. Zalatoris under the Agreement. Mr. Zalatoris is not an employee of the Company and is not an officer or director of the Business Manager but has the authority under the Agreement and the Business Management Agreement to direct the day-to day operations of the Business Manager.

The Business Management Agreement with the Business Manager was amended and restated on February 11, 2019 to, among other things, eliminate all acquisition and disposition fees. On March 23, 2023, the Company entered into a Third Amended and Restated Business Management Agreement (the “Third Business Management Agreement”) with the Business Manager effective April 1, 2023, which amended and restated the Business Management Agreement. On January 19, 2024, the Company entered into the Fourth Business Management Agreement, as described above, with the Business Manager effective February 1, 2024. See Note 12 - “Transactions with related parties” for a summary of the changes made in the Third Business Management Agreement and the Fourth Business Management Agreement.

On February 11, 2019, the Company’s board of directors approved a strategic plan with the goals of providing future liquidity to investors and creating long-term stockholder value. The strategic plan centers around owning a portfolio of grocery-anchored properties with lower exposure to big box retailers. As part of this strategy, the Company's management team continually evaluates possibilities for the opportunistic sale of certain assets with the goal of redeploying capital into the acquisition of strategically located grocery-anchored centers. As part of this strategy, on May 17, 2022, the Company purchased a portfolio of eight properties from certain subsidiaries of Inland Retail Property Fund, LP as described in Note 4 – “Acquisitions.” Seven of the eight properties are grocery-anchored.

In connection with the strategic plan, the Company’s share repurchase program (as amended, the “SRP”) was amended and restated, effective March 21, 2019, and the Business Management Agreement with the Business Manager was amended and restated on February 11, 2019 to, among other things, eliminate all future acquisition and disposition fees. On March 3, 2020, the Company’s SRP was amended and restated (the “Third SRP”), which became effective on April 10, 2020, as further described below in Note 3 – “Equity”. The board of directors considered the Company’s strategic initiatives and believed that the change in the Third SRP that lowered the price paid for “Exceptional Repurchases” would permit the Company to preserve and deploy capital and help to position the Company to achieve its objective of maximizing stockholder value over the long term. The strategic plan may further evolve or change over time. Although the Company is not actively pursuing any new acquisitions as of the date of this annual report, if the Company were to have the requisite capital and financing available to it, it may opportunistically acquire retail properties that management believes complement its existing portfolio in terms of relevant characteristics such as tenant mix, demographics and geography and are consistent with the Company's plan to own a portfolio substantially all of which is comprised of grocery-anchored or shadow-anchored properties. Management may also consider other transactions, such as redeveloping certain properties or portions of certain properties, for example, big-box spaces, to repurpose them for alternative commercial or multifamily residential uses. The timing of the completion of the strategic plan has already extended beyond the management's original expectations and cannot be predicted with certainty. There is no assurance the Company will be able to successfully implement its strategic plan, for example by making strategic sales or purchases of properties or listing the Company’s common stock, within any timeframe the Company might prefer or at all.

On March 5, 2024, as reported in the Company’s Form 8-K filed with the Securities and Exchange Commission on the same date, the Company announced that the Company’s board of directors unanimously approved: (i) an estimated per share net asset value (the

Frisco, TX

Green Tree Shopping Center

13,100

7,218

17,846

(102
)

7,218

17,744

24,962

(1,771
)

1997

2015

5-30
Katy, TX

Harris Plaza (D)

—

6,500

19,403

1,324

6,500

20,727

27,227

(3,223
)

2001-2008

2014

15-30
Layton, UT

Harvest Square

6,707

2,186

9,330

136

2,186

9,466

11,652

(1,105
)

2008

2014

15-30
Harvest, AL

Heritage Square

4,460

2,028

5,538

260

2,028

5,798

7,826

(651
)

2010

2014

15-30
Conyers, AL

Kroger - Copps Grocery
Store (D)

—

1,440

11,799

—

1,440

11,799

13,239

(1,304
)

2012

2014

15-30
Stevens Point, WI

Kroger - Pick n Save Center

9,561

3,150

14,283

375

3,150

14,658

17,808

(1,756
)

2011

2014

15-30
West Bend, WI

Lakeside Crossing

9,910

1,460

16,999

271

1,460

17,270

18,730

(2,233
)

2013

2014

15-30
Lynchburg, VA

Landing at Ocean Isle Beach (D)

—

3,053

7,081

69

3,053

7,150

10,203

(907
)

2009

2014

15-30
Ocean Isle, NC

Mansfield Pointe

14,200

5,350

20,002

2

5,350

20,004

25,354

(2,787
)

2008

2014

15-30
Mansfield, TX

Marketplace at El Paseo

38,000

16,390

46,971

(517
)

16,390

46,454

62,844

(3,654
)

2014

2015

15-30
Fresno, CA

Marketplace at Tech Center

47,550

10,684

68,580

(208
)

10,684

68,372

79,056

(4,844
)

2015

2015

15-30
Newport News, VA

MidTowne Shopping Center

20,725

8,810

29,699

456

8,810

30,155

38,965

(4,116
)

2005/2008

2014

5-30
Little Rock, AR

Milford Marketplace

18,727

—

35,867

40

—

35,907

35,907

(2,885
)

2007

2015

15-30
Milford, CT

Newington Fair (D)

—

7,833

8,329

331

7,833

8,660

16,493

(1,968
)

1994/2009

2012

15-30
Newington, CT

North Hills Square

5,525

4,800

5,493

183

4,800

5,676

10,476

(786
)

1997

2014

15-30
Coral Springs, FL

Oquirrh Mountain Marketplace (D)

—

4,254

14,467

(156
)

4,254

14,311

18,565

(1,085
)

2014-2015

2015

15-30
Jordan, UT

Oquirrh Mountain Marketplace Phase II (D)

—

1,403

3,727

(54
)

1,403

3,673

5,076

(217
)

2014-2015

2016

15-30
Jordan, UT

Park Avenue Shopping Center

14,062

5,500

16,365

2,932

5,500

19,297

24,797

(2,551
)

2012

2014

15-30
Little Rock, AR

Pentucket Shopping Center

14,700

5,993

11,251

29

5,993

11,280

17,273

(327
)

1986

2017

15-30
Plaistow, NH

Plaza at Prairie Ridge (D)

—

618

2,305

—

618

2,305

2,923

(234
)

2008

2015

15-30
Pleasant Prairie, WI

Prattville Town Center

15,930

5,336

27,672

90

5,336

27,762

33,098

(2,817
)

2007

2015

15-30
Prattville, AL

Regal Court

26,000

5,873

41,181

1,151

5,873

42,332

48,205

(4,211
)

2008

2015

5-30
Shreveport, LA

Settlers Ridge

76,533

25,961

98,157

186

25,961

98,343

124,304

(8,317
)

2011

2015

15-30
Pittsburgh, PA

Shoppes at Lake Park (D)

—

2,285

8,527

—

2,285

8,527

10,812

(904
)

2008

2015

15-30
West Valley City. UT

Shoppes at Market Pointe

13,700

12,499

8,388

590

12,499

8,978

21,477

(1,247
)

2006-2007

2015

15-30
Papillion, NE

Shoppes at Prairie Ridge

15,591

7,521

22,468

279

7,521

22,747

30,268

(2,454
)

2009

2014

15-30
Pleasant Prairie, WI

The Shoppes at Branson Hills

20,240

4,418

37,229

920

4,418

38,149

42,567

(4,078
)

2005

2014

15-30

Branson, MO

Shops at Hawk Ridge (D)

—

1,329

10,341

240

1,329

10,581

11,910

(1,096
)

2009

2015

5-30
St. Louis, MO

Treasure Valley (D)

—

3,133

12,000

—

3,133

12,000

15,133

(1,177
)

2014

2015

15-30
Nampa, ID

Village at Burlington Creek

17,723

10,789

19,385

342

10,789

19,727

30,516

(1,807
)

2007 & 2015

2015

5-30
Kansas City, MO

Walgreens Plaza

4,650

2,624

9,683

199

2,624

9,882

12,506

(1,010
)

2011

2015

15-30
Jacksonville, NC

Wedgewood Commons

15,260

2,220

26,577

129

2,220

26,706

28,926

(3,745
)

2009-2013

2013

5-30
Olive Branch, MS

Whispering Ridge (D)

—

1,627

10,418

(6,670
)

1,627

3,748

5,375

—

2007

2015

5-30
Omaha, NE

White City

49,400

18,961

70,423

1,679

18,961

72,102

91,063

(6,990
)

2013

2015

15-30
Shrewsbury, MA

Wilson Marketplace

24,480

11,155

27,498

—

11,155

27,498

38,653

(926
)

2007

2017

15-30
Wilson, NC

Yorkville Marketplace (D)

—

4,990

13,928

498

4,990

14,426

19,416

(1,679
)

2002 & 2007

2015

15-30
Yorkville, IL

Total:

$
609,521

$
277,229

$
1,003,804

$
7,884

$
277,229

$
1,011,688

$
1,288,917

$
(101,094
)

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

“Estimated Per Share NAV”) as of December 31, 2023; (ii) the same per share purchase price for shares issued under the Company’s distribution reinvestment plan (as amended, the “DRP”) until the Company announces a new Estimated Per Share NAV, and (iii) that, in accordance with the SRP, beginning with repurchases in April 2024 and until the Company announces a new Estimated Per Share NAV, any shares accepted for ordinary repurchases and “exceptional repurchases” will be repurchased at 80% of the Estimated Per Share NAV.

~~Notes:~~Due to the uncertainty surrounding the COVID-19 pandemic and the need to preserve cash for the payment of operating and other expenses, such as debt payments, the Company’s board of directors had suspended distributions, rescinded the first quarter distribution that was previously declared and suspended the Company’s DRP effective June 6, 2020 and SRP effective June 26, 2020. On June 29, 2021, the Company announced the reinstatement, and lifting of the suspension, of its DRP effective July 22, 2021. The Company also announced the reinstatement and lifting of the suspension of its SRP and its adoption of the fourth amendment and restatement of the SRP, with the first repurchase having occurred on August 16, 2021. See Note 3 – “Equity” for additional details.

On November 7, 2023, the Company’s board of directors authorized and approved the Fifth Amended and Restated Share Repurchase Program (the “Fifth SRP”), which became effective on December 27, 2023. See Note 3 – “Equity” for additional details.

At December 31, 2023, the Company owned 52 retail properties, totaling 7.2 million square feet. The properties are located in 24 states. At December 31, 2023, the portfolio had a physical occupancy of 91.6% and economic occupancy of 92.0%.

~~(A)~~

~~The initial cost to the Company represents the original purchase price of the property including impairment charges recorded subsequent to acquisition to reduce basis.~~

~~(B)~~

~~The aggregate cost of real estate owned at December 31, 2017 and 2016 for federal income tax purposes was approximately $1,440,279 and $1,364,864, respectively (unaudited).~~

~~(C)~~

~~Reconciliation of real estate owned:~~

2017

2016

2015

Balance at January 1,

$
1,233,231

$
1,161,437

$
414,463

Acquisitions

59,306

68,977

743,893

Improvements, net of master lease

5,594

2,817

3,081

Impairment of investment property

(9,214
)

—

—

Balance at December 31,

$
1,288,917

$
1,233,231

$
1,161,437

~~(D)~~

~~These properties serve as security for our Credit Facility.~~

~~(E)~~

~~Reconciliation of accumulated depreciation:~~

Balance at January 1,

$
62,631

$
27,545

$
6,236

Depreciation expense

39,497

35,086

21,309

Impairment of investment property

(1,034
)

—

—

Balance at December 31,

$
101,094

$
62,631

$
27,545

~~Item 9.~~

~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~

~~None.~~

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The consolidated financial statements have been prepared in accordance with GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. In the opinion of management, all adjustments necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods are presented. Actual results could differ from those estimates. Information with respect to square footage, number of properties and occupancy is unaudited.

Consolidation

The consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries. Wholly owned subsidiaries generally consist of limited liability companies (“LLCs”). All intercompany balances and transactions have been eliminated in consolidation. Each property is owned by a separate legal entity which maintains its own books and financial records and each entity’s assets are not available to satisfy the liabilities of other affiliated entities.

The fiscal year-end of the Company is December 31.

Acquisitions

Assets and liabilities acquired typically include land, building and site improvements and identified intangible assets and liabilities, consisting of the value of above market and below market leases and the value of in-place leases. The portion of the purchase price allocated to above market lease values is included in acquired lease intangible assets, net and is amortized on a straight-line basis over the term of the related lease as a reduction to rental income. The portion allocated to below market lease values is included in acquired intangible liabilities, net and is amortized as an increase to rental income over the term of the lease including any renewal periods with fixed rate renewals. The portion of the purchase price allocated to acquired in-place lease value is included in acquired lease intangible assets, net and is amortized on a straight-line basis over the acquired leases’ weighted average remaining term.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

Certain of the Company’s properties included earnout components to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The Company is not obligated to settle the contingent portion of the purchase price unless space which was vacant at the time of acquisition is later leased by the seller within the time limits and parameters set forth in the related acquisition agreements. The Company’s policy is to record earnout components when estimable and probable. At December 31, 2023, there is no earnout liability outstanding.

Impairment of Investment Properties

The use of projected future cash flows is based on assumptions that are consistent with management's estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows, including comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions which impact the discounted cash flow approach to determining value are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analysis could impact these assumptions and result in future impairment charges of real estate properties.

On a quarterly basis, management assesses whether there are any indicators that the carrying value of the Company’s investment in unconsolidated entities and notes receivable may be other than temporarily impaired as a loss in value that is other than a temporary decline is required to be recognized. Indicators include significant delays in construction, significant costs over budget and financial concerns. To the extent indicators suggest that a loss in value may have occurred, the Company will evaluate both quantitative and qualitative factors to determine if the loss in value is other than temporary. If a potential loss in value is determined to be other than temporary, the Company will recognize an impairment loss based on the estimated fair value of the investment.

During the years ended December 31, 2023, 2022 and 2021 the Company did not record any impairment charges.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

REIT Status

The Company elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2013. Commencing with such taxable year, the Company was organized and began operating in such a manner as to qualify for taxation as a REIT under the Internal Revenue Code and believes it has so qualified. As a result, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its REIT taxable income (subject to certain adjustments and excluding any net capital gain) to its stockholders. The Company will monitor the business and transactions that may potentially impact its REIT status. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain statutory relief provisions, the Company will be subject to tax as a “C corporation.” Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes. Any taxable REIT subsidiaries generally will be subject to federal income tax applicable to “C corporations.”

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and all short-term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.

Restricted Cash

Amounts included in restricted cash represent those required to be set aside by lenders for real estate taxes, insurance, capital expenditures and tenant improvements on the Company's existing properties. These amounts also include post close escrows for tenant improvements, leasing commissions, master lease, general repairs and maintenance, and are classified as restricted cash on the Company’s consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the Company’s consolidated balance sheets to such amounts shown on the Company’s consolidated statements of cash flows:


	December 31,
	2023		2022
Cash and cash equivalents	$	5,975	$	4,857
Restricted cash		479		477
Total cash, cash equivalents, and restricted cash	$	6,454	$	5,334

Accounts and Rents Receivable

The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding and payment history of the tenant. The Company includes both billed and accrued charges in its evaluation of the collectability of a tenant’s receivable balance. For tenant receivables that the Company determines to be uncollectable, the Company records an offset for uncollectable tenant revenues directly to rental income.

Capitalization and Depreciation

Real estate properties held and used are recorded at cost less accumulated depreciation. Real estate properties held for sale are recorded at the lesser of their carrying value or fair value less selling costs. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred.

Real estate properties are classified as held for sale when the Company concludes that a sale is likely. Criteria that may be considered in this determination include obtaining a signed purchase and sale agreement, the completion and waiving of due diligence by the seller, and the receipt of non-refundable earnest money from the seller.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)


~~Item 9A.~~Building and other improvements	~~Controls~~	30 years
Site improvements		5-15 years
Furniture, fixtures and ~~Procedures~~equipment		5-15 years
Tenant improvements		Shorter of the life of the asset or the term of the related lease
Leasing fees		Term of the related lease

~~Evaluation~~

Depreciation expense was $46,837, $43,331 and $37,806 for the years ended December 31, 2023, 2022 and 2021, respectively. Amortization of ~~Disclosure Controls~~ leasing fees were $1,167, $876, and ~~Procedures~~ $731 for the years ended December 31, 2023, 2022 and 2021, respectively.

Debt Issuance Costs

Fair Value Measurements


Level 1 −		Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2 −		Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 −		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company’s ~~management~~cash equivalents, accounts receivable and payables and accrued expenses all approximate fair value due to the short term nature of these financial instruments. The Company’s financial instruments measured on a recurring basis include derivative interest rate instruments.

Derivatives

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

The Company has ~~evaluated,~~elected to apply the hedge accounting expedients in FASB ASU 2020-04, Reference Rate Reform (Topic 848) related to probability and the assessments of the effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.

Revenue Recognition

The Company commences revenue recognition for its operating leases on the ~~participation~~commencement date of the lease, which the Company considers is the date on which it makes the leased space available to the lessee.

The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset. If the Company is the owner, for accounting purposes, of the tenant improvements, then the tenant improvements are capitalized and depreciated over the life of the lease. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded by the Company under the lease are treated as lease incentives which reduce revenue recognized over the term of the lease. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes.

Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rent receivable on the consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally will be greater than the cash collected in the early years and will decrease in the later years of a lease.

The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met and amounts due are considered collectable. Such termination fees are recognized on a straight-line basis over the remaining lease term in rental income.

As a lessor, the Company defers the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved.

Equity-Based Compensation

The Company has restricted shares outstanding at December 31, 2023 and 2022. The Company recognizes expense related to the fair value of equity-based compensation awards as general and administrative expense on the consolidated statements of operations and comprehensive income (loss). The Company primarily recognizes expense based on the fair value at the grant date on a straight-line basis over the vesting period representing the requisite service period and adjusts expense for forfeitures as they occur. See Note 7 – “Equity-Based Compensation” for further information.

Accounting Pronouncements Recently Issued but Not Yet Effective

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, early adoption is permitted. The amendments should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable. The Company is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 improves the transparency of income tax disclosures related to rate reconciliation and income taxes. ASU 2023-07 is effective for

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied prospectively, however retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the Company’s consolidated financial statements.

NOTE 3 – EQUITY

The Company commenced an initial public “best efforts” offering (the “Offering”) on October 18, 2012, which concluded on October 16, 2015. The Company sold 33,534,022 shares of common stock generating gross proceeds of $834,399 from the Offering. On March 4, 2024, the Company’s board of directors determined an Estimated Per Share NAV of the Company’s ~~principal executive~~ ~~and principal financial~~ ~~officers, the effectiveness of~~ ~~the Company’s disclosure controls and procedures~~ ~~(as defined in~~ ~~Rules 13a-15(e) and~~ ~~15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the~~ ~~principal executive and~~ ~~principal financial officers have~~ ~~concluded that the Company’s~~ ~~disclosure controls and procedures were effective as of the end of the period covered by this report.~~

~~Management’s Report on Internal Control Over Financial Reporting~~

~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule~~ ~~13a-15(f). Under the supervision and with the participation of our~~ ~~management, including our principal executive officer and principal financial officers, we conducted an evaluation of~~ ~~the effectiveness of our internal control over financial reporting based on the framework in Internal Control~~ - ~~Integrated Framework issued by the Committee of Sponsoring~~ ~~Organizations of the Treadway Commission (COSO). Based on~~ ~~our evaluation~~ ~~under the framework in Internal Control - Integrated Framework (2013) issued by the COSO, our management~~ ~~concluded that our internal control over financial reporting~~ ~~was effective~~common stock as of December 31, ~~2017.~~2023. The previously estimated per share NAV of the Company’s common stock as of December 31, 2022 was established on March 2, 2023.

~~This annual report~~The Company provides the following programs to facilitate additional investment in the Company’s shares and to provide limited liquidity for stockholders.

Distribution Reinvestment Plan

On October 19, 2015, the Company registered 25,000,000 shares of common stock to be issued under its distribution reinvestment plan (“DRP”) pursuant to a registration statement on Form S-3D. The Company provides stockholders with the option to purchase additional shares from the Company by automatically reinvesting cash distributions through the DRP, subject to certain share ownership restrictions. The Company does not ~~include~~pay any selling commissions or a marketing contribution and due diligence expense allowance in connection with the DRP. Pursuant to the DRP, the price per share for shares of common stock purchased under the DRP is equal to the estimated value of a share, as determined by the Company’s board of directors and reported by the Company from time to time, until the shares become listed for trading, if a listing occurs, assuming that the DRP has not been terminated or suspended in connection with such listing.

Distributions reinvested through the DRP were $6,976, $7,287 and $3,749 for the years ended December 31, 2023, 2022 and 2021, respectively. The DRP was suspended during the first half of 2021 as discussed in Note 1 – “Organization.”

Share Repurchase Program

The Company adopted a share repurchase program (as amended, “SRP”) effective October 18, 2012, under which the Company is authorized to purchase shares from stockholders who purchased their shares from the Company or received their shares through a non-cash transfer and who have held their shares for at least one year. Purchases are in the Company’s sole discretion. In the case of repurchases made upon the death of a stockholder or qualifying disability (“Exceptional Repurchases”), as defined in the SRP, the one year holding period does not apply. The SRP was amended and restated effective January 1, 2018 to change the processing of repurchase requests from a monthly to a quarterly basis to align with the move to quarterly distributions. On February 11, 2019, the Company’s board of directors adopted a second amended and restated SRP, effective March 21, 2019. On March 3, 2020 the Company’s board of directors adopted the Third SRP. On June 29, 2021, the Company’s board of directors adopted the Fourth Amended and Restated Share Repurchase Program (the “Fourth SRP”), which became effective August 12, 2021.

The SRP will immediately terminate if the Company’s shares become listed for trading on a national securities exchange. In addition, the Company’s board of directors, in its sole discretion, may, at any time, amend, suspend or terminate the SRP. For any quarter ended, unfulfilled repurchase requests will be included in the list of requests for the following quarter unless the request is withdrawn in accordance with the SRP. However, each stockholder who has submitted a repurchase request must submit an ~~attestation report~~acknowledgment annually after the Company publishes a new estimated value per share acknowledging, among other things, that the stockholder wishes to maintain the request. If the Company does not receive the acknowledgment prior to the repurchase date, it will deem the request to have been withdrawn.

On November 7, 2023, the Company’s board of directors authorized and approved the Fifth SRP, which became effective on December 27, 2023. Under the revised program, the requirement that funding for share repurchases be limited to a percentage of the net proceeds received by the Company from the issuance of shares of common stock under its DRP has been eliminated. The board of directors will have discretion to establish the proceeds available to fund repurchases each quarter and may use proceeds from all sources available to the Company, in the board of directors’ sole discretion. The board of directors will, however, continue to have discretion to determine

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

the amount of repurchases, if any, to be made each quarter based on its evaluation of the Company’s business, cash needs and any other requirements of applicable law.

Repurchases through the SRP were $5,966, $3,645 and $2,777 for the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023 and 2022, there was no liability related to the SRP. See Note 1 – “Organization” for further discussion on the suspension during 2020 and resumption during 2021 of the SRP.

NOTE 4 – ACQUISITIONS

2023 Acquisitions

The Company did not acquire any properties during the year ended December 31, 2023.

2022 Acquisitions

On May 17, 2022, the Company acquired a portfolio of eight properties (the “IRPF Properties”) from certain subsidiaries of Inland Retail Property Fund, LP (the “Seller”). The acquisition of the IRPF Properties is referred to herein as the “IRPF Transaction.” The IRPF Properties are leased primarily to grocery, retail and restaurant tenants. More specifically, seven of the IRPF Properties are grocery-anchored. The IRPF Properties are located across seven states and aggregate approximately 686,851 square feet. The Seller was a fund managed by an affiliate of the Company’s sponsor and business manager. Because the IRPF Transaction was a related party transaction, it was required by the Company’s Related Party Transactions Policy to be approved by at least a majority of the Company’s independent ~~registered public accounting firm regarding internal control over financial reporting. Management’s report~~directors and was ~~not subject to attestation~~approved by all of the Company’s independent ~~registered public accounting firm pursuant to permanent rules adopted by~~directors.

The following table provides further details of the ~~SEC, permitting the Company to provide only management’s report in this annual report.~~

~~Changes in Internal Control over Financial Reporting~~

~~There have not been any changes in the Company’s internal control over financial reporting that occurred~~properties acquired during the ~~Company’s fiscal quarter~~year ended December 31, ~~2017 that have materially affected, or~~2022:


Date Acquired	Property Name	Number of Transactions	Number of Properties	Square Footage		Purchase Price (a)
5/17/2022	IRPF Properties	1	8		686,851	$	278,153
					686,851	$	278,153

(a)

Contractual purchase price excluding closing credits.

The above acquisition was accounted for as an asset acquisition. For the year ended December 31, 2022, the Company incurred $710 of total acquisition costs. All of the acquisition costs are ~~reasonably likely~~capitalized in the accompanying consolidated balance sheets. These costs include third party due diligence costs such as appraisals, environmental studies, and legal fees as well as time and travel expense reimbursements to ~~materially affect,~~the Sponsor and its affiliates.

The following table presents certain additional information regarding the Company’s ~~internal control~~acquisitions during the year ended December 31, 2022. The amounts recognized for major assets acquired and liabilities assumed as of the acquisition date are as follows:


	Year Ended December 31,
	2022
Land	$	62,510
Building and improvements		192,722
Acquired lease intangible assets		33,285
Acquired intangible liabilities		(9,654	)
Assumed liabilities, net		(983	)
Total	$	277,880

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

NOTE 5 – ACQUIRED INTANGIBLE ASSETS AND LIABILITIES

The following table summarizes the Company’s identified intangible assets and liabilities as of December 31, 2023 and 2022:


	December 31, 2023			December 31, 2022
Intangible assets:
Acquired in-place lease value	$	183,305		$	183,305
Acquired above market lease value		52,640			52,640
Accumulated amortization		(174,118	)		(158,984	)
Acquired lease intangibles, net	$	61,827		$	76,961
Intangible liabilities:
Acquired below market lease value	$	79,914		$	79,914
Accumulated amortization		(42,494	)		(36,575	)
Acquired below market lease intangibles, net	$	37,420		$	43,339

The portion of the purchase price allocated to acquired above market lease value and acquired below market lease value is amortized on a straight-line basis over ~~financial reporting.~~the term of the related lease as an adjustment to rental income. For below market lease values, the amortization period includes any renewal periods with fixed rate renewals. The portion of the purchase price allocated to acquired in-place lease value is amortized on a straight-line basis over the acquired leases’ weighted average remaining term.

~~Item 9B.~~

~~Other Information~~

Amortization pertaining to acquired in-place lease value, above market ground lease, above market lease value and below market lease value is summarized below:


Amortization recorded as amortization expense:	2023			2022			2021
Acquired in-place lease value	$	11,538		$	11,112		$	10,369
Amortization recorded as a (reduction) increase to rental income:
Acquired above market leases	$	(3,596	)	$	(3,415	)	$	(2,966	)
Acquired below market leases		5,919			4,233			3,739
Net rental income increase	$	2,323		$	818		$	773

~~None.~~

Estimated amortization of the respective intangible lease assets and liabilities as of December 31, 2023 for each of the five succeeding years and thereafter is as follows:


	Acquired In-Place Leases		Above Market Leases		Below Market Leases
2024	$	9,103	$	3,311	$	3,300
2025		6,741		2,929		3,065
2026		5,017		2,503		2,926
2027		3,609		1,858		2,724
2028		2,909		1,612		2,587
Thereafter		13,699		8,536		22,818
Total	$	41,078	$	20,749	$	37,420

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

~~Part III~~

~~Item 10.~~

~~Directors, Executive Officers and Corporate Governance~~

NOTE 6 – DEBT AND DERIVATIVE INSTRUMENTS

As of December 31, 2023 and 2022, the Company had the following mortgages and credit facility payable:


	December 31, 2023						December 31, 2022
Type of Debt	Principal Amount			Weighted Average Interest Rate			Principal Amount			Weighted Average Interest Rate
Fixed rate mortgages payable	$	112,019			3.84	%	$	112,345			3.84	%
Variable rate mortgages payable with swap agreements		26,000			4.55	%		67,348			3.71	%
Mortgages payable	$	138,019			3.97	%	$	179,693			3.79	%
Credit facility payable		709,000			4.95	%		677,000			4.56	%
Total debt before unamortized debt issuance costs including impact of interest rate swaps	$	847,019			4.79	%	$	856,693			4.40	%
(Less): Unamortized debt issuance costs		(3,129	)					(4,348	)
Total debt	$	843,890					$	852,345

The ~~information required~~Company’s indebtedness bore interest at a weighted average interest rate of 4.79% per annum at December 31, 2023, which includes the effects of interest rate swaps. The Company estimates the fair value of its total debt by ~~this Item~~discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying value of the Company’s debt excluding unamortized debt issuance costs was $847,019 and $856,693 as of December 31, 2023 and 2022, respectively, and its estimated fair value was $841,313 and $847,652 as of December 31, 2023 and 2022, respectively.

As of December 31, 2023, scheduled principal payments and maturities on the Company’s debt were as follows:


	December 31, 2023
Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments		Maturities of Mortgage Loans		Maturity of Credit Facility		Total
2024	$	341	$	—	$	—	$	341
2025		295		92,656		—		92,951
2026		—		44,727		134,000		178,727
2027		—		—		575,000		575,000
2028		—		—		—		—
Thereafter		—		—		—		—
Total	$	636	$	137,383	$	709,000	$	847,019

Credit Facility Payable

On February 3, 2022, the Company entered into a second amended and restated credit agreement (the “Credit Agreement”) with KeyBank National Association, individually and as administrative agent, KeyBanc Capital Markets Inc., PNC Capital Markets LLC and BofA Securities, Inc., as joint lead arrangers, and other lenders from time to time parties to the Credit Agreement (the “Credit Facility”). Pursuant to the Credit Agreement, the aggregate total commitments under the Credit Facility were increased from $350,000 to $475,000. The Company’s Credit Facility consists of the “Revolving Credit Facility” providing revolving credit commitments in an aggregate amount of $200,000 and a term loan facility (the term loans funded under such commitments, the “Term Loan”) providing term loan commitments in an aggregate amount of $275,000 (increased from $150,000). On May 17, 2022, the Company entered into a First Amendment to Credit Agreement Regarding Incremental Term Loans (the “First Amendment”), amending the terms of the Credit Agreement primarily to draw an additional $300,000 to fund the IRPF Transaction discussed in “Note 4 – Acquisitions.” The Credit

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

Agreement provides the Company with the ability from time to time to increase the size of the Credit Facility up to a total of $1,200,000, subject to certain conditions.

At December 31, 2023, the Company had $134,000 outstanding under the Revolving Credit Facility and $575,000 outstanding under the Term Loan. At December 31, 2023 the interest rates on the Revolving Credit Facility and the Term Loan were 7.36% and 4.39%, respectively. The Revolving Credit Facility matures on February 3, 2026, and the Company has the option to extend the maturity date for one additional year subject to the payment of an extension fee and certain other conditions. The Term Loan matures on February 3, 2027. As of December 31, 2023 the Company had a maximum amount of $66,000 available for borrowing under the Revolving Credit Facility, subject to the terms and conditions of the Credit Agreement that governs the Credit Facility, including compliance with the covenants which could further limit the amount available. Although all of the amount available under the Revolving Credit Facility is available to pay off existing mortgages, due to the covenant limitations, the Company expects to have substantially less than all $66,000 available to draw or otherwise undertake as additional debt as a result of, among other things, completing the aforementioned IRPF Transaction and increasing the amount of the Term Loan.

The Company’s performance of the obligations under the Credit Facility, including the payment of any outstanding indebtedness under the Credit Facility, is guaranteed by certain subsidiaries of the Company, including each of the subsidiaries of the Company which owns or leases any of the properties included in the pool of unencumbered properties comprising the borrowing base. Additional properties will be ~~presented~~added to and removed from the pool from time to time to support amounts borrowed under the Credit Facility so long as at any time there are at least fifteen unencumbered properties with an unencumbered pool value of $300,000 or more. At December 31, 2023, there were 47 properties included in ~~our definitive proxy statement for our 2018 annual meeting~~the pool of ~~stockholders which we anticipate filing~~unencumbered properties.

The Credit Facility requires compliance with certain covenants, including a minimum tangible net worth requirement, a limitation on the use of leverage, a distribution limitation, restrictions on indebtedness and investment restrictions, as defined. It also contains customary default provisions including the failure to comply with the ~~SEC no later than 120 days after~~Company's covenants and the ~~end~~failure to pay when amounts outstanding under the Credit Facility become due. As of December 31, 2023, the Company is in compliance with all financial covenants related to the Credit Facility as amended.

Mortgages Payable

The mortgage loans require compliance with certain covenants, such as debt service ratios, investment restrictions and distribution limitations. As of December 31, 2023, the Company was current on all of its debt service payments and in compliance with all financial covenants. All of the ~~fiscal~~Company’s mortgage loans are secured by first mortgages on the respective real estate assets. As of December 31, 2023, the weighted average years to maturity for the Company’s mortgages payable was 2.0 years. There are no mortgage loans maturing in the next twelve months.

Interest Rate Swap Agreements

The Company entered into interest rate swaps to fix certain of its floating SOFR based debt under variable rate loans to a fixed rate to manage its risk exposure to interest rate fluctuations. The Company will generally match the maturity of the underlying variable rate debt with the maturity date on the interest swap. See Note 14 – “Fair Value Measurements” for further information.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

The following table summarizes the Company’s interest rate swap contracts outstanding as of December 31, 2023.


Date Entered	Effective Date	Maturity Date	Receive Floating Rate Index (a)	Pay Fixed Rate			Notional Amount		Fair Value at December 31, 2023
Assets
December 5, 2022	December 1, 2022	January 1, 2026	One-month Term SOFR		2.25	%	$	26,000	$	882
February 3, 2022	March 1, 2022	February 3, 2027	One-month Term SOFR		1.69	%		90,000		5,219
February 3, 2022	March 1, 2022	February 3, 2027	One-month Term SOFR		1.85	%		100,000		5,328
February 3, 2022	March 1, 2022	February 3, 2027	One-month Term SOFR		1.72	%		85,000		4,872
May 17, 2022	June 1, 2022	February 3, 2027	One-month Term SOFR		2.71	%		60,000		1,694
May 17, 2022	June 1, 2022	February 3, 2027	One-month Term SOFR		2.71	%		60,000		1,695
May 17, 2022	June 1, 2022	February 3, 2027	One-month Term SOFR		2.71	%		75,000		2,122
May 17, 2022	June 1, 2022	February 3, 2027	One-month Term SOFR		2.77	%		55,000		1,473
							$	551,000	$	23,285

(a)

At December 31, 2023, the one-month term SOFR was 5.35%.

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021.


	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationships:	2023			2022		2021
Effective portion of derivatives	$	6,934		$	40,902	$	2,445
Reclassification adjustment for amounts included in net gain or loss (effective portion)	$	(15,978	)	$	737	$	7,654

The total amount of interest expense presented on the consolidated statements of operations and comprehensive income (loss) was $42,451, $33,069 and $23,240 for the years ended December 31, 2023, 2022 and 2021, respectively. The net gain or loss reclassified into income from accumulated other comprehensive income (loss) is reported in interest expense on the consolidated statements of operations and comprehensive income (loss). The amount that is expected to be reclassified from accumulated other comprehensive income into income (loss) in the next 12 months is $13,828.

NOTE 7 – EQUITY-BASED COMPENSATION

Under the Company’s Employee and Director Restricted Share Plan (“RSP”), restricted shares and restricted share units generally vest over a one to three year vesting period from the date of the grant, subject to the specific terms of the grant. On November 7, 2023, the Company issued 4,834 restricted shares to its independent directors pursuant to the automatic grant provisions of the RSP, which become vested in equal installments of 33-1/3% on each of the first three anniversaries of November 7, 2023, subject to certain exceptions. In accordance with the RSP, restricted shares were issued to non-employee directors as compensation. Each restricted share and restricted share unit entitles the holder to receive one common share when it vests. Restricted shares and restricted share units are included in common stock outstanding on the date of the vesting. The grant-date value of the restricted shares and restricted share units is ~~incorporated by reference into this Item 10.~~amortized over the vesting period representing the requisite service period. Compensation expense associated with the restricted shares and restricted share units issued to the non-employee directors was $88, $74 and $51 in the aggregate, for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the Company had $127 of unrecognized compensation expense related to the unvested restricted shares, in the aggregate. The weighted average remaining period that compensation expense related to unvested

INLAND REAL ESTATE INCOME TRUST, INC.

~~We have adopted a code of ethics, which is available on our website free of charge at~~ ~~inland-investments.com/inland-income-trust~~. ~~We will provide the code of ethics free of charge upon request to our investor services group.~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Item 11.~~

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

~~Executive Compensation~~

~~The information required by this Item~~restricted shares will be ~~presented in our definitive proxy statement~~recognized is 1.70 years. The total fair value at the vesting date for ~~our 2018 annual meeting of stockholders which we anticipate filing with~~restricted shares and restricted share units that vested during the ~~SEC no later than 120 days after the end~~years ended December 31, 2023, 2022 and 2021 was $90, $80 and $58, respectively.

A summary of the ~~fiscal year,~~Company’s restricted share and restricted share unit activity during the years ended December 31, 2023, 2022 and 2021 is ~~incorporated by reference into this Item 11.~~as follows:


	Restricted Shares			Restricted Share Units
Outstanding at December 31, 2020		6,457			683
Granted (at grant date fair value of $18.08 per share)		4,425			4
Vested		(2,774	)		(435	)
Outstanding at December 31, 2021		8,108			252
Granted (at grant date fair value of $20.20 per share)		4,752			4
Vested		(3,688	)		(256	)
Outstanding at December 31, 2022		9,172			—
Granted (at grant date fair value of $19.86 per share)		4,834			—
Vested		(4,529	)		—
Outstanding at December 31, 2023		9,477			—

~~Item 12.~~

~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~

NOTE 8 – INCOME TAX AND DISTRIBUTIONS

The ~~information required~~Company qualifies as a REIT under the Internal Revenue Code of 1986, as amended, for federal income tax purposes. In order to maintain the Company’s status as a REIT, the Company must annually distribute at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, to its stockholders. For the years ended December 31, 2023, 2022 and 2021, the Company’s REIT taxable (loss) income was $(3,960) (unaudited), $67 (unaudited) and $4,154 (unaudited), respectively.

The Company had no uncertain tax positions as of December 31, 2023 or 2022. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of December 31, 2023. The Company had no interest or penalties relating to income taxes recognized on the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, returns for the calendar years 2020, 2021, 2022 and 2023 remain subject to examination by ~~this Item will be presented~~U.S. and various state and local tax jurisdictions.

During the year ended December 31, 2018, the Company recorded a $15,405 impairment for the Mainstreet JV recorded on its consolidated statement of operations and comprehensive loss. The Company’s investment in ~~our definitive proxy statement for our 2018 annual meeting~~Mainstreet JV was held through a taxable REIT subsidiary. Based on an effective tax rate of ~~stockholders~~28.51%, which ~~we anticipate filing with the SEC no later than 120 days after the end~~is calculated by combining a 21% Federal tax rate and an IL tax rate of 7.51% (9.5% state rate net of the ~~fiscal~~Federal benefit), the deferred tax benefit related to the impairment was approximately $4,400. Since the taxable REIT subsidiary did not conduct any activities outside the investment in Mainstreet JV, management concluded it was not more likely than not that the taxable REIT subsidiary would be able to utilize these losses in future tax periods and recorded a full valuation allowance of $4,400 during the year ended December 31, 2018. The Mainstreet JV was liquidated for income tax purposes in 2019, resulting in a $1,560 reduction in the deferred tax asset and ~~is incorporated by reference into this Item 12.~~valuation allowance. Since the taxable REIT subsidiary has no other activity, a valuation allowance has been maintained on the remaining $2,840 deferred tax asset. No income tax expense or benefit was recorded during the years ended December 31, 2023, 2022 and 2021. The taxable REIT subsidiary has $9,931 of capital loss carryforwards that expire on December 31, 2024.

Distributions

In 2020, due to the uncertainty surrounding the COVID-19 pandemic and the need to preserve cash for the payment of operating and other expenses, during the second quarter the Company’s board of directors rescinded the first quarter distribution and suspended distributions until June 29, 2021, when the Company declared a distribution to stockholders of record as of June 30, 2021 in the amount of $0.135600 per share, that was paid on or about July 26, 2021. On or about October 7, 2021, the Company paid a distribution to stockholders of record as of September 30, 2021 in the amount of $0.135600 per share. On or about January 7, 2022, the Company paid a distribution to stockholders of record as of December 31, 2021 in the amount of $0.135600 per share. In 2023 and 2022, the Company paid quarterly distributions in an amount equal to $0.135600 per share, which represented an annualized rate of 3% and 3% based on the previously estimated per share NAV as of December 31, 2022 and 2021, respectively, payable in arrears the following quarter.

~~Item 13.~~

~~Certain Relationships and Related Transactions, and Director Independence~~

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

The table below presents the distributions declared and paid during the years ended December 31, 2023, 2022 and 2021.


	December 31,
	2023		2022		2021
Distributions paid	$	19,636	$	19,583	$	9,767
Distributions declared	$	19,634	$	19,602	$	14,655

~~The information required by this Item will be presented in our definitive proxy statement for our 2018 annual meeting~~

For federal income tax purposes, distributions may consist of ~~stockholders which we anticipate filing with~~ordinary dividend income, qualified dividend income, non-taxable return of capital, capital gains or a combination thereof. Distributions to the ~~SEC no later than 120 days after the end~~extent of the ~~fiscal year~~Company’s current and accumulated earnings and profits for federal income tax purposes are taxable to the recipient as either ordinary dividend income or, if so declared by the Company, qualified dividend income or capital gain dividends. Distributions in excess of these earnings and profits (calculated for income tax purposes) constitute a non-taxable return of capital rather than ordinary dividend income or a capital gain dividend and reduce the recipient’s tax basis in the shares to the extent thereof. Distributions in excess of earnings and profits that reduce a recipient’s tax basis in the shares have the effect of deferring taxation of the amount of the distribution until the sale of the stockholder’s shares. If the recipient's tax basis is ~~incorporated~~reduced to zero, distributions in excess of the aforementioned earnings and profits (calculated for income tax purposes) constitute taxable gain.

The following table sets forth the taxability of distributions on common shares, on a per share basis, paid in 2023, 2022 and 2021:


	2023		2022		2021
Ordinary income	$	—	$	—	$	0.12
Capital gain	$	—	$	—	$	—
Nontaxable return of capital	$	0.54	$	0.54	$	0.15

NOTE 9 – EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share (“EPS”) is computed by ~~reference into this Item 13.~~dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus common share equivalents. The Company excludes antidilutive restricted shares and units from the calculation of weighted-average shares for diluted EPS. As a result of a net loss for the years ended December 31, 2023, 2022 and 2021, 7,820 shares, 7,664 shares and 4,304 shares, respectively, were excluded from the computations of diluted EPS, because they would have been antidilutive.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company may be subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the consolidated financial statements of the Company.

~~Item 14.~~

~~Principal Accounting Fees and Services~~

NOTE 11 – SEGMENT REPORTING

The ~~information required~~Company has one reportable segment, retail real estate, as defined by ~~this Item will be presented~~GAAP for the years ended December 31, 2023, 2022 and 2021.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in ~~our definitive proxy statement~~thousands, except per share amounts)

NOTE 12 – TRANSACTIONS WITH RELATED PARTIES

The following table summarizes the Company’s related party transactions for ~~our 2018 annual meeting of stockholders which we anticipate filing with~~ the ~~SEC no later than 120 days after~~years ended December 31, 2023, 2022 and 2021. Certain compensation and fees payable to the ~~end of the fiscal year, and is incorporated by reference into this Item 14.~~

~~Part IV~~

~~Item 15.~~

~~Exhibits and Financial Statement Schedules~~

~~(a)~~

~~List of documents filed as part of this report:~~

~~(1)~~

~~Financial Statements:~~

~~Report of Independent Registered Public Accounting Firm~~

~~The consolidated financial statements of~~Business Manager for services provided to the Company are ~~set forth~~limited to maximum amounts.


		Year ended December 31,						Unpaid amounts (f) as of
		2023		2022		2021		December 31, 2023		December 31, 2022
General and administrative reimbursements	(a)	$	1,721	$	1,664	$	1,409	$	268	$	241
Loan costs	(b)	$	—	$	42	$	—	$	—	$	—
Acquisition related costs	(c)	$	—	$	19	$	—	$	—	$	—

Real estate management fees		$	5,613	$	5,127	$	4,734	$	—	$	—
Property operating expenses			2,013		1,446		1,321		15		24
Construction management fees			605		82		66		74		45
Leasing fees			362		440		284		128		132
Total real estate management related costs	(d)	$	8,593	$	7,095	$	6,405	$	217	$	201

Business management fees	(e)	$	9,632	$	10,212	$	8,950	$	2,311	$	2,713

(a)

The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses incurred by the Business Manager or its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the ~~report~~consolidated statements of operations and comprehensive income (loss). Unpaid amounts are included in ~~Item 8.~~

due to related parties on the consolidated balance sheets.

~~(2)~~

~~Financial Statement Schedules:~~

(b)

The Business Manager and its related parties are entitled to reimbursement for certain legal costs related to securing financing for the Company. Such costs are capitalized as debt issuance costs on the consolidated balance sheets and amortized into interest expense on the consolidated statements of operations and comprehensive income (loss) over the term of the related financing. Unpaid amounts are included in due to related parties in the consolidated balance sheets.

~~Financial statement schedule~~

(c)

The Business Manager and its related parties are reimbursed for acquisition and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition activities, regardless of whether the Company acquires the real estate assets. All of the $19 related party acquisition costs incurred during the year ended December 31, ~~2017~~2022 are capitalized in the accompanying consolidated balance sheets. See Note 4 – “Acquisitions” for further information.

(d)

For each property that is ~~submitted herewith.~~

managed by Inland Commercial Real Estate Services LLC (the “Real Estate Manager”) (and its predecessor), the Company pays a monthly real estate management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and ~~Accumulated Depreciation (Schedule III)~~up to 3.9% of the gross income from any other property type. The Real Estate Manager determines, in its sole discretion, the amount of the fee with respect to a particular property, subject to the limitations. For each property that is managed directly by the Real Estate Manager or its affiliates, the Company pays the Real Estate Manager a separate leasing fee. Further, in the event that the Company engages its Real Estate Manager to provide construction management services for a property, the Company pays a separate construction management fee. Leasing fees are included in deferred costs, net and construction management fees are included in building and other improvements in the consolidated balance sheets. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses and benefits of persons performing services for the Real Estate Manager and its affiliates except for the salaries, bonuses and benefits of persons who also serve as an executive officer of the Real Estate Manager or the Company. Real estate management fees and reimbursable expenses are included in property operating expenses in the consolidated statements of operations and comprehensive income (loss).

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

(e)

Prior to April 1, 2023, the Company paid the Business Manager an annual business management fee equal to 0.65% of its “average invested assets.” The fee is payable quarterly in an amount equal to 0.1625% of its average invested assets as of the last day of the immediately preceding quarter. Effective April 1, 2023, the Company paid the Business Manager an annual business management fee equal to 0.55% of its “averaged invested assets.” The fee is payable quarterly in an amount equal to 0.1375% of its average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties on the consolidated balance sheets.

(f)

In this table, unpaid amounts as of December 31, 2022 does not reflect $879 due to IRPF related to tenant reconciliations for the eight properties acquired during 2022.

On March 23, 2023, the Company entered into a Third Amended and Restated Business Management Agreement (the “Third Business Management Agreement”) with the Business Manager effective April 1, 2023, which amended and restated the Second Amended and Restated Business Management Agreement dated October 15, 2021 (the “Second Business Management Agreement”) to make the following changes, among others:

~~(3)~~

~~Exhibits:~~

•

changed the termination date of the agreement to March 31, 2027, and removed the provisions regarding one-year renewal terms;

•

deleted the provision, formerly included to conform to provisions in the Company’s Third Articles of Amendment and Restatement, which has since been amended and restated, requiring the Business Manager to reimburse the Company, subject to certain exceptions, for any amount by which the Total Operating Expenses (including the Business Management Fee and other fees payable hereunder) of the Company for the Fiscal Year just ended exceeded the greater of (i) two percent (2%) of the total of the Average Invested Assets for the just ended Fiscal Year; or (ii) twenty-five percent (25%) of the Net Income for the just ended Fiscal Year; and

•

Capitalized terms used above but not defined in this Annual Report have the definitions ascribed to them in the applicable business management agreement. The ~~list~~above description is qualified by reference to the Third Business Management Agreement in its entirety, a copy of ~~exhibits filed~~which is included with this Annual Report as exhibit 10.23.

On January 19, 2024, the Company entered into the Fourth Business Management Agreement with the Business Manager effective February 1, 2024, to, among other things, provide the Company with the authority to engage a person not affiliated with or employed by the Business Manager to serve as president and chief executive officer of the Company and to reduce the business management fee payable to the Business Manager by the amount of any payment made to any third-party person as compensation for service as the Company’s president and chief executive officer. In connection with the Agreement entered into with Mr. Zalatoris, the Business Management Fee will be reduced by the amount of any payments made to Mr. Zalatoris under the Agreement. The foregoing description is qualified by reference to the Fourth Business Management Agreement in its entirety, a copy of which is included with this Annual Report as exhibit 10.24.

NOTE 13 –LEASES

The Company is lessor on approximately 820 retail operating leases. The remaining lease terms for the Company’s leases range from less than one year to 15 years. The Company considers the date on which it makes a leased space available to a lessee as the commencement date of the lease. At commencement, the Company determines the lease classification utilizing the classification tests under ASC 842. Options to extend a lease are included in the lease term when it is reasonably certain that the tenant will exercise its option to extend. Termination penalties are included in income when there is a termination agreement, all the conditions of the agreement have been met and amounts due are considered collectable. Such termination fees are recognized on a straight-line basis over the

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in thousands, except per share amounts)

remaining lease term in rental income. If an operating lease is modified and the modification is not accounted for as a separate contract, the Company accounts for the modification as if it were a termination of the existing lease and the creation of a new lease. The Company considers any prepaid or accrued rentals relating to the original lease as part of ~~this Annual Report~~the lease payments for the modified lease. The Company includes options to modify the original lease term when it is ~~set forth~~reasonably certain that the tenant will exercise its option to extend.

Lease Income

Most of the revenue from the Company’s properties consists of rents received under long-term operating leases. Most leases require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the Company and recoverable under the terms of the lease. Under these leases, the Company pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid.

~~(b)~~

~~Exhibits:~~

consolidated statements of operations and comprehensive income (loss). Under leases where all expenses are paid by the Company, subject to reimbursement by the tenant, the expenses are included within property operating expenses. Reimbursements for common area maintenance are considered non-lease components that are permitted to be combined with rental income. The ~~exhibits filed in response to Item 601 of Regulation S-K~~combined lease component and reimbursements for insurance and taxes are ~~listed~~reported as rental income on the ~~Exhibit Index attached hereto.~~consolidated statements of operations and comprehensive income (loss).

~~(c)~~

~~Financial Statement Schedules:~~

Rental income related to the Company’s operating leases is comprised of the following for the years ended December 31, 2023, 2022 and 2021:


	Year Ended December 31,
	2023		2022		2021
Rental income - fixed payments	$	115,092	$	106,422	$	95,157
Rental income - variable payments (a)		32,221		26,192		23,027
Amortization of acquired lease intangibles, net		2,323		818		773
Rental income	$	149,636	$	133,432	$	118,957

(a)

Primarily includes tenant recovery income for real estate taxes, common area maintenance and insurance.

The future base rent payments to be received under operating leases including ground leases as of December 31, 2023 for the years indicated, assuming no expiring leases are renewed, are as follows:


	Lease Payments
2024	$	107,831
2025		93,184
2026		81,501
2027		68,027
2028		52,454
Thereafter		152,259
Total	$	555,256

~~All schedules other than those indicated~~

Lease Expense

The Company is the lessee under one ground lease. The ground lease, which commenced on July 1, 2007, was assumed as part of a property purchased in October 2015 and extends through June 30, 2037 with six5-year renewal options which the ~~index~~Company assumes will be exercised. When the Company acquired the lease, the Company considered the lease terms and lease classification. As reassessment was not required under practical expedients accorded in ASC 842, the Company has continued to account for the ground lease as ~~set forth~~an operating lease with an established lease term and payment schedule. The lease liability was based on the present value of the ground lease’s future lease payments using an interest rate of 6.225% which the Company considers reasonable and within the range

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Dollar amounts in ~~Item 8 have been omitted as~~thousands, except per share amounts)

of the ~~required information is inapplicable or~~Company’s incremental borrowing rate. For the ~~information is presented~~years ended December 31, 2023, 2022 and 2021, total rent expense was $1,944, $1,944 and $1,944, respectively, recorded in property operating expenses on the consolidated ~~financial~~ statements ~~or related notes.~~of operations and comprehensive income (loss).

Lease payments for the ground lease as of December 31, 2023 for each of the five succeeding years and thereafter is as follows:


	Lease Payments
2024	$	1,264
2025		1,264
2026		1,264
2027		1,332
2028		1,401
Thereafter		81,852
Total undiscounted lease payments		88,377
Less: Amount representing interest		(63,385	)
Present value of lease liability	$	24,992

As of December 31, 2023, the Company’s accounts and rent receivable, net balance was $23,645, which was net of an allowance for bad debts of $871. As of December 31, 2022, the Company’s accounts and rent receivable, net balance was $20,114, which was net of an allowance for bad debts of $1,119.

NOTE 14 – FAIR VALUE MEASUREMENTS

~~Item 16. Form 10-K Summary~~Fair Value Hierarchy

~~None.~~The Company defines fair value based on the price that it believes would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

~~EXHIBIT INDEX~~


~~Exhibit~~ ~~No.~~Level 1 −		~~Description~~Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

~~3.1~~ Level 2 −		~~Second Articles of Amendment~~Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and ~~Restatement of Inland Real Estate Income Trust, Inc. (incorporated~~liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by reference to Exhibit 3.1 to Amendment No. 5 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the Securities and Exchange Commission on October 11, 2012 (file number 333-176775))observable market data.

~~3.2~~ Level 3 −		~~Second Amended~~Unobservable inputs that are supported by little or no market activity and ~~Restated Bylaws of Inland Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 3.2~~that are significant to the ~~Registrant’s Current Report on Form 8-K, as filed by~~fair value of the ~~Registrant with the Securities~~assets and ~~Exchange Commission on August 13, 2015 (file number 000-55146))~~

~~4.1~~		~~Amended~~liabilities. This includes certain pricing models, discounted cash flow methodologies and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 9, 2015 (file number 000-55146))

~~4.2~~		Amended and Restated Share Repurchase Program (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on November 22, 2017 (file number 000-55146))

~~10.1~~		Business Management Agreement, dated as of October 18, 2012, by and between Inland Real Estate Income Trust, Inc. and IREIT Business Manager & Advisor, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 24, 2012 (file number 333-176775))

~~10.2~~		Master Real Estate Management Agreement, dated as of October 18, 2012, by and between Inland Real Estate Income Trust, Inc. and Inland National Real Estate Services, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 24, 2012 (file number 333-176775))

~~10.3~~		Assignment and Assumption of Master Management Agreement, effective January 1, 2016, by and between Inland National Real Estate Services, LLC and Inland Commercial Real Estate Services LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2016 (file number 000-55146))

~~10.4~~		Investment Advisory Agreement, dated as of October 18, 2012, by and between Inland Real Estate Income Trust, Inc., IREIT Business Manager & Advisor, Inc. and Inland Investment Advisors, Inc. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on October 24, 2012 (file number 333-176775))

~~10.5~~		License Agreement, by and between The Inland Real Estate Group, Inc. and Inland Real Estate Income Trust, Inc., effective as of August 24, 2011 (incorporated by reference to Exhibit 10.5 to Amendment No. 4 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the Securities and Exchange Commission on September 25, 2012 (file number 333-176775))


~~10.6~~		Purchase and Sale Agreement, dated September 16, 2014, by and among Inland Real Estate Income Trust, Inc. and the subsidiaries of Kite Realty Group Trust party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on September 19, 2014 (file number 000-55146))

~~10.7~~		Assignment and Assumption of Leases and Security Deposits, dated as of November 21, 2014, by and between KRG OCEAN ISLE BEACH LANDING, LLC and IREIT OCEAN ISLE BEACH LANDING, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on November 28, 2014 (file number 000-55146))

~~10.8~~		Assignment and Assumption of Leases and Security Deposits (Lot 4B in The Shoppes at Branson Hills), dated as of December 15, 2014, by and between KRG BRANSON HILLS IV, LLC and IREIT BRANSON HILLS, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))
		similar techniques that use significant unobservable inputs.

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.9~~		Assignment and Assumption of Leases and Security Deposits (The Shoppes at Branson Hills and Branson Hills Plaza), dated as of December 15, 2014, by and between KRG BRANSON HILLS, LLC and IREIT BRANSON HILLS, L.L.C. (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.10~~		Consent to Sale, Assumptions and Second Loan Modification Agreement (Branson Hills), dated as of December 15, 2014, by and among KRG BRANSON HILLS, LLC, KITE REALTY GROUP, L.P., IREIT BRANSON HILLS, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.11~~		First Amended and Restated Promissory Note (Branson Hills), dated as of December 15, 2014, issued by IREIT BRANSON HILLS, L.L.C. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.12~~		Replacement Guaranty of Payment and Recourse Obligations (Branson Hills), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.13~~		Assignment and Assumption of Leases and Security Deposits (Harvest Square), dated as of December 15, 2014, by and between KRG HARVEST SQUARE, LLC and IREIT HARVEST SQUARE, L.L.C. (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.14~~		Consent and Assumption Agreement with Limited Release (Harvest Square), dated as of December 15, 2014, by and among KRG HARVEST SQUARE, LLC, KITE REALTY GROUP, L.P., IREIT HARVEST SQUARE, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.15~~		Environmental Indemnity Agreement (Harvest Square), dated as of December 15, 2014, by IREIT HARVEST SQUARE, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.16~~		Guaranty of Recourse Obligations of Borrower (Harvest Square), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.17~~		General Assignment and Assumption Agreement (Prairie Ridge), dated as of December 15, 2014, by and between KRG PLEASANT PRAIRIE RIDGE, LLC and IREIT PLEASANT PRAIRIE RIDGE, L.L.C. (incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.18~~		Assignment and Assumption of Leases and Security Deposits (Prairie Ridge), dated as of December 15, 2014, by and between KRG PLEASANT PRAIRIE RIDGE, LLC and IREIT PLEASANT PRAIRIE RIDGE, L.L.C. (incorporated by reference to Exhibit 10.12 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~


~~10.19~~		Consent to Sale, Assumptions and Second Loan Modification Agreement (Prairie Ridge), dated as of December 15, 2014, by and among KRG PLEASANT PRAIRIE RIDGE, LLC, KITE REALTY GROUP, L.P., IREIT PLEASANT PRAIRIE RIDGE, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.13 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.20~~		First Amended and Restated Promissory Note (Prairie Ridge), dated as of December 15, 2014, issued by IREIT PLEASANT PRAIRIE RIDGE, L.L.C. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.14 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.21~~		Replacement Guaranty of Payment and Recourse Obligations (Prairie Ridge), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. to and for the benefit of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.15 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.22~~		Assignment and Assumption of Leases and Security Deposit (Copps), dated as of December 15, 2014, by and between KRG STEVENS POINT PINECREST, LLC and IREIT STEVENS POINT PINECREST, L.L.C. (incorporated by reference to Exhibit 10.16 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.23~~		Assignment and Assumption of Leases and Security Deposits (Fox Point), dated as of December 15, 2014, by and between KRG NEENAH FOX POINT, LLC and IREIT NEENAH FOX POINT, L.L.C. (incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.24~~		Consent to Sale, Assumptions and Second Loan Modification Agreement (Fox Point), dated as of December 15, 2014, by and among KRG NEENAH FOX POINT, L.L.C., KITE REALTY GROUP, L.P., IREIT NEENAH FOX POINT, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.18 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.25~~		First Amended and Restated Promissory Note (Fox Point), dated as of December 15, 2014, issued by IREIT NEENAH FOX POINT, L.L.C. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.19 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.26~~		Replacement Guaranty of Payment and Recourse Obligations (Fox Point), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.20 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.27~~		Assignment and Assumption of Leases and Security Deposits (Heritage Square), dated as of December 15, 2014, by and between KRG CONYERS HERITAGE, LLC and IREIT CONYERS HERITAGE, L.L.C. (incorporated by reference to Exhibit 10.21 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.28~~		Consent and Assumption Agreement with Release (Heritage Square), dated as of December 15, 2014, by and among KRG CONYERS HERITAGE, LLC, KITE REALTY GROUP, L.P., KITE REALTY GROUP TRUST, IREIT CONYERS HERITAGE, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.22 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~


~~10.29~~		Joinder Agreement (Heritage Square), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.23 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.30~~		Environmental Indemnity Agreement (Heritage Square), dated as of December 15, 2014, by IREIT CONYERS HERITAGE, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.24 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.31~~		Guaranty Agreement (Heritage Square), dated as of December 15, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.25 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 22, 2014 (file number 000-55146))

~~10.32~~		Assignment and Assumption of Lease and Security Deposit (The Shoppes at Branson Hills – Kohl’s), dated as of December 19, 2014, by and between KRG BRANSON HILLS K-II, LLC and IREIT SHOPPES AT BRANSON HILLS - K, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.33~~		Assumption Agreement (The Shoppes at Branson Hills – Kohl’s), dated as of December 19, 2014, by and among KRG BRANSON HILLS K-II, LLC, KITE REALTY GROUP, L.P., IREIT SHOPPES AT BRANSON HILLS - K, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2007-C7, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C7 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.34~~		Guaranty of Recourse Obligations of Borrower (The Shoppes at Branson Hills – Kohl’s), dated as of December 19, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2007-C7, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C7 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.35~~		Environmental Indemnity Agreement (The Shoppes at Branson Hills – Kohl’s), dated as of December 19, 2014, by IREIT SHOPPES AT BRANSON HILLS - K, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2007-C7, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C7 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.36~~		Assignment and Assumption of Lease and Security Deposit (Branson Hills Plaza – TJ Maxx), dated as of December 22, 2014, by and between KRG BRANSON HILLS T-III, LLC and IREIT BRANSON HILLS PLAZA – T, L.L.C. (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~


~~10.37~~		Assumption Agreement (Branson Hills Plaza – TJ Maxx), dated as of December 22, 2014, by and among KRG BRANSON HILLS T-III, LLC, KITE REALTY GROUP, L.P., IREIT BRANSON HILLS PLAZA - T, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C4, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-C4 (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.38~~		Guaranty of Recourse Obligations of Borrower (Branson Hills Plaza – TJ Maxx), dated as of December 22, 2014, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C4, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-C4 (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.39~~		Environmental Indemnity Agreement (Branson Hills Plaza – TJ Maxx), dated as of December 22, 2014, by IREIT BRANSON HILLS PLAZA - T, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA, NATIONAL ASSOCIATION, SUCCESSOR-BY-MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF LB-UBS COMMERCIAL MORTGAGE TRUST 2006-C4, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-C4 (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on December 29, 2014 (file number 000-55146))

~~10.40~~		Assignment and Assumption of Leases and Security Deposits (Prattville Town Center), dated as of March 16, 2015, by and between KRG PRATTVILLE LEGENDS, LLC and IREIT PRATTVILLE LEGENDS, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.41~~		Consent and Assumption Agreement with Release (Prattville Town Center), dated as of March 16, 2015, by and among KRG PRATTVILLE LEGENDS, LLC, KITE REALTY GROUP, L.P., KITE REALTY GROUP TRUST, IREIT PRATTVILLE LEGENDS, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.42~~		Joinder Agreement (Prattville Town Center), dated as of March 16, 2015, by INLAND REAL ESTATE INCOME TRUST, INC. in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.43~~		Environmental Indemnity Agreement (Prattville Town Center), dated as of March 16, 2015, by IREIT PRATTVILLE LEGENDS, L.L.C. and INLAND REAL ESTATE INCOME TRUST, INC. in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.44~~		Guaranty Agreement (Prattville Town Center) executed as of March 16, 2015, by INLAND REAL ESTATE INCOME TRUST, INC. for the benefit of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.45~~		Assignment and Assumption of Leases and Security Deposits (Walgreens Plaza), dated as of March 16, 2015, by and between KRG JACKSONVILLE RICHLANDS, LLC and IREIT JACKSONVILLE RICHLANDS, L.L.C. (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.46~~		Consent and Assumption Agreement with Release (Walgreens Plaza), dated as of March 16, 2015, by and between KRG JACKSONVILLE RICHLANDS, LLC, KITE REALTY GROUP, L.P., KITE REALTY GROUP TRUST, IREIT JACKSONVILLE RICHLANDS, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC., and WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.47~~		Guaranty Agreement (Walgreens Plaza) executed as of March 16, 2015, by INLAND REAL ESTATE INCOME TRUST, INC. for the benefit of WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.48~~		Environmental Indemnity Agreement (Walgreens Plaza), dated as of March 16, 2015, by IREIT JACKSONVILLE RICHLANDS, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC., and WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES TRUST 2011-C5, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-C5 (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.49~~		Assignment and Assumption of Leases and Security Deposits (Fairgrounds Crossing), dated as of March 16, 2015, by and between KRG HOT SPRINGS FAIRGROUNDS, LLC and IREIT HOT SPRINGS FAIRGROUNDS, L.L.C. (incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.50~~		Assumption Agreement (Fairgrounds Crossing), dated as of March 16, 2015, by and between KRG HOT SPRINGS FAIRGROUNDS, LLC and IREIT HOT SPRINGS FAIRGROUNDS, L.L.C., KITE REALTY GROUP, L.P., INLAND REAL ESTATE INCOME TRUST, INC., and WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF GS MORTGAGE SECURITIES CORPORATION II, COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2012-GC6 (incorporated by reference to Exhibit 10.12 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.51~~		Assignment and Assumption of Leases and Security Deposits (Hawk Ridge), dated as of March 16, 2015, by and between KRG LAKE ST. LOUIS HAWK RIDGE, LLC and IREIT LAKE ST. LOUIS HAWK RIDGE, L.L.C. (incorporated by reference to Exhibit 10.13 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.52~~		Assignment and Assumption of Leases and Security Deposits (Whispering Ridge), dated as of March 16, 2015, by and between KRG OMAHA WHISPERING RIDGE, LLC, and RE INCOME OMAHA WHISPERING RIDGE, L.L.C. (incorporated by reference to Exhibit 10.14 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.53~~		Assignment and Assumption of Leases and Security Deposits (Regal Court), dated as of March 16, 2015, by and between KRG SHREVEPORT REGAL COURT, LLC, and IREIT SHREVEPORT REGAL COURT, L.L.C. (incorporated by reference to Exhibit 10.15 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.54~~		Assignment and Assumption of Leases and Security Deposits (Eastside Junction), dated as of March 16, 2015, by and between KRG ATHENS EASTSIDE, LLC, and IREIT ATHENS EASTSIDE, L.L.C. (incorporated by reference to Exhibit 10.16 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.55~~		Guaranty of Recourse Obligations of Borrower (Eastside Junction), executed as of March 16, 2015, by INLAND REAL ESTATE INCOME TRUST, INC., in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.56~~		Environmental Indemnity Agreement (Eastside Junction), dated as of March 16, 2015, by IREIT ATHENS EASTSIDE, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC., in favor of PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.18 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.57~~		Consent and Assumption Agreement with Limited Release (Eastside Junction), dated as of March 16, 2015, by and among KRG ATHENS EASTSIDE, LLC, KITE REALTY GROUP, L.P., IREIT ATHENS EASTSIDE, L.L.C., INLAND REAL ESTATE INCOME TRUST, INC. and PNC BANK, NATIONAL ASSOCIATION (incorporated by reference to Exhibit 10.19 to the Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on March 20, 2015 (file number 000-55146))

~~10.58~~		Credit Agreement, dated as of September 30, 2015, by and among Inland Real Estate Income Trust, Inc., as borrower, KeyBank National Association, individually and as administrative agent, KeyBanc Capital Markets Inc., as lead arranger, and other lender parties thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.59~~		Amendment Regarding Increase, dated as of January 21, 2016, by and among Inland Real Estate Income Trust, Inc., as borrower, KeyBank National Association, individually and as administrative agent, PNC Bank National Association, as a lender, and Fifth Third Bank, as a new lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on January 22, 2016 (file number 000-55146))

~~10.60~~		Third Amendment to Credit Agreement, dated as of April 17, 2017, by and among Inland Real Estate Income Trust, Inc., as borrower, KeyBank National Association, as Administrative Agent and as a Lender, PNC Bank National Association, as a Lender, and Fifth Third Bank, as a Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on April 20, 2017 (file number 000-55146))

~~10.61~~		Purchase and Sale Agreement and Escrow Instructions, dated August 21, 2015, by and among CBL/Settlers Ridge GP, LLC, CBL/Settlers Ridge LP, LLC, Settlers Ridge Management GP, LLC, Settlers Ridge Management LP, LLC, O’Connor/Realvest Milford LLC and Inland Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.62~~		First Amendment to Purchase and Sale Agreement and Escrow Instructions, dated September 16, 2015, by and among CBL/Settlers Ridge GP, LLC, CBL/Settlers Ridge LP, LLC, Settlers Ridge Management GP, LLC, Settlers Ridge Management LP, LLC, O’Connor/Realvest Milford LLC and Inland Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.63~~		Second Amendment to Purchase and Sale Agreement and Escrow Instructions, dated September 18, 2015, by and among CBL/Settlers Ridge GP, LLC, CBL/Settlers Ridge LP, LLC, Settlers Ridge Management GP, LLC, Settlers Ridge Management LP, LLC, O’Connor/Realvest Milford LLC and Inland Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.64~~		Third Amendment to Purchase and Sale Agreement and Escrow Instructions, dated September 21, 2015, by and among CBL/Settlers Ridge GP, LLC, CBL/Settlers Ridge LP, LLC, Settlers Ridge Management GP, LLC, Settlers Ridge Management LP, LLC, O’Connor/Realvest Milford LLC and Inland Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.65~~		Assignment and Assumption of Purchase and Sale Agreement and Escrow Instructions (Settlers Ridge), dated October 1, 2015, by and between Inland Real Estate Acquisitions, Inc. and Inland Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.66~~		Assignment of Partnership Interest, dated October 1, 2015, by and between Inland Real Estate Income Trust, Inc. and CBL/Settlers Ridge GP, LLC (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.67~~		Assignment of Partnership Interest, dated October 1, 2015, by and between Inland Real Estate Income Trust, Inc. and CBL/Settlers Ridge LP, LLC (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.68~~		Assignment of Partnership Interest, dated October 1, 2015, by and between Inland Real Estate Income Trust, Inc. and Settlers Ridge Management GP, LLC (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.69~~		Assignment of Partnership Interest, dated October 1, 2015, by and between Inland Real Estate Income Trust, Inc. and Settlers Ridge Management LP, LLC (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on October 6, 2015 (file number 000-55146))

~~10.70~~		Loan Agreement, dated December 3, 2015, by and between IREIT Pittsburgh Settlers Ridge, L.L.C. and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.71~~		Promissory Note, dated December 3, 2015, issued by IREIT Pittsburgh Settlers Ridge, L.L.C. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.72~~		Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, effective December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. for the benefit of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.73~~		Assignment of Leases, effective December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.74~~		Guaranty of Recourse Obligations, dated December 3, 2015, by Inland Real Estate Income Trust, Inc. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.75~~		Unsecured Indemnity Agreement, dated December 3, 2015, by IREIT Pittsburgh Settlers Ridge, L.L.C. and Inland Real Estate Income Trust, Inc. in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K as filed by the Registrant with the Securities and Exchange Commission on December 9, 2015 (file number 000-55146))

~~10.76~~		Employee and Director Restricted Share Plan of Inland Real Estate Income Trust, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, as filed by the Registrant with the Securities and Exchange Commission on June 17, 2016 (file number 000-55146))

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.77~~		Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.78 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

~~10.78~~		Form of Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 10.79 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

~~10.79~~		Inland Real Estate Income Trust, Inc. Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.80 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

~~10.80~~		Form of Deferred Compensation Election – Eligible Cash Compensation (incorporated by reference to Exhibit 10.81 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

~~10.81~~		Form of Deferred Compensation Election – Eligible Stock Compensation (incorporated by reference to Exhibit 10.82 to the Registrant’s Annual Report on Form 10-K, as filed by the Registrant with the Securities and Exchange Commission on March 15, 2017 (file number 000-55146))

~~14.1~~		Code of Ethics (incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed by the Registrant with the Securities and Exchange Commission on April 1, 2013 (file number 000-55146))

~~21.1~~		Subsidiaries of the Registrant*

~~23.1~~		Consent of KPMG LLP*

~~31.1~~		Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

~~31.2~~		Certification by Co-Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

~~31.3~~		Certification by Co-Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

~~32.1~~		Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

~~32.2~~		Certification by Co-Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

~~32.3~~		Certification by Co-Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

~~101~~		The following financial information from our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 16, 2018, is formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Loss, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements (tagged as blocks of text).

		* Filed as part of this Annual Report on Form 10-K.

Recurring Fair Value Measurements

~~SIGNATURES~~

~~Pursuant to~~For assets and liabilities measured at fair value on a recurring basis, the ~~requirements of Section 13 or 15(d)~~table below presents the fair value of the ~~Securities Exchange Act~~Company’s cash flow hedges as well as their classification on the consolidated balance sheets as of ~~1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~December 31, 2023 and 2022.

INLAND REAL ESTATE INCOME TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~By:~~		~~/s/ Mitchell A. Sabshon~~
~~Name:~~		~~Mitchell A. Sabshon~~
		~~President and Chief Executive Officer~~
~~Date:~~		~~March 16, 2018~~

December 31, 2023

(Dollar amounts in thousands, except per share amounts)


	Fair Value
	Level 1		Level 2		Level 3		Total
December 31, 2023
Interest rate swap agreements - Other assets	$	—	$	23,285	$	—	$	23,285
Interest rate swap agreements - Other liabilities	$	—	$	—	$	—	$	—
December 31, 2022
Interest rate swap agreements - Other assets	$	—	$	33,274	$	—	$	33,274
Interest rate swap agreements - Other liabilities	$	—	$	—	$	—	$	—

The fair value of derivative instruments was estimated based on data observed in the forward yield curve which is widely observed in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the counterparty's nonperformance risk in the fair value measurements which utilize Level 3 inputs, such as estimates of current credit spreads. The Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative interest rate swap agreements and therefore has classified these in Level 2 of the hierarchy.

NOTE 15 – SUBSEQUENT EVENTS

In connection with the preparation of its consolidated financial statements, the Company has evaluated events that occurred subsequent to December 31, 2023 through the date on which these consolidated financial statements were issued to determine whether any of these events required disclosure in the consolidated financial statements.

Election of Mark Zalatoris as the Company’s President and Chief Executive Officer

On January 13, 2024, Mitchell A. Sabshon notified the Company that, because of his decision to retire from his position with the Sponsor, he was also resigning his position as a director of the Company and as the Company’s president and chief executive officer, effective at the close of business on January 31, 2024. On January 18, 2024, the board of directors of the Company elected Mark E. Zalatoris to serve as the Company’s president and chief executive officer effective February 1, 2024 and elected Mr. Zalatoris to fill the vacancy resulting from Mr. Sabshon’s resignation as a director also effective February 1, 2024. In addition, on January 19, 2024, the Company entered into the Agreement with Mr. Zalatoris to, among other things, compensate him for performing services as the Company’s president and chief executive officer. Pursuant to the ~~requirements~~Agreement, the Company will pay Mr. Zalatoris an annual fee (payable pro rata on a monthly basis) equal to $350 per year.

Fourth Amended and Restated Business Management Agreement

In connection with the Agreement the Company entered into with Mark Zalatoris, on January 19, 2024, the Company entered into the Fourth Business Management Agreement with the Business Manager to, among other things, add a provision that allows the Company’s board of directors to hire or engage a person unaffiliated with the Business Manager to serve as the Company’s president and chief executive officer at a cost to be borne by the Business Manager.

Announcement of the ~~Securities Exchange Act~~Company’s Estimated Per Share NAV

On March 5, 2024, the Company announced that the Company’s board of ~~1934, this report has been signed below by~~directors unanimously approved: (i) an Estimated Per Share NAV as of December 31, 2023; (ii) the ~~following persons on behalf~~same per share purchase price for shares issued under the DRP until the Company announces a new Estimated Per Share NAV, and (iii) that, in accordance with the Fourth SRP, beginning with repurchases in April 2024 and until the Company announces a new Estimated Per Share NAV, any shares accepted for ordinary repurchases and Exceptional Repurchases will be repurchased at 80% of the ~~registrant~~Estimated Per Share NAV.

100

INLAND REAL ESTATE INCOME TRUST, INC.

Schedule III

Real Estate and Accumulated Depreciation

December 31, 2023

(Dollar amounts in thousands)


			Initial cost (A)							Gross amount carried at end of period (B)
Property Name	Encumbrance		Land		Buildings and Improve- ments		Cost Capitalized Subsequent to Acquisitions (C)			Land (D)		Buildings and Improvements (D)		Total (D)		Accumulated Depreciation (E)			Date Constructed	Date Acquired		Depreciable Lives
Blossom Valley Plaza	$	—	$	9,515	$	11,142	$	1,079		$	9,515	$	12,221	$	21,736	$	(3,847	)	1988		2015	15-30
Turlock, CA
Branson Hills Plaza		—		3,787		6,039		174			3,787		6,213		10,000	$	(2,149	)	2005		2014	15-30
Branson, MO
CityPlace		—		16,609		54,245		215			16,609		54,460		71,069	$	(3,481	)	2016-2018		2022	15-30
Woodbury, MN
Coastal North Town Center		—		13,725		49,673		(581	)		13,725		49,092		62,817	$	(13,693	)	2014		2016	15-30
Myrtle Beach, SC
Coastal North Town Center - Phase II		—		365		3,034		—			365		3,034		3,399	$	(707	)	2016		2017	15-30
Myrtle Beach, SC
Denton Village		—		1,312		15,308		—			1,312		15,308		16,620	$	(935	)	2016		2022	15-30
Denton, TX
Dixie Valley		—		2,807		9,053		2,360			2,807		11,413		14,220	$	(3,868	)	1988		2014	15-30
Louisville, KY
Dogwood Festival		—		4,500		41,865		4,660			4,500		46,525		51,025	$	(16,240	)	2002		2014	5-30
Flowood, MO
Eastside Junction		—		2,411		8,393		149			2,411		8,542		10,953	$	(2,905	)	2008		2015	15-30
Athens, AL
Fairgrounds Crossing		—		6,069		22,637		1,137			6,069		23,774		29,843	$	(7,730	)	2008		2015	15-30
Hot Springs, AR
Fox Point Plaza		—		3,518		12,681		2,917			3,518		15,598		19,116	$	(5,193	)	2008		2014	15-30
Neenah, WI
Frisco Marketplace		—		6,618		3,315		15			6,618		3,330		9,948	$	(1,336	)	2002		2015	15-30
Frisco, TX
Green Tree Shopping Center		—		7,218		17,846		1,531			7,218		19,377		26,595	$	(5,955	)	1997		2015	5-30
Katy, TX
Harris Plaza		—		6,500		19,403		3,283			6,500		22,686		29,186	$	(8,081	)	2001-2008		2014	15-30
Layton, UT
Harvest Square		—		2,186		9,330		186			2,186		9,516		11,702	$	(3,408	)	2008		2014	15-30
Harvest, AL
Heritage Square		—		2,028		5,538		364			2,028		5,902		7,930	$	(2,077	)	2010		2014	15-30
Conyers, AL
Kroger - Copps Grocery Store		—		1,440		11,799		—			1,440		11,799		13,239	$	(3,916	)	2012		2014	15-30
Stevens Point, WI
Kroger - Pick n Save Center		—		3,150		14,283		2,848			3,150		17,131		20,281	$	(5,877	)	2011		2014	15-30
West Bend, WI
Lakeside Crossing		—		1,460		16,999		432			1,460		17,431		18,891	$	(6,184	)	2013		2014	15-30
Lynchburg, VA
Landing at Ocean Isle Beach		—		3,053		7,081		205			3,053		7,286		10,339	$	(2,730	)	2009		2014	15-30
Ocean Isle, NC
Lower Makefield Shopping Center		—		6,559		18,351		53			6,559		18,404		24,963	$	(1,259	)	1986/2000		2022	15-30
Lower Makefield, PA
Mansfield Pointe		—		5,350		20,002		977			5,350		20,979		26,329	$	(7,666	)	2008		2014	15-30
Mansfield, TX
Marketplace at El Paseo		—		16,390		46,971		(117	)		16,390		46,854		63,244	$	(13,862	)	2014		2015	15-30
Fresno, CA
Marketplace at Tech Center				10,684		68,580		3,836			10,684		72,416		83,100	$	(19,673	)	2015		2015	15-30
Newport News, VA
MidTowne Shopping Center		—		8,810		29,699		1,001			8,810		30,700		39,510	$	(11,075	)	2005/2008		2014	5-30
Little Rock, AR
Milford Marketplace		18,727		—		35,867		1,550			—		37,417		37,417	$	(11,218	)	2007		2015	15-30
Milford, CT
Newington Fair		—		7,833		8,329		597			7,833		8,926		16,759	$	(4,462	)	1994/2009		2012	15-30
Newington, CT
New Town Village		—		2,106		3,216		87			2,106		3,303		5,409	$	(381	)	1996		2022	15-30
Owings Mills, MD
North Hills Square		—		4,800		5,493		653			4,800		6,146		10,946	$	(2,202	)	1997		2014	15-30
Coral Springs, FL
Northpark Village Square		—		15,806		41,201		254			15,806		41,455		57,261	$	(2,725	)	1996		2022	15-30
Santa Clarita, CA
Northville Park Place		—		6,440		27,635		445			6,440		28,080		34,520	$	(1,877	)	2014		2022	15-30
Northville, MI
Olde Ivy Village		—		5,034		12,104		—			5,034		12,104		17,138	$	(731	)	2015		2022	15-30
Smyrna, GA
Oquirrh Mountain Marketplace		—		4,254		14,467		487			4,254		14,954		19,208	$	(4,294	)	2014-2015		2015	15-30
Jordan, UT

101


			Initial cost (A)							Gross amount carried at end of period (B)
Property Name	Encumbrance		Land		Buildings and Improve- ments		Cost Capitalized Subsequent to Acquisitions (C)			Land (D)		Buildings and Improvements (D)		Total (D)		Accumulated Depreciation (E)			Date Constructed	Date Acquired		Depreciable Lives
Oquirrh Mountain Marketplace Phase II		—		1,403		3,727		(50	)		1,403		3,677		5,080	$	(1,039	)	2014-2015		2016	15-30
Jordan, UT
Park Avenue Shopping Center		—		5,500		16,365		5,270			5,500		21,635		27,135	$	(6,986	)	2012		2014	15-30
Little Rock, AR
Pentucket Shopping Center		—		5,993		11,251		1,799			5,993		13,050		19,043	$	(3,333	)	1986		2017	15-30
Plaistow, NH
Plaza at Prairie Ridge		—		618		2,305		—			618		2,305		2,923	$	(730	)	2008		2015	15-30
Pleasant Prairie, WI
Prattville Town Center		—		5,336		27,672		326			5,336		27,998		33,334	$	(9,031	)	2007		2015	15-30
Prattville, AL
Regal Court		26,000		5,873		41,181		2,780			5,873		43,961		49,834	$	(14,024	)	2008		2015	5-30
Shreveport, LA
Rusty Leaf Plaza		—		8,643		20,638		—			8,643		20,638		29,281	$	(1,288	)	1966		2022	15-30
Orange, CA
Settlers Ridge		76,533		25,962		98,157		1,465			25,962		99,622		125,584	$	(30,757	)	2011		2015	15-30
Pittsburgh, PA
Shoppes at Lake Park		—		2,285		8,527		96			2,285		8,623		10,908	$	(2,798	)	2008		2015	15-30
West Valley City. UT
Shoppes at Market Pointe		—		12,499		8,388		1,257			12,499		9,645		22,144	$	(4,014	)	2006-2007		2015	15-30
Papillion, NE
Shoppes at Prairie Ridge		—		7,521		22,468		1,321			7,521		23,789		31,310	$	(7,755	)	2009		2014	15-30
Pleasant Prairie, WI
The Shoppes at Branson Hills		—		4,418		37,229		2,910			4,418		40,139		44,557	$	(12,766	)	2005		2014	15-30
Branson, MO
Shops at Hawk Ridge		—		1,329		10,341		356			1,329		10,697		12,026	$	(3,411	)	2009		2015	5-30
St. Louis, MO
Village at Burlington Creek		16,759		10,789		19,385		3,274			10,789		22,659		33,448	$	(6,887	)	2007 & 2015		2015	5-30
Kansas City, MO
Walgreens Plaza		—		2,624		9,683		441			2,624		10,124		12,748	$	(3,475	)	2011		2015	15-30
Jacksonville, NC
Wedgewood Commons		—		2,220		26,577		3,787			2,220		30,364		32,584	$	(9,920	)	2009-2013		2013	5-30
Olive Branch, MS
White City		—		18,961		70,423		3,786			18,961		74,209		93,170	$	(23,197	)	2013		2015	15-30
Shrewsbury, MA
Wilson Marketplace		—		11,155		27,498		1,870			11,155		29,368		40,523	$	(7,424	)	2007		2017	15-30
Wilson, NC
Yorkville Marketplace		—		4,990		13,928		933			4,990		14,861		19,851	$	(5,128	)	2002 & 2007		2015	15-30
Yorkville, IL
Total:	$	138,019	$	330,456	$	1,147,322	$	62,418		$	330,456	$	1,209,740	$	1,540,196	$	(335,700	)

Notes:

(a)

The initial cost to the ~~capacities and on~~Company represents the ~~dates indicated:~~original purchase price of the property.

(b)

The aggregate cost of real estate owned at December 31, 2023 for federal income tax purposes was $1,676,924.

(c)

As applicable, some amounts include write-offs.

(d)

Reconciliation of real estate owned:


	2023		2022		2021
Balance at January 1,	$	1,528,765	$	1,261,075	$	1,255,127
Acquisitions	$	—	$	255,080		—
Improvements, net of master lease		11,431		12,610		5,948
Balance at December 31,	$	1,540,196	$	1,528,765	$	1,261,075

(e)

Reconciliation of accumulated depreciation:


Balance at January 1,	$	288,863	$	245,532	$	207,764
Depreciation expense		46,837		43,331		37,768
Balance at December 31,	$	335,700	$	288,863	$	245,532

~~By:~~ 102	~~/s/ Daniel L. Goodwin~~	~~Director and Chairman of the Board~~	~~March 16, 2018~~
~~Name:~~	~~Daniel L. Goodwin~~

~~By:~~	~~/s/ Mitchell A. Sabshon~~	~~Director, President and Chief Executive Officer (principal executive officer)~~	~~March 16, 2018~~
~~Name:~~	~~Mitchell A. Sabshon~~

~~By:~~	~~/s/ Catherine L. Lynch~~	~~Chief Financial Officer (co-principal financial officer)~~	~~March 16, 2018~~
~~Name:~~	~~Catherine L. Lynch~~

~~By:~~	~~/s/ David Z. Lichterman~~	~~Vice President, Treasurer and~~ ~~Chief Accounting Officer~~ ~~(co-principal financial officer and principal accounting officer)~~	~~March 16, 2018~~
~~Name:~~	~~David Z. Lichterman~~

~~By:~~	~~/s/ Lee A. Daniels~~	~~Director~~	~~March 16, 2018~~
~~Name:~~	~~Lee A. Daniels~~

~~By:~~	~~/s/ Stephen Davis~~	~~Director~~	~~March 16, 2018~~
~~Name:~~	~~Stephen Davis~~

~~By:~~	~~/s/ Gwen Henry~~	~~Director~~	~~March 16, 2018~~
~~Name:~~	~~Gwen Henry~~

~~By:~~	~~/s/ Bernard J. Michael~~	~~Director~~	~~March 16, 2018~~
~~Name:~~	~~Bernard J. Michael~~


Maryland		45-3079597
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2901 Butterfield Road, Oak Brook, Illinois		60523
(Address of principal executive offices)		(Zip Code)


		Page
	Part I

Item 1.	Business	13
Item 1A.	Risk Factors	47
Item 1B.	Unresolved Staff Comments	2534
Item 2.1C.	~~Properties~~Cybersecurity	2534
Item 3.2.	~~Legal Proceedings~~Properties	2835
Item 4.3.	~~Mine Safety Disclosures~~Legal Proceedings	2838
Item 4.	Mine Safety Disclosures	38
	~~Part II~~
	Part II
~~Item 5.~~
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2939
Item 6.	~~Selected Financial Data~~Reserved	3441
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3542
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4752
Item 8.	Financial Statements and Supplementary Data	4954
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7854
Item 9A.	Controls and Procedures	7854
Item 9B.	Other Information	7854
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	54
	~~Part III~~
	Part III
~~Item 10.~~
Item 10.	Directors, Executive Officers and Corporate Governance	7955
Item 11.	Executive Compensation	7961
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7962
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7963
Item 14.	Principal ~~Accounting~~Accountant Fees and Services	7967

	Part IV

Item 15.	Exhibits and Financial Statement Schedules	8069
Item 16.	Form 10-K Summary	8069

	Signatures	9073


	As of December 31, 2023			As of December 31, 2022
Number of properties		52			52
Purchase price	$	1,624,667		$	1,624,667
Total square footage		7,167,446			7,168,022
Physical occupancy		91.6	%		93.0	%
Economic occupancy		92.0	%		93.5	%
Weighted average remaining lease term (years) (a)		4.6			4.7

	As of December 31, 2017			As of December 31, 2016
Number of properties		59			56
Purchase price	$	1,412,841		$	1,337,827
Total square footage		6,860,923			6,345,578
Weighted average physical occupancy		93.9	%		93.6	%
Weighted average economic occupancy		94.8	%		94.6	%
Weighted average remaining lease term (years)	6.4			6.8


Property	Location	Square Footage		Physical Occupancy			Economic Occupancy			Mortgage Balance		Interest Rate (c)
Newington Fair (a)	Newington, CT		186,205		100.0	%		100.0	%		—		—
Wedgewood Commons (a)	Olive Branch, MS		169,558		90.7	%		92.8	%		—		—
Park Avenue (a)	Little Rock, AR		78,648		85.4	%		85.4	%		—		—
North Hills Square (a)	Coral Springs, FL		63,829		97.5	%		97.5	%		—		—
Mansfield Shopping Center (a)	Mansfield, TX		148,529		93.5	%		93.5	%		—		—
Lakeside Crossing (a)	Lynchburg, VA		67,034		97.8	%		97.8	%		—		—
MidTowne Shopping Center (a)	Little Rock, AR		126,288		70.3	%		70.3	%		—		—
Dogwood Festival (a)	Flowood, MS		187,468		87.0	%		87.0	%		—		—
Pick N Save Center (a)	West Bend, WI		94,446		98.9	%		98.9	%		—		—
Harris Plaza (a)	Layton, UT		125,814		76.8	%		76.8	%		—		—
Dixie Valley (a)	Louisville, KY		119,981		81.1	%		81.1	%		—		—
The Landings at Ocean Isle (a)	Ocean Isle, NC		53,203		97.4	%		97.4	%		—		—
Shoppes at Prairie Ridge (a)	Pleasant Prairie, WI		232,606		98.0	%		99.3	%		—		—
Harvest Square (a)	Harvest, AL		70,590		93.2	%		93.2	%		—		—
Heritage Square (a)	Conyers, GA		22,510		88.6	%		93.8	%		—		—
The Shoppes at Branson Hills (a)	Branson, MO		256,244		97.2	%		97.2	%		—		—
Branson Hills Plaza (a)	Branson, MO		210,201		100.0	%		100.0	%		—		—
Copps Grocery Store (a)	Stevens Point, WI		69,911		100.0	%		100.0	%		—		—
Fox Point Plaza (a)	Neenah, WI		171,121		96.4	%		96.4	%		—		—
Shoppes at Lake Park (a)	West Valley City, UT		52,997		100.0	%		100.0	%		—		—
Plaza at Prairie Ridge (a)	Pleasant Prairie, WI		9,035		100.0	%		100.0	%		—		—
Green Tree Shopping Center (a)	Katy, TX		147,621		97.5	%		97.5	%		—		—
Eastside Junction (a)	Athens, AL		79,675		91.0	%		91.0	%		—		—
Fairgrounds Crossing (a)	Hot Springs, AR		155,127		84.9	%		84.9	%		—		—
Prattville Town Center (a)	Prattville, AL		168,842		89.0	%		89.0	%		—		—
Regal Court	Shreveport, LA		363,061		97.0	%		97.0	%		26,000		4.55	%
Shops at Hawk Ridge (a)	St. Louis, MO		75,951		100.0	%		100.0	%		—		—
Walgreens Plaza (a)	Jacksonville, NC		42,219		52.8	%		52.8	%		—		—
Frisco Marketplace (a)	Frisco, TX		112,024		88.1	%		88.1	%		—		—
White City (a)	Shrewsbury, MA		256,974		84.7	%		84.7	%		—		—
Yorkville Marketplace (a)	Yorkville, IL		111,591		94.7	%		94.7	%		—		—
Shoppes at Market Pointe (a)	Papillion, NE		253,903		95.3	%		95.3	%		—		—
Marketplace at El Paseo (a)	Fresno, CA		224,683		98.2	%		99.4	%		—		—
The Village at Burlington Creek	Kansas City, MO		157,937		81.6	%		81.6	%		16,759		4.25	%
Milford Marketplace	Milford, CT		111,959		95.9	%		95.9	%		18,727		4.02	%
Settlers Ridge	Pittsburgh, PA		473,871		92.1	%		92.1	%		76,533		3.70	%
Blossom Valley Plaza (a)	Turlock, CA		111,435		89.4	%		89.4	%		—		—
Oquirrh Mountain Marketplace (a)	South Jordan, UT		75,950		100.0	%		100.0	%		—		—
Marketplace at Tech Center (a)	Newport News, VA		210,666		89.0	%		94.1	%		—		—
Coastal North Town Center (a)	Myrtle Beach, SC		304,662		97.1	%		97.7	%		—		—
Oquirrh Mountain Marketplace II (a)	South Jordan, UT		10,150		100.0	%		100.0	%		—		—
Wilson Marketplace (a)	Wilson, NC		311,030		93.6	%		93.6	%		—		—
Pentucket Shopping Center (a)	Plaistow, NH		198,469		86.4	%		86.4	%		—		—
Hickory Tavern	Myrtle Beach, SC		6,588		100.0	%		100.0	%		—		—
New Town (a)	Owings Mill, MD		117,593		43.8	%		45.1	%		—		—
Olde Ivy Village (a)	Smyrna, GA		46,500		93.7	%		93.7	%		—		—
Northpark Village Square (a)	Santa Clarita, CA		87,103		78.1	%		78.1	%		—		—
Lower Makefield Shopping Center (a)	Lower Makefield, PA		74,953		97.6	%		97.6	%		—		—
Denton Village (a)	Denton, TX		48,280		100.0	%		100.0	%		—		—
Rusty Leaf Plaza (a)	Orange, CA		59,188		95.7	%		95.7	%		—		—
Northville Park Place (a)	Northville, MI		78,421		94.4	%		100.0	%		—		—
CityPlace (a)	Woodbury, MN		174,802		98.4	%		98.4	%		—		—
Portfolio total			7,167,446		91.6	%		92.0	%	$	138,019		3.97	%


Large accelerated filer	☐o	Accelerated filer	☐o
Non-accelerated filer	☒x	Smaller reporting company	☐o
		Emerging growth company	☐o

Tenant Name	Number of Leases		Annualized Base Rent		Percent of Total Portfolio Annualized Base Rent			Annualized Base Rent Per Square Foot		Square Footage		Percent of Total Portfolio Square Footage
Dicks Sporting Goods, Inc		6	$	3,511		3.7	%	$	12.72		276,038		4.0	%
The Kroger Co		4		3,307		3.4	%		13.25		249,493		3.6	%
TJ Maxx/HomeGoods/Marshalls		13		3,170		3.3	%		9.63		329,253		4.8	%
Petsmart		10		2,583		2.7	%		13.31		194,077		2.8	%
Ross Dress for Less, Inc		9		2,379		2.5	%		10.03		237,165		3.5	%
Albertsons/Jewel/Shaws		2		2,235		2.3	%		17.48		127,892		1.9	%
Ulta Salon, Cosmetics & Fragrance		10		2,217		2.3	%		21.26		104,276		1.5	%
Kohl's Department Stores		4		1,888		2.0	%		5.68		332,461		4.8	%
LA Fitness (Fitness International)		2		1,810		1.9	%		20.20		89,600		1.3	%
Giant Eagle		1		1,805		1.9	%		13.96		129,340		1.9	%
Top ten tenants		61	$	24,905		26.0	%	$	12.03		2,069,595		30.1	%


Tenant Type	Gross Leasable Area – Square Footage		Percent of Total Gross Leasable Area			Percent of Total Annualized Base Rent
Discount and Department Stores		1,386,881		21.0	%		10.2	%
Grocery		1,331,589		20.2	%		17.1	%
Home Goods		814,498		12.3	%		6.8	%
Lifestyle, Health Clubs, Books & Phones		870,227		13.2	%		15.9	%
Restaurant		643,281		9.8	%		18.7	%
Apparel & Accessories		445,219		6.8	%		9.0	%
Consumer Services, Salons, Cleaners, Banks		344,089		5.2	%		9.6	%
Pet Supplies		256,913		3.9	%		4.0	%
Health, Doctors & Health Foods		186,497		2.8	%		5.0	%
Sporting Goods		202,067		3.1	%		2.3	%
Other		113,891		1.7	%		1.4	%
Total		6,595,152		100.0	%		100.0	%


Property Type	Percent of Total Annualized Base Rent
Grocery		60	%
Grocery Shadow-Anchored		27	%
Community Center		7	%
Power Center		6	%
Total		100	%

Tenant Type	Gross Leasable Area – Square Footage		Percent of Total Gross Leasable Area			Percent of Total Annualized Base Rent
Discount and Department Stores		1,535,229		23.6	%		12.0	%
Home Goods		1,016,961		15.7	%		9.7	%
Grocery		950,042		14.6	%		13.9	%
Lifestyle, Health Clubs, Books & Phones		778,762		12.0	%		14.8	%
Restaurant		543,098		8.4	%		15.8	%
Apparel & Accessories		472,346		7.3	%		10.7	%
Sporting Goods		333,719		5.1	%		4.9	%
Pet Supplies		287,633		4.4	%		4.3	%
Consumer Services, Salons, Cleaners, Banks		273,663		4.2	%		7.3	%
Health, Doctors & Health Foods		154,126		2.4	%		4.4	%
Other		147,393		2.3	%		2.2	%
Total		6,492,972		100.0	%		100.0	%


Size of Tenant	Description - Square Footage	Percent of Total Annualized Base Rent			Weighted Average Lease Expiration – Years		Description - Square Footage	Percent of Total Annualized Base Rent			Weighted Average Lease Expiration – Years
Anchor	10,000 and over		52	%		7.7	10,000 and over		48	%		5.6
Junior Box	5,000-9,999		15	%		5.9	5,000-9,999		14	%		4.1
Small Shop	Less than 5,000		33	%		4.6	Less than 5,000		38	%		3.6
Total			100	%		6.4			100	%		4.6

Lease Expiration Year	Number of Expiring Leases		Gross Leasable Area of Expiring Leases - Square Footage		Percent of Total Gross Leasable Area of Expiring Leases			Total Annualized Base Rent of Expiring Leases		Percent of Total Annualized Base Rent of Expiring Leases			Annualized Base Rent per Leased Square Foot
2018 (including month-to-month)		81		281,164		4.3	%	$	5,195		5.4	%	$	18.48
2019		81		475,753		7.3	%		7,217		7.5	%		15.17
2020		96		522,947		8.1	%		8,512		8.9	%		16.28
2021		92		374,011		5.8	%		7,546		7.9	%		20.18
2022		91		572,501		8.8	%		10,845		11.3	%		18.94
2023		69		688,974		10.6	%		9,314		9.7	%		13.52
2024		50		480,656		7.4	%		9,075		9.4	%		18.88
2025		68		601,759		9.3	%		11,288		11.7	%		18.76
2026		38		439,754		6.8	%		6,016		6.3	%		13.68
2027		39		389,979		6.0	%		4,937		5.1	%		12.66
Thereafter		39		1,665,474		25.6	%		16,189		16.8	%		9.72
Leased Total		744		6,492,972		100.0	%	$	96,134		100.0	%	$	14.81


Lease Expiration Year	Number of Expiring Leases		Gross Leasable Area of Expiring Leases - Square Footage		Percent of Total Gross Leasable Area of Expiring Leases			Total Annualized Base Rent of Expiring Leases		Percent of Total Annualized Base Rent of Expiring Leases			Annualized Base Rent per Leased Square Foot
2024		128		588,359		8.9	%	$	13,230		12.0	%	$	22.49
2025		133		748,979		11.4	%	$	16,416		14.8	%		21.92
2026		106		453,277		6.9	%	$	10,163		9.2	%		22.42
2027		126		886,481		13.4	%	$	15,006		13.5	%		16.93
2028		139		1,407,188		21.3	%	$	18,294		16.5	%		13.00
2029		54		535,066		8.1	%	$	7,707		7.0	%		14.40
2030		28		310,459		4.7	%	$	5,536		5.0	%		17.83
2031		22		197,517		3.0	%	$	3,817		3.4	%		19.32
2032		30		200,551		3.0	%	$	4,758		4.3	%		23.72
2033		29		208,789		3.2	%	$	3,847		3.5	%		18.43
Thereafter		24		1,058,486		16.1	%	$	11,931		10.8	%		11.27
Leased Total		819		6,595,152		100.0	%	$	110,705		100.0	%	$	16.79

	Range of Value and Rate
	Low			Midpoint			High
Share price	$	21.55		$	22.63		$	23.70
Terminal capitalization rate		6.97	%		6.80	%		6.63	%
Discount rate		7.80	%		7.61	%		7.41	%

	Per Share as of December 31, 2016			Per Share as of December 31, 2015
Real estate assets	$	39.75		$	38.28
Cash and other assets, net of other liabilities (1)		(0.24	)		1.30
Fair value of debt (2)		(16.88	)		(17.03	)
Estimated Per Share NAV (midpoint)	$	22.63		$	22.55


	Year Ended December 31, 2023						Year Ended December 31, 2022
				% of Distributions						% of Distributions
Distributions:
Distributions paid in cash	$	12,660					$	12,296
Distributions reinvested through DRP		6,976						7,287
Total distributions	$	19,636					$	19,583
Source of distribution coverage:
Cash flows provided by operating activities	$	19,636			100	%	$	19,583			100	%
Proceeds from DRP		—			—	%		—			—	%
Total source of distribution coverage	$	19,636			100	%	$	19,583			100	%
Cash flows provided by operating activities (GAAP basis)	$	39,401					$	44,787
Net loss (in accordance with GAAP)	$	(15,123	)				$	(12,618	)

	Year Ended December 31, 2017						Year Ended December 31, 2016
				% of Distributions						% of Distributions
Distributions:
Distributions paid in cash	$	26,246					$	24,527
Distributions reinvested through DRP		27,069						27,831
Total distributions	$	53,315					$	52,358
Source of distribution coverage:
Cash flows provided by operating activities	$	50,871			95	%	$	36,203			69	%
Proceeds from Offering and DRP		2,444			5	%		16,155			31	%
Total source of distribution coverage	$	53,315			100	%	$	52,358			100	%
Cash flows provided by operating activities (U.S. GAAP basis)	$	50,871					$	36,203
Net loss (in accordance with U.S. GAAP) (1)	$	(19,102	)				$	(7,961	)


	For the Period from August 24, 2011 (Date of Inception) to December 31, 2023
Distributions paid:
Common stockholders in cash	$	161,047
Common stockholders reinvested through DRP		143,143
Total distributions paid	$	304,190
Reconciliation of net loss:
Revenues	$	1,125,127
Acquisition and transaction related expenses		(19,669	)
Provision for asset impairment		(12,950	)
Depreciation and amortization		(497,088	)
Other operating expenses		(469,993	)
Provision for impairment of investment in and note receivable from unconsolidated entities		(15,405	)
Other non-operating expenses		(233,892	)
Net loss (in accordance with GAAP) (1)	$	(123,870	)
Funds from operations (2)	$	398,205
Cash flows provided by operating activities	$	376,865

Period	Total Shares Requested to be Repurchased		Total Number of Shares Repurchased		Average Price Paid per Share		Amount of Shares Repurchased		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
January 2017		39,678		39,678	$	21.72	$	861		39,678		1,723,435
February 2017		22,862		22,862	$	21.60		494		22,862		1,700,573
March 2017		63,188		63,188	$	21.88		1,382		63,188		1,637,385
April 2017		51,550		51,550	$	21.66		1,117		51,550		1,585,835
May 2017		59,200		59,200	$	21.84		1,294		59,200		1,526,635
June 2017		53,008		53,008	$	21.76		1,153		53,008		1,473,627
July 2017		105,587		105,587	$	22.14		2,337		105,587		1,368,040
August 2017		118,970		118,970	$	21.84		2,598		118,970		1,249,070
September 2017		84,029		84,029	$	22.01		1,850		84,029		1,165,041
October 2017		176,737		176,737	$	21.99		3,887		176,737		988,304
November 2017		70,632		70,632	$	22.12		1,562		70,632		917,672
December 2017		116,257		116,257	$	21.17		2,531		116,257		801,415
Total		961,698		961,698	$	21.91	$	21,066		961,698

	As of December 31,
	2017		2016		2015		2014		2013
Balance Sheet Data:
Total assets	$	1,375,370	$	1,357,560	$	1,401,368	$	569,797	$	90,888
Mortgages and credit facility payable, net (a)	$	691,465	$	606,025	$	584,499	$	184,344	$	32,179

	For the year ended December 31
	2017			2016			2015			2014			2013
Total income	$	129,157		$	121,498		$	76,542		$	18,946		$	2,825
Net loss (b)	$	(19,102	)	$	(7,961	)	$	(13,436	)	$	(4,356	)	$	(2,527	)
Net loss per common share, basic and diluted (c)	$	(0.54	)	$	(0.23	)	$	(0.48	)	$	(0.53	)	$	(2.95	)
Distributions paid to common stockholders	$	53,315		$	52,358		$	42,537		$	10,597		$	998
Distributions declared to common stockholders	$	53,364		$	52,449		$	44,908		$	12,318		$	1,289
Distributions declared per common share (c)	$	1.50		$	1.50		$	1.58		$	1.50		$	1.50
Cash flows provided by (used in) operating activities	$	50,871		$	36,203		$	27,080		$	2,922		$	(961	)
Cash flows used in investing activities	$	(82,226	)	$	(88,034	)	$	(740,542	)	$	(310,485	)	$	(30,375	)
Cash flows provided by (used in) financing activities	$	32,398		$	(21,151	)	$	691,434		$	386,800		$	55,733
Weighted average number of common shares outstanding, basic and diluted		35,571,249			34,963,827			27,737,301			8,226,376			859,179


Uses			Sources
		Interest & principal payments on mortgage loans and Credit Facility		Cash receipts from our tenants
		Property operating expenses		Sale of shares through the DRP
		General and administrative expenses		Proceeds from new or refinanced mortgage loans
		Distributions to stockholders		Borrowing on our Credit Facility
		Fees payable to our Business Manager and Real Estate Manager		Proceeds from sales of real estate (if any)*
		Repurchases of shares under the SRP		Proceeds from issuance of securities (if any) other than through the DRP*
		Capital expenditures, tenant improvements and leasing commissions
		Acquisitions of real estate directly or through joint ventures*
		Redevelopments of entire properties or certain spaces within our properties*


	For the year ended December 31,									Change					For the year ended December 31,									Change
	2017			2016			2015			2017 vs. 2016		2016 vs. 2015			2023			2022			2021			2023 vs. 2022			2022 vs. 2021
	(Dollar amounts in thousands)														(Dollar amounts in thousands)
Net cash flows provided by operating activities	$	50,871		$	36,203		$	27,080		$	14,668	$	9,123		$	39,401		$	44,787		$	48,150		$	(5,386	)	$	(3,363	)
Net cash flows used in investing activities	$	(82,226	)	$	(88,034	)	$	(740,542	)	$	5,808	$	652,508		$	(10,351	)	$	(290,505	)	$	(5,883	)	$	280,154		$	(284,622	)
Net cash flows provided by (used in) financing activities	$	32,398		$	(21,151	)	$	691,434		$	53,549	$	(712,585	)
Net cash flows (used in) provided by financing activities															$	(27,930	)	$	237,669		$	(42,869	)	$	(265,599	)	$	280,538


Year Ended December 31, (1)	Distributions Declared		Distributions Declared Per Share			Cash Distributions Paid		Cash Distributions Reinvested via DRP		Total Cash Distributions Paid		Cash Flows From Operations
2023	$	19,634	$	0.54	(2)	$	12,660	$	6,976	$	19,636	$	39,401
2022	$	19,602	$	0.54	(2)	$	12,296	$	7,287	$	19,583	$	44,787
2021	$	14,655	$	0.41	(3)	$	6,018	$	3,749	$	9,767	$	48,150

Year Ended December 31,	Distributions Declared		Distributions Declared Per Share (1)		Cash		Reinvested via DRP		Total		Cash Flows From Operations		Net Offering Proceeds (3) (4)
2017	$	53,364	$	1.50	$	26,246	$	27,069	$	53,315	$	50,871	$	—
2016	$	52,449	$	1.50	$	24,527	$	27,831	$	52,358	$	36,203	$	—
2015 (2)	$	44,908	$	1.58	$	21,709	$	20,828	$	42,537	$	27,080	$	379,131


	Total									Same Store							Non-Same Store						Total									Same Store							Non-Same Store
	For the year ended December 31,									For the year ended December 31,							For the year ended December 31,						For the year ended December 31,									For the year ended December 31,							For the year ended December 31,
	2017			2016			Change			2017		2016		Change			2017		2016		Change		2023			2022			Change			2023		2022		Change			2023		2022		Change
Rental income	$	95,816		$	90,228		$	5,588		$	86,856	$	87,097	$	(241	)	$	8,960	$	3,131	$	5,829	$	146,421		$	132,030		$	14,391		$	122,427	$	117,492	$	4,935		$	23,994	$	14,538	$	9,456
Tenant recovery income		29,101			26,526			2,575			26,766		25,785		981			2,335		741		1,594
Other property income		472			1,056			(584	)		469		1,055		(586	)		3		1		2		336			214			122			183		112		71			153		102		51
Total income	$	125,389		$	117,810		$	7,579		$	114,091	$	113,937	$	154		$	11,298	$	3,873	$	7,425		146,757			132,244			14,513			122,610		117,604		5,006			24,147		14,640		9,507

Property operating expenses	$	21,681		$	20,745		$	936		$	20,022	$	20,109	$	(87	)	$	1,659	$	636	$	1,023		29,408			24,332			5,076			25,280		21,881		3,399			4,128		2,451		1,677
Real estate tax expense		15,992			14,202			1,790			14,665		13,771		894			1,327		431		896		18,362			17,210			1,152			14,100		14,307		(207	)		4,262		2,903		1,359
Total property operating expenses	$	37,673		$	34,947		$	2,726		$	34,687	$	33,880	$	807		$	2,986	$	1,067	$	1,919		47,770			41,542			6,228			39,380		36,188		3,192			8,390		5,354		3,036

Property net operating income	$	87,716		$	82,863		$	4,853		$	79,404	$	80,057	$	(653	)	$	8,312	$	2,806	$	5,506		98,987			90,702			8,285		$	83,230	$	81,416	$	1,814		$	15,757	$	9,286	$	6,471

Straight-line income, net	$	1,678		$	2,164		$	(486	)
Intangible amortization		1,402			809			593
Straight-line income (expense), net																								411			(37	)		448
Amortization of intangibles and lease incentives																								2,124			698			1,426
General and administrative expenses		(5,200	)		(5,908	)		708																(5,237	)		(5,400	)		163
Acquisition related costs		(754	)		1,556			(2,310	)
Business management fee		(9,196	)		(8,580	)		(616	)															(9,632	)		(10,212	)		580
Provision for impairment of investment property		(8,530	)		—			(8,530	)
Depreciation and amortization		(61,804	)		(59,860	)		(1,944	)															(59,542	)		(55,319	)		(4,223	)
Interest expense		(24,582	)		(21,635	)		(2,947	)															(42,451	)		(33,069	)		(9,382	)
Interest and other income		147			378			(231	)															217			19			198
Equity in earnings (loss) of unconsolidated entity		21			252			(231	)
Net loss	$	(19,102	)	$	(7,961	)	$	(11,141	)														$	(15,123	)	$	(12,618	)	$	(2,505	)


	Number of Leases Signed		Gross Leasable Area		New Contractual Rent per Square Foot		Prior Contractual Rent per Square Foot		% Change over Prior Annualized Base Rent			Weighted Average Lease Term		Tenant Improvements per Square Foot
Comparable Renewal Leases		120		768,317	$	18.70	$	17.90		4.5	%		5.4	$	0.35
Comparable New Leases		13		79,992	$	18.98	$	14.16		34.0	%		9.2	$	33.00
Non-Comparable New and Renewal Leases (a)		34		151,939	$	15.53	N/A		N/A				5.5	$	14.25
Total		167		1,000,248

	Number of Leases Signed		Gross Leasable Area		New Contractual Rent per Square Foot		Prior Contractual Rent per Square Foot		% Change over Prior Annualized Base Rent			Weighted Average Lease Term		Tenant Allowances per Square Foot
Comparable Renewal Leases		66		445,178	$	16.75	$	15.90		5.3	%		5.4	$	0.36
Comparable New Leases		6		14,729	$	27.26	$	20.15		35.3	%		6.1	$	22.31
Non-Comparable New and Renewal Leases (a)		37		146,308	$	14.41	N/A		N/A				8.4	$	13.36
Total		109		606,215

	Payments due by period
	2018		2019		2020		2021		2022		Thereafter		Total
Principal payments on debt	$	15,481	$	236,465	$	897	$	84,272	$	126,631	$	229,575	$	693,321
Interest payments on debt		25,412		21,980		16,577		14,446		10,189		17,959		106,563
Rental payments on ground lease		1,140		1,140		1,140		1,140		1,202		89,641		95,403
Total	$	42,033	$	259,585	$	18,614	$	99,858	$	138,022	$	337,175	$	895,287

		~~Page~~

~~Report of Independent Registered Public Accounting Firm~~		50

~~Financial Statements:~~

~~Consolidated Balance Sheets at December 31, 2017 and 2016~~		51

~~Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015~~		52

~~Consolidated Statements of Equity for the years ended December 31, 2017, 2016 and 2015~~		53

~~Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015~~		54

~~Notes to Consolidated Financial Statements~~		56

~~Real Estate and Accumulated Depreciation (Schedule III)~~		75

	December 31, 2017				December 31, 2016
ASSETS
Assets:
Investment properties:
Land	$	277,229			$	262,210
Building and other improvements		1,011,688				971,021
Total		1,288,917				1,233,231
Less accumulated depreciation		(101,094	)			(62,631	)
Net investment properties		1,187,823				1,170,600
Cash and cash equivalents		11,904				10,861
Investment in unconsolidated entities		7,125		��		126
Accounts and rent receivable		15,152				11,671
Acquired lease intangible assets, net		138,658				150,108
Deferred costs, net		1,317				683
Other assets		13,391				13,511
Total assets	$	1,375,370			$	1,357,560

LIABILITIES AND EQUITY
Liabilities:
Mortgages and credit facility payable, net	$	691,465			$	606,025
Accounts payable and accrued expenses		10,167				7,270
Distributions payable		4,537				4,488
Acquired intangible liabilities, net		62,270				63,474
Deferred investment property acquisition obligations		1,050				6,856
Due to related parties		2,665				2,663
Other liabilities		11,744				12,330
Total liabilities		783,898				703,106

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding		—				—
Common stock, $.001 par value, 1,460,000,000 shares authorized, 35,498,444 and 35,262,283 shares issued and outstanding as of December 31, 2017 and 2016, respectively		35				35
Additional paid in capital (net of offering costs of $87,059 as of December 31, 2017 and 2016)		798,567				792,531
Accumulated distributions and net loss		(212,883	)			(140,417	)
Accumulated other comprehensive income		5,753				2,305
Total stockholders’ equity		591,472				654,454
Total liabilities and stockholders’ equity	$	1,375,370			$	1,357,560

~~Building and other improvements~~		~~30 years~~
~~Site improvements~~		~~5-15 years~~
~~Furniture, fixtures and equipment~~		~~5-15 years~~
~~Tenant improvements~~		~~Shorter of the life of the asset or the term of the related lease~~
~~Leasing fees~~		~~Term of the related lease~~

	For the Year Ended December 31,
	2017			2016 (a)
Land	$	17,513		$	15,128
Building and improvements		41,793			53,849
Acquired lease intangible assets, net		15,385			13,848
Acquired intangible liabilities, net		(4,589	)		(3,432	)
Fair value adjustment related to the assumption of mortgages payable		—			—
Deferred investment property acquisition obligations		—			—
Assumed liabilities, net		(149	)		(359	)
Total	$	69,953		$	79,034


						Investment in unconsolidated entities
Entity	Company's Profit/Loss Allocation at December 31, 2017			Remaining Commitment		December 31, 2017		December 31, 2016
Mainstreet Texas Development Fund, LLC ("Mainstreet JV") (a)		83	%	$	1,783	$	7,125	$	—
Oak Property Casualty, LLC ("Captive") (b)	n/a				—		—		126
						$	7,125	$	126


Name	Age*	Position
Robert D. Parks	81	Chairman of the Board
Lee A. Daniels	81	Lead Independent Director
Stephen L. Davis	66	Independent Director
Gwen Henry	83	Independent Director
Bernard J. Michael	64	Independent Director
Mark E. Zalatoris	66	Director, President and Chief Executive Officer
Catherine L. Lynch	65	Chief Financial Officer
Daniel Zatloukal	43	Senior Vice President
Judith Fu	62	Vice President
Cathleen M. Hrtanek	47	Secretary