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INLAND REAL ESTATE INCOME TRUST, INC.

(INRE)
Delayed OTC Markets  -  09:33 2022-09-20 am EDT
17.51 USD   +700300.00%
09/29Inland Real Estate Income Trust, Inc. : Other Events (form 8-K)
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09/29Inland Real Estate Income Trust, Inc. Authorizes A Distribution, Payable on or About October 7, 2022
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08/10INLAND REAL ESTATE INCOME TRUST, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)
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INLAND REAL ESTATE INCOME TRUST, INC. Financial Statements and Exhibits (form 8-K/A)

07/29/2022 | 04:27pm EDT

Item 9.01 Financial Statements and Exhibits.


These financial statements and exhibits are being filed solely to provide the
required audited statements of revenues and certain operating expenses under
Rule 3-14 of Regulation S-X with respect to the portfolio of eight properties
(collectively identified as the "Inland Retail Property Fund Portfolio" or the
"Properties") acquired by the Company on May 17, 2022.

The performance of the Properties and their effect on the Company's future
results may be materially different from the historical financial results of the
Properties and the Company's pro forma financial information contained in this
report due to various factors, including but not limited to those discussed
under Item 1A. Risk Factors in our annual report on Form 10-K for the year ended
December 31, 2021 and subsequent quarterly reports on Form 10-Q.

(a) Financial Statements of Properties Acquired.

• Combined Statement of Revenues and Certain Operating Expenses for the Inland

      Retail Property Fund Portfolio for the three months ended March 31, 2022
      (Unaudited).


• Combined Statement of Revenues and Certain Operating Expenses for the Inland

      Retail Property Fund Portfolio for the year ended December 31, 2021.


• Notes to Combined Statements of Revenues and Certain Operating Expenses for

the three months ended March 31, 2022 (Unaudited) and for the year ended

      December 31, 2021.



(b) Pro Forma Financial Information.

• Unaudited pro forma condensed consolidated balance sheet as of March 31,

      2022.


• Notes to unaudited pro forma condensed consolidated balance sheet as of

      March 31, 2022.


• Unaudited pro forma condensed consolidated statement of operations and

      comprehensive income for the three months ended March 31, 2022.


• Notes to unaudited pro forma condensed consolidated statement of operations

      and comprehensive income for the three months ended March 31, 2022.


• Unaudited pro forma condensed consolidated statement of operations and

      comprehensive income for the year ended December 31, 2021.


• Notes to unaudited pro forma condensed consolidated statement of operations

and comprehensive income for the year ended December 31, 2021.



(d) Exhibits

Exhibit No   Description
23.1           Consent of KPMG LLP

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

--------------------------------------------------------------------------------

                          Independent Auditors' Report

To the Stockholders and Board of Directors
Inland Real Estate Income Trust, Inc.:

We have audited the accompanying Combined Statement of Revenue and Certain Operating Expenses of the Inland Retail Property Fund Portfolio for the year ended December 31, 2021, and the related notes (the Statement).

Management's Responsibility for the Statement


Management is responsible for the preparation and fair presentation of the
Statement in accordance with U.S. generally accepted accounting principles; this
includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of the Statement that is free
from material misstatement, whether due to fraud or error.

Auditors' Responsibility


Our responsibility is to express an opinion on the Statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the Statement is
free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the combined financial statement. The procedures
selected depend on the auditors' judgment, including the assessment of the risks
of material misstatement of the Statement, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant
to the entity's preparation and fair presentation of the Statement in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well
as evaluating the overall presentation of the Statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion


In our opinion, the Statement referred to above presents fairly, in all material
respects, the revenues and certain operating expenses described in Note 2 of the
Statement for the year ended December 31, 2021, in accordance with
U.S. generally accepted accounting principles.

Emphasis of Matter


We draw attention to Note 2 to the Statement, which describes that the Statement
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission (for inclusion in the filing of Form 8-K of
Inland Real Estate Income Trust, Inc.) and is not intended to be a complete
presentation of the Inland Retail Property Fund Portfolio's revenues and
expenses. Our opinion is not modified with respect to this matter.

/s/ KPMG LLP

Chicago, Illinois
July 29, 2022
--------------------------------------------------------------------------------

Inland Retail Property Fund Portfolio
Combined Statements of Revenues and Certain Operating Expenses for the Three
Months Ended March 31, 2022 (Unaudited) and for the Year Ended December 31, 2021
(in thousands)

                                                        Three months
                                                        ended March         Year ended
                                                          31, 2022         December 31,
                                                        (unaudited)            2021
Revenues:
Rental income                                          $        5,839     $        23,626
Other property income                                              33                 323
Total revenues                                                  5,872              23,949
Certain operating expenses:
Property operating expenses                                       963               3,907
Real estate tax expense                                         1,151               4,471
Total certain operating expenses                                2,114       

8,378

Revenues in excess of certain operating expenses $ 3,758 $

       15,571


See accompanying notes to the combined statements of revenues and certain

                              operating expenses.
--------------------------------------------------------------------------------
Inland Retail Property Fund, LP
Notes to Combined Statements of Revenues and Certain Operating Expenses for the
Three Months Ended March 31, 2022 (Unaudited) and for the Year Ended December
31, 2021
(Dollar amounts stated in thousands)

NOTE 1 - ORGANIZATION


On May 17, 2022, Inland Real Estate Income Trust, Inc. (the "Company") acquired
eight properties (properties collectively referred to as "Inland Retail Property
Fund Portfolio" or the "Properties") from subsidiaries of Inland Retail Property
Fund, LP (collectively, the "Seller"). The Properties are leased primarily to
grocery, retail and restaurant tenants. More specifically, seven of the
Properties are grocery-anchored. The Properties are located across seven states
and aggregate approximately 686,851 square feet. As of March 31, 2022, those
leases had a weighted average remaining lease term of 6.3 years. Inland Retail
Property Fund, LP is a fund managed by an affiliate of the Company's sponsor and
business manager. Because the sale of the Properties was a related party
transaction, it was approved by all of the Company's independent directors.

The Company acquired the Properties for an aggregate purchase price of $278,153,
excluding closing costs. The Company funded the acquisition of the Properties
with $5,563 of cash on hand and funds from additional term loans borrowed under
its credit facility totaling $300,000.

The following table lists information about the Properties as of May 17, 2022:

                                                                 Square       Physical      Economic
             Property                        Location           Footage       Occupancy     Occupancy
Northpark Village Square               Valencia, California        87,103       98.6%         98.6%
Rusty Leaf Plaza                        Orange, California         59,188       97.0%         97.0%
CityPlace                              Woodbury, Minnesota        174,813       95.2%         95.2%
Northville Park Place                  Northville, Michigan        78,421      100.0%        100.0%
Denton Village                            Denton, Texas            48,280      100.0%        100.0%
Lower Makefield Shopping Center       Yardley, Pennsylvania        74,953       97.6%         97.6%
New Town Village                      Owings Mills, Maryland      117,593       46.8%         46.8%
Olde Ivy Village                         Smyrna, Georgia           46,500       93.7%         93.7%


NOTE 2 - BASIS OF PRESENTATION


The combined statements of revenues and certain operating expenses (the
"Statements") have been prepared on the accrual basis of accounting. The
Statements have been prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (the "SEC") and with the
provisions of SEC Rule 3-14 of Regulation S-X, which requires certain
information with respect to real estate operations to be included with certain
filings with the SEC.

The Statements are not intended to be a complete presentation of the revenues
and expenses for the Properties. The Statements exclude certain expenses such as
interest, depreciation and amortization, non-recurring professional fees, and
other revenues and expenses not directly related or comparable to, or expected
to be incurred in, the future operations of the Properties. All intercompany
transactions and balances, if any, have been eliminated in combination.

The Company is not aware of any other material factors relating to the Properties that would cause this financial information not to be indicative of future operating results.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition


The Properties are leased to tenants under agreements that are classified as
operating leases. The Properties recognize the total minimum lease payments
provided for under the leases on a straight-line basis over the lease term. In
addition to minimum lease payments, some leases provide for the reimbursement of
the tenant's pro rata share of certain operating expenses incurred by the
landlord as recoveries, including real estate taxes, special assessments,
insurance, utilities, common area maintenance, management fees and certain
capital repairs.

Expense Recognition


Property operating expenses represent the direct expenses of operating the
Properties and include repairs and maintenance, insurance, and other property
expenses that are expected to continue in the ongoing operations of the
Properties. Expenditures for maintenance and repairs are charged to operations
as incurred.
--------------------------------------------------------------------------------
Use of Estimates

The preparation of the Statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates, judgments and assumptions that affect the reported amounts of
revenues and certain expenses during the reporting period presented. The
estimates, judgments and assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances. Actual results may differ from those estimates, judgments and
assumptions.

NOTE 4 - LEASES

Space is leased to tenants pursuant to lease agreements. Tenant leases typically
provide for minimum rent, percentage rent, and other charges to cover certain
operating costs. Minimum future rentals under non-cancelable operating leases
greater than one year in effect at December 31, 2021, under which the Properties
are lessor, are as follows:

               Lease
             Payments
2022         $  15,996
2023            15,916
2024            15,001
2025            13,892
2026            11,838
Thereafter      41,162
Total        $ 113,805



NOTE 5 - COMMITMENTS AND CONTINGENCIES

The Properties are presently not subject to material litigation nor, to management's knowledge, is any material litigation threatened against the Properties.

NOTE 6 - SUBSEQUENT EVENTS


In preparing the Statements, the Company has evaluated events and transactions
occurring through July 29, 2022, the date the Statements were available to be
issued, and management did not identify any subsequent events requiring
additional disclosure.
--------------------------------------------------------------------------------
Inland Real Estate Income Trust, Inc.
Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma condensed consolidated financial statements
have been prepared to comply with Article 11 of Regulation S-X, as promulgated
by the SEC. These unaudited pro forma condensed consolidated financial
statements of the Company have been prepared from and should be read in
conjunction with the condensed consolidated financial statements and notes
thereto presented in the Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 2022 and Annual Report on Form 10-K for the year ended
December 31, 2021. These unaudited pro forma condensed consolidated financial
statements are presented as if the acquisitions of the properties (as described
below) were completed, along with the pro forma adjustments associated with the
acquisitions, as of March 31, 2022 for purposes of the unaudited pro forma
condensed consolidated balance sheet, and as of January 1, 2021 for purposes of
the unaudited pro forma condensed consolidated statements of operations. Our pro
forma condensed consolidated financial statements are presented for
informational purposes only and are based on information and assumptions we
consider appropriate and reasonable, and do not purport to (i) represent our
financial position had the acquisitions reflected in these unaudited pro forma
condensed consolidated financial statements occurred on March 31, 2022, (ii)
represent the results of our operations had the acquisitions and other
adjustments described in these unaudited pro forma condensed consolidated
financial statements occurred on January 1, 2021 or (iii) project or forecast
our financial position or results of operations as of any future date or for any
future period, as applicable. The unaudited pro forma condensed consolidated
financial statements include all adjustments that are normal and recurring in
management's opinion.

Acquisition of Properties

On May 17, 2022, the Company acquired eight properties (collectively, the
"Inland Retail Properties Fund Portfolio", or the "Properties") from certain
subsidiaries of Inland Retail Property Fund, LP (collectively, the "Seller")
pursuant to the previously disclosed purchase and sale agreement among the
Company and the Seller. The acquisition of the Properties is referred to herein
as the "Transaction." The Properties are leased primarily to grocery, retail and
restaurant tenants. More specifically, seven of the Properties are
grocery-anchored. The Properties are located across seven states and aggregate
approximately 686,851 square feet. As of March 31, 2022, those leases had a
weighted average remaining lease term of 6.3 years. Inland Retail Property Fund,
LP is a fund managed by an affiliate of the Company's sponsor and business
manager. Thus, because the Transaction was a related party transaction, it was
approved by all of the Company's independent directors.

The Company acquired the Properties for an aggregate purchase price of $278,153,
excluding closing costs. The Company funded the acquisition of the Properties
with $5,563 of cash on hand and funds from additional term loans under the
Second Amended and Restated Credit Agreement, dated as of February 3, 2022,
amended on May 17, 2022 by the First Amendment to Credit Agreement and Agreement
Regarding Incremental Term Loans (collectively, the "Credit Agreement") totaling
$300,000.
--------------------------------------------------------------------------------
Inland Real Estate Income Trust, Inc.
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2022
(Unaudited, in thousands except share and per share data)

                                                  Inland Real
                                                 Estate Income
                                                  Trust, Inc.
                                                 Historical (a)       The Properties         Pro Forma Total
ASSETS
Assets:
Investment properties held and used:
Land                                            $        267,946     $         62,510   (b) $         330,456
Building and other improvements                          994,632              192,730   (b)         1,187,362
Total                                                  1,262,578              255,240               1,517,818
Less accumulated depreciation                           (255,024 )                  -                (255,024 )
Net investment properties held and used                1,007,554              255,240               1,262,794
Cash and cash equivalents                                  9,174               18,845   (c)            28,019
Restricted cash                                            6,067                    -                   6,067
Accounts and rent receivable                              18,134                    -                  18,134
Acquired lease intangible assets, net                     55,324               33,285   (b)            88,609
Operating lease right-of-use asset, net                   14,463                    -                  14,463
Other assets                                              13,375                    -                  13,375
Total assets                                    $      1,124,091     $        307,370       $       1,431,461

LIABILITIES AND EQUITY
Liabilities:
Mortgages and credit facility payable, net      $        592,223     $        297,716   (d) $         889,939
Accounts payable and accrued expenses                      8,713                    -                   8,713
Operating lease liability                                 24,489                    -                  24,489
Distributions payable                                      4,894                    -                   4,894
Acquired intangible liabilities, net                      37,041                9,654   (b)            46,695
Due to related parties                                     2,829                    -                   2,829
Other liabilities                                          7,720                    -                   7,720
Total liabilities                                        677,909              307,370                 985,279

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, 36,079,247 shares issued
and outstanding                                               36                    -                      36
Additional paid in capital                               812,177                    -                 812,177
Accumulated distributions and net loss                  (372,029 )                  -                (372,029 )
Accumulated other comprehensive loss                       5,998                    -                   5,998
Total stockholders' equity                               446,182                    -                 446,182

Total liabilities and stockholders' equity $ 1,124,091 $

307,370 $ 1,431,461

--------------------------------------------------------------------------------


Inland Real Estate Income Trust, Inc.
Notes to Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2022
(Unaudited, in thousands)

(a) Historical unaudited financial information obtained from Inland Real Estate

Income Trust Inc.'s Quarterly Report on Form 10-Q for the three months

      ended March 31, 2022.


(b) The Company records the assets acquired and liabilities assumed related to

      the acquisition at fair value in accordance with Accounting Standards
      Codification Section 805, Business Combinations (as disclosed in the
      Company's Annual Report on Form 10-K), as if the acquisitions were
      completed on March 31, 2022. The Properties qualified as asset
      acquisitions.


(c) Reflects the total cash paid for the acquisition of the Properties, net of

proceeds of $300,000 from the additional term loans on the Company's Credit

      Facility.


(d) Reflects the additional term loans on the Company's Credit Facility net of

loan fees paid that were used to fund the acquisition of the Properties.

--------------------------------------------------------------------------------


Inland Real Estate Income Trust, Inc.
Pro Forma Condensed Consolidated Statement of Operations and Comprehensive
Income for the Three Months Ended March 31, 2022
(Unaudited, in thousands, except share and per share data)

                                            Inland Real                                                 Inland Real
                                           Estate Income            The                                Estate Income
                                            Trust, Inc.         Properties         Pro Forma          Trust, Inc. Pro
                                           Historical (a)           (b)           Adjustments              Forma
Income:
Rental income                             $         29,113     $       5,839     $           (9 ) (c) $         34,943
Other property income                                   30                33                  -                     63
Total income                                        29,143             5,872                 (9 )               35,006

Expenses:
Property operating expenses                          5,593               963                 21   (e)            6,577
Real estate tax expense                              3,730             1,151                  -                  4,881
General and administrative expenses                  1,412                 -                  -                  1,412
Business management fee                              2,244                 -                453   (f)            2,697
Depreciation and amortization                       11,854                 -              3,059   (d)           14,913
Total expenses                                      24,833             2,114              3,533                 30,480

Other Income (Expense):
Interest expense                                    (5,567 )               -             (2,959 ) (g)           (8,526 )
Interest and other income                               (1 )               -                  -                     (1 )
Net income (loss)                         $         (1,258 )   $       3,758     $       (6,501 )     $         (4,001 )

Net loss per common share, basic and
diluted                                   $          (0.03 )   $           -     $            -       $          (0.11 )

Weighted average number of common
shares outstanding, basic and diluted           36,084,505                 -                  -             36,084,505

Comprehensive income (loss):
Net income (loss)                         $         (1,258 )   $       3,758     $       (6,501 )     $         (4,001 )
Unrealized gain on derivatives                      11,999                 -                  -                 11,999
Reclassification adjustment for amounts
included in net loss                                 1,468                 -                  -                  1,468
Comprehensive income (loss)               $         12,209     $       3,758     $       (6,501 )     $          9,466


--------------------------------------------------------------------------------

Inland Real Estate Income Trust, Inc. Notes to Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income for the Three Months Ended March 31, 2022 (Unaudited, in thousands, except share and per share data)

(a) Historical unaudited financial information obtained from Inland Real Estate

Income Trust Inc.'s Quarterly Report on Form 10-Q for the three months

      ended March 31, 2022.


(b) Reflects operating results attributable to the Properties for the three

months ended March 31, 2022.

(c) The Company recognizes rental revenue for operating leases on a

straight-line basis over the life of the related lease, including any rent

steps or abatement provisions. An adjustment in the amount of $106 is made

to reflect rental revenue on a straight-line basis as if the Company had

acquired the Property as of January 1, 2021. In addition, the Company

records acquired above-market and below-market leases at their fair value

and recognizes the related amortization over the weighted average lives of

the related leases as an adjustment to rental revenue. As such, an

adjustment in the amount of $(115) is made to reflect rental revenue as if

      the Company had acquired the Properties as of January 1, 2021.


(d) Reflects depreciation and amortization expense on the Properties during the

three months ended March 31, 2022. The Company records depreciation and

amortization on a straight-line basis over the estimated useful lives,

ranging between 13 months and 30 years. For the three months ended March

31, 2022, total depreciation expense and total amortization expense for the

      properties were $1,893 and $1,166, respectively.


(e) Reflects the pro forma adjustment for the three months ended March 31, 2022

      for an adjustment to property management fees.



(f)   Reflects an adjustment to the business management fee for the Company to
      account for the additional properties under management following the
      acquisition.


(g) Reflects the pro forma interest expense, using a weighted average interest

      rate of 3.8% per annum, for the three months ended March 31, 2022 on the
      $300,000 of term loans added to the Company's Credit Facility, which were
      used to partially fund the acquisition of the Properties.

--------------------------------------------------------------------------------

Inland Real Estate Income Trust, Inc.
Pro Forma Condensed Consolidated Statement of Operations and Comprehensive
Income for the Year Ended December 31, 2021
(Unaudited, in thousands, except share and per share data)

                                            Inland Real                                                 Inland Real
                                           Estate Income            The                                Estate Income
                                            Trust, Inc.         Properties         Pro Forma          Trust, Inc. Pro
                                           Historical (a)           (b)           Adjustments              Forma
Income:
Rental income                             $        118,957     $      23,626     $          (46 ) (c) $        142,537
Other property income                                  183               323                  -                    506
Total income                                       119,140            23,949                (46 )              143,043

Expenses:
Property operating expenses                         21,649             3,907                 89   (e)           25,645
Real estate tax expense                             14,388             4,471                  -                 18,859
General and administrative expenses                  4,784                 -                  -                  4,784
Business management fee                              8,950                 -              1,813   (f)           10,763
Depreciation and amortization                       48,906                 -             12,426   (d)           61,332
Total expenses                                      98,677             8,378             14,328                121,383

Other Income (Expense):
Interest expense                                   (23,240 )               -            (11,969 ) (g)          (35,209 )
. . .

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