Company: INRE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001193125-25-268836
Chunk: 5

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 3
Chunk 5
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Market Risk

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.

Interest Rate Risk

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 September 30, 2025, we had outstanding debt of $830.4 million, excluding unamortized debt issuance costs, bearing interest rates ranging from 3.70% to 6.16% per annum. The weighted average interest rate was 4.50% per annum, which includes the effect of interest rate swaps. As of September 30, 2025, the weighted average years to maturity for our mortgages and Credit Facility payable was 1 year.

As of September 30, 2025, our fixed-rate debt consisted of secured mortgage financings with a carrying value of $111.4 million and a fair value of $110.7 million. 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. If market interest rates were to increase by 1% (100 basis points), the fair market value of our fixed-rate debt would decrease by $0.3 million as of September 30, 2025. If market interest rates were to decrease by 1% (100 basis points), the fair market value of our fixed-rate debt would increase by $0.3 million as of September 30, 2025. 

If the interest rates upon refinancing of the maturing mortgage loans were to increase by 1% (100 basis points), the increase in interest expense would decrease earnings and cash flows by $1.4 million annually.

As of September 30, 2025, we had $168 million of debt or 20% of our total debt, excluding unamortized debt issuance costs, bearing interest at variable rates with a weighted average interest rate equal to 6.13% per annum. We