Company: INRE
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000950170-25-033568
Chunk: 102

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 1A
Chunk 102
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 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 reliance on single or significant tenants, such as big-box or anchor tenants, at certain properties may decrease our ability to lease vacated space and adversely affect the returns we earn.

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. For example, REI vacated 26,500 square feet, at Settlers Ridge in February 2021 and that space remains vacant. This vacancy and similar events at 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, generally within six to twelve months following the termination of the other tenant’s lease. For example, MidTowne Shopping Center continues to be impacted by a co-tenancy failure with six tenants actively paying a reduced substitute rent in lieu of their full lease obligated payments. On November 3, 2024, American Freight filed for bankruptcy and eventually rejected and closed their location at 

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Harris Plaza. American Freight is a named co-tenant in Ulta’s lease at this center. In addition, Ross Stores has co-tenancy rights requiring the American Freight unit to be occupied and operating. Furthermore, two additional tenants at Pentucket Shopping Center cited known co-tenancy failures in September 2024, both of these tenant’s substitute rent rights were originally triggered by the closure of Bed Bath & Beyond and were effective retroactive to July 1, 2023. Similarly, the leases of some tenants may permit the tenant to transfer its lease to another retailer. Further, the transfer to a new tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail