Company: INRE
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000950170-25-033568
Chunk: 341

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 7A
Chunk 341
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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.

49

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 December 31, 2024, we had outstanding debt of $837.7 million, excluding unamortized debt issuance costs, bearing interest rates ranging from 3.70% to 6.34% per annum. The weighted average interest rate was 4.55%, which includes the effect of interest rate swaps. As of December 31, 2024, the weighted average years to maturity for our mortgages and Credit Facility payable was 1.8 years.

As of December 31, 2024, our fixed-rate debt consisted of secured mortgage financings with a carrying value of $111.7 million and a fair value of $108.8 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 $1.0 million as of December 31, 2024. If market interest rates were to decrease by 1% (100 basis points), the fair market value of our fixed-rate debt would increase by $1.0 million as of December 31, 2024.

As of December 31, 2024, we had $175 million of debt or 21% of our total debt, excluding unamortized debt issuance costs, bearing interest at variable rates with a weighted average interest rate equal to 6.31% per annum. We had additional variable rate debt subject to swap agreements of $551 million, or 66% of our total debt, excluding unamortized debt issuance costs, as of December 31, 2024.

If interest