Company: INRE
Filing Date: 2025-12-09
Form Type: 8-K
Source: 0001193125-25-312903
Chunk: 4

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-12-09
Form: 8-K
Item: Item 8.01
Chunk 4
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 book value. SitusAMC also estimated the fair market value of the Company’s debt by comparing current market interest rates to the contract rates on the Company’s long-term debt. The fair market value of the Company’s debt was utilized in the Valuation Report. Based on guidance from the Business Manager, SitusAMC assumed that no incentive fee to the Business Manager would be payable under a hypothetical liquidation event occurring within the range of values provided in the Valuation Report. SitusAMC estimated the NAV range in a manner consistent with the definition of fair value under U. S. generally accepted accounting principles 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 as of the Valuation Date. SitusAMC created a valuation range by first establishing a discount rate and terminal capitalization rate for each real estate asset. SitusAMC then applied a discount rate and terminal capitalization rate sensitivity analysis by varying the discount rate and terminal capitalization rate of each real estate asset by 2.5% in either direction, which represents an approximate 5% sensitivity on the discount rates and terminal capitalization rates, resulting in a value range equal to $15.76 to $18.02 per share. The mid-point in that range was $16.89. Discount rates and terminal capitalization rates were sourced from the MAI Appraisals and varied by location, asset quality and supply and demand metrics. The Estimated Per Share NAV determined by the board of $16.89 assumes a weighted average discount rate equal to 8.36% and a weighted average terminal capitalization rate of 7.47%.

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 on the Estimated Per Share NAV of variations in the terminal capitalization rate and discount rate that correspond to the range of values assumed by SitusAMC and the Estimated Per Share NAV selected by our board.

                                    Range of Value and Rate                                                            
                                    Low                                     Mid-point                 High             
  Share Price                       $                            15.76      $              16.89      $         18.02  
  Terminal Capitalization Rate                                    7.66                      7.47                 7.29  
  Discount Rate                                                   8.57