Company: INRE
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000950170-25-033568
Chunk: 30

Company: Inland Real Estate Income Trust, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 13
Chunk 30
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 The Business Manager did not exercise this discretion in the year ended December 31, 2024.

As used herein, “average invested assets” means, for any period, the average of the aggregate book value of our assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter.

If the business management agreement is terminated prior to the term expiring on March 31, 2027, the Business Manager is entitled to be paid the amount of the base management fee for the remainder of the term of the agreement calculated in the calendar quarter in which the agreement is terminated. Likewise, the Business Manager, or its successor or designee, would also be entitled to an incentive fee the Business Manager would have been entitled under the agreement as if it had not been terminated on a pro rata basis. If the agreement had been terminated as of December 31, 2024, for example, we would have been obligated to pay the Business Manager a termination fee of approximately $21 million representing the amount of the base fee due for the remaining term. We would not have been obligated to pay any incentive fees. Upon a “triggering event,” we also are required to pay the Business Manager a subordinated incentive fee equal to 10% of the amount by which (1) the “liquidity amount” (as defined below) exceeds (2) the “aggregate invested capital,” plus the total distributions required to be paid to our stockholders in order to pay them a 7% per annum cumulative, pre-tax non-compounded return on the aggregate invested capital, all measured as of the triggering event. If we have not satisfied this return threshold at the time of the applicable triggering event, the fee is required to be paid at the time of any future triggering event, provided that we have satisfied the return requirements. We did not experience a “triggering event,” and thus did not incur a subordinated incentive fee, during the year ended December 31, 2024.

As used herein, a “triggering event” means any sale of assets (excluding the sale of marketable securities) in which the net sales proceeds are specifically identified and distributed to our stockholders