# EDGAR Filing Document

**Accession Number:** 0001314152
**File Stem:** 0001314152-23-000029
**Filing Date:** 2023-3
**Character Count:** 780875
**Document Hash:** e0e4b75eca6472fc0d1740807cb730f1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001314152-23-000029.hdr.sgml**: 20230327

**ACCESSION NUMBER**: 0001314152-23-000029

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 97

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230327

**DATE AS OF CHANGE**: 20230327

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** JLL Income Property Trust, Inc.
- **CENTRAL INDEX KEY:** 0001314152
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-51948
- **FILM NUMBER:** 23765177

**BUSINESS ADDRESS:**
- **STREET 1:** 333 WEST WACKER DRIVE
- **CITY:** CHICAGO
- **STATE:** IL
- **ZIP:** 60606
- **BUSINESS PHONE:** 312-897-4000

**MAIL ADDRESS:**
- **STREET 1:** 333 WEST WACKER DRIVE
- **CITY:** CHICAGO
- **STATE:** IL
- **ZIP:** 60606

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Jones Lang LaSalle Income Property Trust, Inc.
- **DATE OF NAME CHANGE:** 20111114

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** EXCELSIOR LASALLE PROPERTY FUND INC
- **DATE OF NAME CHANGE:** 20050111

?xml version="1.0" ? jllipt-20221231

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_________________________________**

**FORM 10-K**

**_________________________________**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2022** 

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from______to_______.**

**Commission file number: 000-51948**

![jllipt-20221231_g1.jpg](jllipt-20221231_g1.jpg)

**JLL Income Property Trust, Inc.**

(Exact name of registrant as specified in its charter)

**_________________________________**

---

| | |
|:---|:---|
| **Maryland** | **20-1432284** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |

---

**333 West Wacker Drive, Chicago, IL, 60606**

(Address of principal executive offices, including Zip Code)

Registrant's telephone number, including area code**: (312) 897-4000**

**Securities registered pursuant to Section 12(b) of the Act: None**

**Securities registered pursuant to Section 12(g) of the Act:** 

**<u>Title of each class</u>**

**Class A Common Stock, $.01 par value**

**Class M Common Stock, $.01 par value**

**Class A-I Common Stock, $.01 par value**

**Class M-I Common Stock, $.01 par value**

**Class D Common Stock, $.01 par value**

**_________________________________**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes ◻&nbsp;&nbsp;&nbsp;&nbsp;No 🗷

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes ◻&nbsp;&nbsp;&nbsp;&nbsp;No 🗷

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗷&nbsp;&nbsp;&nbsp;&nbsp;No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes 🗷&nbsp;&nbsp;&nbsp;&nbsp;No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻ Accelerated filer ◻ Emerging growth company ☐ <br> Non-accelerated filer 🗷 Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued it audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements&nbsp;&nbsp;&nbsp;&nbsp;◻

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).&nbsp;&nbsp;&nbsp;&nbsp;◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ◻&nbsp;&nbsp;&nbsp;&nbsp;No ☒

As of June 30, 2022, the aggregate market value of the 108,205,677 shares of Class A common stock, 24,298,368 shares of Class M common stock, 6,106,688 shares of Class A-I common stock, 86,818,680 shares of Class M-I common stock and 6,041,611 shares of Class D common stock held by non-affiliates of the registrant was $1,606,897, $361,457, $90,923, $1,291,203, and $89,746 for Class A, Class M, Class A-I,

Class M-I and Class D shares, respectively, based upon the last net asset value of $14.85, $14.88, $14.89, $14.87 and $14.85 per share for Class A, Class M, Class A-I, Class M-I and Class D shares, respectively.

As of March 27, 2023, there were 112,809,047 shares of Class A common stock, 26,472,493 shares of Class M common stock, 4,891,032 shares of Class A-I common stock, 95,761,320 shares of Class M-I common stock and 3,023,025 shares of Class D common stock outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Specified portions of the registrant's proxy statement, which will be filed with the Commission pursuant to Regulation 14A in connection with the registrant's 2023 Annual Meeting of Stockholders, are incorporated by reference into Part III of this annual report.

**Risk Factor Summary**

*We are subject to numerous risks and uncertainties that could cause our actual results and future events to differ materially from those set forth or contemplated in our forward-looking statements, including those summarized below. The following list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. This risk factor summary should be read together with the more detailed discussion of risks and uncertainties set forth under "Item 1A. Risk Factors" in this Form 10-K.*

**Risks Related to Investment in Shares of Our Common Stock**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There is no public trading market for shares of our common stock; therefore, the ability of our stockholders to dispose of their shares will likely be limited to the repurchase of shares by us which generally will not be available during the first year after the purchase. If stockholders do sell their shares to us, they may receive less than the price paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to repurchase shares may be limited, and our board of directors may modify or suspend our share repurchase plan at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a history of operating losses and cannot assure you that we will sustain profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The availability, timing and amount of cash distributions to you is uncertain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Your overall return may be reduced if we pay distributions from sources other than our cash from operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Your purchase price may be more or less than the actual net asset value ("NAV") if our NAV is incorrectly calculated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our NAV per share may suddenly change if the appraised values of our properties materially change from prior appraisals or the actual operating results for a particular month differ from what we originally budgeted for that month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The NAV per share that we publish may not necessarily reflect changes in our NAV that are not immediately quantifiable.

**Risks Related to Conflicts of Interest**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Advisor will face a conflict of interest with respect to the allocation of investment opportunities and competition for tenants between us and other real estate programs that it advises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Advisor faces a conflict of interest because the fees it receives for services performed are based on our NAV, for which our Advisor is ultimately responsible for calculating.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Advisor's management personnel face conflicts of interest relating to time management and there can be no assurance that our Advisor's management personnel will devote adequate time to our business activities or that our Advisor will be able to hire adequate additional employees.

**Risks Related to Adverse Changes in General Economic Conditions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in economic and capital markets conditions, including periods of generally deteriorating real estate industry fundamentals, may significantly affect our results of operations and returns to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any market deterioration may cause the value of our real estate investments to decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Economic events that may cause our stockholders to request that we repurchase their shares may materially adversely affect our cash flow and our ability to achieve our investment objectives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inflation or deflation may adversely affect our financial condition and results of operations.

**Risks Related to Our General Business Operations and Our Corporate Structure**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on our Advisor and the key personnel of our Advisor and we may not be able to secure suitable replacements in the event that we fail to retain their services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Advisor's inability to retain the services of key real estate professionals could negatively impact our performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may change our investment and operational policies without stockholder consent.

**Risks Related to Investments in Real Property**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on tenants for our revenue, and accordingly, lease terminations and/or tenant defaults, particularly by one of our significant tenants, could adversely affect the income produced by our properties, which may harm our operating performance, thereby limiting our ability to pay distributions to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our revenues will be significantly influenced by the economies and other conditions of the industrial, office, residential, retail and other markets in general and the specific geographic markets in which we operate where we have high concentrations of these types of properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our operating results are affected by economic and regulatory changes that impact the real estate market in general.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our retail properties may decline in rental revenue and/or occupancy as a result of co-tenancy provisions contained in certain tenant's leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We face considerable competition in the leasing market and may be unable to renew existing leases or re-let space on terms similar to the existing leases, or we may expend significant efforts to re-let space, which may adversely affect our operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competition in acquiring properties may reduce our profitability and the return on your investment.

**Risks Related to Investments in Real Estate-Related Assets**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our investments in real estate-related assets will be subject to the risks related to the underlying real estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The real estate-related equity securities in which we may invest are subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The value of the real estate-related securities that we may invest in may be volatile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may invest in mezzanine debt, which is subject to greater risks of loss than senior loans secured by real properties, and may result in losses to us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We expect a portion of our securities portfolio to be illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest rate and related risks may cause the value of our real estate-related assets to be reduced.

**Risks Related to Debt Financing**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have incurred and are likely to continue to incur mortgage or other indebtedness, which may increase our business risks, could hinder our ability to pay distributions and could decrease the value of your investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Renewed uncertainty and volatility in the credit markets could affect our ability to obtain debt financing on reasonable terms, or at all, which could reduce the number of properties we may be able to acquire and the amount of cash distributions we can make to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to pay distributions to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we draw on our line of credit to fund repurchases or for any other reason, our financial leverage ratio could increase beyond our target.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to pay distributions to our stockholders.

**Federal Income Tax Risks**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Failure to qualify as a real estate investment trust ("REIT") would have significant adverse consequences to us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• To maintain our REIT status, we may have to borrow funds on a short-term basis during unfavorable market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compliance with REIT requirements may cause us to forego otherwise attractive opportunities, which may hinder or delay our ability to meet our investment objectives and reduce your overall return.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be subject to tax liabilities that reduce our cash flow and our ability to pay distributions to you even if we qualify as a REIT for federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Legislative, regulatory or administrative changes could adversely affect us or our stockholders.

**General Risk Factors** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The phase-out of LIBOR could affect interest rates for our Term Loans and interest rate cap and swap arrangements.

------

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| | | **Page** |
| PART I |  |  |
| Item 1. | <u>[Business](#i8c39d713b53c47809e65903a90f52737_10)</u> | <u>[3](#i8c39d713b53c47809e65903a90f52737_10)</u> |
| Item 1A. | <u>[Risk Factors](#i8c39d713b53c47809e65903a90f52737_34)</u> | <u>[13](#i8c39d713b53c47809e65903a90f52737_34)</u> |
| Item 1B. | <u>[Unresolved Staff Comments](#i8c39d713b53c47809e65903a90f52737_37)</u> | <u>[45](#i8c39d713b53c47809e65903a90f52737_37)</u> |
| Item 2. | <u>[Properties](#i8c39d713b53c47809e65903a90f52737_40)</u> | <u>[46](#i8c39d713b53c47809e65903a90f52737_40)</u> |
| Item 3. | <u>[Legal Proceedings](#i8c39d713b53c47809e65903a90f52737_61)</u> | <u>[56](#i8c39d713b53c47809e65903a90f52737_61)</u> |
| Item 4. | <u>[Mine Safety Disclosures](#i8c39d713b53c47809e65903a90f52737_64)</u> | <u>[56](#i8c39d713b53c47809e65903a90f52737_64)</u> |
| PART II |  |  |
| Item 5. | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i8c39d713b53c47809e65903a90f52737_67)</u> | <u>[57](#i8c39d713b53c47809e65903a90f52737_67)</u> |
| Item 6. | <u>[Reserved](#i8c39d713b53c47809e65903a90f52737_73)</u> | <u>[63](#i8c39d713b53c47809e65903a90f52737_73)</u> |
| Item 7. | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i8c39d713b53c47809e65903a90f52737_79)</u> | <u>[64](#i8c39d713b53c47809e65903a90f52737_79)</u> |
| Item 7A. | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i8c39d713b53c47809e65903a90f52737_136)</u> | <u>[83](#i8c39d713b53c47809e65903a90f52737_136)</u> |
| Item 8. | <u>[Financial Statements and Supplementary Data](#i8c39d713b53c47809e65903a90f52737_139)</u> | <u>[83](#i8c39d713b53c47809e65903a90f52737_139)</u> |
| Item 9. | <u>[Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#i8c39d713b53c47809e65903a90f52737_142)</u> | <u>[83](#i8c39d713b53c47809e65903a90f52737_142)</u> |
| Item 9A. | <u>[Controls and Procedures](#i8c39d713b53c47809e65903a90f52737_145)</u> | <u>[83](#i8c39d713b53c47809e65903a90f52737_145)</u> |
| Item 9B. | <u>[Other Information](#i8c39d713b53c47809e65903a90f52737_148)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_148)</u> |
| Item 9C. | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i8c39d713b53c47809e65903a90f52737_148)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_148)</u> |
| PART III |  |  |
| Item 10. | <u>[Directors, Executive Officers and Corporate Governance](#i8c39d713b53c47809e65903a90f52737_151)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_151)</u> |
| Item 11. | <u>[Executive Compensation](#i8c39d713b53c47809e65903a90f52737_154)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_154)</u> |
| Item 12. | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters](#i8c39d713b53c47809e65903a90f52737_157)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_157)</u> |
| Item 13. | <u>[Certain Relationships and Related Transactions, and Director Independence](#i8c39d713b53c47809e65903a90f52737_160)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_160)</u> |
| Item 14. | <u>[Principal Accountant Fees and Services](#i8c39d713b53c47809e65903a90f52737_163)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_163)</u> |
| PART IV |  |  |
| Item 15. | <u>[Exhibits, Financial Statement Schedule](#i8c39d713b53c47809e65903a90f52737_166)</u> | <u>[84](#i8c39d713b53c47809e65903a90f52737_166)</u> |
| Item 16. | <u>[Form 10-K Summary](#i8c39d713b53c47809e65903a90f52737_169)</u> | <u>[87](#i8c39d713b53c47809e65903a90f52737_169)</u> |

---

------

**Cautionary Note Regarding Forward-Looking Statements**

This Form 10-K may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments. Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, "may," "should," "expect," "anticipate," "estimate," "would be," "believe," or "continue" or the negative or other variations of comparable terminology. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-K is filed with the Securities and Exchange Commission ("SEC"). Except as required by law, we do not undertake any obligation to update or revise any forward-looking statements contained in this Form 10-K. Important factors that could cause actual results to differ materially from the forward-looking statements are disclosed in "Item 1A. Risk Factors," "Item 1. Business" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

**Presentation of Dollar Amounts**

Unless otherwise noted, all dollar amounts, except per share dollar amounts, reported in this Form 10-K are in thousands.

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**PART I**

---

| | |
|:---|:---|
| **Item 1.** | **Business.** |

---

***GENERAL***

*Except where the context suggests otherwise, the terms "we," "us," "our" and the "Company" refer to JLL Income Property Trust, Inc. The terms "Advisor" and "LaSalle" refer to LaSalle Investment Management, Inc.*

JLL Income Property Trust, Inc., formerly known as Jones Lang LaSalle Income Property Trust, Inc., is an externally advised, daily valued perpetual-life REIT that owns and manages a diversified portfolio of industrial, office, residential, retail and other properties located in the United States. Over time, our real estate portfolio may be further diversified on a global basis through the acquisition of properties outside of the United States and will be complemented by investments in real estate-related debt and equity securities. We were incorporated on May 28, 2004 under the laws of the State of Maryland. We believe that we have operated in such a manner to qualify to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2004, when we first elected REIT status. As of December 31, 2022, we owned interests in a total of 135 properties and over 4,300 single-family rental houses located in 26 states.

We own substantially all of our assets through JLLIPT Holdings, LP, a Delaware limited partnership (our "operating partnership"), of which we are a limited partner and JLLIPT Holdings GP, LLC, our wholly owned subsidiary, is the sole general partner. The use of our operating partnership to hold substantially all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"). By using an UPREIT structure, a property owner who desires to defer taxable gain on the disposition of his or her property may transfer the property to our operating partnership in exchange for limited partnership interests in the operating partnership ("OP Units") and defer taxation of gain until the limited partnership interests are disposed of in a taxable transaction. As of December 31, 2022, we raised aggregate proceeds from the issuance of OP Units in our operating partnership of $128,421, and owned directly or indirectly 96.1% of the OP Units of our operating partnership. The remaining 3.9% of the OP Units are held by third parties.

From our inception to December 31, 2022, we have received approximately $4,695,400 in gross offering proceeds from various public and private offerings of shares of our common stock as well as issuance of OP Units. On October 1, 2012, we commenced our initial public offering of common stock and since that time we have offered shares of our common stock in various public offerings registered with the SEC.

On December 21, 2021, our most recent public offering (the "Current Public Offering") of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock was declared effective by the SEC. As of December 31, 2022, we have raised aggregate gross proceeds from the sale of shares of our common stock in our Current Public Offering of $825,192. We intend to continue to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering.

In addition to our public offerings, on March 3, 2015, we commenced a private offering (the "Private Offering") of up to $350,000 in shares of our Class D common stock with an indefinite duration. As of December 31, 2022, we have raised aggregate gross proceeds of $98,188 in the Private Offering. In addition, on October 16, 2019, through our operating partnership, we initiated a program (the "DST Program") to raise up to $2,000,000 in private placements exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts ("DSTs") holding real properties ("DST Properties"), which may be sourced from our real properties or from third parties. As of December 31, 2022, we have raised approximately $759,194 of aggregate gross proceeds from our DST Program.

As of December 31, 2022, 113,645,166 shares of Class A common stock, 26,170,260 shares of Class M common stock, 4,950,208 shares of Class A-I common stock, 95,803,409 shares of Class M-I common stock, and 3,023,025 shares of Class D common stock were outstanding and held by a total of 24,496 stockholders.

LaSalle acts as our Advisor pursuant to the advisory agreement among us, our operating partnership and LaSalle (the "Advisory Agreement"). The term of our Advisory Agreement expires June 5, 2023, subject to an unlimited number of successive one-year renewals. Our Advisor, a registered investment advisor with the SEC, has broad discretion with respect to our investment decisions and is responsible for selecting our investments and for managing our investment portfolio pursuant to the terms of the Advisory Agreement. Our executive officers are employees of, and compensated by, our Advisor. We have no employees, as all operations are managed by our Advisor.

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

LaSalle is a wholly owned, but operationally independent subsidiary, of Jones Lang LaSalle Incorporated ("JLL" or our "Sponsor"), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. As of December 31, 2022, JLL and its affiliates owned an aggregate of 2,521,801 Class M shares, which were issued for cash at a price equal to the most recently reported net asset value ("NAV") per share as of the purchase date and have a current value of approximately $36,300.

***INVESTMENT OBJECTIVES AND STRATEGY***

**Investment Objectives**

Our primary investment objectives are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to generate an attractive level of current income for distribution to our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to preserve and protect our stockholders' capital investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to achieve appreciation of our NAV over time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to enable stockholders to utilize real estate as an asset class in diversified, long-term investment portfolios.

We cannot assure you that we will achieve our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases, these limitations cannot be changed unless our charter is amended, which may require the approval of our stockholders.

**Investment Strategy**

The cornerstone of our investment strategy is to acquire and manage income-producing commercial real estate properties and real estate-related assets around the world. We believe this strategy will enable us to provide stockholders with a portfolio that is well-diversified across property type, geographic region and industry, both in the United States and internationally. It is our belief that adding international investments to our portfolio over time will serve as an effective tool to construct a well-diversified portfolio designed to provide our stockholders with stable distributions and attractive long-term risk-adjusted returns.

We believe that our broadly diversified portfolio will benefit our stockholders by providing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diversification of sources of income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to attractive real estate opportunities currently in the United States and, over time, around the world; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to a return profile that should have lower correlations with other investments.

Since real estate markets are often cyclical in nature, our strategy will allow us to more effectively deploy capital into property types and geographic regions where the underlying investment fundamentals are relatively strong or strengthening and away from those property types and geographic regions where such fundamentals are relatively weak or weakening. We intend to meet our investment objectives by selecting investments across multiple property types and geographic regions to achieve portfolio stability, diversification, current income and favorable risk-adjusted returns. To a lesser degree, we also intend to invest in debt and equity interests backed principally by real estate, which we refer to collectively as "real estate-related assets."

We will leverage LaSalle's broad commercial real estate research and strategy platform and capabilities to employ a research-based investment philosophy focused on building a portfolio of commercial properties and real estate-related assets that we believe have the potential to provide stable income streams and outperform market averages over an extended holding period. Furthermore, we believe that having access to LaSalle and JLL's international organization and platform, with real estate professionals living and working full time throughout our global target markets, will be a valuable resource to us when considering and executing upon international investment opportunities.

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**Investment Portfolio Allocation Targets**

Our board of directors has adopted investment guidelines for our Advisor to implement and actively monitor in order to allow us to achieve and maintain diversification in our overall investment portfolio. Our board of directors formally reviews our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Our board of directors will review the investment guidelines to ensure that the guidelines are being followed and are in the best interests of our stockholders. Each such determination and the basis therefore shall be set forth in the minutes of the meetings of our board of directors. Changes to our investment guidelines must be approved by our board of directors and do not require notice to or the vote of our stockholders.

We will seek to invest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 95% of our assets in properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 25% of our assets in real estate-related assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 15% of our assets in cash, cash equivalents and other short-term investments.

Notwithstanding the above, the actual percentage of our portfolio that is invested in each investment type may from time to time be outside the target levels provided above due to factors such as a large inflow of capital over a short period of time, a lack of attractive investment opportunities or an increase in anticipated cash requirements for repurchase requests.

**Sustainability and Climate Risk**

We actively work to promote our growth and operations in a sustainable and responsible manner across our portfolio. Our sustainability strategy focuses on delivering long-term value to our stockholders while operating our properties in a manner to contribute to positive economic, social, and environmental outcomes for our tenants and the communities we serve.

We tailor our approach to each asset, working to protect and enhance financial returns today and in the future. We examine a range of sustainability factors for each asset that have the potential to enhance accretive value drivers, such as tenant marketability, lower operating expenses and greater appeal to future buyers, as well as to fortify defensive value protectors, such as regulatory disclosure and carbon pricing risk, physical climate risk and insurance premium risk, among others. The relative importance of these factors for any given investment opportunity will vary for many reasons including but not limited to the investment type, market, sector, tenant profile, the expected investment period and the local regulatory environment. By tailoring our approach, our Advisor is able to develop an action plan to maximize the sustainability impact and financial performance of each investment. This sustainability strategy complements our investment strategy and policies and furthers our core investment thesis.

Our sustainability activities are overseen by our Advisor's Sustainability Governance Board. This board consists of representatives from the fund management, asset management, acquisitions, research & strategy, investor relations and sustainability teams within our Advisor. The Sustainability Governance Board supports our portfolio management team, provides input, oversight and leadership for program activities, and is responsible for ensuring that sustainability is embedded into each part of the asset life cycle and business operations.

We are focused on acquiring and maintaining high-performing, resilient properties that fit our investment strategy, while simultaneously looking for ways to mitigate operational costs and the potential external impacts of energy, water, waste, greenhouse gas emissions and climate change. Sustainability factors are incorporated throughout the investment lifecycle, and we actively pursue resource efficiency projects and sustainability certifications across the portfolio. Prior to the acquisition of a property, our Advisor conducts an in-depth investigation during the due diligence process to identify key sustainability and climate risk information.

Every year, our Advisor considers the energy performance level of each asset and the sustainability related capital and operating activities are integrated into the annual budget process. In order to identify opportunities to increase efficiency, our Advisor conducts energy audits on properties located in jurisdictions with sustainability regulations, as well as on properties with low energy performance or with significant planned capital work that will impact energy-using systems.

Climate change is a risk to us, our tenants and our other stakeholders and will require us to evaluate strategies for resilience and to incorporate sustainability risks into our long-term strategic business decisions. These risks include transitional risks such as policy, market, technology and reputational concerns, as well as physical risks, and are a focus area for us.

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Our Advisor addresses climate risk by evaluating climate change scenarios and adapting its acquisition and portfolio review processes to address climate change vulnerabilities resulting from potential future climate scenarios. Physical and transition risks that may result from climate change could have a material adverse effect on our properties, operations and business. Our role in assessing and managing these climate-related risks and initiatives is spread across multiple teams in the organization, including executive leadership and the sustainability, acquisitions, risk management, asset management, legal and compliance and research departments.

In 2018, we became the first NAV REIT to submit to Global Real Estate Sustainability Benchmark ("GRESB"), a leading global provider of real estate environmental, social and governance benchmarking and performance assessments. For 2022, we achieved a 3-star out of 5-star GRESB rating. Also in 2022, our properties achieved 12 BREEAM In-Use Certifications, five ENERGY STAR Certifications and 31 WELL Health Safety Ratings. We conducted energy efficiency or net zero carbon audits to identify efficiency opportunities at three of our properties and are evaluating several properties for installation of solar and electric vehicle chargers. Our Advisor is committed to reduce the landlord-controlled operational carbon emissions of our portfolio of directly-managed properties to net zero by the year 2050, including a 50% reduction by 2030. In line with this, our Advisor is a signatory to the UN's net Zero Asset Managers Initiative, ULI Greenprint's Net Zero Goal and the US DOE's Better Climate Challenge.

***INVESTMENT POLICIES***

We may invest in real estate directly or indirectly through interests in corporations, limited liability companies, partnerships and joint ventures having an equity interest in real property, real estate investment trusts, ground leases, tenant in common interests, mortgages, participating mortgages, convertible mortgages, second mortgages, mezzanine loans or other debt interests convertible into equity interests in real property, options to purchase real estate, real property purchase-and-leaseback transactions and other transactions and investments with respect to real estate.

We intend to use financial leverage to provide additional funds to support our investment activities. We expect to maintain a targeted company leverage ratio (calculated as our share of total liabilities (excluding future dealer manager fees) divided by our share of the fair value of total assets) of between approximately 30% and 50%. Our company leverage ratio was 36% at December 31, 2022 and 42% at December 31, 2021. We intend to continue to use portions of the proceeds from our offerings to retire certain borrowings as they mature or become available for repayment or when doing so is beneficial to achieving our investment objectives. We are precluded from borrowing more than approximately 75% of the sum of the cost of our investments (before non-cash reserves and depreciation), which is based upon the limit specified in our charter that borrowing may not exceed 300% of the cost of our net assets. "Net assets" is defined as our total assets, other than intangibles, valued at cost (prior to deducting depreciation and amortization, reserves for bad debts and other non-cash reserves) less total liabilities. However, we may temporarily borrow in excess of these amounts if such excess is approved by a majority of our board, including a majority of our independent directors, and disclosed to stockholders in our next quarterly report, along with justification for such excess. In such event, we will review our debt levels at that time and take action to reduce any such excess as soon as practicable. As of December 31, 2022, we are in compliance with the charter limitations on our indebtedness.

**Investments in Properties**

We generally invest in properties located in large metropolitan areas that are well-leased with a stable tenant base and that are expected to generate predictable income. However, we may make investments in properties with other characteristics if we believe that the investments have the potential to enhance portfolio diversification or investment returns, as further described below under "Value Creation Opportunities." There is no limitation on the amount we may invest in any single property.

We intend to manage risk through constructing and managing a broadly diversified portfolio of properties in developed markets around the world. We believe that a broadly diversified investment portfolio may offer stockholders significant benefits for a given level of risk relative to a more concentrated investment portfolio. In addition, we believe that assembling a diversified tenant base by investing in multiple properties and property types across multiple markets and geographic regions may mitigate the economic impacts associated with releasing properties or tenants potentially defaulting under their leases, since lease revenues represent the primary source of income from our real estate investments.

We will focus on acquiring and managing a portfolio of properties that provides tenants and residents with modern functionality and location desirability in order to avoid near-term obsolescence. We will generally invest in well-designed buildings that we believe present an attractive appearance, have been and are properly maintained and require minimal capital improvements in the near term. We generally do not intend to materially invest in higher risk properties in need of significant renovation, development or new construction; however, we may invest in these types of properties if we believe attractive risk-adjusted investment returns can be achieved through proactive management techniques or value-add programs, as further described below under "Value Creation Opportunities."

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Our board of directors is responsible for determining the consideration we pay for each property we acquire. However, our board has adopted investment guidelines that delegate this authority to our Advisor, so long as our Advisor complies with these investment guidelines. The investment guidelines limit the types of properties and investment amounts that may be acquired or disposed of without the specific approval of our board of directors. Our board of directors may change from time to time the scope of authority delegated to our Advisor.

Subject to limitations contained in our charter, we may issue, or cause to be issued, shares of our stock or OP Units in any manner (and on such terms and for such consideration) in exchange for real estate. Our existing stockholders have no preemptive rights to purchase any such shares of our stock or OP Units, and any such issuance might cause a dilution of a stockholder's initial investment. We may enter into additional contractual arrangements with contributors of property under which we would agree to repurchase a contributor's units for shares of our common stock or cash, at the option of the contributor, at specified times.

**Global Target Markets**

In general, we seek to invest in properties in well-established locations within larger metropolitan areas and with the potential for above average population or employment growth. Although we have focused, and expect to continue to focus, on investing primarily in developed markets throughout the United States, we may also invest a substantial portion of the proceeds of our offerings in markets outside of the United States. We believe that investments in international markets that meet our investment objectives and guidelines will contribute materially to the diversification of our portfolio, the ability for us to identify favorable income-generating investments and the potential for achieving attractive long-term risk-adjusted returns. We believe that opportunities for attractive risk-adjusted returns exist both in and outside the United States. Most of our investments outside of the United States will be in core properties in stabilized, well-developed markets within Europe and the Asia Pacific region. We believe that our long-term strategy to acquire properties on a global basis will provide for a well-diversified portfolio that will generate attractive current returns and optimize long-term value for our stockholders.

**Value Creation Opportunities**

We may periodically seek to enhance investment returns through various value creation opportunities. While there are no specific limitations on the nature or amount of these types of investments, in the aggregate they are not expected to materially change the risk profile of our overall portfolio. Examples of likely value creation investments include properties with significant leasing risk, forward purchase commitments, development, redevelopment or repositioning opportunities and nontraditional or mixed-use property types. These investments generally have a higher risk and higher return profile than our primarily core strategy.

**Disposition Policies**

We anticipate that we will hold most of our properties for an extended period. However, we may determine to sell a property before the end of its anticipated holding period. We will monitor each investment within the portfolio and the overall portfolio composition for appropriateness in meeting our investment objectives. Our Advisor may determine to sell a property if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an opportunity has arisen to enhance overall investment returns by reallocating capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• there are diversification benefits associated with disposing of the property and rebalancing our investment portfolio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the judgment of our Advisor, the value of the property might decline or underperform as compared to our investment strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an opportunity has arisen to pursue a more attractive investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the property was acquired as part of a portfolio acquisition and does not meet our investment guidelines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• there exists a need to generate liquidity to satisfy repurchase requests, to pay distributions to our stockholders or for working capital; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the judgment of our Advisor, the sale of the property is in the best interests of our stockholders.

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Generally, we intend to reinvest proceeds from the sale, financing or other disposition of properties in a manner consistent with our investment strategy and guidelines, although we may be required to distribute such proceeds to stockholders in order to comply with REIT requirements or we may make distributions for other reasons.

**Investments in Real Estate-Related Assets**

We may invest a portion of our portfolio in real estate-related assets other than properties. These assets may include the common and preferred stock of publicly traded real estate-related companies, preferred equity interests, mortgage loans and other real estate-related equity and debt instruments. Up to 25% of our overall portfolio may be invested in real estate-related assets. We believe that our Advisor's ability to acquire real estate-related assets in conjunction with acquiring a portfolio of properties may provide us with additional liquidity and further diversification, which provides greater financial flexibility and discretion to construct an investment portfolio designed to achieve our investment objectives.

Our charter requires that any investment in equity securities (other than equity securities traded on a national securities exchange or included for quotation on an inter-dealer quotation system) not within the specific parameters of our investment guidelines adopted by our board of directors must be approved by a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction as being fair, competitive and commercially reasonable. As of December 31, 2022, we had $44,182 invested in publicly traded real estate companies.

We may invest in mortgage loans consistent with the requirements for qualification as a REIT. We may originate or acquire interests in mortgage loans, generally on the same types of properties we might otherwise buy. These mortgage loans may pay fixed or variable interest rates or have "participating" features described below. Normally, mortgage loans will be secured by income-producing properties. These mortgage loans typically will be nonrecourse, which means they will not be the borrower's personal obligations. We expect that most will be first mortgage loans, with first priority liens on the property. These mortgage loans may provide for payments of principal and interest or may provide for interest-only payments, with a balloon payment at maturity. We may make mortgage loans that permit us to participate in the revenues from, or appreciation, of the underlying property consistent with the rules applicable for qualification as a REIT. These participations may entitle us to receive additional interest, usually calculated as a percentage of the gross income the borrower receives from operating, selling or refinancing the property. We may also receive an option to buy an interest in the property securing the participating loan.

Subject to the percentage of ownership limitations and gross income and asset requirements required for REIT qualification, we may invest in equity securities of companies engaged in real estate activities, including for the purpose of exercising control over such entities. Companies engaged in real estate activities may include, for example, REITs that either own properties or make real estate loans, real estate developers, entities with substantial real estate holdings such as limited partnerships, funds and other commingled investment vehicles, and other companies whose products and services are related to the real estate industry, such as mortgage lenders or mortgage servicing companies. We may acquire all or substantially all of the securities or assets of companies engaged in real estate activities where such investment would be consistent with our investment policies and our status as a REIT. We may also acquire exchange traded funds and mutual funds focused on REITs and real estate companies. In any event, we do not intend that our investments in securities will require us to register as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and we intend to generally divest appropriate securities before any such registration would be required.

**Cash, Cash Equivalents and Other Short-Term Investments**

We may invest up to 15% of our assets in cash, cash equivalents and other short-term investments. These types of investments may include the following, to the extent consistent with our qualification as a REIT:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• money market instruments, cash and other cash equivalents (such as high-quality short-term debt instruments, including commercial paper, certificates of deposit, bankers' acceptances, repurchase agreements, interest- bearing time deposits and credit rated corporate debt securities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• U.S. government or government agency securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• credit rated corporate debt or asset-backed securities of U.S. or foreign entities, or credit rated debt securities of foreign governments or multi-national organizations.

**Other Investments**

We may, but do not presently intend to, make investments other than as previously described. At all times, we intend to make investments in such a manner consistent with maintaining our qualification as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). We do not intend to underwrite securities of other issuers.

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***COMPETITION***

We face competition when attempting to make real estate investments, including competition from domestic and foreign financial institutions, other REITs, life insurance companies, pension funds, partnerships and individual investors. The leasing of real estate is also highly competitive. Our properties compete for tenants with similar properties primarily on the basis of location, total occupancy costs (including base rent and operating expenses), services provided and the design and condition of the improvements.

***SEASONALITY***

Our investments are not materially impacted by seasonality, despite certain of our retail tenants being impacted by seasonality. Percentage rents (rents computed as a percentage of tenant sales) that we earn from investments in retail properties may, in the future, be impacted by seasonality.

***GOVERNMENTAL REGULATIONS***

As an owner of real estate, our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, include among other things: (i) federal and state securities laws and regulations; (ii) federal, state and local tax laws and regulations, (iii) state and local laws relating to real property; (iv) federal, state and local environmental laws, ordinances, and regulations, and (v) various laws relating to housing, including permanent and temporary rent control and stabilization laws, the Americans with Disabilities Act of 1990 and the Fair Housing Amendment Act of 1988, among others.

Compliance with the federal, state and local laws described above has not had a material, adverse effect on our business, assets, results of operations, financial condition and ability to pay distributions, and we do not believe that our existing portfolio will require us to incur material expenditures to comply with these laws and regulations.

***GEOGRAPHIC CONCENTRATION***

The following table provides information regarding the geographic concentration of our real estate portfolio as of December 31, 2022:

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| | | | |
|:---|:---|:---|:---|
| | **Real Estate Portfolio** | **Real Estate Portfolio** | **Real Estate Portfolio** |
| | **Number of**<br>**Properties**<sup>(1)</sup> | **Net Rentable Square Feet** | **Estimated Percent <br>of Fair Value** |
| South | 28 | 7150000 | 28% |
| West | 54 | 8311000 | 39 |
| East | 33 | 7047000 | 24 |
| Midwest | 20 | 2870000 | 9 |
| Total | 135 | 25378000 | 100% |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Excludes over 4,300 single-family rental houses located in various markets across the United States.

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The following charts sets forth the percentage of our consolidated revenues derived from properties owned in each state that accounted for more than 10% of our consolidated revenues during the years ended December 31, 2022, 2021 and 2020:

![jllipt-20221231_g2.jpg](jllipt-20221231_g2.jpg)![jllipt-20221231_g3.jpg](jllipt-20221231_g3.jpg)![jllipt-20221231_g4.jpg](jllipt-20221231_g4.jpg)

***DEPENDENCE ON SIGNIFICANT TENANTS***

Our significant tenants that accounted for more than 10% of the consolidated revenues from their respective segments during the years ending December 31, 2022, 2021 and 2020 were as follows:

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| | | | |
|:---|:---|:---|:---|
| | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
| | **2022** | **2021** | **2020** |
| **Office** |  |  |  |
| &nbsp;&nbsp;Amazon<sup>(1)</sup> | 19% | 26% | 31% |
| &nbsp;&nbsp;&nbsp;Summit Medical Group | (2) | (2) | 10% |
| &nbsp;&nbsp;&nbsp;Cellularity Inc. | (2) | 11% | (2) |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Amazon, including Whole Foods Market IP, Inc., also accounted for 4%, 5%, and 6% of the consolidated revenues in the retail segment in the years ended December 31, 2022, 2021 and 2020, respectively, and 3%, 4% and 5% of the consolidated revenues in the industrial segment in the years ended December 31, 2022, 2021 and 2020, respectively.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Represented less than 10% in the period.

***REPORTABLE SEGMENTS***

We align our internal operations along the primary property types we are targeting for investments, resulting in five operating segments: industrial properties, office properties, residential properties, retail properties and other properties. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 8, "Financial Statements and Supplementary Data" for financial information related to our reportable segments.

**Industrial Properties**

Industrial properties are generally categorized as warehouse/distribution centers, research and development facilities, flex space or manufacturing. The performance of industrial properties is typically dependent on the proximity to economic centers and the movement of global trade and goods. Industrial properties typically utilize a triple-net lease structure pursuant to which the tenant is generally responsible for property operating expenses in addition to base rent which can help mitigate the risks associated with rising expenses. We intend to invest in industrial properties that are located in major distribution hubs and near transportation modes such as port facilities, airports, rail lines and major highway systems as well as facilities located in close proximity to major centers of population.

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**Office Properties** 

Office sector properties are generally categorized based upon location and quality. Buildings may be located in Central Business Districts ("CBDs") or suburbs. Buildings may also be classified by general quality and size, ranging from Class A properties, which are generally large-scale buildings of the highest-quality, to Class C buildings which are below investment grade. We intend to invest in medical office and healthcare related facilities but also have previously invested in Class A or B office properties that are near areas of dense population, have sufficient transportation access or are located within well-established suburban office/business parks or CBDs. We expect the duration of our office leases to be generally between five to ten years, which can help mitigate the volatility of our portfolio's income.

**Residential Properties** 

Residential properties include multifamily apartments and single-family rental properties. Apartments are generally defined as having five or more dwelling units that are part of a single complex and offered for rental use as opposed to detached single-family residential properties. There are three main types of apartment properties: garden-style (mostly two to four story apartments), mid-rise and high-rise. Apartments generally have the lowest vacancy rates of any property type, with the better performing properties typically located in suburban markets in strong school districts, or in urban locations with strong employment and demographic dynamics. We plan to invest in apartment properties that are located in such areas or near employment centers with favorable potential for employment growth and conveniently situated with access to transportation and retail and service amenities. Traditional apartment properties are generally leased by apartment unit to individual tenants for one-year terms. Single-family rentals properties differ from apartments in that single-family rental units are detached, singular homes, usually featuring private yards and garages, as opposed to multi-unit apartments with shared common areas. Tenants in single-family rentals tend to stay longer, about three years, and are on average an older demographic of approximately 40 years old versus multifamily renters whose average age is in the lower 30s.

In addition, single-family rental homes typically offer larger individual living spaces, at around 1,900 square feet per home versus 900 square feet for multifamily (but not featuring the shared amenities of Class A multifamily such as a resident center, outdoor pool, fitness facility, business center, etc.). Single-family rentals is a growing institutional segment within the broader residential sector, and offers a meaningful opportunity to scale.

**Retail Properties**

The retail sector is comprised of five main formats: neighborhood retail, community centers, regional centers, super-regional centers and single-tenant stores. Location, convenience, accessibility and tenant mix are generally considered to be among the key criteria for successful retail investments. Retail leases tend to range from three to five years for small tenants and ten to 15 years for large anchor tenants. Leases, particularly for anchor tenants, may include a base payment plus a percentage of retail sales. Household incomes and population density are generally considered to be key drivers of local retail demand. We will seek investments in retail properties, primarily ones in neighborhood and community centers anchored by a grocery tenant and located within densely populated residential areas, with favorable demographic characteristics and near other retail and service amenities.

**Other Properties**

The other property sector is currently comprised of parking facilities. The parking industry is a large and fragmented sector and includes facilities that provide short-term parking spaces for vehicles on an hourly, daily, weekly or monthly basis. Parking structures can range from surface lots to larger multi-level buildings. Location and the local trade area are critically important to the performance of parking facilities. In addition to location, parking rates offered at a facility have a significant influence on a driver's decision to use a particular facility. We will seek to invest principally in parking facilities in densely populated urban areas with high barriers to entry for new competition and multiple demand drivers.

***AVAILABLE INFORMATION***

We are subject to the information requirements of the Exchange Act. Therefore, we file periodic reports, proxy statements and other information with the SEC. The SEC maintains a website (*www.sec.gov*) where the reports, proxy and information statements, and other information that we file electronically with the SEC can be accessed free of charge. Our website is *www.JLLIPT.com*. We may use our website as a distribution channel for material information about our Company. Our reports on Forms 10-K, 10-Q and 8-K, and all amendments to those reports are posted on our website as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC. The contents of our website are not incorporated by reference.

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***INSURANCE***

Although we believe our investments are currently adequately covered by insurance consistent with the terms and levels of coverage that are standard in our industry, we cannot predict at this time if we will be able to obtain adequate coverage at a reasonable cost in the future.

***HUMAN CAPITAL***

We have no paid employees. The employees of our Advisor or its affiliates provide management, acquisition, advisory and certain other administrative services for us.

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|:---|:---|
| **Item 1A.** | **Risk Factors.** |

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*You should consider carefully the risks and uncertainties described below and the other information in this Form 10-K, including our consolidated financial statements and the related notes included elsewhere in this Form 10-K. If any of the following risks actually occur, they may materially harm our business and our financial condition and results of operations and cause the NAV to decline.*

**Risks Related to Investing in Shares of Our Common Stock** 

***There is no public trading market for shares of our common stock; therefore, the ability of our stockholders to dispose of their shares will likely be limited to the repurchase of shares by us which generally will not be available during the first year after the purchase. If stockholders do sell their shares to us, they may receive less than the price paid.***

There is no current public trading market for shares of our common stock, and we do not expect that such a public market will ever develop. Therefore, the repurchase of shares by us will likely be the only way for stockholders to dispose of their shares, however we are not obligated to repurchase any shares of our common stock and may choose to only repurchase some, or even none, of the shares requested to be repurchased. To the extent we choose to repurchase shares, we will repurchase shares at a price equal to our NAV per share of the class of shares being repurchased on the date of repurchase, and not based on the price at which the shares were purchased. Shares are not eligible for repurchase for the first year after purchase except upon death or disability of a stockholder or under certain circumstances following the departure of key persons; provided, however, that shares issued pursuant to our distribution reinvestment plan are not subject to the one-year holding period. In addition, we may repurchase shares if a stockholder fails to maintain a minimum balance of $5 in shares, even if the failure to meet the minimum balance is caused solely by a decline in our NAV. As a result of these terms of our share repurchase plan, stockholders may receive less than the price they paid for their shares when they sell them to us pursuant to our share repurchase plan. In addition, as a perpetual-life REIT, we are not required to and do not intend to pursue a strategic transaction such as a listing on a national securities exchange or a sale of our Company that would provide liquidity to our stockholders.

***Our ability to repurchase shares may be limited, and our board of directors may modify or suspend our share repurchase plan at any time.***

Our share repurchase plan limits the funds we may use to purchase shares each calendar quarter to 5% of the combined NAV of all classes of shares as of the last day of the previous calendar quarter, which means that in any 12-month period, to the extent we choose to repurchase shares, we limit repurchases to approximately 20% of our total NAV. We are not obligated to repurchase any shares of our common stock and may choose to only repurchase some, or even none, of the shares requested to be repurchased. The vast majority of our assets consist of properties that cannot generally be liquidated quickly. Therefore, we may not always have a sufficient amount of cash to immediately satisfy repurchase requests. Our board of directors may modify or suspend for any period of time or indefinitely our share repurchase plan should repurchase requests, in the business judgment of our board of directors, place an undue burden on our liquidity, adversely affect our investment operations or pose a risk of having a material adverse impact on stockholders whose shares are not repurchased, or should we otherwise determine that investing our liquid assets in real properties or other illiquid investments rather than repurchasing our shares is in the best interests of the Company as a whole, then we may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Because our board of directors is not required to authorize the recommencement of the share repurchase plan within any specified period of time, our board of directors may effectively terminate the plan by suspending it indefinitely. As a result, our stockholders' ability to have their shares repurchased by us may be limited and at times no liquidity may be available for our stockholders' investment.

***We have a history of operating losses and cannot assure you that we will sustain profitability.***

As a consequence of recognizing depreciation in connection with the properties we own, we have a history of operating losses and cannot assure you that we will sustain profitability. As a result, since our inception in 2004, we have experienced net losses (calculated in accordance with U.S. generally accepted accounting principles ("GAAP")) over a number of years. The extent of our future operating losses are highly uncertain, and we may not sustain profitability.

***The availability, timing and amount of cash distributions to you are uncertain.***

Our board of directors is not obligated to declare quarterly dividends for our stockholders in any specific amounts or at all. We bear all expenses incurred in our operations, which are deducted from cash funds generated from operations prior to computing the amount of cash for distribution to stockholders. In addition, our board of directors, in its discretion, may retain any portion of such funds for working capital or other purposes, which was the policy of our board of directors from March 2009 through September 2011 when we suspended our distributions as a part of our cash conservation strategy adopted in response to the uncertain economic climate and extraordinary conditions in the commercial real estate industry.

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***To the extent our distributions represent a return of capital for tax purposes, our stockholders could recognize an increased capital gain upon a subsequent sale of our common stock.***

Distributions in excess of our current and accumulated earnings and profits and not treated by us as a dividend will not be taxable to a stockholder to the extent those distributions do not exceed the stockholder's adjusted tax basis in his or her common stock. Instead, the distribution will constitute a return of capital and will reduce the stockholder's adjusted basis. (Such distributions to non-U.S. stockholders may be subject to withholding, which may be refundable.) If distributions exceed the stockholder's adjusted basis, then his or her adjusted basis will be reduced to zero, and the excess will be treated as capital gain to the stockholder. Related, if distributions result in a reduction of a stockholder's adjusted basis in his or her common stock, then subsequent sales of such stockholder's common stock potentially will result in recognition of an increased capital gain.

***Your overall return may be reduced if we pay distributions from sources other than our cash from operations.***

To date, all of the distributions we have paid to stockholders have been funded through a combination of cash flows from our operations and investing activities. We may not generate sufficient cash flow from operations to fully fund distributions to stockholders. Therefore, we may choose to use cash flows from investing activities such as sales of real estate investments or interests in joint ventures. We may also choose to use financing activities, which include borrowings (including borrowings secured by our assets), net proceeds of our offerings or other sources to fund distributions to our stockholders. For the year ended December 31, 2022, 50% of our distributions were funded from cash flows from operations and 50% from investing activities. We may be required to continue to fund our regular distributions from a combination of some of these sources if our investments fail to perform as anticipated, our expenses are greater than expected or due to numerous other factors. We have not established a limit on the amount of our distributions that may be paid from any of these sources. Using certain of these sources may result in a liability to us, which would require a future repayment. The use of these sources for distributions and the ultimate repayment of any liabilities incurred could adversely impact our ability to pay distributions in future periods, decrease our NAV and NAV per share, decrease the amount of cash we have available for operations and new investments and adversely impact the value of an investment in our shares of common stock.

***Your purchase price may be more or less than the actual NAV if our NAV is incorrectly calculated.***

If our NAV is calculated in a way that is not reflective of our actual NAV, then the purchase price of shares of our common stock or the price paid for the repurchase of your shares of common stock on a given date may not accurately reflect the value of our portfolio, and your shares may be worth more or less than the purchase or repurchase price.

***You will not have the opportunity to evaluate future investments we will make with the proceeds raised in our offerings prior to purchasing shares of our common stock.***

We have not identified all of the investments that we will make with the proceeds of our offerings. As a result, you will not be able to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments prior to purchasing shares of our common stock. You must rely on our Advisor and our board of directors to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. Because you cannot evaluate all of the investments we will make in advance of purchasing shares of our common stock, this additional risk may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

***Our ability to implement our investment strategy is dependent, in part, upon the ability of our Dealer Manager to successfully conduct our offerings, which makes an investment in us more speculative.***

We have retained LaSalle Investment Management Distributors, LLC, an affiliate of our Advisor, to conduct our offerings (the "Dealer Manager"). The success of this offering, and our ability to implement our business strategy, is dependent upon the ability of our Dealer Manager to build and maintain a network of broker-dealers to sell our shares to their clients. If our Dealer Manager is not successful in establishing, operating and managing this network of broker-dealers, our ability to raise proceeds through this offering will be limited, and we may not have adequate capital to execute our investment strategy. If we are unsuccessful in executing our investment strategy, you could lose all or a part of your investment.

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***The performance component of the advisory fee is calculated for each class of our common stock and each class of OP Units on the basis of the total return attributable to that class over a calendar year, so it may differ among classes and it may not be consistent with the return on our shares over a longer or shorter time frame.***

The performance component of the advisory fee is calculated for each class of our common stock and for each class of OP Units on the basis of the total return attributable to that class over a calendar year. As a result, our Advisor may be entitled to receive the performance component with respect to one class of shares or OP Units but not another and may be entitled to receive compensation under the performance component of the advisory fee for a given year even if some of our stockholders who purchased shares during such year experienced a decline in NAV per share. Similarly, stockholders who request that we repurchase their shares during a given year may have their shares repurchased at a lower NAV per share as a result of an accrual for the estimated performance component of the advisory fee, even if no performance component is ultimately payable to our Advisor at the end of such calendar year. In addition, if the NAV of our classes of common stock or classes of OP Units remains above certain threshold levels, our Advisor's ability to earn the performance fee in any year will not be affected by poor performance in prior years. Furthermore, the Advisor will not be obligated to return any portion of advisory fees paid based on our subsequent performance.

***Valuations and appraisals of our properties and real estate-related assets are estimates of fair value and may not necessarily correspond to realizable value.***

For the purposes of calculating our NAV after the close of business on each business day, our properties will initially be valued at cost upon their acquisition which we expect to represent fair value at that time. Thereafter, valuations of properties, which will be based in part on appraisals of each of our properties by our independent valuation advisor at least once during every calendar quarter after the first full calendar quarter in which we owned each respective property, will be performed in accordance with our valuation guidelines. Likewise, our investments in real estate-related assets will initially be valued at cost upon their acquisition, and thereafter will be valued quarterly, or in the case of liquid securities, daily, as applicable, at fair value. Within the parameters of our valuation guidelines, the valuation methodologies used to value our properties will involve subjective judgments regarding such factors as comparable sales, rental and operating expense data, the capitalization or discount rate, and projections of future rent and expenses based on appropriate analysis. Valuations and appraisals of our properties and real estate-related assets will be only estimates of fair value. Ultimate realization of the value of an asset depends to a great extent on economic and other conditions beyond our control and the control of our Advisor and independent valuation advisor.

Further, valuations do not necessarily represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation between a willing buyer and seller. Therefore, the valuations of our properties and our investments in real estate-related assets may not correspond to the timely realizable value upon a sale of those assets. There will be no retroactive adjustment in the valuation of such assets, the price of our shares of common stock, the price we paid to repurchase shares of our common stock or NAV-based fees we paid to our Advisor and Dealer Manager to the extent such valuations prove to not accurately reflect the true estimated value and are not a precise measure of realizable value. Because the price you will pay for shares of our common stock, and the price at which your shares may be repurchased by us pursuant to our share repurchase plan, are based on our estimated NAV per share, you may pay more than realizable value or receive less than realizable value for your investment.

***No rule, regulation, or industry practice requires that we calculate our NAV in a certain way, and our board of directors, including a majority of our independent directors, may adopt changes to our valuation guidelines.***

There are no existing rules or regulatory bodies that specifically govern the manner in which we calculate our NAV and there is no established practice among public REITs, whether listed or not, for calculating NAV in order to establish a purchase and repurchase price. As a result, it is important that you pay particular attention to the specific methodologies and assumptions we use to calculate our NAV, as other public REITs may use different methodologies or assumptions to determine their NAV. For example, we do not fair value our mortgage notes and other debt payable. In addition, our board of directors, including a majority of our independent directors, will review the appropriateness of our valuation guidelines at least annually and may, at any time, adopt changes to our valuation guidelines.

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***Our NAV per share may suddenly change if the appraised values of our properties materially change from prior appraisals or the actual operating results for a particular month differ from what we originally budgeted for that month.***

Each of our properties will be appraised at least once per quarter and, under normal circumstances, will not be appraised more frequently than once per quarter. Properties may be valued more frequently than quarterly if our advisor or independent valuation advisor believes that the value of such property has changed materially since the most recent quarterly valuation. As such, when these appraisals are reflected in our NAV calculation, there may be a sudden change in our NAV per share for each class of our common stock. These changes in a property's value may be as a result of property-specific events or as a result of more general changes to real estate values resulting from local, national or global economic changes.

In addition, actual operation results for a given month may differ from what we originally budgeted for that month, which may cause a sudden increase or decrease in the NAV per share amounts. We accrue estimated income and expenses on a daily basis based on our budgets. On an ongoing basis, we adjust the income and expenses we accrued to reflect the income and expenses actually earned and incurred. We do not retroactively adjust the NAV per share of each class for each day. Therefore, because the actual results from operations may be better or worse than what we previously budgeted, the adjustment to reflect actual operating results may cause the NAV per share for each class of our common stock to increase or decrease, and such increase or decrease will occur on the day the adjustment is made.

***The NAV per share that we publish may not necessarily reflect changes in our NAV that are not immediately quantifiable.***

From time to time, we may experience events with respect to our investments that may have a material impact on our NAV. For example, an unexpected termination or renewal of a material lease, a material change in vacancies or an unanticipated structural or environmental event at a property may cause the value of a property to change materially. The NAV per share of each class of our common stock as published on any given day may not reflect such extraordinary events to the extent that their financial impact is not immediately quantifiable. As a result, the NAV per share of each class published after the announcement of a material event may differ significantly from our actual NAV per share for such class until such time as the financial impact is quantified and our NAV is appropriately adjusted in accordance with our valuation guidelines. The resulting potential disparity in our NAV may inure to the benefit of stockholders whose shares are repurchased or new stockholders, depending on whether our published NAV per share for such class is overstated or understated.

***Due to daily fluctuations in our NAV, the price at which your purchase is executed could be higher than our NAV per share at the time you submit your subscription, and the price at which your repurchase is executed could be lower than our NAV per share at the time you submit your repurchase request.***

The purchase and repurchase price for shares of our common stock will not be based on any established trading price. Your accepted subscription will be executed at a price equal to our NAV per share for the class of shares being purchased next determined after your subscription is received in proper form and processed, plus, for Class A and Class A-I shares only, any applicable selling commissions. As a result of this process, you will not know the purchase price per share at which your subscription will be executed at the time you submit your subscription. The purchase price per share at which your subscription is executed could be higher than the NAV per share on the date you submitted your subscription and if this is the case, you could receive fewer shares than initially anticipated. If the purchase price per share at which your subscription agreement is lower than the NAV per share on the date you submitted your subscription, you could receive more shares than initially anticipated. For example, if a subscription is processed and accepted on a business day and before the close of business (4:00 p.m. Eastern time) on that day, the subscription will be executed at a purchase price equal to our NAV per share for the class of shares being purchased determined after the close of business on that day, plus, for Class A and Class A-I shares, any applicable selling commissions.

If a subscription is processed and accepted on a business day, but after the close of business on that day, the subscription will be executed at a purchase price equal to our NAV per share for the class of shares being purchased determined after the close of business on the next business day, plus, for Class A and Class A-I shares only, any applicable selling commissions. Similarly, received and processed repurchase requests will be effected at a repurchase price equal to the next-determined NAV per share for the class of shares being repurchased. Investors who subscribe for shares will not know the purchase price at the time they submit their subscription. Because stockholders will not know the repurchase price that will apply at the time that repurchase requests are submitted, the repurchase price per share at which your repurchase request is executed could be lower than the NAV per share on the date you submitted your repurchase request. If our NAV per share increases, purchasers of Class A and Class A-I shares will pay a higher selling commission per share and if our NAV per share decreases, purchasers of Class A and Class A-I shares will pay a lower selling commission per share, as the amount of commissions is calculated as a percentage of NAV per share.

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***We have broad discretion in how we use the proceeds from our offerings, and we may use the proceeds in ways with which you disagree.***

We expect to use the net proceeds of our public and private offerings to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan or through tender offers. We have not allocated specific amounts of the net proceeds from our public and private offerings for any specific purpose. Accordingly, our management will have significant flexibility in applying the net proceeds of our public and private offerings, including the ability to apply net proceeds to the payment of distributions. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. In addition, it is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us or our stockholders. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flows.

***Future offerings of debt securities, which would be senior to our common stock upon liquidation, or equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of distributions, may adversely affect the value of our common stock.***

In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities, including medium term notes, senior or subordinated notes and classes of preferred or common stock. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock.

Additionally, holders of our common stock will not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1 billion shares of common stock. Our board of directors may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of common stock or the number of authorized shares of capital stock of any class or series without stockholder approval. After you purchase shares of our common stock, our board of directors may elect, without stockholder approval, to: (1) sell additional shares in future public offerings; (2) issue equity interests in private offerings; (3) issue shares upon the exercise of the options we may grant to our independent directors or future employees; (4) issue shares to our Advisor, or its successors or assigns, in payment of an outstanding obligation to pay fees for services rendered to us or to reimburse expenses paid on our behalf or (5) issue shares to sellers of properties we acquire in connection with an exchange of limited partnership interests of our operating partnership. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our common stock and diluting their proportionate ownership.

***If you purchase shares of common stock, you may experience immediate dilution in the net tangible book value per share.***

Net tangible book value is used as a measure of net worth that reflects certain dilution in the value of our common stock from the issue price as a result of (i) accumulated depreciation and amortization of real estate investments, (ii) fees paid in connection with the offering and (iii) the fees and expenses paid to our Advisor and its affiliates in connection with the selection, acquisition, management and sale of our investments. Net tangible book value does not reflect our estimated value per share nor does it necessarily reflect the value of our assets upon an orderly liquidation of the Company in accordance with our investment objectives. As of December 31, 2022, our net tangible book value per share was $10.82, calculated as our net tangible book value as of December 31, 2022 divided by the 243,592,068 shares of our common stock outstanding as of December 31, 2022, as compared to our share price of $14.37, $14.39, $14.40 and $14.38 per Class A, Class M, Class A-I and Class M-I share, respectively, on such date pursuant to our public offering.

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***Compliance with the SEC's Regulation Best Interest by participating broker-dealers may negatively impact our ability to raise capital in Our Current Public Offering, which would harm our ability to achieve our investment objectives.***

Broker-dealers must comply with Regulation Best Interest, which, among other requirements, establishes a new standard of conduct for broker-dealers and their associated persons when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. The full impact of Regulation Best Interest on participating dealers cannot be determined at this time, and it may negatively impact whether participating dealers and their associated persons recommend our Current Public Offering to certain retail customers, or the amount of shares which are recommended to such customers. In particular, under SEC guidance concerning Regulation Best Interest, a broker-dealer recommending an investment in our shares should consider a number of factors, including but not limited to cost and complexity of the investment and reasonably available alternatives in determining whether there is a reasonable basis for the recommendation. Broker-dealers may recommend a more costly or complex product as long as they have a reasonable basis to believe it is in the best interest of a particular retail customer. However, if broker-dealers instead choose alternatives to our shares, many of which likely exist, our ability to raise capital may be adversely affected. If Regulation Best Interest reduces our ability to raise capital in our Current Public Offering, it would harm our ability to create a diversified portfolio of investments and ability to achieve our investment objectives.

**Risks Related to Conflicts of Interest**

***Our Advisor will face a conflict of interest with respect to the allocation of investment opportunities and competition for tenants between us and other real estate programs that it advises.***

Our Advisor's officers and key real estate professionals identify potential investments in properties and other real estate-related assets that are consistent with our investment guidelines for our possible acquisition. However, our Advisor may not acquire an investment in a property unless it has reviewed and approved presenting it to us in accordance with its allocation policies. LaSalle and its affiliates advise other investment programs that invest in properties and real estate-related assets in which we may be interested, including the DST Program. LaSalle could face conflicts of interest in determining which programs will have the opportunity to acquire and participate in such investments as they become available. As a result, other investment programs advised by LaSalle may compete with us with respect to certain investments that we may want to acquire. Our Advisor also has discretion to choose which of our properties to syndicate in the DST Program, which presents conflicts because our Advisor and the Dealer Manager, earn fees from the DST Program.

In addition, we may acquire properties in geographic areas where other investment programs advised by LaSalle own properties. Therefore, our properties may compete for tenants with other properties owned by such investment programs. If one of such investment programs attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays locating another suitable tenant.

***Our Advisor faces a conflict of interest because the fees it receives for services performed are based on our NAV, for which our Advisor is ultimately responsible for calculating.***

Our Advisor is paid a fee for its services based on our daily NAV, which is calculated by ALPS Fund Services Inc. ("ALPS") under the supervision of our Advisor. The calculation of our NAV includes certain subjective judgments of our Advisor and our independent valuation advisor, including estimates of fair value of particular assets, and therefore may not correspond to realizable value upon a sale of those assets. Our Advisor may benefit by us retaining ownership of our assets at times when our stockholders may be better served by the sale or disposition of our assets in order to avoid a reduction in our NAV. If our NAV is calculated in a way that is not reflective of our actual NAV, then the purchase price of shares of our common stock or the price paid for the repurchase of your shares of common stock on a given date may not accurately reflect the value of our portfolio, and your shares may be worth less than the purchase price or more than the repurchase price.

***Our Advisor's management personnel face conflicts of interest relating to time management and there can be no assurance that our Advisor's management personnel will devote adequate time to our business activities or that our Advisor will be able to hire adequate additional employees.***

All of our Advisor's management personnel, other employees, affiliates and related parties may also provide services to other affiliated entities of our Advisor. We are not able to estimate the amount of time that such management personnel will devote to our business. As a result, certain of our Advisor's management personnel may have conflicts of interest in allocating their time between our business and their other activities which may include advising and managing various other real estate programs and ventures, which may be numerous and may change as programs are closed or new programs are formed. During times of significant activity in other programs and ventures, the time they devote to our business may decline and be less than we would require. There can be no assurance that our Advisor's affiliates will devote adequate time to our business activities or that our Advisor will be able to hire adequate additional employees.

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***Our Advisor and its affiliates, including our officers and some of our directors, face conflicts of interest caused by compensation arrangements with us and other LaSalle affiliated entities, which could result in actions that are not in our stockholders' best interests.***

Our Advisor and its affiliates receive substantial fees from us in return for their services and these fees could influence our Advisor's advice to us. Among other matters, the compensation arrangements could affect their judgment with respect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the continuation, renewal or enforcement of our agreements with our Advisor and its affiliates, including the Advisory Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the decision to adjust the value of our real estate portfolio or the value of certain portions of our portfolio of other real estate-related assets, or the calculation of our NAV;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• public offerings of equity by us, which may result in increased advisory fees of the Advisor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition for tenants from affiliated programs that own properties in the same geographic area as us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• whether to sell interests in certain of our real properties through the DST Program and to select which properties to be sold through the DST Program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• asset sales, which may allow LaSalle or its affiliates to earn disposition fees and commissions.

***We currently have, and may enter into additional, agreements with subsidiaries of our Sponsor to perform certain services for our real estate portfolio.***

Subsidiaries of our Sponsor provide property management, leasing and other services to property owners, and currently provides certain services to us with respect to a portion of our properties, and we may engage subsidiaries of our Sponsor to perform additional property or construction management, leasing and other services related to our real estate portfolio. The fees, commissions and expense reimbursements paid to our Sponsor in connection with these services have not and will not be determined with the benefit of arm's-length negotiations of the type normally conducted between unrelated parties. Even though all such agreements will be subject to approval by our independent directors, they could be on terms not as favorable to us as those we could receive from a third party.

***The time and resources that LaSalle affiliated entities devote to us may be diverted and we may face additional competition due to the fact that LaSalle affiliated entities are not prohibited from raising money for another entity that makes the same types of investments that we target.***

LaSalle affiliated entities are not prohibited from raising money for another investment entity that makes the same types of investments as those we target. As a result, the time and resources they could devote to us may be diverted. In addition, we may compete with any such investment entity for the same investors and investment opportunities. We may also co-invest with any such investment entity. Even though all such co-investments will be subject to approval by our independent directors, they could be on terms not as favorable to us as those we could achieve co-investing with a third party.

***Our Advisor may have conflicting fiduciary obligations if we acquire properties with its affiliates or other related entities; as a result, in any such transaction we may not have the benefit of arm's-length negotiations of the type normally conducted between unrelated parties.***

Our Advisor has in the past and may in the future cause us to acquire an interest in a property from its affiliates or through a joint venture with its affiliates or to dispose of an interest in a property to its affiliates. In these circumstances, our Advisor will have a conflict of interest when fulfilling its fiduciary obligation to us. In any such transaction we may not have the benefit of arm's-length negotiations of the type normally conducted between unrelated parties. Even though all such agreements will be subject to approval by our independent directors, they could be on terms not as favorable to us as those we could receive from a third party.

***The fees we pay to affiliates in connection with our offerings of securities and in connection with the management of our investments were not determined on an arm's-length basis, and therefore, we do not have the benefit of arm's-length negotiations of the type normally conducted between unrelated parties.***

Our Advisor, our Dealer Manager and other affiliates, including our sponsor, have earned and will continue to earn fees, commissions and expense reimbursements from us. The fees, commissions and expense reimbursements paid and to be paid to our Advisor, our Dealer Manager and other affiliates for services they provided us in connection with our offerings were determined without the benefit of arm's-length negotiations of the type normally conducted between unrelated parties.

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***Our executive officers, our affiliated directors and the key real estate professionals acting on behalf of our Advisor face conflicts of interest related to their positions or interests in affiliates of our Advisor, which could hinder our ability to implement our business strategy and to generate returns to our stockholders.***

Our executive officers, our affiliated directors and the key real estate professionals acting on behalf of our Advisor may also be involved in the management of other real estate businesses, including other LaSalle affiliated entities, and separate accounts established for institutional investors, each of which invests in real estate or real estate-related assets. As a result, they owe fiduciary duties to each of these entities and their investors, which fiduciary duties may from time to time conflict with the fiduciary duties that they owe to us and our stockholders. Their loyalties to these other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our investment strategy. These individuals face conflicts of interest in allocating their time among us and such other funds, investors and activities. These conflicts of interest could cause these individuals to allocate less of their time to us than we may require, which may adversely impact our operations.

***You may not have the benefit of an independent due diligence review in connection with our offerings, which would increase the risk of your investment.***

Because our Dealer Manager is an affiliate of our Advisor, investors will not have the benefit of an independent due diligence review and investigation by our Dealer Manager of the type normally conducted by an unaffiliated, independent underwriter in connection with a securities offering. Accordingly, you will have to rely on your own broker-dealer to make an independent due diligence review of the terms of our offerings. The absence of a due diligence review of us and our offerings by an independent underwriter increases the risk you face as a stockholder.

**Risks Related to Adverse Changes in General Economic Conditions**

***Changes in economic and capital markets conditions, including periods of generally deteriorating real estate industry fundamentals, may significantly affect our results of operations and returns to our stockholders.***

We are subject to risks generally incident to the ownership of real estate investments, including changes in global, national, regional or local economic, demographic and real estate market conditions, actual or perceived instability in the U.S. banking system, as well as other factors particular to the locations of our investments. A recession could adversely impact our investments as a result of, among other items, increased tenant defaults under our leases, lower demand for rentable space, as well as potential oversupply of rentable space, each of which could lead to increased concessions, tenant improvement expenditures or reduced rental rates to maintain occupancies. These conditions could also adversely impact the financial condition of the tenants that occupy our real properties and, as a result, their ability to pay us rents.

To the extent that a general economic slowdown is prolonged or becomes more severe or real estate fundamentals deteriorate, it may have a significant and adverse impact on the values of our assets, revenues, results from operations, financial condition, liquidity, overall business prospects and ultimately our ability to pay distributions to our stockholders.

***Any market deterioration may cause the future value of our real estate investments to decline.***

If the current economic or real estate environment were to worsen in the markets where our properties are located, our NAV per share of our common stock may experience more volatility or decline as a result. Volatility in the fair value and operating performance of commercial real estate has made estimating cash flows from our real estate investments difficult, since such estimates are dependent upon our judgment regarding numerous factors, including, but not limited to, current and potential future refinancing availability, fluctuations in regional or local real estate values and fluctuations in regional or local rental or occupancy rates, real estate tax rates and other operating expenses.

We cannot assure our stockholders that we will not have to realize or record impairment charges, or experience disruptions in cash flows and/or permanent losses related to our real estate investments or decreases in our NAV per share of our common stock in future periods. In addition, to the extent that volatile markets persist, these conditions could adversely impact our ability to potentially sell our real estate investments at a price and with terms acceptable to us or at all.

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***Economic events that may cause our stockholders to request that we repurchase their shares may materially adversely affect our cash flow and our ability to achieve our investment objectives.***

Economic events affecting the U.S. and global economies, such as the general negative performance of the real estate sector (including as a result of inflation or higher interest rates), disruptions in the labor market (including labor shortages and unemployment) and stock market volatility (including volatility as a result of geopolitical events and military conflicts) could cause our stockholders to seek to have us repurchase their shares pursuant to our share repurchase plan. Our share repurchase plan limits the amount of funds we may use for repurchases during each calendar quarter to 5% of the combined NAV of all classes of shares as of the last day of the previous calendar quarter. Even if we are able to satisfy all resulting repurchase requests, our cash flow could be materially adversely affected.

In addition, if we determine to sell assets to satisfy repurchase requests, our ability to achieve our investment objectives, including, without limitation, diversification of our portfolio by property type and location, moderate financial leverage, conservative operating risk and an attractive level of current income, could be adversely affected.

***Inflation or deflation may adversely affect our financial condition and results of operations.***

Although neither inflation nor deflation has materially impacted our operations in the recent past, increased inflation could have an adverse impact on our floating rate mortgages and interest rates and general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. Inflation could also have an adverse effect on consumer spending which could impact our tenants' revenues and, in turn, our percentage rents, where applicable. Conversely, deflation could lead to downward pressure on rents and other sources of income.

***Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect our financial results.***

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the reported value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board ("FASB"), the SEC, and our independent registered public accounting firm) may amend, clarify, interpret or even reverse their previous interpretations or positions on how these standards should be applied. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the revision of prior period financial statements. Changes in accounting standards can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

**Risks Related to Our General Business Operations and Our Corporate Structure**

***We depend on our Advisor and the key personnel of our Advisor and we may not be able to secure suitable replacements in the event that we fail to retain their services.***

Our success is dependent upon our relationships with, and the performance of, our Advisor and the key real estate professionals of our Advisor for the acquisition and management of our investment portfolio and our corporate operations. Any of these parties may suffer or become distracted by adverse financial or operational problems in connection with their business and activities unrelated to us and over which we have no control. Should any of these parties fail to allocate sufficient resources to perform their responsibilities to us for any reason, we may be unable to achieve our investment objectives. In the event that, for any reason, the Advisory Agreement is terminated, or our Advisor is unable to retain its key personnel, it may be difficult for us to secure suitable replacements on acceptable terms, which would adversely impact the value of your investment.

***Our Advisor's inability to retain the services of key real estate professionals could negatively impact our performance.***

Our success depends to a significant degree upon the contributions of certain key real estate professionals employed by our Advisor, each of whom would be difficult to replace. Neither we nor our Advisor have employment agreements with these individuals and they may not remain associated with us or our Advisor. If any of these persons were to cease their association with us or our Advisor, our operating results could suffer. Our future success depends, in large part, upon our Advisor's ability to attract and retain highly skilled managerial, operational and marketing professionals. If our Advisor loses or is unable to obtain the services of highly skilled professionals, our ability to implement our investment strategies could be delayed or hindered.

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***We are required to pay substantial compensation to our Advisor and its affiliates, which may be increased or decreased during our Current Public Offering or future offerings by a majority of our board of directors, including a majority of the independent directors.***

Pursuant to our agreements with our Advisor and its affiliates, including our sponsor, we are obligated to pay substantial compensation to our Advisor and its affiliates. Subject to limitations in our charter, the fees, expense reimbursements and other payments that we are required to pay to our Advisor and its affiliates may increase or decrease during our Current Public Offering or future offerings from those described elsewhere in our prospectus related to our Current Public Offering if such change is approved by a majority of our board of directors, including a majority of the independent directors. These payments to our Advisor and its affiliates will decrease the amount of cash we have available for operations and new investments and could negatively impact our NAV, our ability to pay distributions and your overall return.

***We may change our investment and operational policies without stockholder consent.***

We may change our investment and operational policies, including our policies with respect to investments, operations, indebtedness, capitalization and distributions, at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier or more highly leveraged than is currently contemplated. A change in our investment strategy may, among other things, increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could materially affect our ability to achieve our investment objectives.

***Our board of directors will not approve each investment selected by our Advisor.***

Our board of directors has approved investment guidelines that delegate to our Advisor the authority to execute (1) acquisitions and dispositions of real property and (2) investments in other real estate-related assets, in each case so long as such investments are consistent with the investment guidelines. Our directors review our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, as often as they deem appropriate. The prior approval of our board of directors will be required only for the acquisition or disposition of assets that are not in accordance with our investment guidelines. In addition, in conducting periodic reviews, our directors will rely primarily on information provided to them by our Advisor. Furthermore, transactions entered into on our behalf by our Advisor may be costly, difficult or impossible to unwind when they are subsequently reviewed by our board of directors.

***We are and may continue to be subject to litigation, which could have a material adverse effect on our financial condition.***

We currently are, and are likely to continue to be, subject to litigation. Some of these claims may result in significant defense costs and potentially significant judgments against us. We cannot be certain of the ultimate outcomes of currently asserted claims or of those that arise in the future. Resolution of these types of matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments, and settlements exceed insured levels, would adversely impact our earnings and cash flows, thereby impacting our ability to service debt and make quarterly distributions to our stockholders. Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.

***The limits on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that could otherwise benefit our stockholders.***

Our charter, with certain exceptions, authorizes our board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may own more than 9.8% in value of our outstanding capital stock or more than 9.8% in value or number of shares, whichever is more restrictive, of our outstanding common stock. A person that did not acquire more than 9.8% of our shares may become subject to our charter restrictions if repurchases by other stockholders cause such person's holdings to exceed 9.8% of our outstanding shares. Any attempt to own or transfer shares of our common stock in excess of the ownership limit without the consent of our board of directors will be void, or will result in those shares being transferred by operation of law to a charitable trust, and the person who acquired such excess shares will not be entitled to any distributions thereon or to vote those excess shares. Our 9.8% ownership limitation may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for our stockholders.

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***Maryland law and our organizational documents limit our rights and the rights of our stockholders to recover claims against our directors and officers, which could reduce your and our recovery against them if they cause us to incur losses.***

Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct. In addition, Maryland law and our charter provide that no director or officer shall be liable to us or our stockholders for monetary damages unless the director or officer (1) actually received an improper benefit or profit in money, property or services or (2) was actively and deliberately dishonest as established by a final judgment. Moreover, our charter generally requires us to indemnify and advance expenses to our directors and officers for losses they may incur by reason of their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, they actually received an improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had reasonable cause to believe the act or omission was unlawful. As a result, you and we may have more limited rights against our directors or officers than might otherwise exist under common law, which could reduce your and our recovery from these persons if they act in a manner that causes us to incur losses. In addition, we are obligated to fund the defense costs incurred by these persons in some cases. However, our charter provides that we may not indemnify our directors, or our Advisor and its affiliates, for any liability or loss suffered by them or hold our directors, our Advisor and its affiliates harmless for any liability or loss suffered by us, unless they have determined that the course of conduct that caused the loss or liability was in our best interests, they were acting on our behalf or performing services for us, the liability or loss was not the result of negligence or misconduct by our non-independent directors, our Advisor and its affiliates, or gross negligence or willful misconduct by our independent directors, and the indemnification or agreement to hold harmless is recoverable only out of our net assets or the proceeds of insurance and not from the stockholders.

***Certain provisions in our organizational documents and Maryland law could inhibit transactions or changes of control under circumstances that could otherwise provide stockholders with the opportunity to realize a premium.***

In addition, certain provisions of the Maryland General Corporation Law applicable to us prohibit business combinations with: (1) any person who beneficially owns 10% or more of the voting power of our outstanding voting stock, which we refer to as an "interested stockholder;" (2) an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding stock, which we also refer to as an "interested stockholder;" or (3) an affiliate of an interested stockholder. These prohibitions last for five years after the most recent date on which the interested stockholder became an interested stockholder. Thereafter, any business combination with the interested stockholder or an affiliate of the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least 80% of the votes entitled to be cast by holders of our outstanding voting stock, and two-thirds of the votes entitled to be cast by holders of our voting stock other than shares held by the interested stockholder or its affiliate with whom the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These requirements could have the effect of inhibiting a change in control even if a change in control were in our stockholders' best interest. These provisions of Maryland law do not apply, however, to business combinations that are approved or exempted by our board of directors prior to the time that someone becomes an interested stockholder. Pursuant to the business combination statute, our board of directors has exempted any business combination involving us and any person, provided that such business combination is first approved by a majority of our board of directors, including a majority of our independent directors.

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***Our UPREIT structure may result in potential conflicts of interest with our operating partnership or limited partners in our operating partnership whose interests may not be aligned with those of our stockholders.***

Conflicts of interest exist or could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our operating partnership or any partner thereof, on the other. Our directors and officers have duties to our company under applicable Maryland law in connection with their direction of the management of our company. At the same time, we, as sole member, have duties to the general partner of our operating partnership which, in turn, as general partner of our operating partnership, has duties to our operating partnership and to the limited partners under Delaware law in connection with the management of our operating partnership.

Under Delaware law, the general partner of a Delaware limited partnership has fiduciary duties of care and loyalty, and an obligation of good faith, to the partnership and its partners. While these duties and obligations cannot be eliminated entirely in the limited partnership agreement, Delaware law permits the parties to a limited partnership agreement to specify certain types or categories of activities that do not violate the general partner's duty of loyalty and to modify the duty of care and obligation of good faith, so long as such modifications are not unreasonable. These duties as general partner of our operating partnership to the partnership and its partners may come into conflict with the interests of our company. Under the partnership agreement of our operating partnership, upon the admission of a person other than one of our subsidiaries as a limited partner in our operating partnership, the limited partners of our operating partnership expressly agree that the general partner of our operating partnership is acting for the benefit of our operating partnership itself and our stockholders, collectively. The general partner is under no obligation to give priority to the separate interests of the limited partners in deciding whether to cause our operating partnership to take or decline to take any actions. If there is a conflict between the interests of us or our stockholders, on the one hand, and the interests of the limited partners of our operating partnership other than us or our subsidiaries, on the other, that cannot be resolved in a manner not adverse to either, the partnership agreement provides that such conflict will be resolved in favor of our stockholders and the general partner will not be liable for losses sustained by the limited partners in connection with such decisions provided the general partner acted in good faith. Additionally, the partnership agreement of our operating partnership expressly limits our liability by providing that we and our directors, officers, agents and employees, will not be liable or accountable to our operating partnership or its partners for money damages.

In addition, our operating partnership is required to indemnify us, our directors, officers and employees, the general partner and its trustees, officers and employees, employees of our operating partnership and any other persons whom the general partner may designate from and against any and all claims arising from operations of our operating partnership in which any indemnitee may be involved, or is threatened to be involved, as a party or otherwise unless it is established that the act or omission of the indemnitee constituted fraud, intentional harm or gross negligence on the part of the indemnitee, the claim is brought by the indemnitee (other than to enforce the indemnitee's rights to indemnification or advance of expenses) or the indemnitee is found to be liable to our operating partnership, and then only with respect to each such claim. The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.

***Tax protection agreements could limit our ability to sell or otherwise dispose of property contributed to our operating partnership.***

In connection with a contribution of property to our operating partnership, our operating partnership may enter into a tax protection agreement with the contributor of such property that provides that if we dispose of any interest in the contributed property in a taxable transaction within a certain time period, subject to certain exceptions, we may be required to indemnify the contributor for its tax liabilities attributable to the built-in gain that exists with respect to such property interests, and the tax liabilities incurred as a result of such tax protection payment. Therefore, although it may be in our stockholders' best interests that we sell the contributed property, it may be economically prohibitive for us to do so because of these obligations.

***Tax protection agreements may require our operating partnership to maintain certain debt levels that otherwise would not be required to operate our business.***

Under a tax protection agreement, our operating partnership may provide the contributor of property the opportunity to guarantee debt or enter into a deficit restoration obligation. If we fail to make such opportunities available, we may be required to deliver to such contributor a cash payment intended to approximate the contributor's tax liability resulting from our failure to make such opportunities available to that contributor and the tax liabilities incurred as a result of such tax protection payment. These obligations may require our operating partnership to maintain more or different indebtedness than we would otherwise require for our business.

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***The DST Program could subject us to liabilities from litigation or otherwise.***

The DST Program raises capital in private placements exempt from registration under the Securities Act through the sale of beneficial interests to "accredited investors" in specific DSTs holding DST Properties. We expect that the DST Program will give us the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Code. There is no guarantee that the DST Program will provide the tax benefits expected by investors. Investors who acquire beneficial interests pursuant to such private placements may be seeking certain tax benefits that depend on the interpretation of, and compliance with, federal and state income tax laws and regulations. As the sole member and manager of the general partner of our operating partnership, we may become subject to liability, from litigation or otherwise, as a result of the DST Program, including in the event an investor fails to qualify for any desired tax benefits.

***The DST Program will not shield us from risks related to the performance of the DST Properties held through such structures.***

Pursuant to the DST Program, certain of our existing real properties and real properties acquired from third parties may be placed into DSTs, the beneficial interests of which will be sold to investors. We will hold long-term leasehold interests in each DST Property pursuant to a master lease, which is intended to be fully guaranteed by our operating partnership. Under each master lease we will be responsible for subleasing the DST Property to occupying tenants until the earlier of the expiration of the master lease or our operating partnership's exercise of the fair market value purchase option giving it the right, but not the obligation, to acquire the beneficial interests in the DSTs from the investors in exchange for OP Units or cash (the "FMV Option"), which means that we bear the risk that the underlying cash flow from a DST Property may be less than the master lease payments. Therefore, even though we will no longer own the DST Property, because of the fixed terms of the master lease guaranteed by our operating partnership, negative performance by the DST Property could affect cash available for distributions to our stockholders and will likely have an adverse effect on our results of operations. In addition, although our operating partnership will hold a FMV Option to reacquire each DST Property, the purchase price will be based on the then-current fair market value of the DST Property, without regard for the rental terms fixed by the master lease. Therefore, we may pay more for the DST Property upon the FMV Option exercise if it appreciates while held by the DST than if we had not placed such property in the DST Program.

***We may own beneficial interests in trusts owning DST Properties that will be subject to the agreements under our DST Program, which may have an adverse effect on our results of operations, relative to if the DST Program agreements did not exist.***

In connection with the launch of our DST Program, we may own beneficial interests in DSTs owning DST Properties that are subject to the terms of the agreements provided by our DST Program. The DST Program agreements may limit our ability to encumber, lease or dispose of our beneficial interests. Such agreements could affect our ability to turn our beneficial interests into cash and could affect cash available for distributions to our stockholders. The DST Program agreements, and in some cases the financing documents, used in connection with the DST Program could also impair our ability to take actions that would otherwise be in the best interests of our stockholders and, therefore, may have an adverse effect on our results of operations and NAV, relative to if the DST Program agreements did not exist.

***DST Properties may be less liquid than other assets, which could impair our ability to utilize cash proceeds from sales of such DST Properties for other purposes such as paying down debt, distributions or additional investments.***

DST Properties may later be reacquired through the exercise of our operating partnership's FMV Option. In such cases the investors who become limited partners in our operating partnership will generally still be tied to the DST Property in terms of basis and built-in gain. As a result, if the DST Property is subsequently sold, unless we effectuate a like-kind exchange under Section 1031 of the Code, then tax will be triggered on the investors' built-in gain. Although we are not contractually obligated to do so, we intend to execute 1031 exchanges in such situations rather than trigger gain. Any replacement property acquired in connection with a 1031 exchange will similarly be tied to the investors with similar considerations if such replacement property ever is sold. As a result of these factors, placing real properties into the DST Program may limit our ability to access liquidity from such real properties or replacement properties through sale without triggering taxes due to the built-in gain tied to investors in the DST Program. Such reduced liquidity could impair our ability to utilize cash proceeds from sales for other purposes such as paying down debt, distributions or additional investments.

***Cash payments to redeem OP Units will reduce cash available for distribution to our stockholders or to honor their repurchase requests under our share repurchase program.***

Following a one-year holding period, the holders of OP Units (other than us and the general partner) generally have the right to cause our operating partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our

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common stock, cash, or a combination of both. An election to redeem OP Units for cash may reduce funds available for distribution to our stockholders or to honor our stockholders' repurchase requests under our share repurchase program.

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***Determining to exercise the FMV Option for DST Properties may cause us to incur significant additional non-cash interest expense that could materially impact our GAAP earnings and our funds from operations ("FFO").***

When we determine it is probable that we will exercise a DST Property's FMV Option we will need to begin recording additional non-cash interest expense, which will reduce GAAP earnings and FFO. If we exercise the FMV Option prior to the end of the master lease, we record, as a lump sum, non-cash interest expense for the difference between the fair market value of the property and the sum of the mortgage debts outstanding balance and the financing obligation, in the quarter in which we exercise the FMV Option. The lump sum non-cash interest expense could have a very material negative impact on our GAAP earnings and FFO.

***Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.***

We intend to conduct our operations so that neither we nor our operating partnership or our respective subsidiaries are investment companies under the Investment Company Act. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Excluded from the term "investment securities," among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

Rule 3a-1 under the Investment Company Act generally provides that, notwithstanding Section 3(a)(1)(C) of the Investment Company Act, an issuer will not be deemed to be an "investment company" under the Investment Company Act provided that (1) it does not hold itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, and (2) on an unconsolidated basis except as otherwise provided, no more than 45% of the value of its total assets, consolidated with the assets of any wholly owned subsidiary, (exclusive of U.S. government securities and cash items) consists of, and no more than 45% of its net income after taxes, consolidated with the net income of any wholly owned subsidiary, (for the last four fiscal quarters combined) is derived from, securities other than U.S. government securities, securities issued by employees' securities companies, securities issued by certain majority owned subsidiaries of such company and securities issued by certain companies that are controlled primarily by such company. In addition, we believe that neither we nor our operating partnership will be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because neither we nor our operating partnership will engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, through our operating partnership's wholly owned or majority-owned subsidiaries, we and our operating partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real property, mortgages and other interests in real estate. We believe that we, our operating partnership and our respective subsidiaries will satisfy this exclusion.

A change in the value of any of our assets could cause us, our operating partnership or one or more of our respective subsidiaries to fall within the definition of "investment company" and thus be required to register under the Investment Company Act. To ensure that we are not required to register the company or an of our subsidiaries as an investment company under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may be unable to purchase securities we would otherwise want to purchase. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy.

Our Advisor will continually review our investment activity to attempt to ensure that we will not be regulated as an investment company.

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However, if we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limitations on capital structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on specified investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions or prohibitions on retaining earnings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on leverage or senior securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrictions on unsecured borrowings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requirements that our income be derived from certain types of assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prohibitions on transactions with affiliates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

Registration with the SEC as an investment company would be costly, would subject our company to a host of complex regulations, and would divert the attention of management from the conduct of our business. In addition, the purchase of real estate that does not fit our investment guidelines and the purchase or sale of investment securities or other assets to preserve our status as a company not required to register as an investment company could materially adversely affect our NAV, the amount of funds available for investment and our ability to pay distributions to our stockholders.

***Rapid changes in the values of potential investments in real estate-related investments may make it more difficult for us to maintain our qualification as a REIT or our exception from the Investment Company Act.***

If the market value or income potential of our real estate-related investments declines, including as a result of increased interest rates, prepayment rates or other factors, we may need to increase our real estate investments and income or liquidate our non-qualifying assets in order to maintain our REIT qualification or our exception from registration under the Investment Company Act. If the decline in real estate asset values or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-real estate assets that we may own. We may have to make investment decisions that we otherwise would not make absent REIT and Investment Company Act considerations.

***We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology or other business interruption could harm our business.***

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including financial transactions and maintenance of records, which may include confidential information of tenants and lease data. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential tenant information, such as individually identifiable information relating to financial accounts. Although we have taken steps to protect the security of the data maintained in our information systems, there is no guarantee that our security measures will be able to prevent the systems' improper functioning, or the improper disclosure of personally identifiable information such as in the event of cyber attacks. Security breaches include physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches. To date, we have seen no material impact on our business or operations from these attacks or events. Any future significant compromise or breach on our data security could create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could materially and adversely affect us. In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

Other disruptive events, including, but not limited to, natural disasters and public health or pandemic crises (such as COVID-19), may adversely affect our ability to conduct business. Such adverse effects may include the inability of our advisor's employees, or the employees of its affiliates and other service providers, to perform their responsibilities as a result of any such event. Such disruptions to our business operations can result in significant operational issues.

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**Risks Related to Investments in Real Property**

***We depend on tenants for our revenue, and accordingly, lease terminations and/or tenant defaults, particularly by one of our significant tenants, could adversely affect the income produced by our properties, which may harm our operating performance, thereby limiting our ability to pay distributions to our stockholders.***

The success of our investments depends on the financial stability of our tenants, any of whom may experience a change in their business at any time, including as a result of global economic and geopolitical events, military conflicts, natural disasters, public health or pandemic crises, labor shortages, or broad inflationary pressures. Our tenants may delay lease commencements, decline to extend or renew their leases upon expiration, fail to make rental payments when due, or declare bankruptcy. Any of these actions could result in the termination of the tenants' leases, or expiration of existing leases without renewal, and 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-letting our property. If significant leases are terminated or defaulted upon, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. In addition, significant expenditures, such as mortgage payments, real estate taxes and insurance and maintenance costs, are generally fixed and do not decrease when revenues at the related property decrease.

The occurrence of any of the situations described above, particularly if it involves one of our significant tenants, could seriously harm our operating performance. If any of these significant tenants were to default on its lease obligation(s) to us or not extend current leases as they mature, our results of operations and ability to pay distributions to our stockholders could be adversely affected. The revenues generated by the properties these tenants occupy are substantially dependent upon the financial condition of these tenants and, accordingly, any event of bankruptcy, insolvency, or a general downturn in the business of any of these tenants may result in the failure or delay of such tenant's rental payments, which may have a substantial adverse effect on our operating performance.

***Our revenues will be significantly influenced by the economies and other conditions of the industrial, office, residential, retail and other markets in general and the specific geographic markets in which we operate where we have high concentrations of these types of properties.***

As of December 31, 2022, our diversification of current fair value of our consolidated properties by property type consisted of, 39% in the industrial property sector, 13% in the office property sector, 36% in the residential property sector, 12% in the retail property sector and less than 1% in the other property sector. As of December 31, 2022, we also owned an interest in unconsolidated properties in the office, residential, retail and other property sectors. Because our portfolio consists primarily of industrial, office, residential and retail properties, we are subject to risks inherent in investments in these property types and in particular the risk that e-commerce poses to retail. This concentration exposes us to risk of economic downturns in these property sectors to a greater extent than if our portfolio included other sectors in the real estate industry.

Additionally, as of December 31, 2022, approximately 41%, 25% and 24% of the current fair value of our consolidated properties was geographically concentrated in the western, southern and eastern United States, respectively. Moreover, our properties located in California and Texas accounted for approximately 18% and 13% of our consolidated revenues, respectively. As a result, we are particularly susceptible to adverse market conditions in these particular areas, including the current economic conditions, the reduction in demand for office, retail, industrial or residential properties, industry slowdowns, relocation of businesses and changing demographics.

Adverse economic or real estate developments in the markets in which we have a concentration of properties, or in any of the other markets in which we operate, or any decrease in demand for office, retail, industrial or residential space resulting from the local or national business climate, could adversely affect our rental revenues and operating results.

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***Our operating results are affected by economic and regulatory changes that impact the real estate market in general.***

Real estate historically has experienced significant fluctuations and cycles in value that have resulted in reductions in the value of properties. Real estate will continue to be subject to such fluctuations and cycles in value in the future that may negatively impact the value of our properties. The value of our properties will depend on many factors beyond our control. The value of our properties depends upon our ability to operate the real properties in a manner sufficient to maintain or increase revenues in excess of operating expenses and debt service. Revenues and the values of our properties may be adversely affected by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in national or international economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the cyclicality of real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in local market conditions due to changes in general or local economic conditions and neighborhood characteristics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial condition of tenants, buyers and sellers of properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acts of God, earthquakes, hurricanes, climate change and other natural disasters, acts of war, acts of terrorism (any of which may result in uninsured losses), epidemics and pandemics, such as the COVID-19 pandemic;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition from other properties offering the same or similar services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in interest rates and in the availability, cost and terms of mortgage debt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of present or future environmental legislation and compliance with environmental laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ongoing need for capital improvements (particularly in older structures);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in real estate tax rates and other operating expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse changes in governmental rules and fiscal policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• civil unrest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse changes in zoning laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other factors that are beyond our control.

All of these factors are beyond our control. Any negative changes in these factors could affect our ability to meet our obligations and pay distributions to stockholders.

***Consequences of climate change and related regulations could impact our properties and financial performance.***

The impact of climate change presents a significant risk. Damage to our properties caused by extreme weather events linked to climate change is becoming more evident, highlighting the fragility of global infrastructure. These physical effects of climate change could have a material adverse effect on our properties, operations and business, including a decline in demand for our properties and an increase in operation costs related to repairs and insurance. In addition, the adoption of regulations at the federal, state and local levels designed to address climate change may present additional costs and compliance risks as more markets move toward carbon neutral goals.

We anticipate the potential effects of climate change will increasingly impact the decisions and analysis our Advisor makes with respect to buying and selling properties, as climate change considerations can impact the relative desirability of locations and the cost of operating and insuring acquired properties, with the possibility that insurance may not be available, or on terms we find acceptable, for some properties in the future. Legislation that requires specific performance levels for building operations could make non-compliant buildings obsolete or costly to obtain compliance, which could materially affect the performance of our existing and future investments. In addition, capital improvements required to mitigate the potential impacts of climate risk could have an impact on our financial performance.

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***Our retail properties may decline in rental revenue and/or occupancy as a result of co-tenancy provisions contained in certain tenant's leases.***

Tenants of certain of our retail properties have leases that contain certain co-tenancy provisions that require either certain tenants and/or certain amounts of square footage to be occupied and open for business. If these co-tenancy provisions are not satisfied then other tenants of these properties may have the right to, among other things, pay reduced rents and/or terminate the lease. As a result, the loss of a single tenant on these properties, and the triggering of these co-tenancy provisions, could result in reduced rental income and/or reduced occupancy with respect to these properties, which could have a material adverse effect on our business, financial condition and results of operations.

***We face considerable competition in the leasing market and may be unable to renew existing leases or re-let space on terms similar to the existing leases, or we may expend significant capital in our efforts to re-let space, which may adversely affect our operating results.***

Leases (excluding our residential properties) representing approximately 4% and 10% of the annualized minimum base rent from our consolidated properties, as of December 31, 2022, were scheduled to expire in 2023 and 2024, respectively. Because we compete with a number of other developers, owners and managers of office, retail, industrial and residential properties, we may be unable to renew leases with our existing tenants and, if our current tenants do not renew their leases, we may be unable to re-let the space to new tenants. To the extent that we are able to renew leases that are scheduled to expire in the short-term or re-let such space to new tenants, heightened competition resulting from adverse market conditions may require us to utilize rent concessions and tenant improvements to a greater extent than we historically have. Further, leases of long-term duration or which include renewal options that specify a maximum rate increase may not result in fair market lease rates over time if we do not accurately estimate inflation or market lease rates. If we are subject to below-market lease rates on a significant number of our properties pursuant to long-term leases, our cash flow from operations and financial position may be adversely affected. In addition, historic economic turmoil led to foreclosures and sales of foreclosed properties at depressed values, and we may have difficulty competing with competitors who purchase properties in the foreclosure process, because their lower cost basis in their properties may allow them to offer space at reduced rental rates.

If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants upon expiration of their existing leases. Even if our tenants renew their leases or we are able to re-let the space, the terms and other costs of renewal or re-letting, including the cost of required renovations, increased tenant improvement allowances, leasing commissions, declining rental rates, and other potential concessions, may be less favorable than the terms of our current leases and could require significant capital expenditures. If we are unable to renew leases or re-let space in a reasonable time, or if rental rates decline or tenant improvement, leasing commissions, or other costs increase, our financial condition, cash flows, cash available for distribution, value of our common stock, and ability to satisfy our debt service obligations could be materially adversely affected.

***Competition in acquiring properties may reduce our profitability and the return on your investment.***

We face competition from various entities for investment opportunities in properties, including other REITs, pension funds, insurance companies, investment funds and companies, partnerships, and developers. We may also face competition from real estate programs sponsored by JLL and its affiliates. Many third party competitors have substantially greater financial resources than we do and may be able to accept more risk than we can prudently manage. Competition from these entities may reduce the number of suitable investment opportunities offered to us or increase the bargaining power of property owners seeking to sell. Additionally, disruptions and dislocations in the credit markets may materially impact the cost and availability of debt to finance real estate acquisitions, which is a key component of our acquisition strategy. A lack of available debt could result in a further reduction of suitable investment opportunities and create a competitive advantage for other entities that have greater financial resources than we do. In addition, the number of entities and the amount of funds competing for suitable investments may continue to increase. In addition to third party competitors, other programs sponsored by our Advisor may raise additional capital and seek investment opportunities under our Advisor's allocation policy. If we acquire properties and other investments at higher prices or by using less-than-ideal capital structures, our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for such assets. If such events occur, you may experience a lower return on your investment.

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To the extent we acquire properties, our operating results may depend on the availability of, and our Advisor's ability to identify, acquire and manage, appropriate real estate investment opportunities. It may take considerable time for us or our Advisor to identify and acquire appropriate investments. In general, the availability of desirable real estate opportunities and our investment returns will be affected by the level and volatility of interest rates, conditions in the financial markets and general, national and local economic conditions. No assurance can be given that we will be successful in identifying, underwriting and then acquiring investments which satisfy our return objectives or that such investments, once acquired, will perform as intended. The real estate industry is competitive and we compete for investments with traditional equity sources, both public and private, as well as existing funds, or funds formed in the future, with similar investment objectives. If we cannot effectively compete with these entities for investments, our financial performance may be adversely affected.

***Potential losses or damage to our properties may not be covered by insurance.***

Our tenants are required to maintain property insurance coverage for the properties under net leases and we carry comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in our portfolio not insured by our tenants under a blanket policy. Our Advisor will select policy specifications and insured limits that it believes to be appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. Insurance policies on our properties may include some coverage for losses that are generally catastrophic in nature, such as losses due to terrorism, earthquakes and floods, but we cannot assure you that it will be adequate to cover all losses and some of our policies will be insured subject to limitations involving large deductibles or co-payments and policy limits which may not be sufficient to cover losses.

In addition, we share certain policy risk with other clients of our Advisor and it is possible that they may draw those limits leaving no coverage for a claim by us. If we or one or more of our tenants experience a loss which is uninsured or which exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.

***Our real properties are subject to property and other taxes that may increase in the future, which could adversely affect our cash flow.***

Our real properties are subject to real and personal property and other taxes that may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. Certain of our leases provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the real properties that they occupy while other leases will generally provide that we are responsible for such taxes. In any case, as the owner of the properties, we are ultimately responsible for payment of the taxes to the applicable governmental authorities. If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes even if otherwise stated under the terms of the lease. If we fail to pay any such taxes, the applicable taxing authorities may place a lien on the property and the property may be subject to a tax sale. In addition, we will generally be responsible for property taxes related to any vacant space.

***We rely on third party property managers to operate our properties and leasing agents to lease vacancies in our properties.***

Although our Advisor has hired and may hire JLL to manage and lease certain of our properties, we also rely on third party property managers and leasing agents to manage and lease vacancies in most of our properties. The third party property managers have significant decision-making authority with respect to the management of our properties. Our ability to direct and control how our properties are managed on a day-to-day basis may be limited because we will engage third parties to perform this function. Thus, the success of our business may depend in large part on the ability of our third party property managers to manage the day-to-day operations and the ability of our leasing agents to lease vacancies in our properties. Any adversity experienced by our property managers or leasing agents could adversely impact the operation and profitability of our properties.

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***We may not have sole decision-making authority over some of our real property investments and may be unable to take actions to protect our interests in these investments.***

A component of our investment strategy includes entering into joint venture agreements with partners in connection with certain property acquisitions. As of December 31, 2022, we had interests in eight joint ventures that collectively own 18 properties and over 4,300 single-family rental homes across the United States accounting for 14% of our total assets. We may co-invest in the future with third parties through partnerships or other entities, which we collectively refer to as joint ventures, acquiring non-controlling interests in or sharing responsibility for managing the affairs of the joint venture. In such event, we would not be in a position to exercise sole decision-making authority regarding the joint venture. Investments in joint ventures may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their required capital contributions. Co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the co-venturer would have full control over the joint venture. Disputes between us and co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business. Consequently, actions by or disputes with co-venturers might result in subjecting properties owned by the joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our co-venturers. In addition, our lack of control over the properties in which we invest could result in us being unable to obtain accurate and timely financial information for these properties and could adversely affect our internal control over financial reporting.

***We may not have funding for future tenant improvements, which may adversely affect the value of our assets, our results of operations and returns to our stockholders.***

When a tenant at one of our real properties does not renew its lease or otherwise vacates its space in one of our buildings, it is likely that, in order to attract one or more new tenants, we will be required to expend substantial funds to construct new tenant improvements in the vacated space. We do not anticipate that we will maintain permanent working capital reserves and do not currently have an identified funding source to provide funds that may be required in the future for tenant improvements and tenant refurbishments in order to attract new tenants. If we do not establish sufficient reserves for working capital or obtain adequate financing to supply necessary funds for capital improvements or similar expenses, we may be required to defer necessary or desirable improvements to our real properties. If we defer such improvements, the applicable real properties may decline in value, and it may be more difficult for us to attract or retain tenants to such real properties or the amount of rent we can charge at such real properties may decrease. We cannot assure our stockholders that we will have any sources of funding available to us for repair or reconstruction of damaged real property in the future.

***The costs of compliance with governmental laws and regulations may adversely affect our financial condition and results of operations.***

Real estate and the operations conducted on properties are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. Tenants' ability to operate and generate income to pay their lease obligations may be affected by permitting and compliance obligations arising under such laws and regulations. Some of these laws and regulations may impose joint and several liability on tenants, owners, or managers for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal. In addition, the presence of hazardous substances, or the failure to properly remediate these substances, may hinder our ability to sell, rent, or pledge such property as collateral for future borrowings. Compliance with new laws or regulations or stricter interpretation of existing laws by agencies or the courts may require us to incur material expenditures. Future laws, ordinances, or regulations may impose material environmental liability.

Additionally, our tenants' operations, the existing condition of land when we buy it, operations in the vicinity of our properties such as the presence of underground storage tanks or activities of unrelated third parties may affect our properties. In addition, there are various local, state, and federal fire, health, life-safety, and similar regulations with which we may be required to comply, and which may subject us to liability in the form of fines or damages for noncompliance. Any material expenditures, fines, or damages we must pay will reduce our cash flows and ability to pay distributions and may reduce the value of our shares of common stock.

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***As the present or former owner or manager of real property, we could become subject to liability for environmental contamination, regardless of whether we caused such contamination.***

We could become subject to liability in the form of fines or damages for noncompliance with environmental laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid hazardous materials, the remediation of contaminated property associated with the disposal of solid and hazardous materials and other health and safety-related concerns. Some of these laws and regulations may impose joint and several liability on tenants, owners or managers for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. Under various federal, state and local environmental laws, ordinances, and regulations, a current or former owner or manager of real property may be liable for the cost to remove or remediate hazardous or toxic substances, wastes, or petroleum products on, under, from, or in such property. These costs could be substantial and liability under these laws may attach whether or not the owner or manager knew of, or was responsible for, the presence of such contamination. Even if more than one person may have been responsible for the contamination, each liable party may be held entirely responsible for all of the clean-up costs incurred.

In addition, third parties may sue the owner or manager of a property for damages based on personal injury, natural resources, or property damage and/or for other costs, including investigation and clean-up costs, resulting from the environmental contamination. The presence of contamination on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination, or otherwise adversely affect our ability to sell or lease the property or borrow using the property as collateral. In addition, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which the property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants. There can be no assurance that future laws, ordinances or regulations will not impose any material environmental liability, or that the current environmental condition of our properties will not be affected by the operations of the tenants, by the existing condition of the land, by operations in the vicinity of the properties. There can be no assurance that these laws, or changes in these laws, will not have a material adverse effect on our business, results of operations or financial condition.

***Future terrorist attacks may result in financial losses for us and limit our ability to obtain terrorism insurance.***

Our portfolio maintains significant holdings in areas that are located in or around major population centers that may be high-risk geographical areas for terrorism and threats of terrorism. Future terrorist attacks and the anticipation of any such attacks, or the consequences of the military or other response by the United States and its allies, could severely impact the demand for, and value of, our properties. Terrorist attacks in and around any of the major metropolitan areas in which we own properties also could directly impact the value of our properties through damage, destruction, loss, or increased security costs, and could thereafter materially impact the availability or cost of insurance to protect against such acts. A decrease in demand could make it difficult to renew or re-lease our properties at lease rates equal to or above historical rates. To the extent that any future terrorist attacks otherwise disrupt our tenants' businesses, it may impair our tenants' ability to make timely payments under their existing leases with us, which would harm our operating results.

In addition, the events of September 11, 2001 created significant uncertainty regarding the ability of real estate owners of high profile properties to obtain insurance coverage protecting against terrorist attacks at commercially reasonable rates, if at all. With the enactment of the Terrorism Risk Insurance Act, which has been extended through 2027, insurers must make terrorism insurance available under their property and casualty insurance policies, but this legislation does not regulate the pricing of such insurance. The absence of affordable insurance coverage may affect the general real estate lending market, lending volume and the market's overall loss of liquidity may reduce the number of suitable investment opportunities available to us and the pace at which its investments are made. We currently carry terrorism insurance under our master insurance program on all of our investments.

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***We may be subject to additional risks from our international investments.***

We do not own any properties located outside the United States as of December 31, 2022 but may purchase investments located outside the United States, and may make or purchase loans or participations in loans secured by property located outside the United States. These investments may be affected by factors peculiar to the laws and business practices of the jurisdictions in which the properties are located. These laws and business practices may expose us to risks that are different from and in addition to those commonly found in the United States. Foreign investments could be subject to the following additional risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the burden of complying with a wide variety of foreign laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• existing or new laws relating to the foreign ownership of real property or loans and laws restricting the ability of foreign persons or companies to remove profits earned from activities within the country to the person's or company's country of origin;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential for expropriation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible currency transfer restrictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• imposition of adverse or confiscatory taxes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in real estate and other tax rates and changes in other operating expenses in particular countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the willingness of domestic or foreign lenders to make loans in certain countries and changes in the availability, cost and terms of loan funds resulting from varying national economic policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general political and economic instability in certain regions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential difficulty of enforcing obligations in other countries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our limited experience and expertise in foreign countries relative to our experience and expertise in the United States.

***Investments in properties or other real estate investments outside the United States subject us to foreign currency risks, which may adversely affect distributions and our REIT status.***

Revenues generated from any properties or other real estate investments we acquire or ventures we enter into relating to transactions involving assets located in markets outside the United States likely will be denominated in the local currency. Therefore any investments we make outside the United States may subject us to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. As a result, changes in exchange rates of any such foreign currency to U.S. dollars may affect our revenues, operating margins and distributions and may also affect the book value of our assets and the amount of stockholders' equity. Changes in foreign currency exchange rates used to value a REIT's foreign assets may be considered changes in the value of the REIT's assets. These changes may adversely affect our status as a REIT. Further, bank accounts in foreign currency that are not considered cash or cash equivalents may adversely affect our status as a REIT.

***Inflation in foreign countries, along with government measures to curb inflation, may have an adverse effect on our investments.***

Certain countries have in the past experienced extremely high rates of inflation. Inflation, along with governmental measures to curb inflation, coupled with public speculation about possible future governmental measures to be adopted, has had significant negative effects on the certain international economies in the past and this could occur again in the future. The introduction of governmental policies to curb inflation can have an adverse effect on our business. High inflation in the countries in which we purchase real estate or make other investments could increase our expenses and we may not be able to pass these increased costs onto our tenants.

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***Lack of compliance with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.***

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including potential competitors, are not subject to these prohibitions. Fraudulent practices, including corruption, extortion, bribery, pay-offs, theft and others, occur from time-to-time in countries in which we may do business. If people acting on our behalf or at our request are found to have engaged in such practices, severe penalties and other consequences could be imposed on us that may have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay distributions to our stockholders and the value of our shares of common stock.

**Risks Related to Investments in Real Estate-Related Assets**

***Our investments in real estate-related assets will be subject to the risks related to the underlying real estate.***

Real estate loans secured by properties are subject to the risks related to underlying real estate. The ability of a borrower to repay a loan secured by a property typically is dependent upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower's ability to repay the loan may be impaired. Any default on the loan could result in our acquiring ownership of the property, and we would bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan. In addition, foreclosure of a mortgage loan can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed loan. We will not know whether the values of the properties ultimately securing our loans will remain at the levels existing on the dates of origination of those loans. If the values of the underlying properties decline, our risk will increase because of the lower value of the security associated with such loans. In this manner, real estate values could impact the values of our loan investments. Our investments in mortgage-backed securities, collateralized debt obligations and other real estate-related investments may be similarly affected by property values.

***The real estate-related equity securities in which we may invest are subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities.***

We may invest in common and preferred stock of both publicly traded and private real estate companies, which involves a higher degree of risk than debt securities due to a variety of factors, including that such investments are subordinate to creditors and are not secured by the issuer's properties. Our investments in real estate-related equity securities will involve special risks relating to the particular issuer of the equity securities, including the financial condition and business outlook of the issuer. Issuers of real estate-related common equity securities generally invest in real estate or real estate-related assets and are subject to the inherent risks associated with real estate discussed in our prospectus related to our Current Public Offering.

***The value of the real estate-related securities that we may invest in may be volatile.***

The value of real estate-related securities, including those of publicly-listed REITs, fluctuates in response to issuer, political, market and economic developments. In the short term, equity prices can fluctuate dramatically in response to these developments. Different parts of the market and different types of equity securities can react differently to these developments and they can affect a single issuer, multiple issuers within an industry, the economic sector or geographic region, or the market as a whole. The real estate industry is sensitive to economic downturns. The value of securities of companies engaged in real estate activities can be affected by changes in real estate values and rental income, property taxes, interest rates and tax and regulatory requirements. In addition, the value of a REIT's equity securities can depend on the capital structure and amount of cash flow generated by the REIT.

***We may invest in mezzanine debt, which is subject to greater risks of loss than senior loans secured by real properties, and may result in losses to us.***

We may invest in mezzanine loans that take the form of subordinated loans secured by second mortgages on the underlying real property or loans secured by a pledge of the ownership interests of either the entity owning the real property or the entity that owns the interest in the entity owning the real property. These types of investments involve a higher degree of risk than first-lien mortgage loans secured by income producing real property because the investment may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt. As a result, we may not recover some or all of our investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the real property and increasing the risk of loss of principal.

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***We expect a portion of our securities portfolio to be illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions.***

We may purchase real estate-related securities in connection with privately negotiated transactions that are not registered under the relevant securities laws, resulting in a prohibition against their transfer, sale, pledge or other disposition except in a transaction that is exempt from the registration requirements of, or is otherwise in accordance with, those laws. As a result, our ability to vary our portfolio in response to changes in economic and other conditions may be relatively limited. The mezzanine and bridge loans we may purchase will be particularly illiquid investments due to their short life, their unsuitability for securitization and the greater risk of our inability to recover loaned amounts in the event of a borrower's default.

***Interest rate and related risks may cause the value of our real estate-related assets to be reduced.***

We are subject to interest rate risk with respect to our investments in fixed income securities such as preferred equity and debt securities, and to a lesser extent dividend paying common stocks. Interest rate risk is the risk that these types of securities will decline in value because of changes in market interest rates. Generally, when market interest rates rise, the fair value of such securities will decline, and vice versa. Our investment in such securities means that our NAV may decline if market interest rates rise. During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below-market interest rate, increase the security's duration and reduce the value of the security. This is known as extension risk. During periods of declining interest rates, an issuer may be able to exercise an option to prepay principal earlier than scheduled, which is generally known as "call risk" or "prepayment risk." If this occurs, we may be forced to reinvest in lower yielding securities. This is known as "reinvestment risk." Preferred equity and debt securities frequently have call features that allow the issuer to redeem the security prior to its stated maturity. An issuer may redeem an obligation if the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer. These risks may reduce the value of our securities investments.

**Risks Related to Debt Financing**

***We have incurred and are likely to continue to incur mortgage or other indebtedness, which may increase our business risks, could hinder our ability to pay distributions and could decrease the value of your investment.***

As of December 31, 2022, we had total outstanding indebtedness of $1,924,527. Our Company leverage ratio, calculated as our share of total liabilities (excluding future dealer manager fees) divided by our share of the fair value of total assets, was 36% as of December 31, 2022 and 42% as of December 31, 2021. We may obtain mortgage loans and pledge some or all of our properties as security for these loans to acquire the property secured by the mortgage loan, acquire additional properties or pay down other debt. We may also use our line of credit as a flexible borrowing source to cover short-term capital needs, for new property acquisitions and for working capital. If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage loans on that property, then the amount of cash available for distributions to stockholders may be reduced.

In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, thus reducing the value of the shares of our common stock. For tax purposes, a foreclosure on any of our properties will be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the loan secured by the mortgage exceeds our tax basis in the property, we will recognize taxable income on foreclosure, but we would not receive any cash proceeds. We may give full or partial guarantees to lenders of mortgage loans to the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the loan if it is not paid by such entity. If any mortgage contains cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders may be adversely affected.

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***Renewed uncertainty and volatility in the credit markets could affect our ability to obtain debt financing on reasonable terms, or at all, which could reduce the number of properties we may be able to acquire and the amount of cash distributions we can make to our stockholders.***

The U.S. and global credit markets have historically experienced severe dislocations and liquidity disruptions, which caused volatility in the credit spreads on prospective debt financings and constrained the availability of debt financing due to the reluctance of lenders to offer financing at high leverage ratios. Renewed uncertainty in the credit markets, including as a result of global economic events, natural disasters and public health or pandemic crises, may adversely impact our ability to access additional debt financing on reasonable terms or at all, which may adversely affect investment returns on future acquisitions or our ability to make acquisitions.

If mortgage debt is unavailable on reasonable terms as a result of increased interest rates, increased credit spreads, decreased liquidity or other factors, we may not be able to finance the initial purchase of properties. In addition, when we incur mortgage debt on properties, we run the risk of being unable to refinance such debt upon maturity, or of being unable to refinance on favorable terms. As of December 31, 2022, we had $1,318,614 in aggregate outstanding mortgage notes payable, which had maturity dates through August 1, 2042.

If interest rates are higher or other financing terms, such as principal amortization, the need for a corporate guaranty, or other terms are not as favorable when we refinance debt or issue new debt, our income could be reduced. To the extent we are unable to refinance debt on reasonable terms, or at appropriate times or at all, we may be required to sell properties on terms that are not advantageous to us, or could result in the foreclosure of such properties. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to our stockholders and may hinder our ability to raise more capital by borrowing more money.

***Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to pay distributions to our stockholders.***

Interest we pay on our loan obligations will reduce cash available for distributions. If we obtain variable rate loans, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to pay distributions to stockholders. In addition, if we need to repay existing loans during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments.

***If we draw on our line of credit to fund repurchases or for any other reason, our financial leverage ratio could increase beyond our target.***

We may use our line of credit to provide for a ready source of liquidity to fund repurchases of shares of our common stock in the event that repurchase requests exceed net proceeds from our continuous offerings. If we borrow under a line of credit to fund repurchases of shares of our common stock, our financial leverage will increase and may exceed our target leverage ratio. Our leverage may remain at the higher level until we receive additional net proceeds from our continuous offerings or sell some of our assets to repay outstanding indebtedness.

***Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to pay distributions to our stockholders.***

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to obtain additional loans. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property or discontinue insurance coverage. In addition, loan documents may limit our ability to enter into or terminate certain operating or lease agreements related to the property. These or other limitations may adversely affect our flexibility and our ability to achieve our investment objectives.

***If we enter into financing arrangements involving balloon payment obligations, it may adversely affect our ability to pay distributions to our stockholders.***

Some of our financing arrangements may require us to make a lump-sum or "balloon" payment at maturity. Our ability to make a balloon payment at maturity is uncertain and may depend upon our ability to obtain replacement financing or our ability to sell particular properties. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or sell the particular property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets.

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***Failure to hedge effectively against interest rate changes may materially adversely affect our ability to achieve our investment objectives.***

Subject to any limitations required to maintain qualification as a REIT, we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest rate cap or collar agreements and interest rate swap agreements. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and that these arrangements may not be effective in reducing our exposure to interest rate changes. These interest rate hedging arrangements may create additional assets or liabilities from time to time that may be held or liquidated separately from the underlying property or loan for which they were originally established. We have adopted a policy relating to the use of derivative financial instruments to hedge interest rate risks related to our variable rate borrowings. Hedging may reduce the overall returns on our investments. Failure to hedge effectively against interest rate changes may materially adversely affect our ability to achieve our investment objectives.

**Federal Income Tax Risks**

***Failure to qualify as a REIT would have significant adverse consequences to us.***

We are organized and operated in a manner intended to qualify to be taxed as a REIT for U.S. federal income tax purposes. We first elected REIT status for our taxable year that ended December 31, 2004. REIT qualification requires ongoing satisfaction of various requirements regarding our organization, the nature of our gross income and assets and the amount of dividends we distribute. In addition, future legislative, judicial or administrative changes to the federal income tax laws, which could be applied retroactively, could result in our disqualification as a REIT. If the Internal Revenue Service (the "IRS") determines that we do not qualify as a REIT or if we qualify as a REIT and subsequently lose our REIT qualification, we will be subject to serious tax consequences that would cause a significant reduction in our cash available for distribution for each of the years involved and our NAV because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we would be subject to federal and applicable state and local corporate income taxation on our taxable income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we would not be permitted to take a deduction for dividends paid to stockholders in computing our taxable income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we could not re-elect to be taxed as a REIT for four taxable years following the year during which we were disqualified (unless we were entitled to relief under applicable statutory provisions).

In addition, if we do not qualify as a REIT, we will not be required to pay distributions to stockholders. As a result of all these factors, our failure to qualify as a REIT also could hinder our ability to raise capital and grow our business.

***Legislative, regulatory or administrative changes could adversely affect us or our stockholders.***

Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect us and/or our stockholders.

On December 22, 2017, tax legislation commonly referred to as the Tax Cuts and Jobs Act was signed into law. The Tax Cuts and Jobs Act made significant changes to the U.S. federal income tax rules for taxation of individuals and corporations. Most of the changes applicable to individuals are temporary and apply only to taxable years beginning before January 1, 2026. On March 27, 2020, federal legislation intended to ameliorate the economic impact of the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), was signed into law. The CARES Act made technical corrections to, or modified on a temporary basis, certain of the provisions of the Tax Cuts and Jobs Act. There can be no assurance that future tax law changes will not increase income tax rates, impose new limitations on deductions, credits or other tax benefits, or make other changes that may adversely affect our business, cash flows or financial performance or a stockholder's investment in us.

We urge you to consult with your own tax advisor with respect to the impact of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our common stock.

***To maintain our REIT status, we may have to borrow funds on a short-term basis during unfavorable market conditions.***

To maintain our status as a REIT, we generally must distribute annually to our stockholders dividends equal to at least 90% of our REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gain. We will be subject to regular corporate income taxes on any undistributed REIT taxable income, including undistributed net capital gain each year.

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Additionally, we will be subject to a 4% nondeductible excise tax on any amount by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from previous years. Payments we make to our stockholders under our share repurchase plan generally will not be taken into account for purposes of these distribution requirements. If we do not have sufficient cash to pay distributions necessary to preserve our REIT status for any year or to avoid taxation, we may be forced to borrow funds or sell assets even if the market conditions at that time are not favorable for these borrowings or sales.

***Compliance with REIT requirements may cause us to forego otherwise attractive opportunities, which may hinder or delay our ability to meet our investment objectives and reduce your overall return.***

To maintain our status as a REIT, we are required at all times to satisfy tests relating to, among other things, the sources of our income, the nature and diversification of our assets, the ownership of our stock and the amounts we distribute to our stockholders. Compliance with the REIT requirements may impair our ability to operate solely on the basis of maximizing profits. For example, we may be required to pay distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution.

***Compliance with REIT requirements may force us to liquidate otherwise attractive investments.***

To maintain our status as a REIT, at the end of each calendar quarter, at least 75% of our assets must consist of cash, cash items, government securities and qualified real estate assets. The remainder of our investments in securities (other than securities that are qualifying assets for purposes of the 75% asset test and securities of our taxable REIT subsidiaries) generally cannot include more than 10% of the voting securities of any one issuer or more than 10% of the value of the outstanding securities of any one issuer.

Additionally, no more than 5% of the value of our assets (other than securities that are qualifying assets for purposes of the 75% asset test and securities of our taxable REIT subsidiaries) can consist of the securities of any one issuer, and no more than 20% of the value of our assets may be represented by securities of one or more taxable REIT subsidiaries. Finally, no more than 25% of our assets may consist of debt instruments that are issued by "publicly offered REITs" and would not otherwise be treated as qualifying real estate assets. In order to satisfy these requirements, we may be forced to liquidate otherwise attractive investments.

***The IRS may take the position that the gain from one or more sales of our properties is subject to a 100% prohibited transaction tax.***

From time to time, we may sell assets to fund repurchase requests, to satisfy our REIT distribution requirements, to satisfy other REIT requirements, or for other purposes. The IRS may deem one or more sales of our properties to be "prohibited transactions." If the IRS takes the position that we have engaged in a "prohibited transaction" (*i.e.*, we sell a property held by us primarily for sale in the ordinary course of our trade or business and we do not qualify for a statutory safe harbor), the gain we recognize from such sale would be subject to a 100% tax. The Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax; however, there is no assurance that we will be able to qualify at all times for the safe harbor.

We do not intend to hold our properties for sale in the ordinary course of business, but there is no assurance that our position will not be challenged by the IRS, especially if we make frequent property sales or frequent sales of property in which we have short holding periods.

***Non-U.S. holders may be required to file U.S. federal income tax returns and pay U.S. federal income tax upon their disposition of shares of our common stock or upon their receipt of certain distributions from us.***

In addition to any potential withholding tax on ordinary dividends (including with regard to a repurchase of our common stock to the extent not treated as a sale or exchange), a non-U.S. holder other than a "qualified shareholder" or a "qualified foreign pension fund," as each is defined for purposes of the Code, that disposes of a "United States real property interest" ("USRPI") (which includes shares of stock of a U.S. corporation whose assets consist principally of USRPIs), is generally required to report such income on U.S. federal income tax returns and is subject to U.S. federal income tax at regular U.S. federal income tax rates under the Foreign Investment in Real Property Tax Act of 1980, as amended ("FIRPTA"), on the gain from such disposition. FIRPTA gains must be reported on U.S. federal income tax returns and are taxable at regular U.S federal income tax rates. Such tax does not apply, however, to the gain on disposition of stock in a REIT that is "domestically controlled." Generally, a REIT is domestically controlled if less than 50% of its stock, by value, has been owned directly or indirectly by non-U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT's existence. We cannot assure you that we will qualify as a domestically controlled REIT. If we were to fail to so qualify, amounts received by a non-U.S. holder on certain dispositions of shares of our common stock (including a

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redemption) would be subject to tax under FIRPTA, unless (i) our shares of common stock were regularly traded on an established securities market and (ii) the non-U.S. holder did not, at any time during a specified testing period, hold more than 10% of our common stock. We currently do not expect that any class of our shares of common stock will be regularly traded in an established securities market.

Proposed Treasury regulations issued on December 29, 2022 (the "Proposed Regulations") would modify the existing Treasury regulations relating to the determination of whether we are a domestically controlled REIT by providing a look through rule for our stockholders that are non-publicly traded partnerships, REITs, regulated investment companies or domestic "C" corporations owned 25% or more directly or indirectly by foreign persons ("foreign owned domestic corporations") and by treating "qualified foreign pension funds" as foreign persons for this purpose. Although the Proposed Regulations are intended to be effective for transactions occurring on or after the date they are finalized, the preamble to the Proposed Regulations states that the IRS may challenge contrary positions that are taken before the Proposed Regulations are finalized. Moreover, the Proposed Regulations, as currently drafted, would apply to determine whether a REIT was domestically controlled for the entire five-year testing period prior to any disposition of our common stock, rather than applying only to the portion of the testing period beginning after the Proposed Regulations are finalized. The Proposed Regulations relating to foreign owned domestic corporations are inconsistent with prior tax guidance. We cannot predict if or when or in what form the Proposed Regulations will be finalized or what our composition of investors that are treated as domestic under these final regulations will be at the time of enactment. Please consult your tax advisors.

Even if we are domestically controlled, a non-U.S. holder, other than a "qualified shareholder" or a "qualified foreign pension fund," that receives a distribution from a REIT that is attributable to gains from the disposition of a USRPI as described above, including in connection with a repurchase of our common stock, is generally subject to U.S. federal income tax under FIRPTA to the extent such distribution is attributable to gains from such disposition, regardless of whether the difference between the fair market value and the tax basis of the USRPI giving rise to such gains is attributable to periods prior to or during such non-U.S. holder's ownership of our common stock, unless the relevant class of stock is regularly traded on an established securities market in the United States and such non-U.S. holder did not own more than 10% of such class at any time during the one-year period ending on the date of such distribution. In addition, a repurchase of our common stock, to the extent not treated as a sale or exchange, may be subject to withholding as an ordinary dividend.

We seek to act in the best interests of our company as a whole and not in consideration of the particular tax consequences to any specific holder of our stock. Potential non-U.S. holders should inform themselves as to the U.S. tax consequences, and the tax consequences within the countries of their citizenship, residence, domicile, and place of business, with respect to the purchase, ownership and disposition of shares of our common stock.

***Investments outside the U.S. may subject us to additional taxes and could present additional complications to our ability to satisfy the REIT qualification requirements.***

Non-U.S. investments may subject us to various non-U.S. tax liabilities, including withholding taxes. In addition, operating in functional currencies other than the U.S. dollar and in environments in which real estate transactions are typically structured differently than they are in the U.S. or are subject to different legal rules may complicate our ability to structure non-U.S. investments in a manner that enables us to satisfy the REIT qualification requirements.

***We may be subject to tax liabilities that reduce our cash flow and our ability to pay distributions to you even if we qualify as a REIT for federal income tax purposes.***

We may be subject to federal and state taxes on our income or property even if we qualify as a REIT for federal income tax purposes, including, but not limited to, situations as those described below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in order to maintain our status as a REIT, we are required to distribute as dividends annually at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and excluding net capital gain) to our stockholders. If we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to corporate income tax on the undistributed income, including undistributed net capital gains;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we will be required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions we make to our stockholders in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from previous years;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be required to pay a tax on that income at the highest corporate income tax rate; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any gain we recognize on the sale of a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business would be subject to the 100% "prohibited transaction" tax unless we qualify for a safe harbor exception.

***Restrictions on the deduction of our interest expense could prevent us from satisfying the REIT distribution requirement and avoiding the incurrence of income or excise taxes.***

Section 163(j) of the Code, as amended by the Tax Cuts and Jobs Act, may limit our ability (and the ability of entities that are not treated as disregarded entities for U.S. federal income tax purposes and in which we hold an interest) to deduct interest expense in taxable years beginning after December 31, 2017. The deduction for business interest expense may be limited to the amount of the taxpayer's business interest income plus 30% of the taxpayer's "adjusted taxable income" unless the taxpayer's gross receipts do not exceed $25 million per year during the applicable testing period or the taxpayer qualifies to elect and elects to be treated as an "electing real property trade or business." A taxpayer's adjusted taxable income will start with its taxable income and add back items of non-business income and expense, business interest income and business interest expense, net operating losses and any deductions for "qualified business income,". A taxpayer that is exempt from the interest expense limitation as an electing real property trade or business is ineligible for certain expensing benefits and is subject to less favorable depreciation rules for real property.

The rules for business interest expense will apply to us and at the level of each entity in which or through which we invest that is not a disregarded entity for U.S. federal income tax purposes. To the extent that our interest expense is not deductible, our taxable income will be increased, as will our REIT distribution requirement and the amounts we need to distribute to avoid incurring income and excise taxes.

***Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.***

Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is not in our best interest to qualify as a REIT. In this event, we would become subject to U.S. federal income tax on our taxable income and we would no longer be required to distribute most of our net taxable income to our stockholders, which may cause a reduction in the total return to our stockholders.

***You may have current tax liability on distributions you elect to reinvest in our common stock.***

If you participate in our distribution reinvestment plan, you will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. Therefore, unless you are a tax-exempt entity, you may be forced to use funds from other sources to pay your tax liability on the reinvested dividends.

***We may choose to pay dividends in our own stock, in which case our stockholders may be required to pay income taxes in excess of the cash dividends received.***

Under IRS Revenue Procedure 2017-45, as a publicly offered REIT, we may give stockholders a choice, subject to various limits and requirements, of receiving a dividend in cash or in our common stock. As long as at least 20% of the total dividend is available to be paid in cash and certain other requirements are satisfied, the IRS will treat the stock distribution as a dividend (to the extent applicable rules treat such distribution as being made out of the REIT's earnings and profits). Taxable stockholders receiving such dividends will be required to include in income for federal income tax purposes the full amount of the dividend income to the extent of our current and accumulated earnings and profits. As a result, a U.S. stockholder may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock.

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***Generally, ordinary dividends payable by REITs do not qualify for the reduced U.S. federal income tax rates that apply to "qualified dividend income".***

The maximum U.S. federal income tax rate applicable to "qualified dividend income" payable by U.S. corporations to individual U.S. stockholders (as such term is defined under "Federal Income Tax Considerations" below) is 20% (excluding the 3.8% Medicare Tax). However, dividends payable by REITs that are not designated as capital gain dividends or qualified dividend income or "qualified REIT dividends," generally are not eligible for the reduced rates applicable to qualified dividend income and are taxed at ordinary income tax rates. In taxable years beginning before January 1, 2026, however, non-corporate U.S. stockholders are entitled to a deduction of up to 20% of the amount of their qualified REIT dividends, subject to certain limitations. Nevertheless, non-corporate investors may perceive investments in REITs to be relatively less attractive than investments in the stocks of other corporations whose dividends are taxed at lower rates as qualified dividend income.

***There may be tax consequences to any modifications to our borrowings, our hedging transactions and other contracts to replace references to LIBOR.***

The publication of LIBOR rates may be discontinued by June 30, 2023. We are parties to loan agreements with LIBOR-based interest rates and derivatives with LIBOR-based terms used for hedging. We may have to renegotiate such LIBOR-based instruments to replace references to LIBOR. Under current law, certain modifications of terms of LIBOR-based instruments may have tax consequences, including deemed taxable exchanges of the pre-modification instrument for the modified instrument. Final Treasury Regulations, effective March 7, 2022, treat certain modifications that would be taxable events under current law as non-taxable events. The Treasury Regulations do not discuss REIT-specific issues of modifications to LIBOR-based instruments. The IRS has also issued Revenue Procedure 2020-44, which provides additional guidance to facilitate the market's transition from LIBOR rates. This guidance clarifies the treatment of certain debt instruments modified to replace LIBOR-based terms. We will attempt to migrate to a post-LIBOR environment without jeopardizing our REIT qualification or suffering other adverse tax consequences but can give no assurances that we will succeed.

***The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.***

The IRS has issued Revenue Procedure 2003-65, which provides a safe harbor pursuant to which a mezzanine loan that is secured by interests in a pass-through entity will be treated by the IRS as a real estate asset for purposes of the REIT tests, and interest derived from such loan will be treated as qualifying mortgage interest for purposes of the REIT 75% gross income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. To the extent that any of our investments in loans secured by interests in pass-through entities do not satisfy all of the requirements for reliance on the safe harbor set forth in the Revenue Procedure, there can be no assurance that the IRS will not challenge the tax treatment of such loans, which could jeopardize our ability to qualify as a REIT.

***If certain sale-leaseback transactions are not characterized by the IRS as "true leases," we may be subject to adverse tax consequences.***

We may purchase investments in properties and lease them back to the sellers of these properties. If the IRS does not characterize these leases as "true leases," the rental payments would not be treated as rents from real property, which could affect our ability to satisfy the REIT gross income tests and qualify as a REIT.

***If our operating partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal income tax purposes, we would cease to qualify as a REIT.***

If the IRS were to successfully challenge the status of our operating partnership as a partnership or disregarded entity for U.S. federal income tax purposes, it would be taxable as a corporation. In the event that this occurs, it would reduce the amount of distributions that our operating partnership could make to us. This would also result in our failing to qualify as a REIT and becoming subject to a corporate-level tax on our income, which would substantially reduce our cash available to pay distributions and the yield on your investment.

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**Retirement Plan Risks**

***If the fiduciary of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), fails to meet the fiduciary and other standards under ERISA, the Code or common law as a result of an investment in our stock, the fiduciary could be subject to civil (and criminal, if the violation was willful) penalties.***

There are special considerations that apply to investing in our shares on behalf of a trust, pension, profit sharing or 401(k) plans, health or welfare plans, trusts, individual retirement accounts, or IRAs, or Keogh plans. If you are investing the assets of any of the entities identified in the prior sentence in our common stock, you should satisfy yourself that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment is consistent with your fiduciary obligations under applicable law, including common law, ERISA and the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment is made in accordance with the documents and instruments governing the trust, plan or IRA, including a plan's investment policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment will not impair the liquidity of the trust, plan or IRA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment will not produce "unrelated business taxable income" for the plan or IRA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our stockholders will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA, the Code, or other applicable statutory or common law may result in the imposition of civil (and criminal, if the violation was willful) penalties, and can subject the fiduciary to equitable remedies.

In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Code, the fiduciary that authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. Investors that are governmental plans or foreign plans may be subject to laws that are similar to the aforementioned provisions of ERISA and the Code or that otherwise regulate the purchase of our shares.

***If we were at any time deemed to hold "plan assets" under ERISA or the Code, stockholders subject to ERISA and the related excise tax provisions of the Code may be subject to adverse financial and legal consequences.***

Stockholders subject to ERISA or the Code should consult their own advisors as to the effect of an investment in the shares. As discussed under "Certain ERISA Considerations," our assets may not be deemed to constitute "plan assets" of stockholders that are subject to the fiduciary provisions of ERISA or the prohibited transaction rules of Section 4975 of the Code ("Plans"). If we were deemed to hold "plan assets" of Plans (i) ERISA's fiduciary standards would apply to, and might materially affect, our operations if any such Plans are subject to ERISA, and (ii) any transaction we enter into could be deemed a transaction with each Plan and transactions we might enter into in the ordinary course of business could constitute prohibited transactions under ERISA and/or Section 4975 of the Code. Holding plan assets may negatively impact our results.

**General Risk Factors**

***The phase-out of LIBOR could affect interest rates for our Term Loans and interest rate cap and swap arrangements.***

LIBOR is used as a reference rate for our Term Loans and our interest rate cap and swap arrangements. On July 27, 2017, the United Kingdom's Financial Conduct Authority ("FCA") announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On March 5, 2021, the ICE Benchmark Administration Limited, which is supervised by the FCA, announced that it will cease publication of the 3-month U.S. Dollar denominated LIBOR rate after June 30, 2023. There is no assurance that LIBOR will continue to be published until any particular date, and it is unclear if a new method of calculating LIBOR will be established, or if an alternative reference rate will be established. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, has formally recommended the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts.

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We are not able to predict when LIBOR will cease to be available or if SOFR, or another alternative rate reference rate, attains market traction as a LIBOR replacement. Our property level mortgage loans and interest rate swap arrangements provide that if LIBOR is no longer available, then the parties to the agreements shall enter into an amendment utilizing the prevailing market convention for determining the rate of interest for syndicated loans in the United States at the time. In such circumstances the interest rates on our Term Loans and in our interest rate cap and swap arrangements may change. The new rates may not be as favorable as those in effect prior to any LIBOR phase-out. In addition, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR, all of which could negatively impact our cash flow.

---

| | |
|:---|:---|
| **Item 1B.** | **Unresolved Staff Comments.** |

---

Not applicable.

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| | |
|:---|:---|
| **Item 2.** | **Properties.** |

---

***DESCRIPTION OF REAL ESTATE***

Our investments in real estate assets as of December 31, 2022 consisted of interests in wholly owned properties and seven joint ventures. The following table sets forth information with respect to our real estate assets by segment as of December 31, 2022. We own a fee simple interest in all properties unless otherwise noted.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Location** | **%<br>Owned** | **Year<br>Built** | **Date Acquired** | **Net Rentable<br>Square Feet** | **Percentage<br>Leased** |
| *Consolidated Properties:* |  |  |  |  |  |  |
| **Industrial Segment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Kendall Distribution Center | Atlanta, GA | 100% | 2002 | June 30, 2005 | 409000 | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;Suwanee Distribution Center<sup>(1)</sup> | Suwanee, GA | 100 | 2013 | June 28, 2013 | 559000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Grand Prairie Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3325 West Trinity Boulevard | Grand Prairie, TX | 100 | 2013 | January 22, 2014 | 277000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3324 West Trinity Boulevard | Grand Prairie, TX | 100 | 2015 | May 31, 2019 | 145000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Charlotte Distribution Center | Charlotte, NC | 100 | 1991 | June 27, 2014 | 347000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;DFW Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4050 Corporate Drive | Grapevine, TX | 100 | 1996 | April 15, 2015 | 441000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4055 Corporate Drive | Grapevine, TX | 100 | 1996 | April 15, 2015 | 202000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;O'Hare Industrial Portfolio |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;200 Lewis | Wood Dale, IL | 100 | 1985 | September 30, 2015 | 31000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1225 Michael Drive | Wood Dale, IL | 100 | 1985 | September 30, 2015 | 109000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1300 Michael Drive | Wood Dale, IL | 100 | 1985 | September 30, 2015 | 71000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1301 Mittel Drive | Wood Dale, IL | 100 | 1985 | September 30, 2015 | 53000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1350 Michael Drive | Wood Dale, IL | 100 | 1985 | September 30, 2015 | 56000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2501 Allan Drive | Elk Grove, IL | 100 | 1985 | September 30, 2015 | 198000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2601 Allan Drive | Elk Grove, IL | 100 | 1985 | September 30, 2015 | 124000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tampa Distribution Center | Tampa, FL | 100 | 2009 | April 11, 2016 | 386000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Aurora Distribution Center | Aurora, IL | 100 | 2016 | May 19, 2016 | 305000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Valencia Industrial Portfolio: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28150 West Harrison Parkway | Valencia, CA | 100 | 1997 | June 29, 2016 | 87000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28145 West Harrison Parkway | Valencia, CA | 100 | 1997 | June 29, 2016 | 114000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28904 Paine Avenue | Valencia, CA | 100 | 1999 | June 29, 2016 | 117000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25045 Tibbitts Avenue | Santa Clarita, CA | 100 | 1988 | June 29, 2016 | 142000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pinole Point Distribution Center: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6000 Giant Road | Richmond, CA | 100 | 2016 | September 8, 2016 | 225000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6015 Giant Road | Richmond, CA | 100 | 2016 | September 8, 2016 | 252000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6025 Giant Road | Richmond, CA | 100 | 2016 | December 29, 2016 | 41000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mason Mill Distribution Center<sup>(1)</sup> | Buford, GA | 100 | 2016 | December 20, 2017 | 340000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fremont Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45275 Northport Court | Fremont, CA | 100 | 1991 | March 29, 2019 | 117000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45630 Northport Loop East | Fremont, CA | 100 | 1995 | March 29, 2019 | 120000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Taunton Distribution Center | Taunton, MA | 100 | 2016 | August 23, 2019 | 200000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Chandler Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1725 East Germann Road | Chandler, AZ | 100 | 2016 | December 5, 2019 | 122000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1825 East Germann Road | Chandler, AZ | 100 | 2016 | December 5, 2019 | 89000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fort Worth Distributiom Center | Fort Worth, TX | 100 | 2020 | October 23, 2020 | 351000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Whitestown Distribution Center<sup>(1)</sup> |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4993 Anson Boulevard | Whitestown, IN | 100 | 2020 | December 11, 2020 | 280000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5102 E 500 South | Whitestown, IN | 100 | 2020 | December 11, 2020 | 440000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Louisville Distribution Center | Shepherdsville, KY | 100 | 2020 | January 21, 2021 | 1040000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Southeast Phoenix Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6511 West Frye Road | Chandler, AZ | 100 | 2019 | February 23, 2021 | 102000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6565 West Frye Road | Chandler, AZ | 100 | 2019 | February 23, 2021 | 118000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6615 West Frye Road | Chandler, AZ | 100 | 2019 | February 23, 2021 | 136000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6677 West Frye Road | Chandler, AZ | 100 | 2019 | February 23, 2021 | 118000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6635 West Frye Road | Chandler, AZ | 100 | 2019 | June 8, 2022 | 105000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6575 West Frye Road | Chandler, AZ | 100 | 2019 | June 8, 2022 | 140000 | 100 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Location** | **%<br>Owned** | **Year<br>Built** | **Date Acquired** | **Net Rentable<br>Square Feet** | **Percentage<br>Leased** |
| &nbsp;&nbsp;&nbsp;&nbsp;Louisville Airport Distribution Center<sup>(1)</sup> | Louisville, KY | 100 | 2020 | June 24, 2021 | 284000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;13500 Danielson Street | Poway, CA | 95 | 1997 | July 2, 2021 | 73000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;237 Via Vera Cruz | San Marcos, CA | 95 | 1987 | July 2, 2021 | 66000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;4211 Starboard | Fremont, CA | 95 | 1997 | July 9, 2021 | 130000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;5 National Way | Durham, NC | 100 | 2020 | September 28, 2021 | 188000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;47 National Way | Durham, NC | 100 | 2020 | September 28, 2021 | 187000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Friendship Distribution Center<sup>(1)</sup> |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4627 Distribution Pkwy | Buford, GA | 100 | 2020 | October 20, 2021 | 126000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4630 Distribution Pkwy | Buford, GA | 100 | 2020 | October 20, 2021 | 149000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4646 Distribution Pkwy | Buford, GA | 100 | 2020 | October 20, 2021 | 102000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4651 Distribution Pkwy | Buford, GA | 100 | 2020 | October 20, 2021 | 272000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;South San Diego Distribution Center |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2001 Sanyo Avenue | San Diego, CA | 100 | 1987 | October 28, 2021 | 320000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2055 Sanyo Avenue | San Diego, CA | 100 | 1991 | October 28, 2021 | 209000 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2065 Sanyo Avenue | San Diego, CA | 100 | 2020 | October 28, 2021 | 136000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;1755 Britannia Drive | Elgin, IL | 100 | 2020 | November 16, 2021 | 80000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;2451 Bath Road | Elgin, IL | 100 | 2020 | November 16, 2021 | 327000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;687 Conestoga Parkway | Shepardsville, KY | 100 | 2021 | November 17, 2021 | 327000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;2840 Loker Avenue | Carlsbad, CA | 95 | 1998 | November 30, 2021 | 104000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;15890 Bernardo Center Drive | San Diego, CA | 95 | 1991 | November 30, 2021 | 48000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Northeast Atlanta Distribution Center | Jefferson, GA | 100 | 2016 | April 8, 2022 | 459000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;West Phoenix Distribution Center<sup>(1)</sup> | Glendale, AZ | 100 | 2022 | September 30, 2022 | 1200000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Puget Sound Distribution Center | Lacey, WA | 100 | 2021 | October 6, 2022 | 142000 | 100 |
| **Office Segment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Monument IV at Worldgate | Herndon, VA | 100% | 2001 | August 27, 2004 | 228000 | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;140 Park Avenue | Florham Park, NJ | 100 | 2015 | December 21, 2015 | 100000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;San Juan Medical Center<sup>(1)</sup> | San Juan Capistrano, CA | 100 | 2015 | April 1, 2016 | 40000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Genesee Plaza |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9333 Genesee Ave | San Diego, CA | 100 | 1983 | July 2, 2019 | 80000 | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9339 Genesee Ave | San Diego, CA | 100 | 1983 | July 2, 2019 | 81000 | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fountainhead Corporate Park | Tempe, AZ | 100 | 1985 | February 6, 2020 | 295000 | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;170 Park Avenue | Florham Park, NJ | 100 | 1998 | February 2, 2021 | 147000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;9101 Stony Point Drive<sup>(1)</sup> | Richmond, VA | 100 | 2018 | September 15, 2021 | 87000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;North Tampa Surgery Center | Odessa, FL | 100 | 2021 | October 8, 2021 | 13000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Duke Medical Center<sup>(1)</sup> | Durham, NC | 100 | 2010 | December 23, 2021 | 60000 | 96 |
| &nbsp;&nbsp;&nbsp;&nbsp;KC Medical Office Portfolio |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8600 NE 82nd Street | Kansas City, MO | 100 | 2021 | December 23, 2021 | 11000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1203 SW 7 Highway | Blue Springs, MO | 100 | 2000 | December 23, 2021 | 10000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Roeland Park Medical Office | Roeland Park, KS | 100 | 2021 | December 28, 2021 | 30000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;South Reno Medical Center<sup>(1)</sup> | Reno, NV | 100 | 2004 | December 28, 2021 | 32000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sugar Land Medical Office<sup>(1)</sup> | Sugar Land, TX | 100 | 2020 | December 30, 2021 | 37000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cedar Medical Center | Flagstaff, AZ | 100 | 2022 | April 29, 2022 | 26000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;North Boston Medical Center | Haverhill, MA | 100 | 2017 | June 28, 2022 | 30000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;North Charlotte Medical Center | Stanley, NC | 100 | 2017 | June 28, 2022 | 25000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Grand Rapids Medical Center | Wyoming, MI | 100 | 2018 | July 21, 2022 | 25000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Glendale Medical Center | Los Angeles, CA | 100 | 2018 | July 29, 2022 | 20000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;6300 Dumbarton Circle<sup>(1)</sup> | Fremont, CA | 100 | 1990 | September 15, 2022 | 44000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;6500 Kaiser Drive<sup>(1)</sup> | Fremont, CA | 100 | 1990 | September 15, 2022 | 88000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Greater Sacramento Medical Center | Rancho Cordova, CA | 100 | 2012 | September 16, 2022 | 18000 | 100 |
| **Residential Segment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Townlake of Coppell | Coppell, TX | 100% | 1986 | May 22, 2015 | 351000 | 93% |
| &nbsp;&nbsp;&nbsp;&nbsp;AQ Rittenhouse | Philadelphia, PA | 100 | 2015 | July 30, 2015 | 92000 | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lane Parke Apartments | Mountain Brook, AL | 100 | 2014 | May 26, 2016 | 263000 | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dylan Point Loma | San Diego, CA | 100 | 2016 | August 9, 2016 | 204000 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Penfield<sup>(1)</sup> | St. Paul, MN | 100 | 2013 | September 22, 2016 | 245000 | 94 |

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Location** | **%<br>Owned** | **Year<br>Built** | **Date Acquired** | **Net Rentable<br>Square Feet** | **Percentage<br>Leased** |
| &nbsp;&nbsp;&nbsp;&nbsp;180 North Jefferson | Chicago, IL | 100 | 2004 | December 1, 2016 | 217000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Jory Trail at the Grove | Wilsonville, OR | 100 | 2012 | July 14, 2017 | 315000 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Reserve at Johns Creek<sup>(2)</sup> | Johns Creek, GA | 100 | 2007 | July 28, 2017 | 244000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Villas at Legacy<sup>(1)</sup> | Plano, TX | 100 | 1999 | June 6, 2018 | 340000 | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stonemeadow Farms | Bothell, WA | 100 | 1999 | May 13, 2019 | 228000 | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;Summit at San Marcos<sup>(1)</sup> | Chandler, AZ | 100 | 2018 | July 31, 2019 | 257000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Presley Uptown | Charlotte, NC | 100 | 2016 | September 30, 2019 | 190000 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;Princeton North Andover | North Andover, MA | 100 | 2019 | May 3, 2021 | 204000 | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Preserve at the Meadows<sup>(1)</sup> | Fort Collins, CO | 100 | 2001 | August 23, 2021 | 208000 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Rockwell<sup>(1)</sup> | Berlin, MA | 100 | 2020 | August 31, 2021 | 233000 | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;Miramont | Fort Collins, CO | 100 | 1995 | September 29, 2021 | 212000 | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pinecone | Fort Collins, CO | 100 | 1993 | September 29, 2021 | 176000 | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reserve at Venice<sup>(1)</sup> | North Venice, FL | 100 | 2021 | December 17, 2021 | 268000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Woodside Trumbull | Trumbull, CT | 100 | 2021 | December 21, 2021 | 207000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Jefferson Lake Howell | Casselberry, FL | 100 | 2021 | March 30, 2022 | 374000 | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;Oak Street Lofts | Tigard, OR | 100 | 2021 | July 15, 2022 | 162000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Molly Brook on Belmont | North Haledon, NJ | 100 | 2019 | September 27, 2022 | 177000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Single-Family Rental Portfolio II | Various | 95 | Various | Various | 509000 | 95 |
| **Retail Segment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;The District at Howell Mill<sup>(3)</sup> | Atlanta, GA | 88% | 2006 | June 15, 2007 | 306000 | 96% |
| &nbsp;&nbsp;&nbsp;&nbsp;Grand Lakes Marketplace<sup>(3)</sup> | Katy, TX | 90 | 2012 | September 17, 2013 | 131000 | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rancho Temecula Town Center | Temecula, CA | 100 | 2007 | June 16, 2014 | 165000 | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;Skokie Commons | Skokie, IL | 100 | 2015 | May 15, 2015 | 97000 | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;Whitestone Market | Austin, TX | 100 | 2003 | September 30, 2015 | 145000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Maui Mall | Kahului, HI | 100 | 1971 | December 22, 2015 | 235000 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;Silverstone Marketplace<sup>(1)</sup> | Scottsdale, AZ | 100 | 2015 | July 27, 2016 | 78000 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Kierland Village Center | Scottsdale, AZ | 100 | 2001 | September 30, 2016 | 118000 | 96 |
| &nbsp;&nbsp;&nbsp;&nbsp;Timberland Town Center | Beaverton, OR | 100 | 2015 | September 30, 2016 | 92000 | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;Montecito Marketplace<sup>(1)</sup> | Las Vegas, NV | 100 | 2007 | August 8, 2017 | 190000 | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;Milford Crossing<sup>(1)</sup> | Milford, MA | 100 | 2018 | January 29, 2020 | 159000 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Patterson Place | Durham, NC | 100 | 2010 | May 31, 2022 | 25000 | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Silverado Square | Las Vegas, NV | 100 | 2018 | June 1, 2022 | 48000 | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;Woodlawn Point | Marietta, GA | 100 | 1993 | June 30, 2022 | 98000 | 92 |
| **Other Segment:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;South Beach Parking Garage<sup>(4)</sup> | Miami Beach, FL | 100% | 2001 | January 28, 2014 | 130000 | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Unconsolidated Properties:* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Chicago Parking Garage<sup>(5)</sup> | Chicago, IL | 100% | 2003 | December 23, 2014 | 167000 | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;NYC Retail Portfolio<sup>(6)</sup> | NY/NJ | 14 | 1996 - 2004 | December 8, 2015 | 1940000 | 93% |
| &nbsp;&nbsp;&nbsp;&nbsp;Pioneer Tower<sup>(7)</sup> | Portland, OR | 100 | 1990 | June 28, 2016 | 308000 | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Tremont<sup>(3)</sup> | Burlington, MA | 75 | 2016 | July 19, 2018 | 175000 | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;The Huntington<sup>(3)</sup> | Burlington, MA | 75 | 2018 | July 19, 2018 | 115000 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;Siena Suwanee Town Center<sup>(8)</sup> | Suwanee, GA | 100 | 2018 | December 15, 2020 | 226000 | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;Single-Family Rental Portfolio I<sup>(9)</sup> | Various | 47 | Various | August 5, 2021 | 7207000 | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;Kingston at McLean Crossing<sup>(3)</sup> | McLean, VA | 80 | 2018 | December 3, 2021 | 279000 | 91 |

---

___________

1. This property is included in our DST Program.

2. On July 8, 2022, we repurchased this property from our DST Program.

3. We own a majority interest in the joint venture that owns a fee simple interest in this property.

4. The parking garage contains 343 stalls. This property is owned leasehold.

5. We own a condominium interest in the building that contains a 366 stall parking garage.

6. We own an approximate 14% interest in a portfolio of 8 urban infill retail properties located in the greater New York City area.

7. We own a condominium interest in the building that contains a 17 story multi-tenant office property.

8. We own a condominium interest in the project that contains a 240-unit residential property.

9. We own an approximate 47% interest in a portfolio of over 4,000 single-family rental homes located in various markets across the United States.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

***ACQUISITIONS***

*2022 Acquisitions*

During the year ended December 31, 2022, we acquired 19 properties and over 300 single-family rental houses consisting of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* five industrial properties totaling 2,046,000 square feet for approximately $275,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eight office properties all focused in the healthcare industry totaling 276,000 square feet for approximately $171,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• three multi-family residential properties totaling 751 units, entered into a joint venture that purchased 320 single-family rental houses and acquired the remaining 2.5% of Presley Uptown for approximately $428,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• three retail properties totaling 171,000 square feet for approximately $74,000.

*2021 Acquisitions*

During the year ended December 31, 2021, we acquired 40 properties and over 4,000 single-family rental houses consisting of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* 23 industrial properties totaling 4,642,000 square feet for approximately $649,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• nine office properties all focused in the healthcare industry totaling 427,000 square feet for approximately $199,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eight multi-family residential properties totaling 1,815 units and entered into a joint venture that purchased over 4,000 single-family rental houses for a total of approximately $1,173,000, including assumption of debt.

*2020 Acquisitions*

During the year ended December 31, 2020, we acquired six properties consisting of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* three industrial properties totaling 1,071,000 square feet for approximately $86,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one office property totaling 295,000 square feet for approximately $62,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one multifamily residential property totaling 240 units and for a total of approximately $70,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one retail property totaling 159,000 square feet for approximately $42,000.

***DISPOSITIONS***

*2022 Dispositions*

On January 6, 2022, we sold Norfleet Distribution Center, a 702,000 square foot industrial property located in Kansas City, Missouri for approximately $60,375 less closing costs. We recorded a gain on the sale of the property in the amount of approximately $34,584.

On January 24, 2022, we sold The Edge at Lafayette, a 207,000 square foot student housing apartment property located in Lafayette, Louisiana for approximately $16,500 less closing costs. We recorded a gain on the sale of the property in the amount of approximately $13.

On December 1, 2022 we sold Oak Grove Plaza, a 120,000 square foot retail property located in Sache, Texas for approximately $24,400 less closing costs. We recorded a gain on the sale of the property in the amount of approximately $3,492.

*2021 Dispositions*

On January 8, 2021, we sold South Seattle Distribution Center, a 323,000 square foot industrial property located in Seattle, Washington for approximately $72,600 less closing costs and the loan of $17,841 was retired. We recorded a gain on the sale of the property in the amount of $33,580.

*2020 Dispositions*

On March 4, 2020, a 74,000 square foot retail property in the NYC Retail Portfolio (as defined below) was sold and its mortgage loan extinguished. Sale proceeds were maintained at the venture for operating needs.

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On March 27, 2020, we sold 24823 Anza Drive, a 31,000 square foot industrial property located in Santa Clarita, California for approximately $5,600 less closing costs. We recorded a gain on the sale of the property in the amount of $1,724.

***FINANCING***

The following is a summary of the mortgage notes for our consolidated properties as of December 31, 2022:

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| | | | |
|:---|:---|:---|:---|
| **Property** | **Interest Rate** | **Maturity Date** | **Principal Balance** |
| Aurora Distribution Center | 3.39% | June 1, 2023 | $13156 |
| 180 N Jefferson | 3.89 | July 1, 2023 | 45000 |
| Grand Lakes Marketplace | 4.20 | October 1, 2023 | 23900 |
| Charlotte Distribution Center | 3.66 | September 1, 2024 | 9117 |
| Genesee Plaza | 4.30 | January 1, 2025 | 38306 |
| Jory Trail at the Grove | 3.81 | February 1, 2025 | 41954 |
| Skokie Commons | 3.31 | June 1, 2025 | 23118 |
| DFW Distribution Center | 3.23 | June 1, 2025 | 17720 |
| AQ Rittenhouse | 3.65 | September 1, 2025 | 26370 |
| Timberland Town Center | 4.07 | October 1, 2025 | 19739 |
| Whitestone Market | 3.58 | December 1, 2025 | 25750 |
| Miramont Apartments | 3.87 | March 1, 2026 | 27128 |
| Pinecone Apartments | 3.87 | March 1, 2026 | 24895 |
| Louisville Distribution Center | 1.76 | May 1, 2026 | 52250 |
| Maui Mall | 3.64 | June 1, 2026 | 35492 |
| Rancho Temecula Town Center | 4.02 | July 1, 2026 | 28000 |
| Dylan Point Loma | 3.83 | September 1, 2026 | 39598 |
| 237 Via Vera Cruz | 5.79 | September 1, 2026 | 11880 |
| 4211 Starboard Drive | 5.79 | September 1, 2026 | 20612 |
| 13500 Danielson Street | 5.79 | September 1, 2026 | 10990 |
| 2840 Loker Ave | 5.79 | September 1, 2026 | 14316 |
| 15890 Bernardo Center Drive | 5.79 | September 1, 2026 | 8702 |
| Lane Parke Apartments | 3.18 | November 1, 2026 | 37000 |
| The District at Howell Mill | 5.30 | March 1, 2027 | 28036 |
| San Juan Medical Center | 3.35 | October 1, 2027 | 16730 |
| Whitestown Distribution Center | 2.95 | February 10, 2028 | 34000 |
| Townlake of Coppell | 2.41 | April 10, 2028 | 36030 |
| Southeast Phoenix Distribution Center | 2.70 | June 1, 2028 | 49000 |
| Princeton North Andover | 5.94 | June 1, 2028 | 39900 |
| Friendship Distribution Center | 6.05 | March 1, 2029 | 40000 |
| Stonemeadow Farms | 3.62 | August 1, 2029 | 43865 |
| Presley Uptown | 3.25 | November 1, 2029 | 30000 |
| Reserve at Johns Creek | 3.58 | December 1, 2029 | 26000 |
| Summit at San Marcos | 3.28 | May 1, 2030 | 35900 |
| Mason Mill Distribution Center | 3.25 | October 1, 2030 | 17500 |
| The Penfield | 2.50 | October 1, 2030 | 35500 |
| South San Diego Distribution Center | 3.18 | January 1, 2031 | 72500 |
| Villas at Legacy | 2.53 | January 1, 2031 | 29500 |
| The Preserve at the Meadows | 2.57 | October 1, 2031 | 32400 |
| The Rockwell | 2.62 | October 1, 2031 | 46310 |
| Reserve at Venice | 2.98 | March 1, 2032 | 55800 |
| Molly Brook on Belmont | 3.31 | August 1, 2042 | 54650 |

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On April 28, 2022, we entered into a credit agreement providing for a $1,000,000 revolving line of credit and unsecured term loan (collectively, the "Credit Facility") with a syndicate of eight lenders led by JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Capital Markets LLC, Wells Fargo Securities, LLC and Capital One, National Association. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $1,300,000, subject to receipt of lender commitments and other conditions. The $1,000,000 Credit Facility consists of a $600,000 revolving line of credit (the "Revolving Credit Facility") and a $400,000 term loan (the "Term Loan"). The Revolving Credit Facility contains a sublimit of $25,000 for letters of credit. The primary interest rate for the Revolving Credit Facility is based on one-month term secured overnight financing rate ("SOFR") plus 0.10% ("Adjusted Term SOFR"), plus a margin ranging from 1.3% to 2.00%, depending on our total leverage ratio. The primary interest rate for the Term Loan is based on Adjusted Term SOFR, plus a margin ranging from 1.25% to 1.95%, depending on our total leverage ratio. The maturity date of the Revolving Credit Facility is April 28, 2025 and the Term Loan is April 28, 2027. The Credit Facility contains two, twelve-month extension options at our election. Based on our current total leverage ratio, we can elect to borrow at Adjusted Term SOFR plus 1.35% and Adjusted Term SOFR plus 1.30% for the Revolving Credit Facility and Term Loan, respectively, or alternatively, we can choose to borrow at a "base rate" equal to (i) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the prime rate announced by JPMorgan Chase Bank, N.A., and (c) Adjusted Term SOFR plus 1.0%, plus (ii) a margin ranging from 0.30% to 1.00% for base rate loans under the Revolving Credit Facility or a margin ranging from 0.25% to 0.95% for base rate loans under the Term Loan. If the "base rate" is less than 1.0%, it will be deemed to be 1.0% for purposes of the Credit Facility. We intend to use the Revolving Credit Facility to cover short-term capital needs, for new property acquisitions and working capital. We may not draw funds on our Credit Facility if we (i) experience a material adverse effect, which is defined to include, among other things, (a) a material adverse effect on the business, assets, operations or financial condition of the Company taken as a whole; (b) the inability of any loan party to perform any of its obligations under any loan document; or (c) a material adverse effect upon the validity or enforceability of any loan document or (ii) are in default, as that term is defined in the agreement, including a default under certain other loan agreements and/or guarantees entered into by us or our subsidiaries. As of December 31, 2022, we believe no material adverse effects had occurred.

Borrowings under the Credit Facility are guaranteed by us and certain of our subsidiaries. The Credit Facility requires the maintenance of certain financial covenants, including: (i) unencumbered property pool leverage ratio; (ii) debt service coverage ratio; (iii) maximum total leverage ratio; (iv) fixed charges coverage ratio; (v) minimum NAV; (vi) maximum secured debt ratio; (vii) maximum secured recourse debt ratio; (viii) maximum permitted investments; and (ix) unencumbered property pool criteria. The Credit Facility provides the flexibility to move assets in and out of the unencumbered property pool during the term of the Credit Facility.

At December 31, 2022, we had $225,000 outstanding under the Revolving Credit Facility at Adjusted Term SOFR plus 1.35% and $400,000 outstanding under the Term Loan at Adjusted Term SOFR plus 1.40%. We swapped $190,000 of the Revolving Credit Facility to a fixed rate of 2.40% (all in rate of 3.80% at December 31, 2022). The interest swap agreements have maturity dates ranging from February 17, 2023 through April 28, 2027.

On December 10, 2021, we entered into an additional $100,000 short-term bridge loan (the "Bridge Loan") with JPMorgan Chase Bank, N.A. under the same terms as our Credit Facility. The Bridge Loan bore interest at the SOFR plus 1.45% to 2.15% depending on our total leverage ratio. The maturity date of the Bridge Loan was December 1, 2022 and had two, three month extension options. The Bridge Loan was extinguished on April 28, 2022 upon execution of the Credit Facility.

At December 31, 2022, we were in compliance with all debt covenants.

***INSURANCE***

Although we believe our investments are currently adequately covered by insurance consistent with the terms and levels of coverage that are standard in our industry, we cannot predict at this time if we will be able to obtain adequate coverage at a reasonable cost in the future.

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 ***OPERATING STATISTICS***

We generally hold investments in properties with high occupancy rates leased to quality tenants under long-term, non-cancelable leases. We believe these leases are beneficial to achieving our investment objectives. The following table shows our operating statistics by property type for our consolidated properties as of December 31, 2022:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Number of**<br>**Properties/ Portfolios** <sup>(1)</sup> | **Total Area<br>(Sq Ft)** | **% of Total<br>Area** | **Stabilized Occupancy %** | **Estimated Percent <br>of Fair Value** | **Average Minimum**<br>**Base Rent per**<br>**Occupied Sq Ft**<sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | 60 | 13438000 | 59% | 99% | 39% | $6.44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 24 | 1527000 | 7 | 95 | 13 | 32.32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 23 | 5676000 | 25 | 93 | 36 | 24.09 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 14 | 1887000 | 8 | 93 | 12 | 24.31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 1 | 130000 | 1 | N/A |  | N/A |
| Total | 122 | 22658000 | 100% | 97% | 100% | $14.00 |

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________

(1)Residential includes over 300 single-family rental homes in the Single-Family Rental Portfolio II.

(2)Amount calculated as in-place minimum base rent for all occupied space at December 31, 2022 and excludes any straight line rents, tenant recoveries and percentage rent revenues.

The following table shows our operating statistics by property type for our unconsolidated properties as of December 31, 2022:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Number of**<br>**Properties/ Portfolios** <sup>(1)</sup> | **Total Area<br>(Sq Ft)** | **% of Total<br>Area** | **Stabilized Occupancy %** | **Estimated Percent <br>of Fair Value** | **Average Minimum**<br>**Base Rent per**<br>**Occupied Sq Ft**<sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 1 | 308000 | 3% | 68% | 8% | $32.30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 5 | 8002000 | 77 | 94 | 81 | 13.75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 8 | 1940000 | 18 | 93 | 10 | 34.81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 1 | 167000 | 2 | N/A | 1 | N/A |
| Total | 15 | 10417000 | 100% | 93% | 100% | $18.29 |

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(1)Residential includes over 4,000 single-family rental homes in the Single-Family Rental Portfolio I.

(2)Amount calculated as in-place minimum base rent for all occupied space at December 31, 2022 and excludes any straight line rents, tenant recoveries and percentage rent revenues.

As of December 31, 2022, our average effective annual rent per square foot, calculated as average minimum base rent per occupied square foot less tenant concessions and allowances, was $13.30 for our consolidated properties. As of December 31, 2022, the scheduled lease expirations at our consolidated properties are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of<br>Leases Expiring** | **Annualized**<br>**Minimum Base Rent** <sup>(1)</sup> | **Square<br>Footage** | **Percentage of<br>Annualized Minimum<br>Base Rent** |
| 2023 <sup>(2)</sup> | 42 | $6754 | 487000 | 4% |
| 2024 | 63 | 16930 | 1425000 | 10 |
| 2025 | 69 | 17869 | 1401000 | 10 |
| 2026 | 67 | 18714 | 2582000 | 11 |
| 2027 | 73 | 29102 | 2097000 | 16 |
| 2028 and thereafter | 171 | 87651 | 9054000 | 49 |
| Total | 485 | $177020 | 17046000 |  |

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(1)Amount calculated as annualized in-place minimum base rent excluding any above- and below-market lease amortization, straight line rents, tenant recoveries and percentage rent revenues as of December 31, 2022 presented in the year of lease expiration.

(2)Does not include 5,415 leases totaling approximately 5,264,000 square feet and approximately $126,798 in annualized minimum base rent associated with the residential properties and single-family rental houses we owned as of December 31, 2022.

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As of December 31, 2022, the scheduled lease expirations at our unconsolidated properties are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Year** | **Number of<br>Leases Expiring** | **Annualized**<br>**Minimum Base Rent** <sup>(1)</sup> | **Square<br>Footage** | **Percentage of<br>Annualized Minimum<br>Base Rent** |
| 2023 <sup>(2)</sup> | 14 | $8191 | 208000 | 12% |
| 2024 | 15 | 11448 | 362000 | 16 |
| 2025 | 15 | 11763 | 251000 | 17 |
| 2026 | 12 | 11910 | 293000 | 17 |
| 2027 | 11 | 6024 | 222000 | 9 |
| 2028 and thereafter | 32 | 20074 | 563000 | 29 |
| Total | 99 | $69410 | 1899000 |  |

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(1)Amount calculated as annualized in-place minimum base rent excluding any above- and below-market lease amortization, straight line rents, tenant recoveries and percentage rent revenues as of December 31, 2022 presented in the year of lease expiration.

(2)Does not include 4,629 leases totaling approximately 7,546,314 square feet and approximately $103,781 in annualized minimum base rent associated with the unconsolidated residential investments and single-family rental houses.

The following table shows the aggregate stabilized portfolio occupancy rates for our consolidated and unconsolidated properties as of December 31, 2022 and each of the previous five years:

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| | | |
|:---|:---|:---|
| **As of December 31, 2022** | **Stabilized Occupancy Rate for Consolidated Properties**<sup>(1)</sup> | **Stabilized Occupancy Rate for**<br>**Unconsolidated Properties**<sup>(1)</sup> |
| 2022 | 97% | 93% |
| 2021 | 98 | 94 |
| 2020 | 96 | 87 |
| 2019 | 97 | 91 |
| 2018 | 94 | 93 |
| 2017 | 94 | 95 |

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(1)We calculate stabilized portfolio occupancy as the occupancy of all the properties we own, excluding newly constructed properties that have not yet leased up to 90% since our acquisition of the property.

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The following tables show the stabilized occupancy rates for our consolidated properties by property type as well as the average minimum base rent per occupied square foot as of December 31, 2022 and 2021:

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| | | | |
|:---|:---|:---|:---|
| | **Stabilized Occupancy Rate** <sup>(1)</sup> | **Stabilized Occupancy Rate** <sup>(1)</sup> | **Stabilized Occupancy Rate** <sup>(1)</sup> |
| | **December 31, 2022** | **December 31, 2021** | **Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | 99% | 100% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 95 | 98 | (3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 93 | 95 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 93 | 93 |  |
| Total | 97% | 98% | (1)% |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;We calculate stabilized portfolio occupancy as the occupancy of all the properties we own, excluding newly constructed properties that have not yet leased up to 90% since our acquisition of the property.

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| | | | |
|:---|:---|:---|:---|
| | **Average Minimum Base Rent per Occupied Square Foot** <sup>(1)</sup> | **Average Minimum Base Rent per Occupied Square Foot** <sup>(1)</sup> | **Average Minimum Base Rent per Occupied Square Foot** <sup>(1)</sup> |
| | **December 31, 2022** | **December 31, 2021** | **Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | $6.44 | $6.28 | $0.16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 32.32 | 31.72 | 0.60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 24.09 | 23.15 | 0.94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 24.31 | 21.10 | 3.21 |
| Total | $14.00 | $13.14 | $0.86 |

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(1) &nbsp;&nbsp;&nbsp;&nbsp; Amount calculated as in-place minimum base rent for all occupied space and excludes any straight line rents, tenant recoveries and percentage rent revenues.

Our industrial properties' stabilized occupancy rate remained nearly fully occupied from December 31, 2021 to December 31, 2022. The average minimum base rent per occupied square foot for our industrial properties at December 31, 2022 increased when compared to December 31, 2021, due to higher in place rents of our recent acquisitions, as well as base rent increases in our existing properties.

Our office properties' stabilized occupancy rate decreased slightly from December 31, 2021 to December 31, 2022 primarily due to a lease expiration at Fountainhead Corporate Park. Average minimum base rent increased from December 31, 2021 to December 31, 2022 primarily as a result of recent healthcare acquisitions, which have higher minimum base rents than our average office property.

Our residential properties' stabilized occupancy rate decreased slightly from December 31, 2021 to December 31, 2022. The average minimum base rents per occupied square foot for our residential properties at December 31, 2022 increased when compared to December 31, 2021, primarily due to recent acquisitions as well as overall increases in market rents in 2022 throughout the segment.

Our retail properties' stabilized occupancy rate remained the same from December 31, 2021 to December 31, 2022. The average minimum base rents per occupied square foot for our retail properties at December 31, 2022 increased significantly when compared to December 31, 2021, primarily due to base rent increases.

The stabilized occupancy rate of our properties remained high at 97% across our overall portfolio from December 31, 2021 to December 31, 2022. The average minimum base rent per occupied square foot increased from December 31, 2021 to December 31, 2022, primarily due to higher in place rents of our recent acquisitions and increase in rental rates in renewed leases.

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***PRINCIPAL TENANTS***

The following table sets forth the top ten tenants of our consolidated properties based on their percentage of annualized minimum base rent as of December 31, 2022:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Tenants** | **Property** | **Line of Business** | **Date of Lease<br>Expiration** | **Lease Renewal<br>Options** | **Annual Minimum Base Rent** <sup>(1)</sup> | **% of<br>Total<br>Area** | **% of**<br>**Annualized**<br>**Minimum**<br>**Base Rent** <sup>(2)</sup> |
| Amazon | Monument IV at Worldgate, Pinole Point Distribution Center, Maui Mall & Grand Lakes Marketplace | Internet Web Services / Online Retailer / Grocery Store | Various | Various | $13180 | 3% | 3% |
| Williams-Sonoma | Pinole Point Distribution Center, Taunton Distribution Center, West Phoenix Distribution Center | Home Products Retailer | Various | Various | 8860 | 5% | 2% |
| McKesson Corporation | Louisville Distribution Center | Pharmaceutical Distributor | December 31, 2030 | Two 5-year options | 4371 | 4% | 1% |
| Celularity Inc | 170 Park Ave | Biotechnology Company | January 31, 2036 | Two 5-year options | 2834 | 1% | 1% |
| Summit Medical Group | 140 Park Ave | Medical Practice | April 30, 2030 | Three 5-year options | 2750 | <1% | 1% |
| Quanta Computer | Fremont Distribution Center | Computer Manufacturer | August 31, 2025 | Two 5-year options | 2719 | 1% | 1% |
| Mitsubishi Electric | Suwanee Distribution Center | HVAC Manufacturer | July 31, 2028 |  | 2674 | 2% | 1% |
| Virginia Urology | 9101 Stony Point | Medical Practice | March 31, 2035 | Three 5-year options | 2444 | <1% | 1% |
| TJX Companies | Maui Mall, Milford Crossing, Montecito Marketplace, The District at Howell Mill | Home Products Retailer | Various | Various | 2443 | <1% | 1% |
| Kyocera SLD Laser, Inc. | 6500 Kaiser | LED Manufacturer | April 17, 2030 |  | 2272 | <1% | 1% |
| Total |  |  |  |  | $44547 | 16% | 13% |

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(1)Annual minimum base rent is calculated as annualized monthly in-place minimum base rent excluding any above- and below-market lease amortization, straight-line rents, tenant recoveries and percentage rent revenues.

(2)Percent of annualized minimum base rent is calculated as annualized in-place minimum base rent excluding any above- and below-market lease amortization, straight-line rents, tenant recoveries and percentage rent revenues divided by total annualized minimum base rent.

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***PRINCIPAL PROPERTIES***

The following table sets forth our top ten consolidated properties based on percentage of annualized minimum base rent as of December 31, 2022:

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| | | | |
|:---|:---|:---|:---|
| **Properties** | **Property Type** | **% of Total Area** | **% of Annualized Minimum Base Rent** <sup>(1)</sup> |
| Monument IV at Worldgate | Office | 1% | 3% |
| Jefferson Lake Howell | Residential | 2 | 3 |
| Townlake of Coppell | Residential | 2 | 2 |
| South San Diego Distribution Center | Industrial | 3 | 2 |
| Fountainhead Corporate Park | Office | 1 | 2 |
| 180 North Jefferson | Residential | 1 | 2 |
| Single-Family Rental Portfolio II | Residential | 2 | 2 |
| Lane Parke Apartments | Residential | 1 | 2 |
| Dylan at Point Loma | Residential | 1 | 2 |
| Reserve at Venice | Residential | 1 | 2 |
| Total |  | 15% | 22% |

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(1)Minimum base rent is calculated as in-place minimum base rent excluding any above- and below-market lease amortization, straight-line rents, tenant recoveries and percentage rent revenues.

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|:---|:---|
| **Item 3.** | **Legal Proceedings.** |

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We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

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|:---|:---|
| **Item 4.** | **Mine Safety Disclosures.** |

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Not applicable.

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**PART II**

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|:---|:---|
| **Item 5.** | **Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.** |

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Our common stock is not currently traded on any exchange, and there is no established public trading market for our common stock. As of March 27, 2023, there were 24,717 stockholders of record of our common stock, including 13,438 holders of Class A, 4,234 holders Class M, 57 holders Class A-I, 6,987 holders of Class M-I and 1 holder of Class D shares.

***NAV per Share***

At the end of each day the New York Stock Exchange is open for unrestricted trading, before taking into consideration additional issuances of shares of common stock, repurchases or class-specific expense accruals for that day, any change in our aggregate NAV (whether an increase or decrease) is allocated among each class of shares based on each class's relative percentage of the previous aggregate NAV. Changes in our daily NAV reflect factors including, but not limited to, our portfolio income, interest expense and unrealized/realized gains (losses) on assets, and accruals for the advisory fees. The portfolio income is calculated and accrued on the basis of data extracted from (1) the annual budget for each property, real estate loan investment and the company level, including organization and offering expenses incurred after commencement of a public offering and certain operating expenses, (2) material, unbudgeted non-recurring income and expense events such as capital expenditures, prepayment penalties, assumption fees, tenant buyouts, lease termination fees and tenant turnover with respect to our properties when our Advisor becomes aware of such events and the relevant information is available and (3) material property acquisitions and dispositions and real estate loans made and repaid occurring during the month. For the first month following a property acquisition, we calculate and accrue portfolio income with respect to such property based on the performance of the property before the acquisition and the contractual arrangements in place at the time of the acquisition, as identified and reviewed through our due diligence and underwriting process in connection with the acquisition. On an ongoing basis, our Advisor adjusts the accruals to reflect actual operating results and to appropriately reflect the outstanding receivable, payable and other account balances resulting from the accumulation of daily accruals for which financial information is available. The daily accrual of portfolio income also includes reimbursements to our Advisor and dealer manager for organization and offering expenses incurred prior to the date the offering commences and paid on our behalf, which we are reimbursing over the 36 months following the date the offering commences. For the purpose of calculating our NAV, all organization and offering costs incurred after the date the offering commences are recognized as expenses when incurred, and acquisition expenses with respect to each acquired property will be amortized on a daily basis over a five year period following the acquisition date.

Following the allocation of income and expenses as described above, NAV for each class is adjusted for additional issuances of common stock, repurchases and class specific expense accruals, such as the dealer manager fee (which will be included in the calculation on a daily basis and not when accrued on our financial statements), to determine the current day's NAV. Our share classes may have different expense accruals associated with the advisory fee we pay to our Advisor because the performance component of the advisory fee is calculated separately with respect to each class. At the close of business on the date that is one business day after each record date for any declared distribution, our NAV for each class will be reduced to reflect the accrual of our liability to pay the distribution to our stockholders of record of each class as of the record date. NAV per share for each class is calculated by dividing such class's NAV at the end of each trading day by the number of shares outstanding for that class on such day.

At the beginning of each calendar year, our Advisor develops a valuation plan with the objective of having each of our wholly owned properties valued each quarter by an appraisal. Newly acquired wholly owned properties are initially valued at cost and thereafter become subject to the quarterly appraisal cycle during the quarter following the first full calendar quarter in which we own the property.

The fair value of our wholly owned properties is done using the fair value methodologies detailed within the FASB Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures. Our valuation procedures and our NAV are not subject to GAAP or independent audit. Real estate appraisals are reported on a free and clear basis, excluding any property-level indebtedness that may be in place. We expect the primary methodology used to value properties will be the income approach, whereby value is derived by determining the present value of an asset's stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates subjective judgments regarding comparable rental and operating expense data, the capitalization or discount rate and projections of future

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rent and expenses based on appropriate evidence. Other methodologies that may also be used to value properties include sales comparisons and replacement cost approaches.

A fundamental element of the valuation process, the valuation of our properties, real estate loans and the DST Properties, is managed by our independent valuation advisor, SitusAMC Real Estate Valuation Services, LLC, a valuation firm selected by our advisor and approved by our board of directors, including a majority of our independent directors. SitusAMC Real Estate Valuation Services, LLC, founded in 1931, is one of the longest-serving commercial real estate research, valuation and consulting firms in the nation with offices throughout the United States. SitusAMC Real Estate Valuation Services, LLC is engaged in the business of rendering opinions regarding the value of commercial real estate properties and real estate loans and is not affiliated with us or our advisor. The compensation we pay to our independent valuation advisor is based on the number of properties appraised and is not based on the estimated values of such properties. While our independent valuation advisor is responsible for providing our property valuations, our independent valuation advisor is not responsible for, and does not calculate, our daily NAV. Effective January 1, 2018, our NAV and our NAV per share are calculated by ALPS, in accordance with the valuation guidelines established by our board of directors. Our advisor is responsible for reviewing and confirming our NAV, and overseeing the process around the calculation of our NAV, in each case, as performed by ALPS.

Our independent valuation advisor has provided, and is expected to continue to provide, real estate appraisal, appraisal management and real estate valuation advisory services to other clients of our advisor and its affiliates and has received, and is expected to continue to receive, fees in connection with such services. Our independent valuation advisor and its affiliates may from time to time in the future perform other commercial real estate and financial advisory services for other clients of our advisor and its affiliates, so long as such other services do not adversely affect the independence of the independent valuation advisor as certified in the applicable appraisal report.

Properties held through joint ventures are valued in a manner that is consistent with the guidelines described above for wholly owned properties. Once the value of a property held by the joint venture is determined by an independent appraisal, the value of our interest in the joint venture would then be determined by applying the distribution provisions of the applicable joint venture agreements to the value of the underlying property held by the joint venture.

The DST Properties included in a DST offering will be valued at cost until the quarterly appraisal cycle during the quarter following the first full calendar quarter in which the DST Property is owned, and thereafter will be valued before the commencement of the DST offering for purposes of determining the price for beneficial interests in the DST Properties in such DST offering regardless of the valuation schedule otherwise applicable pursuant to the valuation guidelines, and no subsequent valuation of such DST Properties will be performed until the earlier of (i) ninety days from the date of the last closing on the DST offering and (ii) one year from the commencement of the DST offering. Such values will be included in our or our operating partnership's NAV calculation only to the extent of our or our operating partnership's interest in such DST Properties. In addition, the cash received or a loan made in exchange for the sale of interests in a DST Property will be valued as our assets. The Advisor may modify the timing of the valuation of a DST Property to accommodate the timing of our purchase option under the DST Program, regardless of the valuation schedule otherwise applicable pursuant to our valuation guidelines. A DST Property acquired by us pursuant to our purchase option will continue being valued on the same cycle following our exercise of the purchase option.

Real estate-related assets that we own or may acquire include debt and equity interests backed principally by real estate, such as the common and preferred stock of publicly traded real estate companies, commercial mortgage-backed securities, mortgage loans and participation in mortgage loans (i.e. A-Notes and B-Notes) and mezzanine loans. In general, real estate-related assets are valued according to the procedures specified below upon acquisition or issuance and then quarterly, or in the case of liquid securities, daily, as applicable, thereafter.

Publicly traded debt and real estate-related equity securities (such as bonds and shares issued by listed REITs) that are not restricted as to salability or transferability are valued by our Advisor on the basis of publicly available information provided by third parties. Generally, the third parties will rely on the price of the last trade of such securities that was executed at or prior to closing on the valuation day or, in the absence of such trade, the last "bid" price. Our Advisor may adjust the value of publicly traded debt and real estate-related equity securities that are restricted as to salability or transferability for a liquidity discount. In determining the amount of such discount, consideration will be given to the nature and length of such restriction and the relative volatility of the market price of the security.

Investments in privately placed debt instruments and securities of real estate-related operating businesses (other than joint ventures), such as real estate development or management companies, are valued by our Advisor at cost (purchase price plus all related acquisition costs and expenses, such as legal fees and closing costs) and thereafter will be revalued each quarter at fair value. In evaluating the fair value of our interests in certain commingled investment vehicles (such as private real estate funds), values periodically assigned to such interests by the respective issuers, broker-dealers or managers may be relied upon. Our

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board of directors may retain additional independent valuation firms to assist with the valuation of our private real estate-related assets.

Individual investments in private mortgages, mortgage participations and mezzanine loans are valued by our Advisor at our acquisition cost and may be revalued by our Advisor from time to time. Revaluations of mortgages reflect the changes in value of the underlying real estate, with anticipated sale proceeds (estimated cash flows) discounted to their present value using a discount rate based on current market rates.

Liquid non-real estate-related assets include credit rated government and corporate debt securities, publicly traded equity securities and cash and cash equivalents. Liquid non-real estate-related assets are valued daily by our Advisor.

Our liabilities include the fees payable to our Advisor and dealer manager, accounts payable, accrued operating expenses, property-level mortgages, any portfolio-level credit facilities and other liabilities. All liabilities are valued at cost. Costs and expenses that relate to a particular loan will be amortized over the life of the loan. We allocate the financing costs and expenses incurred in connection with obtaining multiple loans that are not directly related to any single loan among the applicable loans, generally pro rata based on the amount of proceeds from each loan. Liabilities allocable to a specific class of shares are only included in the NAV calculation for that class. For non-recourse, property-level mortgages that exceed the value of the underlying property, we assume a value of zero for purposes of the property and the mortgage in the determination of our NAV.

**NAV as of December 31, 2022** 

The following table presents our historical NAV per share as of each date indicated below:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **NAV per Share** | **NAV per Share** | **NAV per Share** | **NAV per Share** | **NAV per Share** |
|<br>**Quarter Ended** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| December 31, 2022 | $14.37 | $14.39 | $14.40 | $14.38 | $14.36 |
| September 30, 2022 | 14.90 | 14.93 | 14.94 | 14.92 | 14.90 |
| June 30, 2022 | 14.85 | 14.88 | 14.89 | 14.87 | 14.85 |
| March 31, 2022 | 14.73 | 14.76 | 14.77 | 14.76 | 14.74 |
| December 31, 2021 | 13.56 | 13.58 | 13.59 | 13.58 | 13.57 |
| September 30, 2021 | 12.71 | 12.73 | 12.75 | 12.74 | 12.72 |
| June 30, 2021 | 12.07 | 12.09 | 12.10 | 12.10 | 12.08 |
| March 31, 2021 | 11.81 | 11.83 | 11.84 | 11.84 | 11.82 |

---

The increase in NAV from December 31, 2021 to December 31, 2022 is primarily related to an overall 5.5% increase in the values of our properties during 2022.

The following table provides a breakdown of the major components of our NAV per share as of December 31, 2022:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|<br>**Component of NAV** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** | **Total** |
| Real estate investments<sup>(1)</sup> | $2554496 | $589026 | $111544 | $2155728 | $67936 | $5478730 |
| Debt | (968627) | (223350) | (42296) | (817420) | (25760) | (2077453) |
| Other assets and liabilities, net | 46871 | 10808 | 2047 | 39554 | 1246 | 100526 |
| Estimated enterprise value premium | None assumed | None assumed | None assumed | None assumed | None assumed | None assumed |
| NAV | $1632740 | $376484 | $71295 | $1377862 | $43422 | $3501803 |
| Number of outstanding shares | 113645166 | 26170260 | 4950208 | 95803409 | 3023025 |  |
| NAV per share | $14.37 | $14.39 | $14.40 | $14.38 | $14.36 |  |

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(1)The value of our real estate investments was greater than the historical cost by approximately 14.6% as of December 31, 2022.

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The following table provides a breakdown of the major components of our NAV per share as of December 31, 2021:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|<br>**Component of NAV** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** | **Total** |
| Real estate investments<sup>(1)</sup> | $2307210 | $842232 | $216341 | $1217062 | $173358 | $4756203 |
| Debt | (988699) | (360918) | (92708) | (521543) | (74289) | (2038157) |
| Other assets and liabilities, net | 37998 | 13871 | 3563 | 20044 | 2856 | 78332 |
| Estimated enterprise value premium | None assumed | None assumed | None assumed | None assumed | None assumed | None assumed |
| NAV | $1356509 | $495185 | $127196 | $715563 | $101925 | $2796378 |
| Number of outstanding shares | 100038362 | 36458191 | 9356309 | 52676693 | 7513281 |  |
| NAV per share | $13.56 | $13.58 | $13.59 | $13.58 | $13.57 |  |

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(1) &nbsp;&nbsp;&nbsp;&nbsp;The value of our real estate investments was greater than the historical cost by approximately 3.6% as of December 31, 2021.

The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of December 31, 2022:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Healthcare** | **Industrial** | **Office** | **Residential** | **Retail** | **Other** <sup>(1)</sup> | **Total<br>Company** |
| Exit capitalization rate | 5.3% | 4.7% | 5.9% | 4.8% | 5.5% | 6.5% | 4.9% |
| Discount rate/internal rate of return (IRR) | 6.4 | 6.2 | 6.9 | 6.3 | 6.7 | 7.9 | 6.4 |
| Annual market rent growth rate | 3.0 | 3.3 | 2.7 | 3.3 | 2.9 | 3.1 | 3.2 |
| Holding period (years) | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 21.0 | 10.1 |

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________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Other includes two standalone parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.

The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of December 31, 2021:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Healthcare** | **Industrial** | **Office** | **Residential** | **Retail** | **Other** <sup>(1)</sup> | **Total<br>Company** |
| Exit capitalization rate | 5.3% | 4.6% | 5.8% | 4.5% | 5.5% | 6.3% | 4.9% |
| Discount rate/internal rate of return (IRR) | 6.2 | 5.6 | 6.4 | 5.9 | 6.4 | 7.8 | 6.0 |
| Annual market rent growth rate | 3.0 | 3.3 | 2.6 | 3.3 | 2.7 | 3.1 | 3.1 |
| Holding period (years) | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 21.8 | 10.1 |

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________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Other includes two standalone parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.

While we believe our assumptions are reasonable, a change in these assumptions would impact the calculation of the value of our real estate investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our real estate investment value:

---

| | | | |
|:---|:---|:---|:---|
| **Input** | | **December 31, 2022** | **December 31, 2021** |
| Discount Rate - weighted average | 0.25% increase | (1.8)% | (1.7)% |
| Exit Capitalization Rate - weighted average | 0.25% increase | (3.0) | (2.8) |
| Annual market rent growth rate - weighted average | 0.25% decrease | (1.4) | (1.2) |

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The following table reconciles stockholders' equity per our Consolidated Balance Sheet to our NAV:

---

| | |
|:---|:---|
| | **December 31, 2022** |
| Stockholders' equity under GAAP | $2096097 |
| Adjustments: |  |
| &nbsp;&nbsp;&nbsp;Accrued dealer manager fees <sup>(1)</sup> | 182152 |
| &nbsp;&nbsp;&nbsp;Organization and offering costs <sup>(2)</sup> | 508 |
| &nbsp;&nbsp;&nbsp;Unrealized real estate appreciation <sup>(3)</sup> | 681041 |
| &nbsp;&nbsp;&nbsp;Accumulated depreciation, amortization and other <sup>(4)</sup> | 542005 |
| NAV | $3501803 |

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________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Accrued dealer manager fees represents the accrual for future dealer manager fees for Class A, Class M and Class A-I shares. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock as an offering cost. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee.

(2)&nbsp;&nbsp;&nbsp;&nbsp;The Advisor agreed to advance organization and offering costs on our behalf through December 21, 2021. Such costs will be reimbursed to the Advisor ratably over 36 months through December 20, 2024. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, such costs will be recognized as a reduction to NAV ratably over 36 months.

(3)&nbsp;&nbsp;&nbsp;&nbsp;Our investments in real estate are presented under historical cost in our GAAP Consolidated Financial Statements. As such, any increases in the fair market value of our investments in real estate are not included in our GAAP results. For purposes of determining our NAV, our investments in real estate are recorded at fair value.

(4)&nbsp;&nbsp;&nbsp;&nbsp;We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of determining our NAV. Additionally, we make other fair value adjustments to our NAV to account for differences with historical cost GAAP, an example would be straight-line rent revenue.

*Limitations and Risks*

As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Our valuation methodology may not result in the determination of the fair value of our net assets as our mortgage notes and other debt payable are valued at cost. Different parties with different assumptions and estimates could derive a different NAV per share.

Accordingly, with respect to our NAV per share, we can provide no assurance that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a stockholder would be able to realize this NAV per share upon attempting to resell his or her shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we would be able to achieve for our stockholders the NAV per share upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio, or merging with another company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the NAV per share, or the methodologies relied upon to estimate the NAV per share, will be found by any regulatory authority to comply with any regulatory requirements.

Furthermore, the NAV per share was calculated as of a particular point in time. The NAV per share will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities and attributes specific to the properties and leases within our portfolio.

***UNREGISTERED SALES OF EQUITY SECURITIES***

On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with indefinite duration. As of December 31, 2022, we have raised aggregate gross proceeds from the sale of 8,711,716 Class D shares in our Private Offering of $98,188. The shares of common stock issued in the Private Offering were issued in transactions exempt from registration under the Securities Act pursuant to Rule 506 of Regulation D promulgated under the Securities Act because the purchasers are accredited investors within the meaning of Regulation D under the Securities Act. The Dealer Manager also serves as the dealer manager for the Private Offering. No commissions were paid with respect to the placement of shares in connection with the Private Offering.

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***ISSUER PURCHASES OF EQUITY SECURITIES***

***Share Repurchase Plan***

We adopted a share repurchase plan whereby on a daily basis stockholders may request we repurchase all or a portion of their shares of common stock at that day's NAV per share. The share repurchase plan is subject to a one-year holding period, with certain exceptions, and limited to 5% of NAV per quarter. To date, we have neither deferred nor rejected any request for repurchase under our share repurchase plan. All redemptions were paid out from offering proceeds. During the quarter ended December 31, 2022, we fulfilled 100% of redemption requests and repurchased shares of our common stock pursuant to our share repurchase plan as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares Purchased** | **Average Price Paid per Share** | **Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs** | **Maximum Number of Shares that May Yet Be Purchased Pursuant to the Plan (1)** |
| October 1-October 31, 2022 | 2472661 | $14.92 | 2472661 |  |
| November 1-November 30, 2022 | 2546305 | 14.86 | 2546305 |  |
| December 1-December 31, 2022 | 2279620 | 14.61 | 2279620 |  |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Redemptions are limited as described above.

***SOURCES OF DISTRIBUTIONS***

The following table summarizes our distributions paid over the last three fiscal years:

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| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
| | **2022** | **2021** | **2020** |
| Distributions: |  |  |  |
| &nbsp;&nbsp;&nbsp;Paid in cash | $41553 | $33070 | $35719 |
| &nbsp;&nbsp;&nbsp;Reinvested in shares | 75574 | 59133 | 66990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total distributions | 117127 | 92203 | 102709 |
| Source of distributions: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash flow from operating activities | 60503 | 87349 | 62354 |
| &nbsp;&nbsp;&nbsp;Cash flow from investing activities | 56624 | 4854 | 40355 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total sources of distributions | $117127 | $92203 | $102709 |

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*Performance Graph (Dollars in whole dollars)*

The following graph is a comparison of the cumulative return of our shares of Class M-I common stock (post leverage and fees), the Standard and Poor's 500 Index ("S&P 500") and the National Counsel of Real Estate Investment Fiduciaries Fund Index-Open-End Diversified Core Equity ("ODCE"). The graph assumes that $100 was invested on January 1, 2018 in each of our shares of Class M-I common stock, the S&P 500 Index and the ODCE, assuming that all dividends were reinvested without the payment of any commissions. We currently have Class A, Class M, Class A-I, Class M-I and Class D shares of common stock outstanding. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below.

![jllipt-20221231_g5.jpg](jllipt-20221231_g5.jpg)

\*The ODCE is a capitalization-weighted, time weighted index of open-end core real estate funds reported net of fees. The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Funds are weighted by capitalization, so larger funds have a greater impact on index returns. While funds used in this benchmark typically target institutional investors and have characteristics that differ from the Company (including differing fees), we feel that the ODCE is an appropriate and accepted index for the purpose of evaluating returns on investments in direct real estate funds. Investors cannot invest in this index. The Company has the ability to utilize higher leverage than is allowed for the funds in this index, which could increase the Company's volatility relative to the index.

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|:---|:---|
| **Item 6.** | **Reserved** |

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|:---|:---|
| **Item 7.** | **Management's Discussion and Analysis of Financial Condition and Results of Operations.** |

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**Management Overview**

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements appearing elsewhere in this Form 10-K. All references to numbered Notes are to specific notes to our consolidated financial statements beginning on page F-1 of this Form 10-K, and the descriptions referred to are incorporated into the applicable portion of this section by reference. References to "base rent" in this Form 10-K refer to cash payments made under the relevant lease(s), excluding real estate taxes and certain property operating expenses that are paid by us and are recoverable under the relevant lease(s) and exclude adjustments for straight-line rent revenue and above- and below-market lease amortization.

The discussions surrounding our Consolidated Properties refer to our wholly or majority owned and controlled properties, which as of December 31, 2022 were comprised of:

**Industrial**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Kendall Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Suwanee Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Grand Prairie Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Charlotte Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• DFW Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• O'Hare Industrial Portfolio,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Tampa Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Aurora Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Valencia Industrial Portfolio,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pinole Point Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mason Mill Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fremont Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 3324 Trinity Boulevard,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Taunton Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Chandler Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Forth Worth Distribution Center (acquired in 2020),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whitestown Distribution Center (acquired in 2020),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Louisville Distribution Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Southeast Phoenix Distribution Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Louisville Airport Distribution Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 237 Via Vera Cruz (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 4211 Starboard (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 13500 Danielson Street (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 5 National Way (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 47 National Way (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Friendship Distribution Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• South San Diego Distribution Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1755 Britannia Drive (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 2451 Bath Road (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 687 Conestoga Parkway (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 2840 Loker Avenue (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 15890 Bernardo Center Drive (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Northeast Atlanta Distribution Center (acquired in 2022),

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• West Phoenix Distribution Center (acquired in 2022), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Puget Sound Distribution Center (acquired in 2022).

**Office**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Monument IV at Worldgate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 140 Park Avenue,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• San Juan Medical Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Genesee Plaza,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fountainhead Corporate Park (acquired in 2020),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 170 Park Avenue (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 9101 Stony Point Drive (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• North Tampa Surgery Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Durham Medical Office (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 1203 SW 7 Highway (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 8600 NE 82nd Street (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• South Reno Medical Center (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Roeland Park Medical Office (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sugar Land Medical Office (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cedar Medical Center (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• North Boston Medical Center (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• North Charlotte Medical Center (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Grand Rapids Medical Center (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Glendale Medical Center (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 6300 Dumbarton Circle (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 6500 Kaiser Drive (acquired in 2022), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Greater Sacramento Medical Center (acquired in 2022).

**Residential**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Townlake of Coppell,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• AQ Rittenhouse,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Lane Parke Apartments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dylan Point Loma,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Penfield,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 180 North Jefferson,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jory Trail at the Grove,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Reserve at Johns Creek Walk,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Villas at Legacy,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stonemeadow Farms,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summit at San Marcos,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Presley Uptown,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Princeton North Andover (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Preserve at the Meadows (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Rockwell (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Miramont Apartments (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pinecone Apartments (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Reserve at Venice (acquired in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Woodside Trumbull (acquired in 2021),

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Jefferson Lake Howell (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Oak Street Lofts (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Molly Brook on Belmont (acquired in 2022), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Single-Family Rental Portfolio II (acquired in 2022).

**Retail**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The District at Howell Mill,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Grand Lakes Marketplace,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Rancho Temecula Town Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Skokie Commons,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whitestone Market,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maui Mall,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Silverstone Marketplace,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Kierland Village Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Timberland Town Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Montecito Marketplace,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Milford Crossing (acquired in 2020),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Patterson Place (acquired in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Silverado Square (acquired in 2022), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Woodlawn Point (acquired in 2022).

**Other**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• South Beach Parking Garage.

**Sold Properties**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 24823 Anza Drive (sold in 2020),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• South Seattle Distribution Center (sold in 2021),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Norfleet Distribution Center (sold in 2022),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Edge at Lafayette (sold in 2022), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Oak Grove Plaza (sold in 2022).

&nbsp;&nbsp;&nbsp;&nbsp;

Discussions surrounding our Unconsolidated Properties refer to properties owned through joint venture arrangements or condominium interests, which were comprised of:

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| | | |
|:---|:---|:---|
| **December 31, 2022** | **December 31, 2021** | **December 31, 2020** |
| Pioneer Tower | Pioneer Tower | Pioneer Tower |
| NYC Retail Portfolio <sup>(1)</sup> | NYC Retail Portfolio <sup>(1)</sup> | NYC Retail Portfolio <sup>(1)</sup> |
| Chicago Parking Garage | Chicago Parking Garage | Chicago Parking Garage |
| The Tremont | The Tremont | The Tremont |
| The Huntington | The Huntington | The Huntington |
| Siena Suwanee Town Center | Siena Suwanee Town Center | Siena Suwanee Town Center |
| Single-Family Rental Portfolio I <sup>(1)</sup> | Single-Family Rental Portfolio I <sup>(1)</sup> |  |
| Kingston at McLean Crossing | Kingston at McLean Crossing |  |

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________

(1) &nbsp;&nbsp;&nbsp;&nbsp;We have elected the Fair Value Option to account for this investment.

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Our primary business is the ownership and management of a diversified portfolio of industrial, office, residential, retail and other properties primarily located in the United States. It is expected that over time our real estate portfolio will be further diversified on a global basis and will be complemented by investments in real estate-related assets.

We are managed by our Advisor, LaSalle, a subsidiary of our Sponsor, JLL (NYSE: JLL), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. We hire property management and leasing companies to provide the on-site, day-to-day management and leasing services for our properties. When selecting a property management or leasing company for one of our properties, we look for service providers that have a strong local market or industry presence, create portfolio efficiencies, have the ability to develop new business for us and will provide a strong internal control environment that will comply with our Sarbanes-Oxley Act of 2002 internal control requirements. We currently use a mix of property management and leasing service providers that include large national real estate service firms, including an affiliate of our Advisor, and smaller local firms.

We seek to minimize risk and maintain stability of income and principal value through broad diversification across property sectors and geographic markets and by balancing tenant lease expirations and debt maturities across the real estate portfolio. Our diversification goals also take into account investing in sectors or regions we believe will create returns consistent with our investment objectives. Under normal conditions, we intend to pursue investments principally in well-located, well-leased properties within the industrial, office, residential, retail and other sectors. We expect to actively manage the mix of properties and markets over time in response to changing operating fundamentals within each property sector and to changing economies and real estate markets in the geographic areas considered for investment. When consistent with our investment objectives, we also seek to maximize the tax efficiency of our investments through like-kind exchanges and other tax planning strategies.

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The following charts summarize our portfolio diversification by property sector and geographic region based upon the fair value of our properties. These tables provide examples of how our Advisor evaluates our real estate portfolio when making investment decisions.

**Estimated Percent of Fair Value as of December 31, 2022**![jllipt-20221231_g6.jpg](jllipt-20221231_g6.jpg)

![jllipt-20221231_g7.jpg](jllipt-20221231_g7.jpg)

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**Future Lease Expirations**

The future lease expiration table represents the lease expirations by both total square feet and annualized minimum base rents for current tenants of our Consolidated Properties (excluding our residential properties).

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| | | | |
|:---|:---|:---|:---|
| **Year** | **Total Occupied<br>Square Footage** | **Annualized**<br>**Minimum**<br>**Base Rents** <sup>(1)</sup> | **Percent of<br>Annualized Minimum<br>Base Rents** |
| 2023 <sup>(2)</sup> | 487000 | $6754 | 4% |
| 2024 | 1425000 | 16930 | 10 |
| 2025 | 1401000 | 17869 | 10 |
| 2026 | 2582000 | 18714 | 11 |
| 2027 | 2097000 | 29102 | 16 |
| 2028 | 2102000 | 16052 | 9 |
| 2029 | 847000 | 7544 | 4 |
| 2030 | 2354000 | 20074 | 11 |
| 2031 | 275000 | 3832 | 2 |
| 2032 and thereafter | 3476000 | 40150 | 23 |

---

________

(1)Amount calculated as annualized in-place minimum base rent excluding any above- and below-market lease amortization, straight line rents, tenant recoveries and percentage rent revenues.

(2)Does not include 5,415 short-term leases totaling approximately 5,264,000 square feet and approximately $126,798 in annualized minimum base rent associated with our residential properties and single-family rental houses as of December 31, 2022.

**Ten-Year Debt Repayment**

The ten-year debt repayment table represents debt principal repayments and maturities and the weighted average interest rate of those repayments and maturities for our Consolidated Properties and our Credit Facility, excluding mortgage notes payable held for sale.

---

| | | | |
|:---|:---|:---|:---|
| **Year** | **Principal Repayments<br>and Maturities** | **Percent of Total<br>Outstanding Debt** | **Weighted Average<br>Interest Rate** |
| 2023 | $90732 | 5% | 3.90% |
| 2024 | 17653 | 1 | 3.79 |
| 2025 | 418473 | 22 | 4.86 |
| 2026 | 309240 | 16 | 3.82 |
| 2027 | 447860 | 23 | 4.77 |
| 2028 | 166448 | 9 | 3.48 |
| 2029 | 138110 | 7 | 4.21 |
| 2030 | 89694 | 5 | 2.98 |
| 2031 | 172158 | 9 | 2.82 |
| 2032 and thereafter | 93246 | 5 | 2.99 |

---

**Use of Estimates**

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.

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**Critical Accounting Policies**

This MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies are those applicable to the following which can be found in greater detail within Note 2 Summary of Significant Accounting Policies.

*Initial Valuations for Real Estate Investments and Intangibles* 

These estimates are particularly important as they are used for the allocation of purchase price between building, land and other identifiable intangibles, including acquired in-place, above, below and at-market leases. As a result, the impact of these estimates on our operations could be substantial. Significant differences in annual depreciation or amortization expense may result from the differing useful life or amortization periods related to such purchased assets and liabilities.

We allocate the purchase price of acquired properties to tangible and identified intangible assets based on their relative fair values, using all pertinent information available at the date of acquisition. The allocation of the purchase price to tangible assets, such as building and land, is based upon our determination of the value of the property as if it were vacant. This "as-if vacant" value is estimated using an income, or discounted cash flow, approach that relies upon internally determined assumptions that we believe are consistent with current market conditions for similar properties. Land is valued using comparable land sales specific to the applicable market.

The purchase price of real estate assets is also allocated to intangible assets consisting of the above or below market component of in-place leases and the value of in-place leases. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value of the difference between (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using market rates over the remaining term of the lease. Factors considered in determining the value allocable to in-place leases include estimates, during estimated lease up periods, related to space that is actually leased at the time of acquisition. These estimates include (i) lost rent at market rates, (ii) fixed operating costs that will be recovered from tenants and (iii) theoretical leasing commissions and tenant improvements required to execute similar leases.

*Impairment of Long-Lived Assets* 

Our estimate of the expected future cash flows used in testing for impairment is highly subjective and based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period, discount rates and the length of our anticipated holding period. These assumptions could differ materially from actual results. If our strategy changes or if market conditions otherwise dictate a change in the holding period and an exit date, an impairment loss could be recognized and such loss could be material. During the year ended December 31, 2021, we determined that The Edge at Lafayette no longer fits our current investment objectives and strategy; therefore, we reduced our expected hold period. We further determined that this asset was impaired as the carrying value of the investment was not deemed recoverable. Therefore, we recognized an impairment charge totaling $1,822, which represents the difference between the sale price less estimated costs to sell and the carrying value of the property.

*Collectibility of Rental Revenue*

Individual leases are evaluated for collectibility at each reporting period. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.

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***Recent Events and Outlook***

*Property Valuations*

Property valuations increased across our portfolio in the first half of the year especially within our residential, industrial and healthcare segments driven by good underlying property fundamentals and strong capital markets before flattening out in the third quarter. The fourth quarter saw property values decline as interest rates increased and capital markets rates of return widened.

*Credit Facility*

On April 28, 2022, we entered into our $1,000,000 Credit Facility, which consists of a $600,000 Revolving Credit Facility and a $400,000 Term Loan. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $1,300,000, subject to receipt of lender commitments and other conditions. We are in compliance with our debt covenants as of December 31, 2022. We expect to maintain compliance with our debt covenants.

*Liquidity*

At December 31, 2022, we had in excess of $70,000 in total cash on hand, $44,000 in marketable securities and $375,000 of capacity under our Credit Facility. Looking into 2023, we expect to utilize our cash on hand and Credit Facility capacity to acquire new properties, fund repurchases of our shares, extinguish mortgage notes maturing and fund quarterly distributions.

*Share Repurchase Plan*

During the fourth quarter of 2022, we repurchased 100% of redemption requests totaling $108,045 of our common stock pursuant to our share repurchase plan, which had a quarterly limit of $181,099. The quarterly limit on repurchases is calculated as 5% of our NAV as of the last day of the previous quarter. The limit for the first quarter of 2023 is $175,092.

*Fair Value of Assets and Liabilities*

We account for our approximate 14% investment in the NYC Retail Portfolio and our approximate 47% investment in the Single-Family Rental Portfolio I using the fair value option. During the year ended December 31, 2022, we recorded a unrealized fair value loss of $9,457 and a unrealized fair value gain of $2,723 related to our investments in NYC Retail Portfolio and Single-Family Rental Portfolio I, respectively. Our interest rate swaps resulted in an unrealized fair value gain of $3,766 as interest rates increased during the year. We utilize our interest rate swaps to fix interest rates on variable rate debt we plan to hold to maturity.

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*General Company and Market Commentary*

On December 21, 2021, the SEC declared our Current Public Offering effective registering up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering period, subject to regulatory approval. The per share purchase price varies from day to day and, on each day, equals our NAV per share for each class of common stock, plus, for Class A and Class A-I shares, applicable selling commissions. The Dealer Manager is distributing shares of our common stock in our Current Public Offering. We intend to primarily use the net proceeds from the offering, after we pay the fees and expenses attributable to the offerings and our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing instruments and (3) fund repurchases of our shares under our share repurchase plan.

On March 3, 2015, we commenced our Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds from our public offerings.

On October 16, 2019, we, through our operating partnership, initiated the DST Program to raise up to $2,000,000 in private placements exempt from registration under the Securities Act through the sale of beneficial interests to accredited investors in specific DSTs holding DST Properties, which may be sourced from our real properties or from third parties.

*Capital Raised and Use of Proceeds*

As of December 31, 2022, we have raised gross proceeds of over $4,648,000 from our public and private offerings since 2012. We used these proceeds along with proceeds from mortgage debt to acquire approximately $5,455,000 of real estate investments, deleverage the Company by repaying mortgage loans of approximately $655,000 and repurchase shares of our common stock for approximately $1,157,000.

*Property Acquisitions*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* five industrial properties totaling 1,801,000 square feet,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• eight office properties all focused in the healthcare industry totaling totaling 276,000 square feet,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• three residential properties totaling 713,000 square feet and entered into joint venture that purchased over 300 single-family rental houses and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• three retail properties totaling 171,000 square feet.

*Property Dispositions*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disposed of 4001 Norfleet, The Edge at Lafayette and Oak Grove Plaza.

*Financing*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• entered into two new mortgage notes totaling in excess of $95,000,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assumed one mortgage note totaling approximately $55,000 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• repaid one mortgage note totaling $8,700.

*Leasing and Occupancy*

We ended 2022 with our stabilized portfolio occupancy at 96%. We calculate stabilized portfolio occupancy as the occupancy of all the properties we own, excluding newly constructed properties that have not yet leased up to 90% since our acquisition of the property. During the year we signed new or renewal leases encompassing approximately 1,180,000 square feet of industrial, office and retail property space. Additionally, for properties owned all 12 months of 2021 and 2022 we experienced a 7.8% increase in rental revenue and a 9.3% increase in net operating income in 2022 as compared to 2021.

During 2022, we raised approximately $1,238,000 of new capital and acquired over $956,000 of real estate investments. These properties are in keeping with the investment strategy we began in 2012 and provide solid cash flow and good dividend coverage. We will continue to acquire these types of properties in 2023 and beyond.

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The 2022 property acquisitions and leasing activity were in line with our long-term strategic objectives of generating attractive income, preserving stockholder capital and realizing moderate appreciation of our NAV over time. Our gross dividends declared and paid in 2022 was $0.56 per share.

*Investment Objectives and Strategy*

Our primary investment objectives are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to generate an attractive level of current income for distribution to our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to preserve and protect our stockholders' capital investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to achieve appreciation of our NAV over time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• to enable stockholders to utilize real estate as an asset class in diversified, long-term investment portfolios.

The cornerstone of our investment strategy is to acquire and manage income-producing commercial real estate properties and real estate-related assets. We believe this strategy enables us to provide our stockholders with a portfolio that is well-diversified across property type, geographic region and industry, both in the United States and, over time, internationally. It is our belief that adding international investments to our portfolio over time will serve as an effective tool to construct a well-diversified portfolio designed to provide our stockholders with stable distributions and attractive long-term risk-adjusted returns.

We believe that our broadly diversified portfolio benefits our stockholders by providing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diversification of sources of income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• access to attractive real estate opportunities currently in the United States and, over time, around the world; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to a return profile that should have lower correlations with other investments.

Since real estate markets are often cyclical in nature, our strategy allows us to more effectively deploy capital into property types and geographic regions where the underlying investment fundamentals are relatively strong or strengthening and away from those property types and geographic regions where such fundamentals are relatively weak or weakening. We intend to meet our investment objectives by selecting investments across multiple property types and geographic regions to achieve portfolio stability, diversification, current income and favorable risk-adjusted returns. To a lesser degree, we also intend to invest in debt and equity interests backed principally by real estate, which we refer to collectively as "real estate-related assets."

Our board of directors has adopted investment guidelines for our Advisor to implement and actively monitor in order to allow us to achieve and maintain diversification in our overall investment portfolio. Our board of directors formally reviews our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Our board of directors reviews the investment guidelines to ensure that the guidelines are being followed and are in the best interests of our stockholders.

We seek to invest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 95% of our assets in properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 25% of our assets in real estate-related assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• up to 15% of our assets in cash, cash equivalents and other short-term investments.

Notwithstanding the above, the actual percentage of our portfolio that is invested in each investment type may from time to time be outside these target levels due to numerous factors including, but not limited to, large inflows of capital over a short period of time, lack of attractive investment opportunities or increases in anticipated cash requirements for repurchase requests.

We expect to maintain a targeted company leverage ratio (calculated as our share of total liabilities divided by our share of the fair value of total assets) of between 30% and 50%. We intend to use low leverage, or in some cases possibly no leverage, to finance new acquisitions in order to maintain our targeted company leverage ratio. Our company leverage ratio was 36% as of December 31, 2022.

***Net Asset Value***

The NAV per share for our five classes of common stock was between $14.36 and $14.40 as of December 31, 2022. The decrease of approximately $0.55 per share in NAV from September 30, 2022 is primarily related to decrease in the values of our properties. Additionally, we paid a distribution of $0.14 per share during the quarter ended December 31, 2022, less share

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class specific fees. For the year ended 2022, our Class A, Class M, Class A-I, and Class M-I common stock had total net returns of 9.27%, 9.75%, 9.77% and 9.97%, respectively, including cash distributions of $0.56 per share, less share class specific fees.

***2023 Key Initiatives***

Our initiatives for 2023 are to use capital raised from our public and private offerings and the DST Program to acquire new investment opportunities, repurchase stock under our share repurchase plan, and fund quarterly distributions. Likely acquisition candidates may include well-located, residential properties, industrial, healthcare, grocery-anchored retail properties and originating mortgage loan investments that align with our property investment strategy. We will also attempt to further our geographic diversification. We will use debt financing when attractive interest rates are available, while looking to keep the company leverage ratio in the 30% to 50% range in the near term. We also intend to use our Revolving Credit Facility to allow us to efficiently manage our cash flows.

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**Results of Operations**

***General***

Our revenues are primarily received from tenants in the form of fixed minimum base rents and recoveries of operating expenses. Our expenses primarily relate to the costs of operating and financing our properties. Our share of the net income, net loss or dividend income from our unconsolidated properties is included in equity in income of unconsolidated affiliates. We believe the following analysis of reportable segments provides important information about the operating results of our real estate investments, such as trends in total revenues or operating expenses that may not be as apparent in a period-over-period comparison of our entire Company. We group our investments in real estate assets from continuing operations into five reportable operating segments based on the type of property: industrial, office, residential, retail and other. Operations from corporate level items and real estate assets sold are excluded from reportable segments.

***Results of Operations for the Years ended December 31, 2022 and 2021:***

Properties acquired or sold during any of the periods are presented within the recent acquisitions and sold properties line until the property has been owned for all periods presented. The properties currently presented within the recent acquisitions and sold properties line include the properties listed as either acquired or sold in the Management Overview section above. 62 of our consolidated properties have been owned for the entire years ended December 31, 2022 and 2021 and are referred to as our comparable properties.

***Revenues***

The following chart sets forth revenues, by reportable segment, for the years ended December 31, 2022 and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **$ Change** | **%<br>Change** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | $54853 | $51786 | $3067 | 5.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 28849 | 27840 | 1009 | 3.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 68871 | 62844 | 6027 | 9.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 50788 | 46049 | 4739 | 10.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 310 | 379 | (69) | (18.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comparable properties total | $203671 | $188898 | $14773 | 7.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent acquisitions and sold properties | 123960 | 39042 | 84918 | 217.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total rental revenue** | $327631 | $227940 | $99691 | 43.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | $109 | $238 | $(129) | (54.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 1386 | 1706 | (320) | (18.8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 3586 | 3329 | 257 | 7.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 497 | 498 | (1) | (0.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 2099 | 2588 | (489) | (18.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comparable properties total | $7677 | $8359 | $(682) | (8.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent acquisitions and sold properties | 1880 | 3039 | (1159) | (38.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total other revenue** | $9557 | $11398 | $(1841) | (16.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenues** | $337188 | $239338 | $97850 | 40.9% |

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Rental revenue at comparable properties increased by $14,773 for the year ended December 31, 2022 as compared to the same period in 2021. The increases within our residential, office and industrial segments was primarily related to an increase in rental rates and occupancy at various properties during the year ended December 31, 2022 as compared to the same period of 2021. The increase in our retail segment was primarily related to an overall increase in collections from tenants that experienced a decrease in operations from COVID-19 in 2021 as well as an increase in recovery revenue related to increased operating expenses with the segment during the year ended December 31, 2022 as compared to 2021.

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Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties decreased by $682 for the year ended December 31, 2022 as compared to the same period in 2021. The decrease is primarily related to approximately $489 of lower parking revenue at our parking garage in Miami, FL and a reduction of lease termination fees received within our office segment.

***Operating Expenses***

The following chart sets forth real estate taxes and property operating expenses, by reportable segment, for the years ended December 31, 2022 and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **$ Change** | **%<br>Change** |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | $8906 | $8731 | $175 | 2.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 3404 | 3327 | 77 | 2.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 10720 | 11536 | (816) | (7.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 5704 | 5684 | 20 | 0.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 389 | 459 | (70) | (15.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comparable properties total | $29123 | $29737 | $(614) | (2.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent acquisitions and sold properties | 16186 | 3100 | 13086 | 422.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total real estate taxes** | $45309 | $32837 | $12472 | 38.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | $5007 | $4740 | $267 | 5.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office | 6968 | 6538 | 430 | 6.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential | 20215 | 18674 | 1541 | 8.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retail | 8143 | 7698 | 445 | 5.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 798 | 755 | 43 | 5.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comparable properties total | $41131 | $38405 | $2726 | 7.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent acquisitions and sold properties | 20406 | 5590 | 14816 | 265.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total property operating expenses** | $61537 | $43995 | $17542 | 39.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total operating expenses** | $106846 | $76832 | $30014 | 39.1% |

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Real estate taxes at comparable properties decreased by $614 for the year ended December 31, 2022 as compared to the same period in 2021. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estate taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases. In 2022, we received real estate tax refunds at 180 N Jefferson and Lane Parke Apartments within our residential segment.

Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased by $2,726 during the year ended December 31, 2022 as compared to the same period in 2021. The increases generally relate to higher property management fees due to higher revenues, higher salary costs and higher utility costs in some markets.

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The following chart sets forth expenses not directly related to the operations of the reportable segments for the years ended December 31, 2022 and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **$ Change** | **%<br> Change** |
| Property general and administrative | $(2882) | $(1596) | $(1286) | 80.6% |
| Advisor fees | (50333) | (65667) | 15334 | (23.4) |
| Company level expenses | (8762) | (4841) | (3921) | 81.0 |
| Provision for impairment of real estate |  | (1822) | 1822 | (100.0) |
| Depreciation and amortization | (138104) | (94051) | (44053) | 46.8 |
| Interest expense | (99284) | (48230) | (51054) | 105.9 |
| (Loss) income from unconsolidated affiliates and fund investments | (3403) | 67333 | (70736) | (105.1) |
| Investment income on marketable securities | 1505 | 418 | 1087 | 260.0 |
| Net realized (loss) gain upon sale of marketable securities | (879) | 247 | (1126) | (455.9) |
| Net unrealized change in fair value of investment in marketable securities | (9570) | 2933 | (12503) | (426.3) |
| Gain on disposition of property and extinguishment of debt, net | 37253 | 33422 | 3831 | 11.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | $(274459) | $(111854) | $(162605) | 145.4% |

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Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses increased $1,286 for the year ending December 31, 2022 as compared to the same period in 2021 due to the increase in the number of properties we own. Additionally, in 2021 we received a partial recovery of a deposit for an unsuccessful acquisition received from 2020.

Advisor fees relate to the fixed advisory and performance fees earned by our Advisor. Fixed fees increase or decrease based on changes in our NAV which will be primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, where in our Advisor will receive 10% of the excess total return above the 7% threshold. The decrease in advisor fees of $15,334 for the year ended December 31, 2022 is primarily related a decrease in performance fees in 2022 partially offset by an increase in fixed fees.

Company level expenses relate mainly to our compliance and administration related costs. Company level expenses increased $3,921 for the year ended December 31, 2022 as compared to the same period in 2021 primarily related to a $3,124 tax provision increase primarily related to gains on sales of properties in our taxable REIT subsidiary related to the DST program and increases in professional service fees as well as the increase in size of our portfolio.

Provision for impairment of real estate relates to real estate investments where the estimated future undiscounted cash flows have decreased below the carrying value of the property. A provision for impairment of real estate is recorded to write the property down from its carrying value to its fair value. We recorded a provision for impairment of $1,822 related to The Edge at Lafayette during the year ended December 31, 2021.

Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. The increase of $44,053 in depreciation and amortization expense for the year ended December 31, 2022 as compared to the same period in 2021 is primarily related to additional expense from our 2022 and 2021 acquisitions.

Interest expense increased by $51,054 for the year ended December 31, 2022 as compared to the same period in 2021 primarily as a result of increased borrowings on our Credit Facility and mortgage notes obtained as well as $32,962 increased interest expense on the financial obligations related to the DST Program which includes non-cash interest expense of $15,283 related to a property we exercised our fair market value purchase option on in 2022. Offsetting the increases were unrealized gains on our interest rate swaps in the amount of $7,686 during the year ended December 31, 2022 compared to unrealized losses of $3,920 during the year ended December 31, 2021. We expect to incur significant amounts of non-cash interest expense in future periods related to the exercising of the fair value option on DST Properties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from unconsolidated affiliates and fund investments relates to the income from Chicago Parking Garage, Pioneer Tower, The Tremont, The Huntington, Siena Suwanee Town Center and Kingston at McLean Crossing as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio and the Single-Family Rental Portfolio I. During the year ended December 31, 2022, we recorded a $9,457 decrease in the fair value of our investment in NYC Retail Portfolio and a $2,723 increase in fair value in Single-Family Rental Portfolio I as well as $7,895 in distributions of income. During the year end ended December 31, 2021, we recorded a $61,945 increase in the fair value in the Single-Family Rental Portfolio I in addition to $4,145 of distributions of income and a $4,021 decrease in the fair value of NYC Retail Portfolio. Additionally, during the year ended December 31, 2022, we recorded an impairment charge related to our investment in Pioneer Tower in the amount of $12,838 as the carrying value of the investment exceeded its estimated fair value.

Investment income on marketable securities relates to dividends earned on our portfolio of publicly traded REIT securities. We made our initial purchase of marketable securities during the year ended December 31, 2021. We recorded dividend income of $1,505 and $418 during the years ended December 31, 2022 and 2021, respectively.

Net realized (loss) gain upon the sale of marketable securities relates to sales of individual stocks within our portfolio of publicly traded REIT stocks. We recorded a realized loss of $879 during the year ended December 31, 2022 as compared to a realized gain of $247 during the year end December 31, 2021.

Net unrealized change in fair value of investment in marketable securities relate to changes in fair value of our portfolio of publicly traded REIT securities. We recorded an unrealized loss of $9,570 during the year ended December 31, 2022 as compared to unrealized gains of $2,933 during the year ended December 31, 2021.

Gain on disposition of property and extinguishment of debt, net of $37,253 in the year ended December 31, 2022 relates to the gain on sale of Norfleet Distribution Center, The Edge at Lafayette and Oak Grove Plaza and the gain on disposal of property and relinquishment of debt, net of $33,422 in the year ended December 31, 2021 relates to the gain on sale of South Seattle Distribution Center.

***Results of Operations for the Years ended December 31, 2021 and 2020:***

For discussion on our results of operations for the years ended December 31, 2021 and 2020 please see our Annual Report on Form 10-K filed with the SEC on March 12, 2022.

***FUNDS FROM OPERATIONS***

Consistent with real estate industry and investment community preferences, we consider FFO as a supplemental measure of the operating performance for a real estate investment trust and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income attributable to the Company (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items, impairment write-downs of depreciable real estate and sales of properties, plus real estate related depreciation and amortization and after adjustments for these items related to noncontrolling interests and unconsolidated affiliates.

FFO does not give effect to real estate depreciation and amortization because these amounts are computed to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO provides stockholders with an additional view of our operating performance. We also use Adjusted FFO ("AFFO") as a supplemental measure of operating performance. We define AFFO as FFO adjusted for straight-line rental income, amortization of above- and below-market leases, amortization of net discount on assumed debt, gains or losses on the extinguishment or modification of debt, performance fees based on the investment returns on shares of our common stock, acquisition related costs and adjustments for DST program properties. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO and AFFO provide investors with an additional view of our operating performance.

In order to provide a better understanding of the relationship between FFO, AFFO and GAAP net income, the most directly comparable GAAP financial reporting measure, we have provided reconciliations of GAAP net income attributable to JLL Income Property Trust, Inc. to FFO and FFO to AFFO. FFO and AFFO do not represent cash flow from operating activities in accordance with GAAP, should not be considered as an alternative to GAAP net income is not a measure of liquidity or an indicator of the Company's ability to make cash distributions. We believe that to more comprehensively understand its operating performance, FFO and AFFO should be considered along with its reported net income attributable to JLL Income Property Trust, Inc. and its cash flows in accordance with GAAP, as presented in our consolidated financial statements. Our presentations of FFO and AFFO are not necessarily comparable to the similarly titled measures of other REITs due to the fact that not all REITs use the same definitions.

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The following table presents a reconciliation of net income to NAREIT FFO for the periods presented:

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| | | | |
|:---|:---|:---|:---|
| **Reconciliation of net income to NAREIT FFO** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** | **2020** |
| Net (loss) income attributable to JLL Income Property Trust, Inc. | $(42551) | $49121 | $(44006) |
| Real estate depreciation and amortization<sup>(1)</sup> | 144239 | 105631 | 84842 |
| (Gain) loss on disposition of property and unrealized loss (gain) on investment in unconsolidated real estate affiliate<sup>(1)</sup> | (29846) | (97525) | 14344 |
| Impairment of depreciable real estate<sup>(1)</sup> | 12341 | 1774 | 1506 |
| NAREIT FFO attributable to JLL Income Property Trust, Inc. Common Stockholders | $84183 | $59001 | $56686 |
| Weighted average shares outstanding, basic and diluted | 229552710 | 186610215 | 170613298 |
| NAREIT FFO per share, basic and diluted | $0.37 | $0.32 | $0.33 |

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________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Includes amounts attributable to our ownership share of both consolidated properties and unconsolidated real estate affiliates for all periods.

The following table presents a reconciliation of NAREIT FFO to AFFO for the periods presented:

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| | | | |
|:---|:---|:---|:---|
| **Reconciliation of NAREIT FFO to AFFO** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** | **2020** |
| NAREIT FFO attributable to JLL Income Property Trust, Inc. | $84183 | $59001 | $56686 |
| Straight-line rental income<sup>(1)</sup> | (7815) | (4503) | (1510) |
| Amortization of above- and below-market leases<sup>(1)</sup> | (3845) | (3231) | (2410) |
| Amortization of net premium/(discount) on assumed debt<sup>(1)</sup> | (1208) | (442) | (129) |
| (Gain) loss on derivative instruments and extinguishment or modification of debt<sup>(1)</sup> | (12396) | (3413) | 7857 |
| Adjustment for investments accounted for under the fair value option<sup>(2)</sup> | 7097 | 3276 | 1291 |
| Net unrealized change in fair value of investment in marketable securities <sup>(1)</sup> | 9244 | (2823) |  |
| Performance fees<sup>(1)</sup> | 6796 | 36028 |  |
| Acquisition expenses<sup>(1)</sup> | 377 | (582) | 2194 |
| Adjustment for DST Program properties<sup>(3)</sup> | 17512 | (5017) | (1145) |
| AFFO attributable to JLL Income Property Trust, Inc. Common Stockholders | $99945 | $78294 | $62834 |
| Weighted average shares outstanding, basic and diluted | 229552710 | 186610215 | 170613298 |
| AFFO per share, basic and diluted | $0.44 | $0.42 | $0.37 |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Includes amounts attributable to our ownership share of both consolidated properties and unconsolidated real estate affiliates for all periods.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Represents the normal and recurring AFFO reconciling adjustments for the NYC Retail Portfolio and Single-Family Rental Portfolio I.

(3)&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reflect the AFFO attributable to the Company for DST Program properties including non-cash interest expense related to the FMV Option. Prior periods adjusted to conform to current period presentation.

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**Review of our Policies**

Our board of directors, including our independent directors, has reviewed our policies described in this Annual Report on Form 10-K and our registration statement related to our Current Public Offering, as well as other policies previously reviewed and approved by our board of directors, and determined that they are in the best interests of our stockholders because: (1) they increase the likelihood that we will be able to acquire a diversified portfolio of income-producing properties, thereby reducing risk in our portfolio; (2) there are sufficient property acquisition opportunities with the attributes that we seek; (3) our executive officers, directors and affiliates of our Advisor have expertise with the type of real estate investments we seek; (4) borrowings should enable us to purchase assets and earn rental income more quickly; and (5) best practices corporate governance and high ethical standards help promote long-term performance, thereby increasing our likelihood of generating income for our stockholders and preserving stockholder capital.

**Liquidity and Capital Resources**

Our primary uses and sources of cash are as follows:

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| | | | |
|:---|:---|:---|:---|
| **Uses** | **Uses** | **Sources** | **Sources** |
| Short-term liquidity and capital needs such as: | Short-term liquidity and capital needs such as: | • | Operating cash flow, including the receipt of distributions of our share of cash flow produced by our unconsolidated real estate affiliates |
| • | Interest payments on debt | | Operating cash flow, including the receipt of distributions of our share of cash flow produced by our unconsolidated real estate affiliates |
| • | Distributions to stockholders | • | Proceeds from secured loans collateralized by individual properties |
| • | Fees payable to our Advisor | | Proceeds from secured loans collateralized by individual properties |
| • | Minor improvements made to individual properties that are not recoverable through expense recoveries or common area maintenance charges to tenants | • | Proceeds from our Credit Facility |
| | Minor improvements made to individual properties that are not recoverable through expense recoveries or common area maintenance charges to tenants | • | Sales of our shares |
| • | General and administrative costs | • | Sales of real estate investments |
| • | Costs associated with our continuous public offering | • | Draws from lender escrow accounts |
| • | Other company level expenses | • | Sales of beneficial interests in the DST Program |
| • | Lender escrow accounts for real estate taxes, insurance, and capital expenditures | | |
| • | Fees payable to our Dealer Manager | | |
| Longer-term liquidity and capital needs such as: | Longer-term liquidity and capital needs such as: | | |
| • | Acquisitions of real estate investments | | |
| • | Expansion of existing properties | | |
| • | Tenant improvements and leasing commissions | | |
| • | Debt repayment requirements, including both principal and interest | | |
| • | Repurchases of our shares pursuant to our share repurchase plan | | |
| • | Fees payable to our Dealer Manager | | |

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The sources and uses of cash for the years ended December 31, 2022 and 2021 were as follows:

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **$ Change** |
| Net cash provided by operating activities | $60503 | $87349 | $(26846) |
| Net cash used in investing activities | (782947) | (1488573) | 705626 |
| Net cash provided by financing activities | 704530 | 1421272 | (716742) |

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Net cash provided by operating activities decreased by $26,846 for the year ending December 31, 2022, as compared to the same period in 2021. The decrease in cash from operating activities is primarily due to the performance fee earned by the Advisor in 2021 and paid in 2022 in the amount of $36,711.

Net cash used in investing activities decreased by $705,626 for the year ending December 31, 2022 as compared to the same period in 2021. The decrease during the year ended December 31, 2022 as compared to 2020 was related to an decrease in acquisitions of $394,470 and a decrease in investments in unconsolidated joint ventures in the amount of $246,897, as well as lower net investments in marketable securities of $28,601. Also impacting the decrease in net cash used in investing activities was an increase in proceeds from the sales of real estate investments during the year ended December 31, 2022 in the amount of $98,247 as compared to $66,992 during the year ended December 31, 2021.

Net cash provided by financing activities decreased by $716,742 for the year ending December 31, 2022 as compared to the same period in 2021. The decrease is primarily related to lower net proceeds from mortgage note payables and other debt payable of $733,399 for the year ending December 31, 2022 as compared to the same period in 2021. The change also resulted from a decrease in cash from net sales of common stock of $37,335 during the year ending December 31, 2022 as compared to the same period in 2021.

***Financing***

We have relied primarily on fixed-rate financing, locking in what were favorable spreads between real estate income yields and mortgage interest rates, and have tried to maintain a balanced schedule of debt maturities. We also use interest rate derivatives to manage our exposure to interest rate movements of our variable rate debt. The following consolidated debt table provides information on the outstanding principal balances and the weighted average interest rate at December 31, 2022 and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Consolidated Debt** | **Consolidated Debt** | **Consolidated Debt** | **Consolidated Debt** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** |
| | **Principal<br>Balance** | **Weighted Average Interest Rate** | **Principal<br>Balance** | **Weighted Average Interest Rate** |
| Fixed | $1362214 | 3.38% | $1268220 | 3.37% |
| Variable | 581400 | 5.81 | 551400 | 1.71 |
| Total | $1943614 | 4.11% | $1819620 | 2.86% |

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***Covenants***

At December 31, 2022, we were in compliance with all debt covenants.

***Other Sources***

On December 21, 2021, our Current Public Offering registration statement was declared effective with the SEC (Commission File No. 333-256823) to register up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each three-year offering period, subject to regulatory approval. We intend to use the net proceeds from the Current Public Offering, which are not used to pay the fees and other expenses attributable to our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan.

On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds of our public offerings. We will reserve the right to terminate the Private Offering at any time and to extend the Private Offering term to the extent permissible under applicable law.

On October 16, 2019, we, through our operating partnership, initiated the DST Program, and on August 10, 2021, our board of directors approved an increase to raise up to a total of $2,000,000 in private placements exempt from registration under the Securities Act, through the sale of beneficial interests to accredited investors in specific DSTs holding DST Properties, which may be sourced from our real properties or from third parties.

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***Commitments***

We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence.

We are subject to fixed ground lease payments on South Beach Parking Garage of $112 per year until September 30, 2024, which will increase every five years thereafter by the lesser of 12% or the cumulative Consumer Price Index ("CPI") over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.

The operating agreement for Grand Lakes Marketplace allows the unrelated third party joint venture partner, owning a 10% interest, to put its interest to us at a market determined value.

The operating agreement for 237 Via Vera Cruz, 13500 Danielson Street, 4211 Starboard, 2840 Loaker Avenue and 15890 Bernardo Center Drive allows the unrelated third party joint venture partner, owning a 5% interest, to put its interest to us at a market determined value starting July 31, 2024.

The operating agreement for our investment in Single-Family Rental Portfolio II allows the unrelated third party joint venture, owning a 5% interest, to put its interest to us at a market determined value starting November 9, 2030.

**Distributions to Stockholders**

To remain qualified as a REIT for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and distribute at least 90% of ordinary taxable income to stockholders.

The following factors, among others, will affect operating cash flow and, accordingly, influence the decisions of our board of directors regarding distributions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• scheduled increases in base rents of existing leases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in minimum base rents and/or overage rents attributable to replacement of existing leases with new or renewal leases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in occupancy rates at existing properties and procurement of leases for newly acquired or developed properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• necessary capital improvement expenditures or debt repayments at existing properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ability of our tenants to pay rent as a result of their financial condition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our share of distributions of operating cash flow generated by the unconsolidated real estate affiliates, less management costs and debt service on additional loans that have been or will be incurred.

We anticipate that operating cash flow, cash on hand, proceeds from dispositions of real estate investments, or refinancings will provide adequate liquidity to conduct our operations, fund general and administrative expenses, fund operating costs and interest payments and allow distributions to our stockholders in accordance with the REIT qualification requirements of the Code.

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| | |
|:---|:---|
| **Item 7A.** | **Quantitative and Qualitative Disclosures About Market Risk.** |

---

We are subject to market risk associated with changes in interest rates in terms of the price of our variable-rate debt and the price of new fixed-rate debt for refinancing of existing debt. We manage our interest rate risk exposure by obtaining fixed-rate loans where possible. As of December 31, 2022, we had consolidated debt of $1,943,614. Including the $19,087 net discount on the assumption of debt and debt issuance costs, we had consolidated debt of $1,924,527 at December 31, 2022. We also entered into interest rate swap agreements on $190,000 of the variable rate debt that cap the LIBOR or SOFR rate at between 1.0% and 2.6% that mature between 2023 and 2027. A 0.25% movement in the interest rate on the $581,400 of variable-rate debt would have resulted in a $1,454 annualized increase or decrease in consolidated interest expense and cash flow from operating activities.

We are subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair market value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At December 31, 2022, the fair value of our mortgage notes and other debt payable was estimated to be approximately $139,690 lower than the carrying value of $1,943,614. If treasury rates were 0.25% higher at December 31, 2022, the fair value of our consolidated debt would have been approximately $162,759 lower than the carrying value.

---

| | |
|:---|:---|
| **Item 8.** | **Financial Statements and Supplementary Data.** |

---

See "Index to Consolidated Financial Statements" on page F-1 of this Form 10-K.

---

| | |
|:---|:---|
| **Item 9.** | **Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.** |

---

None.

---

| | |
|:---|:---|
| **Item 9A.** | **Controls and Procedures.** |

---

***Evaluation of Disclosure Controls and Procedures***

Under the supervision and with the participation of our management, including the chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on management's evaluation as of December 31, 2022, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

***Management's Report on Internal Control Over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed under the supervision of our chief executive officer and chief financial officer to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

As of December 31, 2022, our management conducted an assessment of the effectiveness of our internal control over financial reporting based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in "Internal Control—Integrated Framework" (2013). Based on the assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2022 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

***Changes in Internal Control Over Financial Reporting***

There were no changes to our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | |
|:---|:---|
| **Item 9B.** | **Other Information.** |

---

None.

---

| | |
|:---|:---|
| **Item 9C.** | **Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.** |

---

Not applicable.

**PART III**

In accordance with the rules of the SEC, certain information required by Part III is omitted and incorporated by reference into this Form 10-K from our definitive proxy statement (our "2023 Proxy Statement") relating to our 2023 annual meeting of stockholders (our "2023 Annual Meeting") that we intend to file with the SEC no later than April 1, 2023.

On March 7, 2023, our board of directors determined to hold the 2023 Annual Meeting on June 8, 2023.

---

| | |
|:---|:---|
| **Item 10.** | **Directors, Executive Officers and Corporate Governance.** |

---

The information required by this Item is incorporated by reference to our 2023 Proxy Statement.

---

| | |
|:---|:---|
| **Item 11.** | **Executive Compensation.** |

---

The information required by this Item is incorporated by reference to our 2023 Proxy Statement.

---

| | |
|:---|:---|
| **Item 12.** | **Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.** |

---

The information required by this Item is incorporated by reference to our 2023 Proxy Statement.

---

| | |
|:---|:---|
| **Item 13.** | **Certain Relationships and Related Transactions, and Director Independence.** |

---

The information required by this Item is incorporated by reference to our 2023 Proxy Statement.

---

| | |
|:---|:---|
| **Item 14.** | **Principal Accounting Fees and Services.** |

---

The information required by this Item is incorporated by reference to our 2023 Proxy Statement.

Our independent registered public accounting firm is KPMG LLP, Chicago, Illinois Auditor Firm ID: 185

**PART IV**

---

| | |
|:---|:---|
| **Item 15.** | **Exhibits, Financial Statement Schedules.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Consolidated Financial Statements: See "Index to Consolidated Financial Statements" at page <u>[F-1](#i8c39d713b53c47809e65903a90f52737_172)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Financial Statement Schedule: See "Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2022" at page <u>[F-35](#i8c39d713b53c47809e65903a90f52737_259)</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Exhibits

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| <u>[3.1](http://www.sec.gov/Archives/edgar/data/1314152/000119312512408390/d416864dex31.htm)</u> | Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on September 28, 2012). |
| <u>[3.2](http://www.sec.gov/Archives/edgar/data/1314152/000131415213000062/jllipt592013424b3.htm)</u> | First Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Appendix A to the Company's prospectus supplement filed with the SEC on May 9, 2013). |
| <u>[3.3](http://www.sec.gov/Archives/edgar/data/1314152/000131415214000064/exhibit31.htm)</u> | First Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 8, 2014). |
| <u>[3.4](http://www.sec.gov/Archives/edgar/data/1314152/000131415214000078/jll_combinedarticlessupp6-.htm)</u> | Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 9, 2014). |
| <u>[3.5](http://www.sec.gov/Archives/edgar/data/1314152/000131415214000099/exhibit31.htm)</u> | Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 9, 2014). |
| <u>[3.6](http://www.sec.gov/Archives/edgar/data/1314152/000131415215000067/exhibit3.htm)</u> | Second Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 18, 2015). |
| <u>[3.7](http://www.sec.gov/Archives/edgar/data/1314152/000131415216000194/exhibit31.htm)</u> | Certificate of Correction to the Company's Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on May 17, 2016). |
| <u>[3.8](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000102/exhibit31-101619.htm)</u> | Third Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-11 filed with the SEC on October 16, 2019). |
| <u>[3.9](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000118/exhibit31-jlliptxfourthart.htm)</u> | Fourth Articles of Amendment to the Second Articles of Amendment and Restatements of Jones Lang LaSalle Income Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on October 3, 2022). |
| <u>[3.](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000133/exhibit3103q22.htm)[10](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000133/exhibit3103q22.htm)</u> | Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.10 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 10, 2022). |
| <u>[4.1](https://www.sec.gov/Archives/edgar/data/1314152/000162828021025520/jlliptdecember2021424b3.htm#i46904c91660041fba21d510a3a000277_142)</u> | Second Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Appendix C to the Company's Registration Statement on Form S-11 filed with the SEC on April 7, 2022). |
| <u>[4.2](exhibit42-descriptionofsec.htm)[\*](exhibit42-descriptionofsec.htm)</u> | Description of the Company's securities (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2022). |
| <u>[10.1](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000100/exhibit101-101619.htm)</u> | Fourth Amended and Restated Advisory Agreement, dated October 16, 2019, among Jones Lang LaSalle Income Property Trust, Inc., JLLIPT Holdings LP and LaSalle Investment Management, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 16, 2019). |
| <u>[10.2](https://www.sec.gov/Archives/edgar/data/1314152/000131415221000064/exhibit1013jllipt-publicde.htm)</u> | Amended and Restated Dealer Manager Agreement between Jones Lang LaSalle Income Property Trust, Inc. JLLIPT Holdings LP and LaSalle Investment Management Distributors, LLC, dated as of March 9, 2021 (incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 6, 2021). |
| <u>[10.3](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000038/exhibit103-amendedandresta.htm)</u> | Amended and Restated Jones Lang LaSalle Income Property Trust, Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2022).. |
| <u>[10.](http://www.sec.gov/Archives/edgar/data/1314152/000119312511311195/d252747dex1016.htm)[4](http://www.sec.gov/Archives/edgar/data/1314152/000119312511311195/d252747dex1016.htm)</u> | License Agreement by and between Jones Lang LaSalle Income Property Trust, Inc. and Jones Lang LaSalle IP, Inc. dated as of November 14, 2011 (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-11, Commission File No. 333-177963, filed with the SEC on November 14, 2011). |
| <u>[10.](http://www.sec.gov/Archives/edgar/data/1314152/000119312512345732/d393961dex101.htm)[5](http://www.sec.gov/Archives/edgar/data/1314152/000119312512345732/d393961dex101.htm)</u> | Subscription Agreement by and among Jones Lang LaSalle Income Property Trust, Inc. and LIC II Solstice Holdings, LLC, dated as of August 8, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on August 9, 2012). |
| <u>[10.](http://www.sec.gov/Archives/edgar/data/1314152/000131415215000023/exhibit109123114.htm)[6](http://www.sec.gov/Archives/edgar/data/1314152/000131415215000023/exhibit109123114.htm)</u> | Dealer Manager Agreement between Jones Lang LaSalle Income Property Trust, Inc. and LaSalle Investment Management Distributors, LLC, dated as of March 3, 2015 (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed with the SEC on March 5, 2015). |

---

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| <u>[10.](http://www.sec.gov/Archives/edgar/data/1314152/000131415218000042/ex991contributionagreement.htm)[7](http://www.sec.gov/Archives/edgar/data/1314152/000131415218000042/ex991contributionagreement.htm)</u> | Contribution and Assignment Agreement between Jones Lang LaSalle Income Property Trust, Inc. and JLLIPT Holdings LP (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on April 2, 2018). |
| <u>[10.](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000023/a111sutterpsa.htm)[8](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000023/a111sutterpsa.htm)</u> | Purchase and Sale Agreement for 111 Sutter Street, dated December 17, 2018, between CEP Investors XII, LLC and Paramount Group Acquisition and Development LLC (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed with the SEC on March 8, 2019). |
| <u>[10.](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000038/exhibit1010-dealermanagera.htm)[9](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000038/exhibit1010-dealermanagera.htm)</u> | Amended and Restated Dealer Manager Agreement, dated August 25, 2021, among JLL Exchange TRS, LLC, LaSalle Investment Management Distributors, LLC, JLLIPT Holdings LP and Jones Lang LaSalle Income Property Trust, Inc. (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed with the SEC on March 11, 2022). |
| <u>[10.1](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000111/formoftrustagreement.htm)[0](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000111/formoftrustagreement.htm)</u> | Form of First Amended and Restated Trust Agreement (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 8, 2019). |
| <u>[10.1](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000111/exhibit102formofmasterlease.htm)[1](http://www.sec.gov/Archives/edgar/data/1314152/000131415219000111/exhibit102formofmasterlease.htm)</u> | Form of Master Lease (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 8, 2019). |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/1314152/000131415221000040/exhibit1017.htm)[2](https://www.sec.gov/Archives/edgar/data/1314152/000131415221000040/exhibit1017.htm)</u> | Fourth Amended and Restated Limited Partnership Agreement of JLLIPT Holdings LP (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K filed with the SEC on March 12, 2021). |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/1314152/000131415221000154/purchaseandsaleagreement-s.htm)[3](https://www.sec.gov/Archives/edgar/data/1314152/000131415221000154/purchaseandsaleagreement-s.htm)</u> | Purchase and Sale Agreement for Single-Family Rental Portfolio I , dated August 5, 2021 between LIPT SFR Portfolio, LLC and GVI RH JV HoldCo, LLC (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 10, 2021). |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/1314152/000162828021025142/exhibit1014-jlliptdecember.htm)[4](https://www.sec.gov/Archives/edgar/data/1314152/000162828021025142/exhibit1014-jlliptdecember.htm)</u> | Sixth Amended and Restated Independent Director's Compensation Plan (incorporated by reference to Exhibit 10.14 to the Company's Registration Statement on Form S-11 filed with the SEC on December 21, 2021). |
| <u>[10.15\*](exhibit1015123122.htm)</u> | Seventh Amended and Restated Independent Director's Compensation Plan. |
| <u>[10.16](https://www.sec.gov/Archives/edgar/data/1314152/000131415222000067/ex991-jlliptxthirdamendeda.htm)</u> | Credit Agreement between Jones Lang LaSalle Income Property Trust, Inc. and JPMorgan Chase Bank, N.A. for a $1 billion revolving line of credit and unsecured term loan (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on May 4, 2022). |
| <u>[21.1\*](a123122subsidiarylisting.htm)</u> | Subsidiaries of the Registrant. |
| <u>[24.1\*](#i8c39d713b53c47809e65903a90f52737_169)</u> | Power of Attorney (included in signature page). |
| <u>[31.1\*](exhibit311123122.htm)</u> | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[31.2\*](exhibit312123122.htm)</u> | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| <u>[32.1](exhibit321123122.htm)[\*](exhibit321123122.htm)[\*](exhibit321123122.htm)</u> | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| <u>[32.2](exhibit322123122.htm)[\*](exhibit322123122.htm)[\*](exhibit322123122.htm)</u> | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| <u>[99.1\*](exhibit991-rhjointventures.htm)</u> | RH Joint Ventures, LLC and Subsidiaries Consolidated Financial Statements as of and for the years ended December 31, 2022 and 2021. |
| <u>[99.2\*](exhibit992-madisonnyccorer.htm)</u> | Madison NYC Core Retail Partners, LP Financial Statements as of and for the year ended December 31, 2022. |
| 101.INS\* | XBRL Instance Document. |
| 101.SCH\* | XBRL Schema Document. |
| 101.CAL\* | XBRL Calculation Linkbase Document. |
| 101.DEF\* | Definition Linkbase Document. |
| 101.LAB\* | XBRL Labels Linkbase Document. |
| 101.PRE\* | XBRL Presentation Linkbase Document. |
| 104\* | Cover Page Intereactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* &nbsp;&nbsp;&nbsp;&nbsp;Filed herewith.

\*\*&nbsp;&nbsp;&nbsp;&nbsp;Furnished herewith.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | |
|:---|:---|
| **Item 16.** | **Form 10-K Summary.** |

---

The Company has elected not to provide summary information.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, JLL Income Property Trust, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | JLL INCOME PROPERTY TRUST, INC. | JLL INCOME PROPERTY TRUST, INC. |
| | | By: | /S/&nbsp;&nbsp;&nbsp;&nbsp;C. ALLAN SWARINGEN |
| Date: | March 27, 2023 |  | **C. Allan Swaringen<br>President, Chief Executive Officer** |

---

**POWER OF ATTORNEY**

Each individual whose signature appears below constitutes and appoints C. Allan Swaringen, his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report on Form 10-K, and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **<u>Signature</u>** | **<u>Title</u>** | **<u>Date</u>** |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;LYNN C. THURBER | Chairman of the Board of Directors, Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;C. ALLAN SWARINGEN | President, Chief Executive Officer and Director (Principal Executive Officer) | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;GREGORY A. FALK | Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;VIRGINIA G. BREEN | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;JONATHAN B. BULKELEY | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;R. MARTEL DAY | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;JACQUES N. GORDON | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;KRISTY F. HEUBERGER | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;ROBIN M. ZEIGLER | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;DOUGLAS A. LINDGREN | Director | March 27, 2023 |
| /S/&nbsp;&nbsp;&nbsp;&nbsp;WILLIAM E. SULLIVAN | Director | March 27, 2023 |

---

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| | **PAGE<br>NUMBER** |
| **CONSOLIDATED FINANCIAL STATEMENTS** | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Report of Independent Registered Public Accounting Firm](#i8c39d713b53c47809e65903a90f52737_175)</u> | <u>F-[2](#i8c39d713b53c47809e65903a90f52737_175)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheets as of December 31, 202](#i8c39d713b53c47809e65903a90f52737_181)[2](#i8c39d713b53c47809e65903a90f52737_181)[and 2](#i8c39d713b53c47809e65903a90f52737_181)[02](#i8c39d713b53c47809e65903a90f52737_181)1</u> | <u>F-[4](#i8c39d713b53c47809e65903a90f52737_181)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 202](#i8c39d713b53c47809e65903a90f52737_187)[2](#i8c39d713b53c47809e65903a90f52737_187)[, 202](#i8c39d713b53c47809e65903a90f52737_187)[1](#i8c39d713b53c47809e65903a90f52737_187)[and 20](#i8c39d713b53c47809e65903a90f52737_187)20</u> | <u>F-[5](#i8c39d713b53c47809e65903a90f52737_187)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Equity for the years ended December 31, 202](#i8c39d713b53c47809e65903a90f52737_190)[2](#i8c39d713b53c47809e65903a90f52737_190)[, 202](#i8c39d713b53c47809e65903a90f52737_190)[1](#i8c39d713b53c47809e65903a90f52737_190)[and 20](#i8c39d713b53c47809e65903a90f52737_190)20</u> | <u>F-[6](#i8c39d713b53c47809e65903a90f52737_190)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows for the years ended December 31, 202](#i8c39d713b53c47809e65903a90f52737_196)[2](#i8c39d713b53c47809e65903a90f52737_196)[, 202](#i8c39d713b53c47809e65903a90f52737_196)[1](#i8c39d713b53c47809e65903a90f52737_196)[and 20](#i8c39d713b53c47809e65903a90f52737_196)20</u> | <u>F-[7](#i8c39d713b53c47809e65903a90f52737_196)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements](#i8c39d713b53c47809e65903a90f52737_199)</u> | <u>F-[8](#i8c39d713b53c47809e65903a90f52737_199)</u> |
| **FINANCIAL STATEMENT SCHEDULE** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Schedule III—Real Estate and Accumulated Depreciation as of December 31, 202](#i8c39d713b53c47809e65903a90f52737_259)2</u> | <u>F-[34](#i8c39d713b53c47809e65903a90f52737_259)</u> |

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

JLL Income Property Trust, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of JLL Income Property Trust, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

*Relative fair value of certain assets acquired*

As discussed in Note 3 to the consolidated financial statements, the Company acquired $925.0 million of real estate properties accounted for as asset acquisitions during the year ended December 31, 2022. In asset acquisitions, the Company uses estimates of future cash flows and other valuation techniques to allocate the fair value of the property among land, building and equipment, and other identifiable asset and liabilities on a relative basis.

We identified the assessment of the relative fair value of land and in-place lease intangibles in certain asset acquisitions as a critical audit matter. A high degree of subjectivity and auditor judgment was required to evaluate the fair value amounts used in the relative allocation of the purchase price to these assets. Specifically, the measurement of the relative fair values of land and in-place lease intangibles is dependent upon key assumptions that have a higher degree of sensitivity within the Company's asset acquisition accounting model. Such key assumptions include comparable market land values and market rents.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and implementation of management's internal control process to review purchase price allocations. For certain asset acquisitions, we involved valuation professionals with specialized skills and knowledge, who assisted in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comparing the Company's determination of the fair value of land to independently developed ranges of estimated fair value based on publicly available land sales

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comparing the market rents used in the Company's in-place lease intangible value to market data such as industry guides.

*Expected hold period of net property and equipment*

As discussed in Note 2 to the consolidated financial statements, the Company evaluates the recoverability of net property and equipment whenever events or changes in circumstances, including changes in the expected hold period, indicate that the carrying amount of net property and equipment may exceed fair value. As of December 31, 2022, the Company had net property and equipment of $4.1 billion.

We identified the assessment of the expected hold period of net property and equipment as a critical audit matter. A high degree of auditor judgment was required to evaluate the reasonableness of management's assessment of the hold period. Changes in the expected hold period could have a material impact on the results of management's recoverability assessment and indicate a potential impairment.

The following are the primary procedures we performed to address this critical audit matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we compared the Company's historical hold period for similar net property and equipment to the hold period assumed in the Company's analyses used to evaluate whether a change in circumstance has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we inquired of management and inspected documents such as meeting minutes of the Board of Directors and forecasts developed at the portfolio management team's strategic planning meetings to evaluate the likelihood that a property would be sold before the end of its previously identified hold period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we read external communications with investors in order to identify information regarding potential sales of the Company's properties, or other indicators of a potential reduction in an investment property's hold period.

/s/ KPMG LLP

We have served as the Company's auditor since 2012.

Chicago, Illinois

March 27, 2023

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**CONSOLIDATED BALANCE SHEETS**

**$ in thousands, except per share amounts** 

---

| | | |
|:---|:---|:---|
| | **December 31,** | **December 31,** |
| | **2022** | **2021** |
| **ASSETS** |  |  |
| Investments in real estate: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land (including from VIEs of $70,527 and $59,006, respectively) | $725078 | $598564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buildings and equipment (including from VIEs of $236,265 and $206,016, respectively) | 3728507 | 3010359 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less accumulated depreciation (including from VIEs of $(28622) and $(26955), respectively) | (335216) | (259362) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net property and equipment | 4118369 | 3349561 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in unconsolidated real estate affiliates | 202203 | 217044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate fund investments | 346171 | 352905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in real estate and other assets held for sale |  | 39326 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investments in real estate | 4666743 | 3958836 |
| Investment in marketable securities | 44182 | 43206 |
| Cash and cash equivalents (including from VIEs of $10,720 and $6,740, respectively) | 70940 | 70273 |
| Restricted cash (including from VIEs of $1,082 and $859, respectively) | 32628 | 51203 |
| Tenant accounts receivable, net (including from VIEs of $1,724 and $1,850, respectively) | 8656 | 9066 |
| Deferred expenses, net (including from VIEs of $1,234 and $533, respectively) | 15867 | 14511 |
| Acquired intangible assets, net (including from VIEs of $8,372 and $12,500, respectively) | 256515 | 216227 |
| Deferred rent receivable, net (including from VIEs of $1,539 and $1,135, respectively) | 33567 | 25634 |
| Prepaid expenses and other assets (including from VIEs of $6,383 and $284, respectively) | 25120 | 13290 |
| TOTAL ASSETS | $5154218 | $4402246 |
| **LIABILITIES AND EQUITY** |  |  |
| Mortgage notes and other debt payable, net (including from VIEs of $116,852 and $147,076, respectively) | $1924527 | $1817664 |
| Liabilities held for sale |  | 271 |
| Accounts payable and other accrued expenses (including from VIEs of $3,806 and $2,477, respectively) | 49747 | 70551 |
| Financing obligation | 726375 | 448319 |
| Accrued offering costs | 187742 | 137776 |
| Accrued interest (including from VIEs of $526 and $368, respectively) | 6057 | 3321 |
| Accrued real estate taxes (including from VIEs of $591 and $679, respectively) | 10396 | 9497 |
| Advisor fees payable | 10820 | 39709 |
| Acquired intangible liabilities, net (including from VIEs of $417 and $541, respectively) | 43407 | 31022 |
| TOTAL LIABILITIES | 2959071 | 2558130 |
| Commitments and contingencies |  |  |
| Redeemable noncontrolling interests | 12387 |  |
| Equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A common stock: $0.01 par value; 200,000,000 shares authorized 113,645,166 and 100,038,362 shares issued and outstanding at December 31, 2022 and 2021, respectively  | 1136 | 1000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class M common stock: $0.01 par value; 200,000,000 shares authorized 26,170,260 and 36,458,191 shares issued and outstanding at December 31, 2022 and 2021, respectively | 262 | 365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A-I common stock: $0.01 par value; 200,000,000 shares authorized 4,950,208 and 9,356,309 shares issued and outstanding at December 31, 2022 and 2021 respectively | 50 | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class M-I common stock: $0.01 par value; 200,000,000 shares authorized 95,803,409 and 52,676,693 shares issued and outstanding at December 31, 2022 and 2021, respectively | 958 | 527 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class D common stock: $0.01 par value; 200,000,000 shares authorized 3,023,025 and 7,513,281 shares issued and outstanding at December 31, 2022 and 2021, respectively | 30 | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital (net of offering costs of $337,559 and $264,066 as of December 31, 2022 and 2021, respectively) | 2799539 | 2313815 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions to stockholders | (691090) | (573963) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Accumulated deficit) Retained earnings | (14788) | 34398 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total JLL Income Property Trust, Inc. stockholders' equity | 2096097 | 1776311 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests | 86663 | 67805 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 2182760 | 1844116 |
| TOTAL LIABILITIES AND EQUITY | $5154218 | $4402246 |

---

The abbreviation "VIEs" above means Variable Interest Entities.

See notes to consolidated financial statements.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**

**$ in thousands, except per share amounts**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Revenues: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental revenue | $327631 | $227940 | $186641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 9557 | 11398 | 6980 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 337188 | 239338 | 193621 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | 45309 | 32837 | 29665 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating | 61537 | 43995 | 37999 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative | 2882 | 1596 | 4318 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advisor fees | 50333 | 65667 | 25274 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company level expenses | 8762 | 4841 | 2936 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for impairment of real estate |  | 1822 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 138104 | 94051 | 75603 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 306927 | 244809 | 175795 |
| Other (expenses) and income: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (99284) | (48230) | (40668) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from unconsolidated real estate affiliates and fund investment | (3403) | 67333 | (19451) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment income on marketable securities | 1505 | 418 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized (loss) gain upon sale of marketable securities | (879) | 247 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | (9570) | 2933 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on disposition of property and extinguishment of debt, net | 37253 | 33422 | (1772) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other (expenses) and income | (74378) | 56123 | (61891) |
| Net (loss) income | (44117) | 50652 | (44065) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss (income) attributable to the noncontrolling interests | 1566 | (1531) | 59 |
| Net (loss) income attributable to JLL Income Property Trust, Inc. | $(42551) | $49121 | $(44006) |
| Net (loss) income attributable to JLL Income Property Trust, Inc. per share-basic and diluted: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A | $(0.18) | $0.28 | $(0.26) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class M | (0.20) | 0.27 | (0.26) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A-I | (0.21) | 0.28 | (0.26) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class M-I | (0.18) | 0.24 | (0.26) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class D | (0.22) | 0.26 | (0.26) |
| Weighted average common stock outstanding-basic and diluted | 229552710 | 186610215 | 170613298 |

---

See notes to consolidated financial statements.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**CONSOLIDATED STATEMENTS OF EQUITY**

**$ in thousands, except per share amounts**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional<br>Paid-in<br>Capital** | **Distributions<br>to <br>Stockholders** | **(Accumulated Deficit) Retained Earnings** | **Noncontrolling<br>Interests** | **Total<br>Equity** |
| | **Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Distributions<br>to <br>Stockholders** | **(Accumulated Deficit) Retained Earnings** | **Noncontrolling<br>Interests** | **Total<br>Equity** |
| Balance, December 31, 2019 | 165745572 | $1658 | $1860734 | $(398939) | $29283 | $6021 | $1498757 |
| Issuance of common stock | 28718218 | 287 | 345625 |  |  |  | 345912 |
| Repurchase of shares | (21372888) | (214) | (255141) |  |  |  | (255355) |
| Conversion of shares | (2435) |  |  |  |  |  |  |
| Offering costs |  |  | (29274) |  |  |  | (29274) |
| Stock based compensation | 16000 |  | 192 |  |  |  | 192 |
| Net loss |  |  |  |  | (44006) | (59) | (44065) |
| Issuance of OP units |  |  |  |  |  | 14252 | 14252 |
| Adjustment of noncontrolling interests |  |  | 1352 |  |  | (1352) |  |
| Cash contributed from noncontrolling interests |  |  |  |  |  | 3 | 3 |
| Cash distributed to noncontrolling interests |  |  |  |  |  | (178) | (178) |
| Distributions declared ($0.54) per share |  |  |  | (82821) |  |  | (82821) |
| Balance, December 31, 2020 | 173104467 | $1731 | $1923488 | $(481760) | $(14723) | $18687 | $1447423 |
| Issuance of common stock | 44071596 | 441 | 545261 |  |  |  | 545702 |
| Repurchase of shares | (11151942) | (111) | (135135) |  |  |  | (135246) |
| Conversion of shares | (1285) |  |  |  |  |  |  |
| Offering costs |  |  | (47661) |  |  |  | (47661) |
| Stock based compensation | 20000 |  | 238 |  |  |  | 238 |
| Net income |  |  |  |  | 49121 | 1531 | 50652 |
| Issuance of OP units |  |  |  |  |  | 74673 | 74673 |
| Adjustment of noncontrolling interests |  |  | 27624 |  |  | (27624) |  |
| Cash contributed from noncontrolling interests |  |  |  |  |  | 4350 | 4350 |
| Cash distributed to noncontrolling interests |  |  |  |  |  | (3812) | (3812) |
| Distributions declared ($0.54) per share |  |  |  | (92203) |  |  | (92203) |
| Balance, December 31, 2021 | 206042836 | $2061 | $2313815 | $(573963) | $34398 | $67805 | $1844116 |
| Issuance of common stock | 54844656 | 549 | 802089 |  |  |  | 802638 |
| Repurchase of shares | (17321045) | (174) | (253686) |  |  |  | (253860) |
| Conversion of shares | (1160) |  |  |  |  |  |  |
| Offering costs |  |  | (73493) |  |  |  | (73493) |
| Stock based compensation | 26781 |  | 396 |  |  |  | 396 |
| Net loss ($37 loss allocated to redeemable noncontrolling interests) |  |  |  |  | (42551) | (1529) | (44080) |
| Issuance of OP units |  |  |  |  |  | 39472 | 39472 |
| Adjustment of noncontrolling interests |  |  | 10418 |  |  | (10418) |  |
| Cash distributed to noncontrolling interests |  |  |  |  |  | (4745) | (4745) |
| Allocation to redeemable noncontrolling interests |  |  |  |  | (6635) | (3922) | (10557) |
| Distributions declared ($0.56) per share |  |  |  | (117127) |  |  | (117127) |
| Balance, December 31, 2022 | 243592068 | $2436 | $2799539 | $(691090) | $(14788) | $86663 | $2182760 |

---

See notes to consolidated financial statements.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**$ in thousands, except per share amounts**

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |
| Net (loss) income | $(44117) | $50652 | $(44065) |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 136816 | 93045 | 75073 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposition of property and extinguishment of debt, net | (37253) | (33422) | 1772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized loss (gain) upon sale of marketable securities | 879 | (247) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of marketable securities | 9570 | (2933) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Straight line rent | (8086) | (3975) | (1324) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for impairment of real estate |  | 1822 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (income) from unconsolidated real estate affiliates and fund investments | 3403 | (67333) | 19451 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions received from unconsolidated affiliates and fund investments | 18669 | 11860 | 4043 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense related to DST Program | 43553 | 10851 | 1271 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance fee | (36711) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net changes in assets, liabilities and other | (26220) | 27029 | 6133 |
| Net cash provided by operating activities | 60503 | 87349 | 62354 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of real estate investments | (843911) | (1238381) | (187825) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of real estate investments and fixed assets | 98247 | 66992 | 5372 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital improvements and lease commissions | (25361) | (28764) | (13201) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in unconsolidated real estate affiliates and fund investments | (497) | (247394) | (8802) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits for investments under contract |  | (1000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in marketable securities | (30051) | (45373) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of marketable securities | 18626 | 5347 |  |
| Net cash used in investing activities | (782947) | (1488573) | (204456) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock | 965518 | 809571 | 394082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Offering costs | (23528) | (16792) | (17592) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase of shares | (253858) | (135246) | (255354) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions to stockholders | (41553) | (33070) | (35719) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions paid to noncontrolling interests and redeemable noncontrolling interests | (4921) | (3812) | (178) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contributions received from noncontrolling interests |  | 4350 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits for loan commitments |  | (937) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Draws on credit facility | 395000 | 675000 | 200000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment on credit facility | (405000) | (140000) | (200000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from mortgage notes and other debt payable | 95800 | 356390 | 135130 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on mortgage notes and other debt payable | (16728) | (86402) | (89349) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment on early extinguishment of debt | (91) |  | (1457) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs | (6109) | (7780) | (52) |
| Net cash provided by financing activities | 704530 | 1421272 | 129514 |
| Net (decrease) increase in cash, cash equivalents and restricted cash | (17914) | 20048 | (12588) |
| Cash, cash equivalents and restricted cash at the beginning of the year | 121482 | 101434 | 114022 |
| Cash, cash equivalents and restricted cash at the end of the year | $103568 | $121482 | $101434 |
| Reconciliation of cash, cash equivalents and restricted cash shown per Consolidated Balance Sheets to Consolidated Statements of Cash Flows |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $70940 | $70273 | $84805 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 32628 | 51203 | 16629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash included in assets held for sale |  | 6 |  |
| Cash, cash equivalents and restricted cash at the end of the period | $103568 | $121482 | $101434 |
| Supplemental disclosure of cash flow information: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $58718 | $37184 | $35966 |
| Non-cash activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-offs of receivables | $4 | $198 | $74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-offs of retired assets and liabilities | 24839 | 10257 | 12599 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in liability for capital expenditures | (2395) | (2109) | (412) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net liabilities transferred at sale of real estate investments | 1082 | 230 | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net liabilities assumed at acquisition | 2438 | 2945 | 520 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in issuance of common stock receivable and redemption of common stock payable | 2156 | (731) | 176 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in accrued offering costs | 49965 | 30869 | 11682 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assumption of mortgage notes payable | (54922) | (125716) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in real estate in exchange for OP Units | 39472 | 74673 | 29086 |

---

See notes to consolidated financial statements.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**JLL Income Property Trust, Inc.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**$ in thousands, except per share amounts**

**NOTE 1—ORGANIZATION** 

***General***

*Except where the context suggests otherwise, the terms "we," "us," "our" and the "Company" refer to JLL Income Property Trust, Inc. The terms "Advisor" and "LaSalle" refer to LaSalle Investment Management, Inc.*

JLL Income Property Trust, Inc., formerly known as Jones Lang LaSalle Income Property Trust, Inc., is an externally advised, daily valued perpetual-life real estate investment trust ("REIT") that owns and manages a diversified portfolio of industrial, office, residential, retail and other properties located in the United States. Over time our real estate portfolio may be further diversified on a global basis through the acquisition of properties outside of the United States and will be complemented by investments in real estate-related debt and equity securities. We were incorporated on May 28, 2004 under the laws of the State of Maryland. We believe that we have operated in such a manner to qualify to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2004, when we first elected REIT status. As of December 31, 2022, we owned interests in a total of 135 properties and over 4,300 single-family rental houses located in 26 states.

We own substantially all of our assets through JLLIPT Holdings, LP, a Delaware limited partnership (our "operating partnership"), of which we are a limited partner and JLLIPT Holdings GP, LLC, our wholly owned subsidiary, is the sole general partner. The use of our operating partnership to hold substantially all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"). By using an UPREIT structure, a property owner who desires to defer taxable gain on the disposition of his or her property may transfer the property to our operating partnership in exchange for limited partnership interests in the operating partnership ("OP Units") and defer taxation of gain until the limited partnership interests are disposed of in a taxable transaction. As of December 31, 2022, we raised aggregate proceeds from the issuance of OP Units in our operating partnership of $128,421, and owned directly or indirectly 96.1% of the OP Units of our operating partnership. The remaining 3.9% of the OP Units are held by third parties.

From our inception to December 31, 2022, we have received approximately $4,695,400 in gross offering proceeds from various public and private offerings of shares of our common stock as well as issuance of OP Units. On October 1, 2012, we commenced our initial public offering of common stock and since that time we have offered shares of our common stock in various public offerings registered with the Securities and Exchange Commission (the "SEC").

On December 21, 2021, our most recent public offering (the "Current Public Offering") of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock was declared effective by the SEC. As of December 31, 2022, we have raised aggregate gross proceeds from the sale of shares of our common stock in our Current Public Offering of $825,192. We intend to continue to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering.

In addition to our public offerings, on March 3, 2015, we commenced a private offering (the "Private Offering") of up to $350,000 in shares of our Class D common stock with an indefinite duration. As of December 31, 2022, we have raised aggregate gross proceeds of $98,188 in the Private Offering. In addition, on October 16, 2019, we, through our operating partnership, initiated a program (the "DST Program") to raise up to $500,000, which our board of directors increased to $2,000,000 on November 8, 2022, in private placements exempt from registration under the Securities Act of 1933, as amended, through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts ("DSTs") holding real properties ("DST Properties"), which may be sourced from our real properties or from third parties. As of December 31, 2022, we have raised $759,194 of aggregate gross proceeds from our DST program.

As of December 31, 2022, 113,645,166 shares of Class A common stock, 26,170,260 shares of Class M common stock, 4,950,208 shares of Class A-I common stock, 95,803,409 shares of Class M-I common stock, and 3,023,025 shares of Class D common stock were outstanding and held by a total of 24,496 stockholders.

LaSalle acts as our advisor pursuant to the advisory agreement among us, our operating partnership and LaSalle (the "Advisory Agreement"). The term of our Advisory Agreement expires June 5, 2023, subject to an unlimited number of successive one-year renewals. Our Advisor, a registered investment advisor with the SEC, has broad discretion with respect to our investment decisions and is responsible for selecting our investments and for managing our investment portfolio pursuant to the terms of the Advisory Agreement. Our executive officers are employees of, and compensated by, our Advisor. We have no employees as all operations are managed by our Adviser.

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LaSalle is a wholly owned, but operationally independent subsidiary of Jones Lang LaSalle Incorporated ("JLL" or our "Sponsor"), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. As of December 31, 2022, JLL and its affiliates owned an aggregate of 2,521,801 Class M shares, which were issued for cash at a price equal to the most recently reported net asset value ("NAV") per share as of the purchase date and have a current value of approximately $36,300.

**NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation and Principles of Consolidation***

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the instructions to Form 10-K and include the accounts of our wholly owned subsidiaries, consolidated variable interest entities ("VIE") and the unconsolidated investments in real estate affiliates. We consider the authoritative guidance of accounting for investments in common stock, investments in real estate ventures, investors accounting for an investee when the investor has the majority of the voting interest but the minority partners have certain approval or veto rights, determining whether a general partner or general partners as a group controls a limited partnership or similar entity when the limited partners have certain rights, and the consolidation of VIEs in which we own less than a 100% interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Parenthetical disclosures are shown on our Consolidated Balance Sheets regarding the amounts of VIE assets and liabilities that are consolidated. As of December 31, 2022, our VIEs include The District at Howell Mill, Grand Lakes Marketplace, 237 Via Vera Cruz, 4211 Starboard Drive, 13500 Danielson Drive, 2840 Loker Ave, 15890 Bernardo Center Drive and Single-Family Rental Portfolio II due to the joint venture structures and our partners having limited participation rights and no kick-out rights. The creditors of our VIEs do not have general recourse to us.

Noncontrolling interests represent the minority members' proportionate share of the equity in our VIEs and our operating partnership. At acquisition, the assets, liabilities and noncontrolling interests were measured and recorded at the estimated fair value. Noncontrolling interests will increase for the minority members' share of net income of these entities and contributions and decrease for the minority members' share of net loss and distributions. As of December 31, 2022, noncontrolling interests represented the minority members' proportionate share of the equity of the entities listed above as VIEs.

Redeemable noncontrolling interests represent noncontrolling interests that are redeemable at the option of the holder or in circumstances out of our control and therefore are accounted for as temporary equity. The carrying amount of the redeemable noncontrolling interests is adjusted over time on an accretive basis to reflect the fair value at the time the noncontrolling interest becomes redeemable by the holder. Changes in the redemption value of redeemable noncontrolling interest are recorded as an allocation of retained earnings on our Consolidated Statements of Equity. During the year ended December 31, 2022, we recorded an allocation from noncontrolling interests to redeemable noncontrolling interests in the amount of $3,922. We have redeemable noncontrolling interest that related to Grand Lakes Marketplace, 237 Via Vera Cruz, 4211 Starboard Drive, 13500 Danielson Drive, 2840 Loker Ave, 15890 Bernardo Center Drive and Single-Family Rental Portfolio II as of December 31, 2022. As of December 31, 2022, $12,387 related to these third party joint ventures was included in Redeemable noncontrolling interests on our Consolidated Balance Sheet of which $2,880 is immediately puttable by the holder of the noncontrolling interest.

Certain of our joint venture agreements include provisions whereby, at certain specified times, each party has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, we are not obligated to purchase the interest of its outside joint venture partners.

The carrying amount of our noncontrolling interests reflected in equity are as follows as of December 31:

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| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Interests in the partnership equity of the operating partnership | $82635 | $60019 |
| Noncontrolling interest in consolidated joint ventures | 4028 | 7786 |
| Total noncontrolling interests reflected in equity | $86663 | $67805 |

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***Investments in Real Estate***

Real estate assets are stated at cost. Our real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. A real estate asset is considered to be impaired when the estimated future undiscounted operating cash flow over the expected hold period is less than its carrying value in accordance with the authoritative guidance on accounting for the impairment or disposal of long-lived assets. To the extent impairment has

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occurred, the excess of the carrying value of the asset over its estimated fair value will be charged to operations. The valuation adjustments were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change in the future. If our strategy changes or if market conditions otherwise dictate a change in the holding period and an exit date, an impairment loss could be recognized and such loss could be material. When we have committed to a plan to sell a property that is available for immediate sale, have the necessary approvals and marketing in place, and believe that the sale of the property is probable the assets selected for disposal will be classified as held-for-sale and carried at the lower of their carrying values (*i.e*., cost less accumulated depreciation and any impairment loss recognized, where applicable) or estimated fair values less costs to sell. Carrying values are reassessed at each balance sheet date. Due to market fluctuation, actual proceeds realized on the ultimate sale of these properties may differ from estimates and such differences could be material. Depreciation and amortization cease once a property is classified as held-for-sale. For our consolidated properties we recorded no impairment charges for the years ended December 31, 2022 and 2020. We recorded $1,822 in impairment charges in 2021.

Depreciation expense is computed using the straight-line method based upon the following estimated useful lives:

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| | |
|:---|:---|
| **Asset Category** | **Estimated Useful Life** |
| Buildings and improvements | 40-50 Years |
| Tenant improvements | Lesser of life of improvement or life of related lease |
| Equipment and fixtures | 2-10 Years |

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Maintenance and repairs are charged to expense when incurred. Expenditures for significant betterments and improvements are capitalized.

***Investments in Unconsolidated Real Estate Affiliates and Real Estate Fund Investment***

We account for our investments in unconsolidated real estate affiliates using either the equity method or the fair value option. Under the equity method the cost of the investment is adjusted for our share of equity in net income or loss and reduced by distributions received and increased by contributions provided. Under the fair value option, the cost basis of the investment is increased for contributions made to the investment and adjusted for our share of changes in the fair value of the investment. Distributions received from investments in unconsolidated real estate affiliates under the fair value option are recorded as income from the unconsolidated affiliates. Distributions that are identified as returns of capital are recorded as a reduction to the cost basis of the investment, whereas distributions identified as capital gains or losses are recorded as realized gains or losses.

We evaluate the carrying values of our investments in unconsolidated real estate affiliates accounted for under the equity method, excluding our investment under the fair value option, in accordance with the authoritative guidance on the equity method of accounting for investments in common stock. We analyze our investments in unconsolidated real estate affiliates when circumstances change and at every reporting period and determine if an "other-than-temporary" impairment exists and, if so, we assess our ability to recover our carrying cost of the investment. During 2022, we concluded that an other than temporary decline in value exists in our investment in Pioneer Tower and recognized an impairment charge of $12,838. During 2020, we concluded that an other than temporary decline in value exists in our investment in the Chicago Parking Garage and recognized an impairment charge of $1,506.

***Investment in Marketable Securities***

In accordance with our investment guidelines, investments in marketable securities consist of stock of publicly traded REITs. The net unrealized change in the fair value of our investments in marketable securities is recorded in earnings as part of net income in accordance with Accounting Standard Update ("ASU") 2016-1, Financial Statements - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.

***Rental Revenue Recognition***

Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases. Straight-line rent revenue (representing rents recognized prior to being billed and collectible as provided by the terms of the leases) caused net increases to rent revenue of $8,110, $3,155 and $951 for the years ended December 31, 2022, 2021 and 2020, respectively. Also included, as an increase to rent revenue, for the years ended December 31, 2022, 2021 and 2020, are $3,455, $2,714 and $1,859, respectively, of net amortization related to above-and below-market in-place leases at properties acquired as provided by authoritative guidance on goodwill and intangible assets. Tenant recoveries are recognized as revenues in the period the applicable costs are incurred.

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We recognize rental revenue from tenants under operating leases on a straight-line basis over the non-cancelable term of the lease when collectibility of substantially all rents is reasonably assured. Recognition of rental revenue on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. For leases where collection of substantially all rents is not deemed to be probable of collection, revenue is recorded equal to cash that has been received from the tenant. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates, economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.

***Cash and Cash Equivalents***

We consider all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents. We maintain a portion of our cash in bank deposit accounts, which, at times, may exceed the federally insured limits. No losses have been experienced related to such accounts. We believe our bank deposit accounts are held with quality financial institutions.

***Restricted Cash***

Restricted cash includes amounts established pursuant to various agreements for loan escrow accounts, loan commitments and property sale proceeds. When we sell a property, we can elect to enter into a like-kind exchange pursuant to the applicable Internal Revenue Service guidance whereby the proceeds from the sale are placed in escrow with a qualified intermediary until a replacement property can be purchased. At December 31, 2022 and 2021, our restricted cash balance on our Consolidated Balance Sheet was primarily related to loan escrow amounts and subscriptions received in advance.

***Deferred Expenses***

Deferred expenses consist of lease commissions. Lease commissions are capitalized and amortized over the term of the related lease as a component of depreciation and amortization expense. Accumulated amortization of deferred expenses at December 31, 2022 and 2021 was $10,113 and $8,436, respectively.

***Acquisitions***

We use estimates of future cash flows and other valuation techniques to allocate the fair value of acquired property among land, building and other identifiable asset and liability intangibles. We value land based on comparable land sales specific to the applicable market. We record building values using an as-if-vacant methodology. We record above- and below-market in-place lease values for acquired properties based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) our estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease plus any below-market lease extension option periods. We amortize the capitalized above-market lease values as a reduction of minimum rents over the remaining non-cancelable terms of the respective leases. We amortize the capitalized below-market lease values as an increase to minimum rents over the term of the respective leases plus any below-market lease extension option terms. Should a tenant terminate its lease prior to the contractual expiration, the unamortized portion of the above-market and below-market in-place lease value is immediately charged to minimum rents.

We measure the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases and (ii) the property valued as-if-vacant. Our estimates of value are made using methods similar to those used by independent appraisers, primarily discounted cash flow analyses. Factors considered by us in our analysis include an estimate of carrying costs during the hypothetical expected lease-up periods considering current market conditions at the date of acquisition, and costs to execute similar leases. We also consider information obtained about each property as a result of the pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, we will include estimates of lost rentals during the expected lease-up periods, which is expected to primarily range from one to two years, depending on specific local market conditions, and costs to execute similar leases, including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.

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The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship intangible values based on our evaluation of the specific characteristics of each tenant's lease and our overall relationship with that respective tenant. Characteristics considered by us in allocating these values include, among other factors, the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement). As of December 31, 2022 and 2021, we have allocated no value to customer relationship value. We amortize the value of in-place leases to expense over the weighted average lease term of the respective leases, which generally range from one to 10 years.

Purchase price has been allocated to acquired intangible assets, which include acquired in-place lease intangibles, acquired above-market in-place lease intangibles and acquired ground lease intangibles, which are reported net of accumulated amortization of $123,725 and $102,842 at December 31, 2022 and 2021, respectively, on the accompanying Consolidated Balance Sheets. The acquired intangible liabilities represent acquired below-market in-place leases, which are reported net of accumulated amortization of $15,566 and $15,481 at December 31, 2022 and 2021, respectively, on the accompanying Consolidated Balance Sheets. Our amortizing intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. According to authoritative guidance, an amortizing intangible asset is considered to be impaired when the estimated future undiscounted operating cash flow is less than its carrying value. To the extent impairment has occurred, the excess of the carrying value of the amortizing intangible asset over its estimated fair value will be charged to operations.

Future amortization related to amortizing acquired intangible assets and liabilities, including those classified as held for sale, as of December 31, 2022 is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Acquired in-place leases** | **Acquired above-market leases** | **Below-market ground lease** | **Acquired below-market leases** |
| 2023 | $44651 | $1804 | $401 | $(6173) |
| 2024 | 36712 | 1590 | 401 | (5802) |
| 2025 | 29563 | 1416 | 401 | (5342) |
| 2026 | 25632 | 1388 | 15 | (4482) |
| 2027 | 22223 | 1338 | 15 | (3732) |
| Thereafter | 82643 | 6107 | 215 | (17876) |
|  | $241424 | $13643 | $1448 | $(43407) |

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***Income Taxes***

We first elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"), for our taxable year ended December 31, 2004. To qualify as a REIT, we must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and to meet certain quarterly asset and annual income tests. It is our current intention to adhere to these requirements. As a REIT, we will generally not be subject to corporate-level federal income tax to the extent we distribute 100% of our taxable income to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income, property or net worth, and to certain federal income and excise taxes.

Earnings and profits, which determine the tax treatment of dividends to stockholders, differ from net income reported for financial reporting purposes due to differences for federal income tax reporting purposes in computing, among other things, estimated useful lives, depreciable basis of properties and permanent and timing differences on the inclusion or deductibility of elements of income and expense for such purposes.

We evaluate uncertain tax positions in accordance with FASB ASC 740, *Income Taxes*. Based upon our current evaluation, we have concluded that there are no significant uncertain tax positions relevant to the jurisdictions where we are required to file income tax returns requiring recognition in the consolidated financial statements at December 31, 2022, 2021, and 2020. We are not subject to federal income tax examinations for tax years prior to 2019.

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***Business Segments***

Consistent with how we review and manage our properties, we align our internal operations along the five primary property types we are targeting for investments resulting in five operating segments: industrial, office, residential, retail and other properties.

***Assets and Liabilities Measured at Fair Value***

The Financial Accounting Standards Board's ("FASB") guidance for fair value measurement and disclosure states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Level 1*—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have access to at the measurement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Level 2*—Observable inputs, other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Level 3*—Unobservable inputs for the asset or liability. Unobservable inputs are those inputs that reflect our own assumptions that market participants would use to price the asset or liability based on the best available information.

The authoritative guidance requires the disclosure of the fair value of our financial instruments for which it is practicable to estimate that value. The guidance does not apply to all balance sheet items. Market information as available or present value techniques have been utilized to estimate the amounts required to be disclosed. Since such amounts are estimates, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.

Our investments in marketable securities are valued using Level 1 inputs as the securities are publicly traded on major stock exchanges.

Real estate fund investments accounted for under the fair value option are stated at the fair value of our ownership in the fund. The fair value is recorded based upon changes in the NAV of the limited partnership as determined from the financial statements of the real estate fund. During the years ended December 31, 2022 and 2021, we recorded an unrealized loss and unrealized gain in fair value classified within the Level 3 category of $6,734 and $57,924, respectively, which related to our investments in the NYC Retail Portfolio (as defined below) and the Single-Family Rental Portfolio I (<u>[see Note 4-Unconsolidated Real Estate Affiliates and Fund Investments](#i8c39d713b53c47809e65903a90f52737_217)</u>). During the year ended December 31, 2022, we recorded an impairment charge in our unconsolidated investment in Pioneer Tower within the Level 3 category of $12,838 utilizing a capitalization rate of 6.0% and a discount rate of 7.5% to reflect our investment at its estimated fair value.

We have estimated the fair value of our mortgage notes and other debt payable reflected in the accompanying Consolidated Balance Sheets at amounts that are based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analysis with regard to fixed rate debt) for similar loans made to borrowers with similar credit ratings and for the same maturities. The fair value of our mortgage notes and other debt payable, including amounts included as held for sale, using level two inputs was approximately $139,690 lower and $3,794 higher than the aggregate carrying amounts at December 31, 2022 and 2021, respectively. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon extinguishment of our mortgage notes and other debt payable.

***Derivative Financial Instruments***

We record all derivatives on the Consolidated Balance Sheets at fair value in prepaid expenses and other assets or accounts payable and other accrued expenses. Changes in the fair value of our derivatives are recorded on our Consolidated Statements of Operations and Comprehensive Income, as a component of interest expense, as we have not designated our derivative instruments as hedges. Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate caps and swaps.

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As of December 31, 2022, we had the following outstanding interest rate derivatives related to managing our interest rate risk:

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| | | |
|:---|:---|:---|
| **Interest Rate Derivative** | **Number of Instruments** | **Notional Amount** |
| Interest Rate Swaps | 4 | $190000 |

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The fair value of our interest rate caps and swaps represent assets of $5,106 and liabilities of $2,580 at December 31, 2022 and 2021, respectively.

***Use of Estimates***

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.

***Recent Issued Accounting Pronouncements***

In March 2020, the Financial Accounting Standards Board issued Accounting Standard Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848), which provides guidance containing practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We will continue to evaluate the impact of the guidance and expect to adopt it over time as debt markets transition from LIBOR to alternative rates such as the Secured Overnight Funding Rate ("SOFR").

***Correction of Immaterial Overstatement of Noncontrolling Interest***

During the year ended December 31, 2022, we identified an immaterial overstatement of the net equity balance related to the noncontrolling interests in partnership equity of our operating partnership. We previously recorded these noncontrolling interests based upon the fair value of the OP Units issued as consideration, increased for the noncontrolling interests' share of net income of the operating partnership and decreased for the noncontrolling interests' share of net loss and distributions. We have subsequently determined that transactions that change our ownership interest in the operating partnership are accounted for as equity transactions if we retain our controlling financial interest in the operating partnership and no gain or loss was recognized in net income. Accordingly, the net equity balance related to the noncontrolling interests in partnership equity of the operating partnership was adjusted to reflect these changes in ownership of the operating partnership as an equity transaction to reflect the change in ownership percentage of operating partnership. These adjustments are reflected as an allocation between Additional Paid in Capital and Noncontrolling Interest within our equity section on our Consolidated Balance Sheets and Consolidated Statements of Equity. Our ownership percentage of the operating partnership will increase as we issue common stock and will decrease as we issue OP Units to noncontrolling interests in the future. This correction has no impact on our net income, cash flows or the value of the OP Units. The following table summarizes the effects of this correction:

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| | | | |
|:---|:---|:---|:---|
| | **As of December 31, 2021** | **As of December 31, 2021** | **As of December 31, 2021** |
| | **Previously Reported** | **Adjustment** | **Corrected** |
| Noncontrolling interests | 96781 | (28976) | 67805 |
| Additional paid in capital | 2284839 | 28976 | 2313815 |
|  | **As of December 31, 2020** | **As of December 31, 2020** | **As of December 31, 2020** |
|  | **Previously Reported** | **Adjustment** | **Corrected** |
| Noncontrolling interests | 20039 | (1352) | 18687 |
| Additional paid in capital | 1922136 | 1352 | 1923488 |

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**NOTE 3—PROPERTY**

The primary reason we make acquisitions of real estate investments in the industrial, office, residential, retail and other property sectors is to invest capital contributed by stockholders in a diversified portfolio of real estate assets. All references to square footage and units are unaudited. The following table provides information regarding the consolidated properties acquired during the years ended December 31, 2022, 2021 and 2020:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Property Type** | **Acquisition Date** | **Price** | **Square Footage <br>/ Units** | **Location** |
| **2022 Acquisitions** | | | | | |
| Jefferson Lake Howell | Residential | March 30, 2022 | $154100 | 384 units | Casselberry, FL |
| Northeast Atlanta Distribution Center | Industrial | April 8, 2022 | 54100 | 459000 | Jefferson, GA |
| Cedar Medical Center at Flagstaff | Office | April 29, 2022 | 17200 | 26000 | Flagstaff, AZ |
| Patterson Place | Retail | May 31, 2022 | 14500 | 25000 | Durham, NC |
| Silverado Square | Retail | June 1, 2022 | 24400 | 48000 | Las Vegas, NV |
| Southeast Phoenix Distribution Center | Industrial | June 8, 2022 | 62400 | 245000 | Chandler, AZ |
| North Boston Medical Center | Office | June 28, 2022 | 22500 | 30000 | Haverhill, MA |
| North Charlotte Medical Center | Office | June 28, 2022 | 12500 | 25000 | Stanley, NC |
| Woodlawn Point Shopping Center | Retail | June 30, 2022 | 35000 | 98000 | Marietta, GA |
| Oak Street Lofts | Residential | July 15, 2022 | 81500 | 187 units | Tigard, OR |
| Grand Rapids Medical Center | Office | July 21, 2022 | 9300 | 25000 | Wyoming, MI |
| Glendale Medical Center | Office | July 29, 2022 | 18200 | 20000 | Los Angeles, CA |
| 6300 Dumbarton Circle | Office | September 15, 2022 | 38000 | 44000 | Fremont, CA |
| 6500 Kaiser Drive | Office | September 15, 2022 | 42500 | 88000 | Fremont, CA |
| Greater Sacramento Medical Center | Office | September 16, 2022 | 11100 | 18000 | Rancho Cordova, CA |
| Molly Brook on Belmont | Residential | September 27, 2022 | 89500 | 180 units | North Haledon, NJ |
| West Phoenix Distribution Center | Industrial | September 30, 2022 | 135000 | 1200000 | Glendale, AZ |
| Puget Sound Distribution Center | Industrial | October 6, 2022 | 23800 | 142000 | Lacey, WA |
| Single-Family Rental Portfolio II | Single Family Homes | Various | 99600 | 320 units | Various |
| **2021 Acquisitions** |  |  |  |  |  |
| Louisville Distribution Center | Industrial | January 21, 2021 | $95000 | 1040000 | Shepherdsville, KY |
| 170 Park Avenue | Office | February 2, 2021 | 46600 | 147000 | Florham Park, NJ |
| Southeast Phoenix Distribution Center | Industrial | February 23, 2021 | 91000 | 474000 | Chandler, AZ |
| Princeton North Andover | Residential | May 3, 2021 | 72500 | 192 units | North Andover, MA |
| Louisville Airport Distribution Center | Industrial | June 24, 2021 | 32100 | 284000 | Louisville, KY |
| 237 Via Vera Cruz and 13500 Danielson Street | Industrial | July 2, 2021 | 36640 | 153000 | San Marcos and Poway, CA |
| 4211 Starboard Drive | Industrial | July 9, 2021 | 32000 | 130000 | Fremont, CA |
| The Preserve at the Meadows | Residential | August 23, 2021 | 61000 | 220 units | Fort Collins, CO |
| The Rockwell | Residential | August 31, 2021 | 84000 | 204 units | Berlin, MA |
| Stony Point Drive | Office | September 15, 2021 | 52000 | 87000 | Richmond, VA |
| 5 National Way and 47 National Way | Industrial | September 28, 2021 | 66750 | 375000 | Durham, NC |
| Miramont Apartments | Residential | September 29, 2021 | 57400 | 210 units | Fort Collins, CO |
| Pinecone Apartments | Residential | September 29, 2021 | 51600 | 195 units | Fort Collins, CO |
| North Tampa Surgery Center | Office | October 7, 2021 | 8500 | 13000 | Odessa, FL |
| Friendship Distribution Center | Industrial | October 20, 2021 | 95000 | 649000 | Buford, GA |
| South San Diego Distribution Center | Industrial | October 28, 2021 | 158500 | 665000 | San Diego, CA |
| 1755 Britannia Drive and <br>2451 Bath Road | Industrial | November 16, 2021 | 47100 | 407000 | Elgin, IL |
| 687 Conestoga Parkway | Industrial | November 17, 2021 | 39500 | 327000 | Shepherdsville, KY |
| 2840 Loker Avenue and 15890 Bernardo Center Drive | Industrial | November 30, 2021 | 41100 | 152000 | Carlsbad and San Diego, CA |
| The Reserve at Venice | Residential | December 17, 2021 | 93000 | 276 units | North Venice, FL |
| Woodside Trumbull | Residential | December 21, 2021 | 98000 | 199 units | Trumbull, CT |
| Durham Medical Office | Office | December 23, 2021 | 37125 | 60000 | Durham, NC |
| 1203 SW 7 Highway | Office | December 23, 2021 | 3400 | 10000 | Blue Springs, MO |
| 8600 NE 82nd Street | Office | December 23, 2021 | 5500 | 11000 | Blue Springs, MO |
| South Reno Medical Center | Office | December 28, 2021 | 14025 | 32000 | Reno, NV |
| Roeland Park Medical Office | Office | December 28, 2021 | 13300 | 30000 | Roeland Park, KS |
| Sugar Land Medical Office | Office | December 30, 2021 | 18350 | 37000 | Sugar Land, TX |
| **2020 Acquisitions** |  |  |  |  |  |
| Milford Crossing | Retail | January 29, 2020 | $42100 | 159000 | Milford, MA |
| Fountainhead Corporate Park | Office | February 6, 2020 | 61500 | 295000 | Phoenix, AZ |
| Fort Worth Distribution Center | Industrial | October 23, 2020 | 24050 | 351000 | Fort Worth, TX |
| Whitestown Distribution Center | Industrial | December 11, 2020 | 62300 | 720000 | Whitestown, IN |

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We allocated the purchase price for our 2022 acquisitions in accordance with authoritative guidance as follows:

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| | | | |
|:---|:---|:---|:---|
| | **2022 Acquisitions** | **2021 Acquisitions** | **2020 Acquisitions** |
| Land | $131475 | $173962 | $15782 |
| Building and equipment | 719146 | 1145365 | 136430 |
| In-place lease intangible (acquired intangible assets) | 90377 | 135278 | 35345 |
| Above-market lease intangible (acquired intangible assets) | 2023 | 9568 | 2947 |
| Below-market lease intangible (acquired intangible liabilities) | (18013) | (19997) | (2317) |
|  | $925008 | $1444176 | $188187 |
| Amortization period for intangible assets and liabilities | 6 months - 19 years | 5 months - 19 years | 5 months - 15 years |

---

***Impairment of Investment in Real Estate***

During the year ended December 31, 2021, in accordance with authoritative guidance for impairment of long-lived assets, we determined that The Edge at Lafayette no longer fit our current investment objectives and strategy and reduced our expected hold period. We further determined that this asset was impaired as the carrying value of the investment was not deemed recoverable. Therefore, we recognized an impairment charge totaling $1,822, which represented the difference between the sale price less estimated costs to sell and the carrying value of the property.

***2022 Dispositions***

On January 6, 2022, we sold Norfleet Distribution Center, a 702,000 square foot industrial property located in Kansas City, Missouri for approximately $60,375 less closing costs. We recorded a gain on the sale of the property in the amount of $34,584.

On January 24, 2022, we sold The Edge at Lafayette, a 207,000 square foot student housing apartment property located in Lafayette, Louisiana for approximately $16,500 less closing costs. We recorded a gain on the sale of the property in the amount of $13.

On December 1, 2022 we sold Oak Grove Plaza, a 120,000 square foot retail property located in Sachse, Texas for approximately $24,400 less closing costs. We recorded a gain on the sale of the property in the amount of $3,492.

***2021 Disposition***

On January 8, 2021, we sold South Seattle Distribution Center, a three property industrial center totaling 323,000 square feet located in Seattle, Washington for approximately $72,600 less closing costs. In connection with the disposition, the mortgage loan associated with the property of $17,841 was retired. We recorded a gain on the sale of the property in the amount of $33,580.

***2020 Disposition***

On March 27, 2020, we sold 24823 Anza Drive, a 31,000 square foot industrial property located in Santa Clarita, California for approximately $5,600 less closing costs. We recorded a gain on the sale of the property in the amount of $1,724.

***Held for Sale***

On December 15, 2021, Norfleet Distribution Center was classified as held for sale and was sold on January 6, 2022. On December 23, 2021, The Edge at Lafayette was classified as held for sale and was sold on January 24, 2022. As of December 31, 2021, our investment in real estate and other assets and liabilities held for sale was comprised of:

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| | |
|:---|:---|
| | **December 31, 2021** |
| Land | $3530 |
| Building and equipment, net | 35349 |
| Other assets, net | 447 |
| Total assets | $39326 |
| Other liabilities | $271 |
| Total liabilities | $271 |

---

**NOTE 4—UNCONSOLIDATED REAL ESTATE AFFILIATES AND FUND INVESTMENTS**

In addition to investments in consolidated properties, we may make investments in real estate which are classified as unconsolidated real estate affiliates under GAAP. The residential sector includes residential properties and single-family rental homes.

***Unconsolidated Real Estate Affiliates***

The following represent our unconsolidated real estate affiliates as of December 31, 2022 and December 31, 2021:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **Carrying Amount of Investment** | **Carrying Amount of Investment** |
|<br>**Property** |<br>**Property Type** |<br>**Location** |<br>**Acquisition Date** | **December 31, 2022** | **December 31, 2021** |
| Chicago Parking Garage | Other | Chicago, IL | December 23, 2014 | $13449 | $13992 |
| Pioneer Tower | Office | Portland, OR | June 28, 2016 | 88000 | 103529 |
| The Tremont | Residential | Burlington, MA | July 19, 2018 | 21211 | 21345 |
| The Huntington | Residential | Burlington, MA | July 19, 2018 | 10019 | 10773 |
| Siena Suwanee Town Center | Residential | Suwanee, GA | December 15, 2020 | 30449 | 30685 |
| Kingston at McLean Crossing | Residential | McLean, VA | December 3, 2021 | 39075 | 36720 |
| Total |  |  |  | $202203 | $217044 |

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***Summarized Combined Balance Sheets—Unconsolidated Real Estate Affiliates—Equity Method Investments (Unaudited)***

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| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Net investments in real estate | $399107 | $408233 |
| Acquired intangible assets, net | 8334 | 10139 |
| Other assets | 14661 | 8433 |
| Total assets | $422102 | $426805 |
| Mortgage notes and other debt payable | $180278 | $182318 |
| Acquired intangible liabilities, net | 3518 | 3933 |
| Other liabilities | 1733 | 2266 |
| Total liabilities | 185529 | 188517 |
| Members' equity | 236573 | 238288 |
| Total liabilities and members' equity | $422102 | $426805 |

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***Company Investments in Unconsolidated Real Estate Affiliates—Equity Method Investments (Unaudited)***

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| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Members' equity | $236573 | $238288 |
| Less: other members' equity | (20150) | (19858) |
| Basis differential | (14220) | (1386) |
| Investments in unconsolidated real estate affiliates | $202203 | $217044 |

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***Summarized Combined Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments (Unaudited)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Total revenues | $36426 | $24862 | $18978 |
| Total operating expenses | 27008 | 22868 | 17792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating income | $9418 | $1994 | $1186 |
| Total other expenses | (626) | 4586 | 2894 |
| Net income (loss) | $10044 | $(2592) | $(1708) |

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***Company Equity in Income of Unconsolidated Real Estate Affiliates—Equity Method Investments (Unaudited)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Net income (loss) of unconsolidated real estate affiliates | $10044 | $(2592) | $(1708) |
| Other members' share of net income | (1770) | (186) | (368) |
| Impairment of investments in unconsolidated real estate affiliates | (12838) |  | (1506) |
| Company equity in (loss) of unconsolidated real estate affiliates | $(4564) | $(2778) | $(3582) |

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***Real Estate Fund Investments***

At acquisition we may make the election to account for our interest in investments under the fair value option. This fair value election may be made when the investment is in the form of a commingled fund with institutional partners where fair value accounting provides the most relevant information about the financial condition of the investment. We record increases and decreases in our investment each reporting period based on the change in the fair value of the investment as estimated by the general partner. Critical inputs to NAV estimates include valuations of the underlying real estate assets which incorporate investment-specific assumptions such as discount rates, capitalization rates and rental growth rates. We do not consider adjustments to NAV estimates provided by the general partner, including adjustments for any restrictions to the transferability of ownership interests embedded within the investment agreement to which we are a party, to be necessary based upon (1) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investment level, (2) consideration of market demand for the assets held by the venture, and (3) contemplation of real estate and capital markets conditions in the localities in which the venture operates. Our investments accounted for under the fair value option are presented on our Consolidated Balance Sheets within real estate fund investments. Changes in the fair value of our investments as well as cash distributions received are recorded on our Consolidated Statements of Operations within income from unconsolidated real estate affiliates and fund investments.

*NYC Retail Portfolio*

On December 8, 2015, a wholly owned subsidiary of ours acquired an approximate 28% interest in a newly formed limited partnership, Madison NYC Core Retail Partners, L.P, which acquired an approximate 49% interest in entities that initially owned 15 retail properties located in the greater New York City area (the "NYC Retail Portfolio"), the result of which is that we own an approximate 14% interest in the NYC Retail Portfolio. The purchase price for such portion was approximately $85,600 including closing costs. As of December 31, 2022, the NYC Retail Portfolio owned eight retail properties totaling approximately 1,940,000 square feet across urban infill locations in Manhattan, Brooklyn, Queens and New Jersey. We have no unfunded commitments.

&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2022 and December 31, 2021, the carrying amount of our investment in the NYC Retail Portfolio was $75,417 and $84,874, respectively. During the year ended December 31, 2022, we recorded decreases in fair value of our

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investment in the NYC Retail Portfolio of $9,457 and received no cash distributions. During the year ended December 31, 2022, we made no capital contributions and received no distributions from Madison NYC Core Retail Partners, L.P. During the year ended December 31, 2021, we recorded decreases in fair value of our investment in the NYC Retail Portfolio of $4,021 and received no cash distributions. During the year ended December 31, 2021, we made a $1,661 capital contribution to Madison NYC Core Retail Partners, L.P. On March 4, 2020, a retail property in the NYC Retail Portfolio with a square footage of 74,000 was sold and the mortgage loan was extinguished.

*Single-Family Rental Portfolio I*

On August 5, 2021, we acquired an approximate 47% interest in a portfolio of approximately 4,000 stabilized single-family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others (the "Single-Family Rental Portfolio I"). The portfolio is encumbered by securitized mortgages in a net amount of approximately $760,000 maturing in the fourth quarter of 2025 at a weighted average interest rate of 2.1%. The equity purchase price for our approximate 47% interest was approximately $205,000. We funded the transaction using cash on hand and a draw on our Revolving Credit Facility.

As of December 31, 2022 and December 31, 2021, the carrying amount of our investment in the Single-Family Rental Portfolio I was $270,754 and $268,031 respectively. During the year ended December 31, 2022 and December 31, 2021, we recorded an increase in the fair value of our investment in the Single-Family Rental Portfolio I of $2,723 and an increase of $61,945 respectively. During the year ended December 31, 2022 and December 31, 2021, we received distributions of income totaling $7,895 and $4,145 respectively . The cash distributions of income increased income from unconsolidated real estate affiliates and fund investments. During the year ended December 31, 2021, we made a working capital funding of $909 to the joint venture and paid $343 in closing costs.

***Summarized Combined Balance Sheets—NYC Retail Portfolio Investment and Single-Family Rental Portfolio I—Fair Value Option Investment (Unaudited)***

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| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Investment in real estate venture | $1646374 | $1666923 |
| Cash | 21703 | 19650 |
| Other assets | 52190 | 55562 |
| Total assets | $1720267 | $1742135 |
| Total liabilities | $834237 | $823503 |
| Partners' capital | 886030 | 918632 |
| Total liabilities and partners' capital | $1720267 | $1742135 |

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***Summarized Statement of Operations—NYC Retail Portfolio Investment and Single-Family Rental Portfolio I—Fair Value Option Investment (Unaudited)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2020** |
| Total revenue | $86688 | $31945 | $2261 |
| Net investment income (loss) | $23128 | $4025 | $(28) |
| Net change in unrealized (loss) gain on investment in real estate venture | (34620) | 162207 | (57323) |
| Net (loss) income | $(11492) | $166232 | $(57351) |

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**NOTE 5—MORTGAGE NOTES AND OTHER DEBT PAYABLE**

Mortgage notes and other debt payable have various maturities through 2042 and consist of the following:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Property** | **Maturity/Extinguishment Date** | **Fixed /<br>Floating** | **Interest<br>Rate** | **Amount payable as of** | **Amount payable as of** |
| **Property** | **Maturity/Extinguishment Date** | **Fixed /<br>Floating** | **Interest<br>Rate** | **December 31, 2022** | **December 31, 2021** |
| Aurora Distribution Center | June 1, 2023 | Fixed | 3.39% | $13156 | $13441 |
| 180 N Jefferson | July 1, 2023 | Fixed | 3.89 | 45000 | 45000 |
| Grand Lakes Marketplace | October 1, 2023 | Fixed | 4.20 | 23900 | 23900 |
| Oak Grove Plaza <sup>(1)</sup> | February 1, 2024 | Fixed | 4.17 |  | 8915 |
| Charlotte Distribution Center | September 1, 2024 | Fixed | 3.66 | 9117 | 9341 |
| Genesee Plaza | January 1, 2025 | Fixed | 4.30 | 38306 | 39285 |
| Jory Trail at the Grove | February 1, 2025 | Fixed | 3.81 | 41954 | 42793 |
| Skokie Commons | June 1, 2025 | Fixed | 3.31 | 23118 | 23627 |
| DFW Distribution Center | June 1, 2025 | Fixed | 3.23 | 17720 | 17720 |
| AQ Rittenhouse | September 1, 2025 | Fixed | 3.65 | 26370 | 26370 |
| Timberland Town Center | October 1, 2025 | Fixed | 4.07 | 19739 | 20253 |
| Whitestone Market | December 1, 2025 | Fixed | 3.58 | 25750 | 25750 |
| Miramont Apartments | March 1, 2026 | Fixed | 3.87 | 27128 | 27629 |
| Pinecone Apartments | March 1, 2026 | Fixed | 3.87 | 24895 | 25355 |
| Louisville Distribution Center | May 1, 2026 | Fixed | 1.76 | 52250 | 52250 |
| Maui Mall | June 1, 2026 | Fixed | 3.64 | 35492 | 36322 |
| Rancho Temecula Town Center | July 1, 2026 | Fixed | 4.02 | 28000 | 28000 |
| Dylan Point Loma | September 1, 2026 | Fixed | 3.83 | 39598 | 40319 |
| 237 Via Vera Cruz | September 1, 2026 | Floating | 5.79 | 11880 | 11880 |
| 4211 Starboard Drive | September 1, 2026 | Floating | 5.79 | 20612 | 20612 |
| 13500 Danielson Street | September 1, 2026 | Floating | 5.79 | 10990 | 10990 |
| 2840 Loker Ave | September 1, 2026 | Floating | 5.79 | 14316 | 14316 |
| 15890 Bernardo Center | September 1, 2026 | Floating | 5.79 | 8702 | 8702 |
| Lane Parke Apartments | November 1, 2026 | Fixed | 3.18 | 37000 | 37000 |
| The District at Howell Mill | March 1, 2027 | Fixed | 5.30 | 28036 | 28858 |
| San Juan Medical Center | October 1, 2027 | Fixed | 3.35 | 16730 | 16730 |
| Whitestown Distribution Center | February 10, 2028 | Fixed | 2.95 | 34000 | 34000 |
| Townlake of Coppell | April 10, 2028 | Fixed | 2.41 | 36030 | 36030 |
| Southeast Phoenix Distribution Center | June 1, 2028 | Fixed | 2.70 | 49000 | 49000 |
| Princeton North Andover | June 1, 2028 | Floating | 5.94 | 39900 | 39900 |
| Friendship Distribution Center <sup>(2)</sup> | March 1, 2029 | Floating | 6.05 | 40000 |  |
| Stonemeadow Farms | August 1, 2029 | Fixed | 3.62 | 43865 | 44722 |
| Presley Uptown | November 1, 2029 | Fixed | 3.25 | 30000 | 30000 |
| Reserve at Johns Creek | December 1, 2029 | Fixed | 3.58 | 26000 | 26000 |
| Summit at San Marcos | May 1, 2030 | Fixed | 3.28 | 35900 | 35900 |
| Mason Mill Distribution Center | October 1, 2030 | Fixed | 3.25 | 17500 | 17500 |
| The Penfield | October 1, 2030 | Fixed | 2.50 | 35500 | 35500 |
| South San Diego Distribution Center | January 1, 2031 | Fixed | 3.18 | 72500 | 72500 |
| Villas at Legacy | January 1, 2031 | Fixed | 2.53 | 29500 | 29500 |
| The Preserve at the Meadows | October 1, 2031 | Fixed | 2.57 | 32400 | 32400 |
| The Rockwell | October 1, 2031 | Fixed | 2.62 | 46310 | 46310 |
| Reserve at Venice <sup>(3)</sup> | March 1, 2032 | Fixed | 2.98 | 55800 |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Molly Brook on Belmont <sup>(4)</sup> | August 1, 2042 | Fixed | 3.31 | 54650 |  |
| Revolving line of credit | April 28, 2025 | Floating | 5.81 | 225000 | 300000 |
| Bridge loan <sup>(5)</sup> | December 1, 2022 | Floating | 1.75 |  | 100000 |
| Term loans | April 28, 2027 | Fixed & Floating | 3.40% - 5.76% | 400000 | 235000 |
| TOTAL |  |  |  | $1943614 | $1819620 |
| Net debt discount on assumed debt and debt issuance costs | Net debt discount on assumed debt and debt issuance costs |  |  | (19087) | (1956) |
| MORTGAGE NOTES AND OTHER DEBT PAYABLE, NET | MORTGAGE NOTES AND OTHER DEBT PAYABLE, NET | MORTGAGE NOTES AND OTHER DEBT PAYABLE, NET | MORTGAGE NOTES AND OTHER DEBT PAYABLE, NET | $1924527 | $1817664 |

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________

(1)&nbsp;&nbsp;&nbsp;&nbsp;On August 5, 2022, we repaid the mortgage note payable related to Oak Grove Plaza in the amount of $8,770.

(2)&nbsp;&nbsp;&nbsp;&nbsp;On March 18, 2022, we entered into a $40,000 mortgage payable on Friendship Distribution Center. The mortgage note bears an interest rate equal to the Secured Overnight Financing Rate ("SOFR") plus 1.75% (6.05% at December 31, 2022) and matures on March 1, 2029.

(3)&nbsp;&nbsp;&nbsp;&nbsp;On February 15, 2022, we entered into a $55,800 mortgage payable on Reserve at Venice. The mortgage note bears an interest of 2.98% and matures on March 1, 2032.

(4)&nbsp;&nbsp;&nbsp;&nbsp;On September 27, 2022, we assumed a mortgage payable that was originated on August 1, 2022 on Molly Brook on Belmont. The mortgage bears an interest rate of 3.31% and matures on August 1, 2042. As of December 31, 2022, the balance of the loan was $54,650.

(5)&nbsp;&nbsp;&nbsp;&nbsp;On April 28, 2022, the Bridge Loan was extinguished upon execution of the Credit Facility.

We have recognized a premium or discount on debt we assumed with the following property acquisitions, the remaining premium or discount is as follows as of December 31, 2022:

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| | | |
|:---|:---|:---|
| **Property** | **Debt Premium <br>(Discount)** | **Effective<br>Interest Rate** |
| The District at Howell Mill | $(844) | 6.34% |
| Timberland Town Center | 280 | 3.34 |
| Jory Trail at the Grove | (54) | 3.94 |
| Genesee Plaza | 670 | 4.30 |
| Pinecone Apartments | 1202 | 2.33 |
| Miramont Apartments | 1310 | 2.33 |
| South San Diego Distribution Center | 2990 | 3.18 |
| Molly Brook on Belmont | (13047) | 5.90 |
| Net debt premium on assumed debt | $(7493) |  |

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Aggregate future principal payments of mortgage notes payable and other debt payable are as follows:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;**Year** | **Amount** |
| &nbsp;&nbsp;&nbsp;2023 | $90732 |
| &nbsp;&nbsp;&nbsp;2024 | 17653 |
| &nbsp;&nbsp;&nbsp;2025 | 418473 |
| &nbsp;&nbsp;&nbsp;2026 | 309240 |
| &nbsp;&nbsp;&nbsp;2027 | 447860 |
| &nbsp;&nbsp;&nbsp;Thereafter | 659656 |
| &nbsp;&nbsp;&nbsp;Total | $1943614 |

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Land, buildings, equipment and acquired intangible assets related to the mortgage notes payable, with an aggregate cost of approximately $2,731,000 and $2,421,000 at December 31, 2022 and 2021, respectively, have been pledged as collateral, and are not available to satisfy our debts and obligations unless first satisfying the mortgage note payable on the property. As our mortgage notes mature, we will explore refinancing and paying off the loans as well as full or partial sales of the properties. To accomplish these refinancings and pay downs, we would use cash on hand, cash from future property operations and capital from the proceeds of the Current Public Offering.

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***Credit Facility***

On April 28, 2022, we entered into a credit agreement providing for a $1,000,000 revolving line of credit and unsecured term loan (collectively, the "Credit Facility") with a syndicate of nine lenders led by JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Capital Markets LLC, Wells Fargo Securities, LLC and Capital One, National Association. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $1,300,000, subject to receipt of lender commitments and other conditions. The $1,000,000 Credit Facility consists of a $600,000 revolving line of credit (the "Revolving Credit Facility") and a $400,000 term loan (the "Term Loan"). The primary interest rate for the Revolving Credit Facility is based on one-month term SOFR plus 0.10% ("Adjusted Term SOFR"), plus a margin ranging from 1.3% to 2.00%, depending on our total leverage ratio. The primary interest rate for the Term Loan is based on Adjusted Term SOFR, plus a margin ranging from 1.25% to 1.95%, depending on our total leverage ratio. The maturity date of the Revolving Credit Facility is April 28, 2025 and the Term Loan is April 28, 2027. The Credit Facility contains two, twelve-month extension options at our election. Based on our current total leverage ratio, we can elect to borrow at Adjusted Term SOFR plus 1.35% and Adjusted Term SOFR plus 1.30% for the Revolving Credit Facility and Term Loan, respectively, or alternatively, we can choose to borrow at a "base rate" equal to (i) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the prime rate announced by JPMorgan Chase Bank, N.A., and (c) Adjusted Term SOFR plus 1.0%, plus (ii) a margin ranging from 0.30% to 1.00% for base rate loans under the Revolving Credit Facility or a margin ranging from 0.25% to 0.95% for base rate loans under the Term Loan. If the "base rate" is less than 1.0%, it will be deemed to be 1.0% for purposes of the Credit Facility. We intend to use the Revolving Credit Facility to cover short-term capital needs, for new property acquisitions and working capital. We may not draw funds on our Credit Facility if we (i) experience a material adverse effect, which is defined to include, among other things, (a) a material adverse effect on the business, assets, operations or financial condition of the Company taken as a whole; (b) the inability of any loan party to perform any of its obligations under any loan document; or (c) a material adverse effect upon the validity or enforceability of any loan document or (ii) are in default, as that term is defined in the agreement, including a default under certain other loan agreements and/or guarantees entered into by us or our subsidiaries. As of December 31, 2022, we believe no material adverse effects had occurred. We expect to utilize our cash on hand and Credit Facility capacity to extinguish mortgage notes maturing in 2023.

Borrowings under the Credit Facility are guaranteed by us and certain of our subsidiaries. The Credit Facility requires the maintenance of certain financial covenants, including: (i) unencumbered property pool leverage ratio; (ii) debt service coverage ratio; (iii) maximum total leverage ratio; (iv) fixed charges coverage ratio; (v) minimum NAV; (vi) maximum secured debt ratio; (vii) maximum secured recourse debt ratio; (viii) maximum permitted investments; and (ix) unencumbered property pool criteria. The Credit Facility provides the flexibility to move assets in and out of the unencumbered property pool during the term of the Credit Facility.

At December 31, 2022, we had $225,000 outstanding under the Revolving Credit Facility at Adjusted Term SOFR plus 1.45% and $400,000 outstanding under the Term Loan at Adjusted Term SOFR plus 1.40%. We swapped $190,000 of the Term Loan to a fixed rate of 2.40% (all in rate of 3.80% at December 31, 2022). The interest swap agreements have maturity dates ranging from February 17, 2023 through April 28, 2027. At December 31, 2021, we had $300,000 outstanding under our previous revolving line of credit, $100,000 outstanding under the Bridge Loan, and $235,000 outstanding under the Term Loans.

On December 10, 2021, we entered into an additional $100,000 short-term bridge loan (the "Bridge Loan") with JPMorgan Chase Bank, N.A. under the same terms as our Credit Facility. The Bridge Loan bore interest at SOFR plus 1.45% to 2.15% depending on our total leverage ratio. The maturity date of the Bridge Loan was December 1, 2022 and had two, three month extension options. The Bridge Loan was extinguished on April 28, 2022 upon execution of the Credit Facility.

***Covenants***

At December 31, 2022, we were in compliance with all debt covenants.

***Debt Issuance Costs***

Debt issuance costs are capitalized and amortized over the terms of the respective agreements as a component of interest expense. Accumulated amortization of debt issuance costs at December 31, 2022 and December 31, 2021 were $11,032 and $8,024, respectively.

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**NOTE 6—COMMON STOCK AND OP UNITS**

We have five classes of common stock: Class A, Class M, Class A-I, Class M-I, and Class D. The fees payable to LaSalle Investment Management Distributors, LLC, an affiliate of our Advisor and the dealer manager for our offerings (the "Dealer Manager"), with respect to each outstanding share of each class, as a percentage of NAV, are as follow:

---

| | | |
|:---|:---|:---|
| | **Selling Commission** <sup>(1)</sup> | **Dealer Manager Fee** <sup>(2)</sup> |
| Class A Shares | up to 3.0% | 0.85% |
| Class M Shares |  | 0.30% |
| Class A-I Shares | up to 1.5% | 0.30% |
| Class M-I Shares |  |  |
| Class D Shares <sup>(3)</sup> | up to 1.0% |  |

---

________

(1) &nbsp;&nbsp;&nbsp;&nbsp;Selling commissions are paid on the date of sale of our common stock.

(2) &nbsp;&nbsp;&nbsp;&nbsp;We accrue all future dealer manager fees up to the ten percent regulatory limitation as accrued offering costs on our Consolidated Balance Sheets on the date of sale of our common stock. For NAV calculation purposes, dealer manager fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Each Class A, Class M and Class A-I share sold in a public offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the termination of the primary portion of such public offering in which we, with the assistance of the Dealer Manager, determine that total underwriting compensation paid with respect to such public offering equals 10% of the gross proceeds from the primary portion of such public offering.

(3) &nbsp;&nbsp;&nbsp;&nbsp;Shares of Class D common stock are only being offered pursuant to a private offering.

The selling commissions and dealer manager fees are offering costs and are recorded as a reduction of additional paid in capital.

***Stock Transactions***

The stock transactions for each of our classes of common stock for the years ending December 31, 2022, 2021 and 2020 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Shares of <br>Class A <br>Common Stock** | **Shares of <br>Class M<br>Common Stock** | **Shares of<br>Class A-I<br>Common Stock** | **Shares of<br>Class M-I<br>Common Stock** | **Shares of<br>Class D<br>Common Stock** |
| Balance, December 31, 2019 | 88007721 | 39036770 | 11153567 | 22589599 | 4957915 |
| Issuance of common stock | 13533380 | 2453336 | 314149 | 12417353 |  |
| Repurchase of shares | (11333773) | (5009716) | (1878636) | (3150763) |  |
| Stock based compensation |  |  |  | 16000 |  |
| Share conversions | (536232) | (868234) | 27219 | 1374812 |  |
| Balance, December 31, 2020 | 89671096 | 35612156 | 9616299 | 33247001 | 4957915 |
| Issuance of common stock | 16945256 | 3590727 | 478460 | 20501787 | 2555366 |
| Repurchase of shares | (6327886) | (1937556) | (738450) | (2148050) |  |
| Stock based compensation |  |  |  | 20000 |  |
| Share conversions | (250104) | (807136) |  | 1055955 |  |
| Balance, December 31, 2021 | 100038362 | 36458191 | 9356309 | 52676693 | 7513281 |
| Issuance of common stock | 20927064 | 5652729 | 443729 | 27821134 |  |
| Repurchase of shares | (5590784) | (767360) | (1361701) | (5110944) | (4490256) |
| Stock based compensation |  |  |  | 26781 |  |
| Share conversions | (1729476) | (15173300) | (3488129) | 20389745 |  |
| Balance, December 31, 2022 | 113645166 | 26170260 | 4950208 | 95803409 | 3023025 |

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***Stock Issuances***

The stock issuances for our classes of shares, including those issued through our distribution reinvestment plan, for the years ending December 31, 2022, 2021 and 2020 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2020** | **December 31, 2020** |
| | **# of shares** | **$ Amount** | **# of shares** | **$ Amount** | **# of shares** | **$ Amount** |
| Class A Shares | 20927064 | $308318 | 16945256 | $210810 | 13533380 | $164020 |
| Class M Shares | 5652729 | 82545 | 3590727 | 44885 | 2453336 | 29258 |
| Class A-I Shares | 443729 | 6578 | 478460 | 6077 | 314149 | 3736 |
| Class M-I Shares | 27847915 | 405593 | 20521787 | 254168 | 12433353 | 149090 |
| Class D Shares |  |  | 2555366 | 30000 |  |  |
| Total |  | $803034 |  | $545940 |  | $346104 |

---

***Share Repurchase Plan***

Our share repurchase plan allows stockholders, subject to a one-year holding period, with certain exceptions, to request that we repurchase all or a portion of their shares of common stock on a daily basis at that day's NAV per share, limited to 5% of aggregate Company NAV per quarter. We honored 100% of redemption requests we received and have made repurchases according to our share repurchase plan as following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year ending December 31,** | **Shares of <br>Class A <br>Common Stock** | **Shares of <br>Class M<br>Common Stock** | **Shares of<br>Class A-I<br>Common Stock** | **Shares of<br>Class M-I<br>Common Stock** | **Shares of<br>Class D<br>Common Stock** | **Total Dollar of Repurchases** |
| 2020 | 11333773 | 5009716 | 1878636 | 3150763 |  | $255355 |
| 2021 | 6327886 | 1937556 | 738450 | 2148050 |  | 135246 |
| 2022 | 5590784 | 767360 | 1361701 | 5110944 | 4490256 | 253860 |

---

***Distribution Reinvestment Plan***

Pursuant to our distribution reinvestment plan, holders of shares of any class of our common stock and OP Units may elect to have their cash distributions reinvested in additional shares of our common stock and OP Units at the NAV per share or NAV per unit applicable to the class of shares or unit being purchased on the distribution date. For the year ended December 31, 2022, we issued 5,151,317 shares of common stock for $75,552 and 1,624 OP Units for $22 under the distribution reinvestment plan. For the year ended December 31, 2021, we issued 4,726,012 shares of common stock for $59,133 under the distribution reinvestment plan. For the year ended December 31, 2020, we issued 5,653,314 shares of common stock for $66,990 under the distribution reinvestment plan.

***Operating Partnership Units***

In connection with the acquisition of Siena Suwanee Town Center and South San Diego Distribution Center, our operating partnership issued 7,037,257 OP Units to third parties for a total of $88,925. On July 8, 2022, our operating partnership exercised its fair market value purchase option to acquire The Reserve at Johns Creek and issued 2,575,832 OP Units for approximately $38,200 to DST investors. After a one-year holding period, holders of OP Units generally have the right to cause our operating partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.

***Earnings Per Share ("EPS")***

Basic per share amounts are based on the weighted average of shares outstanding of 229,552,710, 186,610,215 and 170,613,298 for the years ended December 31, 2022, 2021 and 2020, respectively. We have no dilutive or potentially dilutive securities.

We compute net income per share for Class A, Class M, Class A-I, Class M-I, and Class D common stock using the two-class method. Our Advisor may earn a performance fee (<u>[see Note 9-Related Party Transactions](#i8c39d713b53c47809e65903a90f52737_238)</u>) which may impact the net income of each class of common stock differently. The calculated performance component for the years ended December 31, 2022, 2021 and 2020, and the impact on each class of common stock, are shown below. In periods where no performance fee is recognized in our Consolidated Statements of Operations and Comprehensive Income, the net income per share will be the same for each class of common stock.

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Basic and diluted net income per share for each class of common stock is computed using the weighted-average number of common shares outstanding during the period for each class of common stock. We have not issued any dilutive or potentially dilutive securities, and thus the basic and diluted net income per share for a given class of common stock is the same for each period presented.

The following table sets forth the computation of basic and diluted net income per share for each of our Class A, Class M, Class A-I, Class M-I, and Class D common stock:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
| | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| Basic and diluted net loss per share: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Allocation of net loss before performance fee | $(16766) | $(4327) | $(1039) | $(12689) | $(761) |
| &nbsp;&nbsp;&nbsp;Allocation of performance fee | 2642 | 1240 | 356 | 2170 | 330 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $(19408) | $(5567) | $(1395) | $(14859) | $(1091) |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding | 108161922 | 27911145 | 6708638 | 81854681 | 4916324 |
| Basic and diluted net loss per share: | $(0.18) | $(0.20) | $(0.21) | $(0.18) | $(0.22) |
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| Basic and diluted net income per share: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Allocation of net income before performance fee | $43011 | $16231 | $4360 | $18960 | $3262 |
| &nbsp;&nbsp;&nbsp;Allocation of performance fee | 17269 | 6561 | 1712 | 8992 | 1408 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $25742 | $9670 | $2648 | $9968 | $1854 |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding | 93504890 | 35291400 | 9484119 | 41229584 | 7100222 |
| Basic and diluted net income per share: | $0.28 | $0.27 | $0.28 | $0.24 | $0.26 |
|  | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** | **Year Ended December 31, 2020** |
|  | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| Basic and diluted net loss per share: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Allocation of net loss before performance fee | $(23259) | $(9465) | $(2598) | $(7405) | $(1279) |
| &nbsp;&nbsp;&nbsp;Allocation of performance fee |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $(23259) | $(9465) | $(2598) | $(7405) | $(1279) |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding | 90176584 | 36694995 | 10073075 | 28710729 | 4957915 |
| Basic and diluted net loss per share: | $(0.26) | $(0.26) | $(0.26) | $(0.26) | $(0.26) |

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***Distributions Declared***

The distributions declared per share for each of our classes of common stock for the years ended December 31, 2022, 2021 and 2020 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** |
|<br>**Record Date** | **Distributions**<br>**Declared** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| 3/24/2022 | $0.14000 | $0.11467 | $0.13095 | $0.13100 | $0.14000 | $0.14000 |
| 6/23/2022 | 0.14000 | 0.11270 | 0.12951 | 0.13102 | 0.14000 | 0.14000 |
| 9/22/2022 | 0.14000 | 0.11240 | 0.12962 | 0.13082 | 0.14000 | 0.14000 |
| 12/22/2022 | 0.14000 | 0.11204 | 0.12966 | 0.13100 | 0.14000 | 0.14000 |
| Total | $0.56000 | $0.45181 | $0.51974 | $0.52384 | $0.56000 | $0.56000 |
|  | **Distributions** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** |
| **Record Date** | **Declared** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| 3/24/2021 | $0.13500 | $0.11326 | $0.12715 | $0.12726 | $0.13500 | $0.13500 |
| 6/24/2021 | 0.13500 | 0.11294 | 0.12696 | 0.12710 | 0.13500 | 0.13500 |
| 9/24/2021 | 0.13500 | 0.11189 | 0.12666 | 0.12644 | 0.13500 | 0.13500 |
| 12/23/2021 | 0.13500 | 0.11092 | 0.12637 | 0.12675 | 0.13500 | 0.13500 |
| Total | $0.54000 | $0.44901 | $0.50714 | $0.50755 | $0.54000 | $0.54000 |
|  | **Distributions** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** | **Distributions Paid (1)** |
| **Record Date** | **Declared** | **Class A** | **Class M** | **Class A-I** | **Class M-I** | **Class D** |
| 3/25/2020 | $0.13500 | $0.11211 | $0.12649 | $0.12681 | $0.13500 | $0.13500 |
| 6/24/2020 | 0.13500 | 0.11239 | 0.12683 | 0.12753 | 0.13500 | 0.13500 |
| 9/24/2020 | 0.13500 | 0.11282 | 0.12661 | 0.12632 | 0.13500 | 0.13500 |
| 12/23/2020 | 0.13500 | 0.11280 | 0.12719 | 0.12715 | 0.13500 | 0.13500 |
| Total | $0.54000 | $0.45012 | $0.50712 | $0.50781 | $0.54000 | $0.54000 |

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________

(1) &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid are net of dealer manager fees applicable to each share class.

***Organization and Offering Costs***

Organization and offering costs include, but are not limited to, legal, accounting and printing fees and personnel costs of our Advisor attributable to our organization, preparation of the registration statement, registration and qualification of our common stock for sale with the SEC, or in a private placement, and in the various states and filing fees incurred by our Advisor. LaSalle agreed to fund our organization and offering expenses for the Current Public Offering until December 21, 2021, the day the registration statement was declared effective by the SEC, following which time we commenced reimbursing LaSalle over 36 months. Following the Current Public Offering commencement date, we began paying directly or reimbursing LaSalle if it pays on our behalf any organization and offering costs incurred during the Current Public Offering period (other than selling commissions and dealer manager fees) as and when incurred. After the termination of the Current Public Offering, LaSalle has agreed to reimburse us to the extent that the organization and offering costs that we incur exceed 15% of our gross proceeds from the Current Public Offering. Organization costs are expensed, whereas offering costs are recorded as a reduction of capital in excess of par value. As of December 31, 2022 and 2021, LaSalle had paid $2,185 and $2,113, respectively, of organization and offering costs on our behalf which we had not yet reimbursed. These costs are included in accrued offering costs on the Consolidated Balance Sheets.

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**NOTE 7—DST PROGRAM**

On October 16, 2019, we, through our operating partnership, initiated the DST Program, and on November 8, 2022, our board of directors approved an increase to raise up to a total of $2,000,000 in private placements through the sale of beneficial interests in specific DSTs holding DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties. Each DST Property will be leased back by a wholly owned subsidiary of our operating partnership on a long-term basis of up to ten years pursuant to a master lease agreement. The master lease agreements are expected to be guaranteed by our operating partnership. As compensation for the master lease guarantee, our operating partnership will retain a fair market value purchase option giving it the right, but not the obligation, to acquire the beneficial interests in the DST from the investors at any time after two years from the closing of the applicable DST offering in exchange for OP Units or cash, at our discretion.

The sale of beneficial interests in the DST Property will be accounted for as a failed sale-leaseback transaction due to the fair market value purchase option retained by the operating partnership and as such, the property will remain on our books and records. The proceeds received from each DST offering will be accounted for as a financing obligation on the Consolidated Balance Sheets. Upfront costs incurred for services provided to the DST totaling $901 are accounted for as deferred loan costs and are netted against the financing obligation.

Under the master lease, we are responsible for subleasing the DST Property to tenants, for covering all costs associated with operating the underlying DST Property, and for paying base rent to the DST that owns such property. For financial reporting purposes (and not for income tax purposes), the DST Properties are included in our consolidated financial statements, with the master lease rent payments accounted for using the interest method whereby a portion is accounted for as interest expense and a portion is accounted for as a reduction of the outstanding principal balance of the financing obligation. During the years ended December 31, 2022 and 2021 we recorded interest expense related to the master lease in the amounts of $20,859 and $8,603, respectively. Upon the determination that it is probable that we will exercise the fair market value purchase option, we will recognize additional interest expense or interest income to the financing obligation to account for the difference between the fair value of the property and the outstanding liabilities. During the year ended December 31, 2022, we determined that certain properties were probable for exercising the fair market value purchase option and recorded additional non-cash interest expense of $22,693. We will remeasure the fair value of these properties at each balance sheet date and adjust the non-cash interest expense recognized over the remaining term of the master lease for any changes in fair value. If we elect to repurchase the property prior to the maturity date of the master lease, we will record the difference between the repurchase amount and the financial obligation as additional non-cash interest expense in the period of repurchase. For financial reporting purposes, the rental revenues and rental expenses associated with the underlying property of each master lease are included in the respective line items on our Consolidated Statements of Operations and Comprehensive Income. The net amount we receive from the underlying DST Properties may be more or less than the amount we pay to the investors in the specific DST and could fluctuate over time.

As of December 31, 2022, we sold approximately $759,194 of interests related to the DST Program. As of December 31, 2022, the following properties are included in our DST Program:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Summit at San Marcos,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mason Mill Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• San Juan Medical Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Penfield,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Milford Crossing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Villas at Legacy,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Montecito Marketplace,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whitestown Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Louisville Airport Distribution Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Preserve at the Meadows,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Rockwell,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 9101 Stony Point Drive,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reserve at Venice,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Friendship Distribution Center,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Duke Medical Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Silverstone Marketplace,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• South Reno Medical Center,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Sugar Land Medical Plaza,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Suwanee Distribution Center, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• West Phoenix Distribution Center.

**NOTE 8—RENTALS UNDER OPERATING LEASES**

We receive rental income from operating leases. The minimum future rentals from consolidated properties, excluding those classified as held for sale, based on operating leases in place at December 31, 2022 are as follows:

---

| | |
|:---|:---|
| **Year** | **Amount** |
| 2023 | $248339 |
| 2024 | 181270 |
| 2025 | 155686 |
| 2026 | 138913 |
| 2027 | 112196 |
| Thereafter | 447196 |
| Total | $1283600 |

---

Minimum future rentals do not include amounts payable by certain tenants based upon a percentage of their gross sales or as reimbursement of property operating expenses. During the years ended December 31, 2022, 2021 and 2020, no individual tenant accounted for greater than 10% of minimum base rents. The majority of the decrease in rents from 2023 future rents to 2024 is related to our residential properties which generally have a one year lease life.

**NOTE 9—RELATED PARTY TRANSACTIONS**

Pursuant to the Advisory Agreement with LaSalle, we pay a fixed advisory fee of 1.25% of our NAV calculated daily. The Advisory Agreement allows for a performance fee to be earned for each share class based on the total return of that share class or OP Unit during the calendar year. The performance fee is calculated as 10% of the return in excess of 7% per annum. The term of our Advisory Agreement expires June 5, 2023, subject to an unlimited number of successive one-year renewals.

The fixed advisory fees for the years ended December 31, 2022, 2021 and 2020 were $43,364, $28,956 and $25,274, respectively. The performance fees for the years ended December 31, 2022, 2021 and 2020 were $6,969, $36,711 and $0, respectively. Included in Advisor fees payable for the years ended December 31, 2022 and 2021 were $3,851 and $2,998 of fixed fee expense, respectively, and $6,969 and $36,711 of performance fee expenses, respectively.

We pay Jones Lang LaSalle Americas, Inc. ("JLL Americas"), an affiliate of the Advisor, for property management, construction management, leasing, mortgage brokerage and sales brokerage services performed at various properties we own. For the years ended December 31, 2022, 2021 and 2020, JLL Americas was paid $2,098, $1,222 and $741, respectively, for property management and leasing services. During the year ended December 31, 2022, there were no mortgage brokerage fees paid to JLL Americas. During the year ended December 31, 2021, we paid JLL Americas $209 in mortgage brokerage fees related to the mortgage notes payable for Louisville Airport Distribution Center and $162 in mortgage brokerage fees related to the mortgage payable for Townlake of Coppell. During the year ended December 31, 2020, we paid JLL Americas $75 in brokerage fees for the sale of 24823 Anza Drive and $133 in mortgage brokerage fees related to the mortgage note payable for Villas at Legacy.

We pay the Dealer Manager selling commissions and dealer manager fees in connection with our offerings. For the years ended December 31, 2022, 2021 and 2020, we paid the Dealer Manager selling commissions and dealer manager fees totaling $16,075, $12,246 and $11,303, respectively. A majority of the selling commissions and dealer manager fees are reallowed to participating broker-dealers. Included in accrued offering costs at December 31, 2022 and 2021 were $185,557 and $135,663 of future dealer manager fees payable, respectively.

As of December 31, 2022 and 2021, we owed $2,185 and $2,113, respectively, for organization and offering costs paid by LaSalle (<u>[see Note 6-Common Stock and OP Units](#i8c39d713b53c47809e65903a90f52737_229)</u>). These costs are included in Accrued offering costs.

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LaSalle Investment Management Distributors, LLC also serves as the dealer manager for the DST Program on a "best efforts" basis. Our taxable REIT subsidiary, which is a wholly owned subsidiary of our operating partnership, will pay the dealer manager upfront selling commissions, upfront dealer manager fees and placement fees of up to 5.0%, 1.0% and 1.0%, respectively, of the gross purchase price per unit of beneficial interest sold in the DST Program. All upfront selling commissions and upfront dealer manager fees are reallowed to participating broker-dealers. For the years ended December 31, 2022 and 2021, our taxable REIT subsidiary paid $6,524 and $5,697, respectively, to the Dealer Manager. In addition, the dealer manager may receive an ongoing investor servicing fee that is calculated daily on a continuous basis from year to year equal to 1/365th of (a) 0.25% of the NAV of each outstanding unit of beneficial interest for such day, payable by the DSTs; (b) 0.85% of the NAV of each outstanding Class A OP Unit, 0.30% of the NAV of each outstanding Class M OP Unit and 0.30% of the NAV of each outstanding Class A-I OP Unit for such day issued in connection with the FMV Option, payable by our operating partnership; and (c) 0.85% of the NAV of each outstanding Class A share, 0.30% of the NAV of each outstanding Class M share and 0.30% of the NAV of each outstanding Class A-I share for such day issued in connection with the Redemption Right, payable by us. The investor servicing fee may continue for so long as the investor in the DST Program holds beneficial interests, Class A, Class M, and Class A-I OP Units or Class A, Class M and Class A-I shares that were issued in connection with the DST Program. No investor servicing fee will be paid on Class M-I OP Units or Class M-I shares. For the years ended December 31, 2022 and 2021, the DSTs paid $1,493 and $754, respectively, in investor servicing fees to the Dealer Manager in connection with the DST Program.

LaSalle also serves as the manager for the DST Program. Each DST may pay the manager a management fee equal to a to-be-agreed upon percentage of the total equity of such DST. For the years ended December 31, 2022 and 2021, the DSTs paid $947 and $463, respectively, in management fees to our Advisor in connection with the DST Program.

**NOTE 10—COMMITMENTS AND CONTINGENCIES**

We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.

We are subject to fixed ground lease payments on South Beach Parking Garage of $112 per year until September 30, 2024, which will increase every five years thereafter by the lesser of 12% or the cumulative Consumer Price Index ("CPI") over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.

The operating agreement for Grand Lakes Marketplace allows the unrelated third party joint venture partner, owning a 10% interest, to put its interest to us at a market determined value.

The operating agreement for 237 Via Vera Cruz, 13500 Danielson Street, 4211 Starboard, 2840 Loaker Avenue and 15890 Bernardo Center Drive allows the unrelated third party joint venture partner, owning a 5% interest, to put its interest to us at a market determined value starting July 31, 2024.

The operating agreement for our investment in Single-Family Rental Portfolio II allows the unrelated third part joint venture, owning a 5% interest, to put its interest to us at a market determined value starting November 9, 2030.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**NOTE 11—SEGMENT REPORTING**

We have five operating segments: industrial, office, residential, retail and other properties. Consistent with how we review and manage our properties, the financial information summarized below is presented by operating segment and reconciled to income from operations for the years ended December 31, 2022, 2021 and 2020:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year Ended December 31, 2022** | **Industrial** | **Office** | **Residential** | **Retail** | **Other** | **Total** |
| **Assets** | $1586416 | $640066 | $1623069 | $612640 | $20543 | $4482734 |
| **Capital expenditures by segment** | $9202 | $4536 | $8692 | $5014 | $11 | $27455 |
| **Revenues:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental revenue | $106020 | $50179 | $115259 | $55863 | $310 | $327631 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 127 | 1392 | 5439 | 500 | 2099 | 9557 |
| **Total revenues** | $106147 | $51571 | $120698 | $56363 | $2409 | $337188 |
| **Operating expenses:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | $16730 | $4927 | $17086 | $6177 | $389 | $45309 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating | 9172 | 10346 | 32423 | 8798 | 798 | 61537 |
| **Total segment operating expenses** | $25902 | $15273 | $49509 | $14975 | $1187 | $106846 |
| **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative |  |  |  |  |  | 2882 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisor fees |  |  |  |  |  | 50333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Company level expenses |  |  |  |  |  | 8762 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization |  |  |  |  |  | 138104 |
| Total operating expenses |  |  |  |  |  | $306927 |
| Other income and (expenses): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  |  |  |  | $(99284) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investment | &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investment | &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investment |  |  |  | (3403) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment income on marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Investment income on marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Investment income on marketable securities |  |  |  | 1505 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized loss upon sale of marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net realized loss upon sale of marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net realized loss upon sale of marketable securities |  |  |  | (879) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities |  |  | (9570) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain from disposition of property and extinguishment of debt, net | &nbsp;&nbsp;&nbsp;&nbsp;Gain from disposition of property and extinguishment of debt, net | &nbsp;&nbsp;&nbsp;&nbsp;Gain from disposition of property and extinguishment of debt, net | &nbsp;&nbsp;&nbsp;&nbsp;Gain from disposition of property and extinguishment of debt, net |  |  | 37253 |
| Total other income and (expenses) |  |  |  |  |  | $(74378) |
| Net loss |  |  |  |  |  | $(44117) |
| Reconciliation to total consolidated assets as of December 31, 2022 | Reconciliation to total consolidated assets as of December 31, 2022 | Reconciliation to total consolidated assets as of December 31, 2022 | Reconciliation to total consolidated assets as of December 31, 2022 | Reconciliation to total consolidated assets as of December 31, 2022 |  |  |
| Assets per reportable segments <sup>(1)</sup> |  |  |  |  |  | $4482734 |
| Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | 671484 |
| Total consolidated assets |  |  |  |  |  | $5154218 |

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year Ended December 31, 2021** | **Industrial** | **Office** | **Residential** | **Retail** | **Other** | **Total** |
| **Assets** | $1352580 | $479306 | $1301454 | $564565 | $23412 | $3721317 |
| **Capital expenditures by segment** | $17165 | $4284 | $6196 | $3212 | $16 | $30873 |
| **Revenues:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental revenue | $71719 | $33178 | $74378 | $48286 | $379 | $227940 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other revenue | 367 | 1792 | 5534 | 1117 | 2588 | 11398 |
| **Total revenues** | $72086 | $34970 | $79912 | $49403 | $2967 | $239338 |
| **Operating expenses:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | $10505 | $3394 | $12500 | $5979 | $459 | $32837 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating | 5783 | 6865 | 22619 | 7973 | 755 | 43995 |
| **Total segment operating expenses** | $16288 | $10259 | $35119 | $13952 | $1214 | $76832 |
| **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative |  |  |  |  |  | 1596 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisor fees |  |  |  |  |  | 65667 |
| &nbsp;&nbsp;&nbsp;&nbsp;Company level expenses |  |  |  |  |  | 4841 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for impairment of real estate |  |  |  |  |  | 1822 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization |  |  |  |  |  | 94051 |
| Total operating expenses |  |  |  |  |  | $244809 |
| Other income and (expenses): |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  |  |  |  | $(48230) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income from unconsolidated real estate affiliates and fund investments | &nbsp;&nbsp;&nbsp;&nbsp;Income from unconsolidated real estate affiliates and fund investments | &nbsp;&nbsp;&nbsp;&nbsp;Income from unconsolidated real estate affiliates and fund investments |  |  |  | 67333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment income on marketable securities |  |  |  |  |  | 418 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain upon sale of marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain upon sale of marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain upon sale of marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net realized gain upon sale of marketable securities |  |  | 247 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities | &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized change in fair value of investment in marketable securities |  |  | 2933 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income from disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Income from disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Income from disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Income from disposition of property and extinguishment of debt |  |  | 33422 |
| Total other income and (expenses) |  |  |  |  |  | 56123 |
| Net income |  |  |  |  |  | $50652 |
| Reconciliation to total consolidation assets as of December 31, 2021 | Reconciliation to total consolidation assets as of December 31, 2021 | Reconciliation to total consolidation assets as of December 31, 2021 | Reconciliation to total consolidation assets as of December 31, 2021 | Reconciliation to total consolidation assets as of December 31, 2021 |  |  |
| Assets per reportable segments |  |  |  |  |  | $3721317 |
| Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets | 680929 |
| Total consolidated assets |  |  |  |  |  | $4402246 |

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________

(1) &nbsp;&nbsp;&nbsp;&nbsp;Includes $39,326 of Industrial and Residential segment assets classified as held for sale as of December 31, 2021.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year Ended December 31, 2020** | **Industrial** | **Office** | **Residential** | | **Retail** | **Other** | **Total** |  |
| **Capital expenditures by segment** | $4673 | $2589 | $4346 |  | $1803 | $119 | $13530 |  |
| **Revenues:** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental revenue | $49743 | $27239 | $63948 |  | $45417 | $294 | $186641 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 323 | 1313 | 3474 |  | 572 | 1298 | 6980 |  |
| **Total revenues** | $50066 | $28552 | $67422 |  | $45989 | $1592 | $193621 |  |
| **Operating expenses:** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | $8218 | $3396 | $11476 |  | $6193 | $382 | $29665 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating | 4121 | 5938 | 19643 |  | 7583 | 714 | 37999 |  |
| **Total segment operating expenses** | $12339 | $9334 | $31119 |  | $13776 | $1096 | $67664 |  |
| **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** | **Reconciliation to net income** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative |  |  |  |  |  |  | 4318 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisor fees |  |  |  |  |  |  | 25274 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Company level expenses |  |  |  |  |  |  | 2936 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization |  |  |  |  |  |  | 75603 |  |
| Total operating expenses |  |  |  |  |  |  | $175795 |  |
| Other income and (expenses): |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  |  |  |  |  |  | $(40668) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investments | &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investments | &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated real estate affiliates and fund investments |  |  |  |  | (19451) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt |  |  |  | (1772) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property and extinguishment of debt | Total other income and (expenses) |  |  |  | $(61891) |
| Net loss |  |  |  |  |  |  | $(44065) |  |

---

**NOTE 12—INVESTMENT IN MARKETABLE SECURITIES** 

The following is a summary of our investment in marketable securities held as of December 31, 2022 and December 31, 2021, which consisted entirely of stock of publicly traded REITs.

---

| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| Investment in marketable securities - cost | $50815 | $40273 |
| &nbsp;&nbsp;Unrealized gains | 716 | 3161 |
| &nbsp;&nbsp;Unrealized losses | (7349) | (228) |
| Net unrealized (loss) gain | (6633) | 2933 |
| Investment in marketable securities - fair value | $44182 | $43206 |

---

Upon the sale of a particular security, the realized net gain or loss is computed assuming the shares purchased first are sold first. During the year ended December 31, 2022, marketable securities sold generated proceeds of $18,626, resulting in realized gains of $576, and $1,455 realized losses.

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**NOTE 13—SUBSEQUENT EVENTS**

On March 7, 2023, our board of directors approved a gross dividend for the first quarter of 2023 of $0.145 per share to stockholders and OP Unit holders of record as of March 24, 2023. The dividend will be paid on or around March 30, 2023. Stockholders and OP Unit holders will receive $0.145 per share or OP Unit, less applicable class-specific fees, if any.

On March 16, 2023, our operating partnership exercised the fair value options to acquire the DST investors beneficial interests in Summit at San Marcos, Mason Mill Distribution Center and San Juan Medical Center for approximately $109,000 of OP Units. As a result of the transaction we incurred approximately $35,000 of non-cash interest expense.

\* \* \* \* \* \*

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<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

**Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2022** 

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Col. A** | **Col. B** | **Col. C** | **Col. C** | **Col. D** | **Col. D** | **Col. D** | **Col. E** | **Col. E** | **Col. E** |
| **Description** | **Encumbrances** | **Initial Cost** | **Initial Cost** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Gross Amounts at which<br>Carried at the Close of Period** | **Gross Amounts at which<br>Carried at the Close of Period** | **Total** |
| **Description** | **Encumbrances** | **Land** | **Building<br>and<br>Equipment** | **Land** | **Building<br>and<br>Equipment** | **Carrying<br>Costs** | **Land** | **Building<br>and<br>Equipment** | **Total** |
| **Industrial Properties:** | | | | | | | | | |
| Kendall Distribution Center—Atlanta, GA |  | 2656 | 12836 | (293) | 1015 |  | 2363 | 13851 | 16214 |
| Suwanee Distribution Center—Suwanee, GA |  | 6155 | 27598 |  | 121 |  | 6155 | 27719 | 33874 |
| Grand Prairie Distribution Center—Grand Prairie, TX |  | 2100 | 12478 |  | 404 |  | 2100 | 12882 | 14982 |
| Charlotte Distribution Center—Charlotte, NC | 9117 | 5381 | 15002 |  | 397 |  | 5381 | 15399 | 20780 |
| 4050 Corporate Drive—Grapevine, TX | 12147 | 5200 | 18327 |  | 1779 |  | 5200 | 20106 | 25306 |
| 4055 Corporate Drive—Grapevine, TX | 5573 | 2400 | 12377 |  | 1638 |  | 2400 | 14015 | 16415 |
| 2501-2575 Allan Drive—Elk Grove, IL |  | 4300 | 10926 |  | 717 |  | 4300 | 11643 | 15943 |
| 2601-2651 Allan Drive—Elk Grove, IL |  | 2600 | 7726 |  | 232 |  | 2600 | 7958 | 10558 |
| 1300 Michael Drive—Wood Dale, IL |  | 1900 | 6770 |  | 385 |  | 1900 | 7155 | 9055 |
| 1350 Michael Drive—Wood Dale, IL |  | 1500 | 5059 |  | 296 |  | 1500 | 5355 | 6855 |
| 1225 Michael Drive—Wood Dale, IL |  | 2600 | 7149 |  | 172 |  | 2600 | 7321 | 9921 |
| 200 Lewis Drive—Wood Dale, IL |  | 1100 | 4165 |  | 71 |  | 1100 | 4236 | 5336 |
| 1301-1365 Mittel Boulevard—Chicago, IL |  | 2700 | 5473 |  | 141 |  | 2700 | 5614 | 8314 |
| Tampa Distribution Center- Tampa, FL |  | 3507 | 22485 |  | 73 |  | 3507 | 22558 | 26065 |
| Aurora Distribution Center- Aurora, IL | 13156 | 9861 | 14646 |  |  |  | 9861 | 14646 | 24507 |
| 28150 West Harrison Parkway- Valencia, CA |  | 2760 | 8899 |  | 288 |  | 2760 | 9187 | 11947 |
| 28145 West Harrison Parkway- Valencia, CA |  | 3468 | 10111 |  | 11 |  | 3468 | 10122 | 13590 |
| 28904 Avenue Paine- Valencia, CA |  | 3812 | 10535 |  | 411 |  | 3812 | 10946 | 14758 |
| 25045 Avenue Tibbitts- Santa Clarita, CA |  | 4087 | 13224 |  | 1080 |  | 4087 | 14304 | 18391 |
| 6000 Giant Road- Richmond, CA |  | 11572 | 26556 |  | 31 |  | 11572 | 26587 | 38159 |
| 6015 Giant Road- Richmond, CA |  | 10468 | 24127 |  | (1004) |  | 10468 | 23123 | 33591 |
| 6025 Giant Road- Richmond, CA |  | 2700 | 4167 |  | 497 |  | 2700 | 4664 | 7364 |
| Mason Mill Distribution Center—Buford, GA | 17500 | 3406 | 23312 |  | (123) |  | 3406 | 23189 | 26595 |
| Fremont Distribution Center - Fremont, CA |  | 29427 | 7024 |  | 1814 |  | 29427 | 8838 | 38265 |
| 3324 Trinity Boulevard - Grand Prairie, TX |  | 3215 | 11255 |  | (13) |  | 3215 | 11242 | 14457 |
| Taunton Distribution Center - Taunton, MA |  | 2000 | 21589 |  | 220 |  | 2000 | 21809 | 23809 |
| Chandler Distribution Center - Chandler, AZ |  | 3803 | 24095 |  | 272 |  | 3803 | 24367 | 28170 |
| Fort Worth Distribution Center--Fort Worth, TX |  | 3059 | 21053 |  | 1296 |  | 3059 | 22349 | 25408 |
| 4993 Anson Boulevard--Whitestown, IN | 17000 | 2197 | 20224 |  | (59) |  | 2197 | 20165 | 22362 |
| 5102 E 500 South--Whitestown, IN | 17000 | 3460 | 28049 |  | (80) |  | 3460 | 27969 | 31429 |
| Louisville Distribution Center—Shepherdsville, KY | 52250 | 9028 | 66792 |  | 4161 |  | 9028 | 70953 | 79981 |
| 6511 West Frye Road—Chandler, AZ | 12250 | 2102 | 15511 |  | 1654 |  | 2102 | 17165 | 19267 |
| 6565 West Frye Road—Chandler, AZ | 12250 | 2451 | 18807 |  |  |  | 2451 | 18807 | 21258 |
| 6615 West Frye Road—Chandler, AZ | 12250 | 2799 | 18030 |  |  |  | 2799 | 18030 | 20829 |

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Col. A** | **Col. B** | **Col. C** | **Col. C** | **Col. D** | **Col. D** | **Col. D** | **Col. E** | **Col. E** | **Col. E** |
| **Description** | **Encumbrances** | **Initial Cost** | **Initial Cost** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Gross Amounts at which<br>Carried at the Close of Period** | **Gross Amounts at which<br>Carried at the Close of Period** | **Total** |
| **Description** | **Encumbrances** | **Land** | **Building<br>and<br>Equipment** | **Land** | **Building<br>and<br>Equipment** | **Carrying<br>Costs** | **Land** | **Building<br>and<br>Equipment** | **Total** |
| 6677 West Frye Road—Chandler, AZ | 12250 | 2451 | 18662 |  | 37 |  | 2451 | 18699 | 21150 |
| 5 National Way—Durham, NC |  | 6846 | 21233 |  | 592 |  | 6846 | 21825 | 28671 |
| 47 National Way—Durham, NC |  | 6840 | 20401 |  | 2104 |  | 6840 | 22505 | 29345 |
| South San Diego Distribution Center—San Diego, CA | 72500 | 18496 | 123682 |  | 3703 |  | 18496 | 127385 | 145881 |
| 2451 Bath Road—Elgin, IL |  | 4247 | 26182 |  | (63) |  | 4247 | 26119 | 30366 |
| 1755 Britannia Drive—Elgin, IL |  | 1046 | 10522 |  | 700 |  | 1046 | 11222 | 12268 |
| 687 Conestoga Parkway—Shepardsville, KY |  | 2462 | 33393 |  | 447 |  | 2462 | 33840 | 36302 |
| Louisville Airport Distribution Center(2)—Louisville, KY |  | 2843 | 26812 |  | (1) |  | 2843 | 26811 | 29654 |
| Friendship Distribution Center-Buford, GA | 40000 | 7082 | 80654 |  | 4 |  | 7082 | 80658 | 87740 |
| 13500 Danielson Street-Poway, CA | 10990 | 7624 | 11503 |  | 54 |  | 7624 | 11557 | 19181 |
| 237 Via Vera Cruz-San Marcos, CA | 11880 | 5421 | 8581 |  | 54 |  | 5421 | 8635 | 14056 |
| 4211 Starboard-Fremont, CA | 20612 | 13409 | 13872 |  | 146 |  | 13409 | 14018 | 27427 |
| 2840 Loker Avenue-Carlsbad, CA | 14316 | 7631 | 16030 |  | 245 |  | 7631 | 16275 | 23906 |
| 15890 Bernardo Center Drive-San Diego, CA | 8702 | 2316 | 11715 |  | 47 |  | 2316 | 11762 | 14078 |
| NE Atlanta DC-Jefferson, GA |  | 7587 | 42725 |  |  |  | 7587 | 42725 | 50312 |
| 6635 West Frye Road-Chandler, AZ |  | 2960 | 24950 |  |  |  | 2960 | 24950 | 27910 |
| 6575 West Frye Road-Chandler, AZ |  | 3971 | 29415 |  |  |  | 3971 | 29415 | 33386 |
| West Phoenix Distribution Center-Glendale, AZ |  | 28914 | 95012 |  |  |  | 28914 | 95012 | 123926 |
| Puget Sound Distribution Center-Lacey, WA |  | 3898 | 17470 |  |  |  | 3898 | 17470 | 21368 |
| **Total Industrial Properties** | **371743** | **295818** | **1189191** | **(293)** | **25966** | **—** | **295525** | **1215153** | **1510678** |
| **Office Properties:** |  |  |  |  |  |  |  |  |  |
| Monument IV at Worldgate—Herndon, VA |  | 5186 | 57013 |  | 19657 |  | 5186 | 76670 | 81856 |
| 140 Park Avenue—Florham Park, NJ |  | 3162 | 34784 |  | (4) |  | 3162 | 34780 | 37942 |
| San Juan Medical Center- San Juan Capistrano, CA | 16730 | 9807 | 13303 |  | 1208 |  | 9807 | 14511 | 24318 |
| Genesee Plaza - San Deigo, CA | 38306 | 8222 | 73964 |  | 1264 |  | 8222 | 75228 | 83450 |
| Fountainhead Corporate Park--Tempe, AZ |  | 5942 | 36301 |  | 6555 |  | 5942 | 42856 | 48798 |
| 170 Park Avenue-Florham Park, NJ | **—** | 4612 | 38337 |  | 3 |  | 4612 | 38340 | 42952 |
| South Reno Medical Center-Reno, NV | **—** | 1029 | 9882 |  | (104) |  | 1029 | 9778 | 10807 |
| North Tampa Surgery Center-Odessa, FL | **—** | 1227 | 5069 |  | (4) |  | 1227 | 5065 | 6292 |
| 1203 SW 7 Highway-Blue Springs, MO | **—** | 171 | 2355 |  | 10 |  | 171 | 2365 | 2536 |
| 8600 NE 82nd Street-Kansas City, MO | **—** | 143 | 3519 |  | 12 |  | 143 | 3531 | 3674 |
| Sugar Land Medical Office-Sugar Land, TX | **—** | 2449 | 9943 |  | (86) |  | 2449 | 9857 | 12306 |
| Roeland Park Medical Office-Roeland Park, KS | **—** | 1057 | 8182 |  | 5 |  | 1057 | 8187 | 9244 |
| Durham Medical Center-Durham, NC | **—** | 974 | 29575 |  | 26 |  | 974 | 29601 | 30575 |
| 9101 Stony Point Drive(2)--Richmond, VA | **—** | 3980 | 37939 |  | 15 |  | 3980 | 37954 | 41934 |

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Col. A** | **Col. B** | **Col. C** | **Col. C** | **Col. D** | **Col. D** | **Col. D** | **Col. E** | **Col. E** | **Col. E** |
| **Description** | **Encumbrances** | **Initial Cost** | **Initial Cost** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Gross Amounts at which<br>Carried at the Close of Period** | **Gross Amounts at which<br>Carried at the Close of Period** | **Total** |
| **Description** | **Encumbrances** | **Land** | **Building<br>and<br>Equipment** | **Land** | **Building<br>and<br>Equipment** | **Carrying<br>Costs** | **Land** | **Building<br>and<br>Equipment** | **Total** |
| Cedar Medical Center at Flagstaff-Flagstaff, AZ | **—** | 1735 | 12814 |  |  |  | 1735 | 12814 | 14549 |
| North Boston Medical Center-Haverhill, MA | **—** | 2004 | 16253 |  |  |  | 2004 | 16253 | 18257 |
| North Charlotte Medical Center-Denver, NC | **—** | 2462 | 8562 |  |  |  | 2462 | 8562 | 11024 |
| Grand Rapids Medical Center-Wyoming, MI | **—** | 1031 | 5941 |  |  |  | 1031 | 5941 | 6972 |
| Glendale Medical Center-Los Angeles, CA | **—** | 2782 | 13074 |  |  |  | 2782 | 13074 | 15856 |
| 6300 Dumbarton Circle-Fremont, CA | **—** | 5804 | 15359 |  |  |  | 5804 | 15359 | 21163 |
| 6500 Kaiser Drive-Fremont, CA | **—** | 11542 | 25535 |  |  |  | 11542 | 25535 | 37077 |
| Greater Sacramento Medical Center-Rancho Cordova, CA | **—** | 1105 | 8770 |  |  |  | 1105 | 8770 | 9875 |
| **Total Office Properties** | **55036** | **76426** | **466474** | **—** | **28557** | **—** | **76426** | **495030** | **571456** |
| **Residential Properties:** |  |  |  |  |  |  |  |  |  |
| Townlake of Coppell—Coppell, TX | 36030 | 8444 | 36805 |  | 2432 |  | 8444 | 39237 | 47682 |
| AQ Rittenhouse—Philadelphia, PA | 26370 | 11000 | 39963 |  | 60 |  | 11000 | 40023 | 51023 |
| Lane Park Apartments—Mountain Brook, AL | 37000 | 5100 | 66428 |  | 1502 |  | 5100 | 67930 | 73030 |
| Dylan Point Loma—San Diego, CA | 39598 | 19000 | 70860 |  | (353) | **—** | 19000 | 70507 | 89507 |
| The Penfield—St. Paul, MN | 35500 | 8021 | 52713 |  | 1033 | **—** | 8021 | 53746 | 61767 |
| 180 North Jefferson—Chicago, IL | 45000 | 18588 | 75435 |  | 9702 | **—** | 18588 | 85137 | 103725 |
| Jory Trail at the Grove—Wilsonville, OR | 41954 | 7877 | 64369 |  | 4548 | **—** | 7877 | 68917 | 76794 |
| The Reserve at Johns Creek Walk—Johns Creek, GA | 26000 | 7552 | 38025 |  | 1212 | **—** | 7552 | 39237 | 46789 |
| Villas at Legacy—Plano, TX | 29500 | 6888 | 48504 |  | 4294 | **—** | 6888 | 52798 | 59686 |
| Stonemeadow Farms - Bothell, WA | 43865 | 14000 | 65535 |  | 2850 |  | 14000 | 68385 | 82385 |
| Summit at San Marcos - Chandler, AZ | 35900 | 6401 | 63335 |  | 195 |  | 6401 | 63530 | 69931 |
| Presley Uptown - Charlotte, NC | 30000 | 7390 | 46479 | 12 | 1045 |  | 7402 | 47524 | 54926 |
| Princeton North Andover-North Andover, MA | 39900 | 8140 | 75403 | (639) | 279 |  | 7501 | 75682 | 83183 |
| The Preserve at the Meadows<sup>(2)--</sup>Fort Collins, CO | 32400 | 9656 | 86125 | (4156) | 103 |  | 5500 | 86228 | 91728 |
| The Rockwell<sup>(2)--</sup>Berlin, MA | 46310 | 7501 | 53870 | 2154 | 220 |  | 9655 | 54090 | 63745 |
| Miramont-Fort Collins, CO | 27128 | 9217 | 63156 | (1077) | 157 |  | 8140 | 63313 | 71453 |
| Pinecone-Fort Collins, CO | 24895 | 8558 | 49005 | 659 | 425 |  | 9217 | 49430 | 58647 |
| Reserve at Venice-North Venice, FL | 55800 | 5500 | 43833 | 3058 | 309 |  | 8558 | 44142 | 52700 |
| Woodside Trumbull-Trumbull, CT | **—** | 4654 | 91755 |  | (322) |  | 4654 | 91433 | 96087 |
| Jefferson Lake Howell-Casselberry, FL | **—** | 12680 | 139532 |  |  |  | 12680 | 139532 | 152212 |
| Oak Street Lofts-Tigard, OR | **—** | 5325 | 75260 |  |  |  | 5325 | 75260 | 80585 |
| Molly Brook on Belmont-North Haledon, NJ | 54650 | 8893 | 60049 |  |  |  | 8893 | 60049 | 68942 |
| Single-Family Rental Portfolio II |  | 18911 | 75410 |  |  |  | 18911 | 75410 | 94321 |
| **Total Residential Properties** | **707800** | **219296** | **1481849** | **11** | **29691** | **—** | **219307** | **1511539** | **1730847** |
| **Retail Properties:** | **Retail Properties:** |  |  |  |  |  |  |  |  |

---

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Col. A** | **Col. B** | **Col. C** | **Col. C** | **Col. D** | **Col. D** | **Col. D** | **Col. E** | **Col. E** | **Col. E** |
| **Description** | **Encumbrances** | **Initial Cost** | **Initial Cost** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Costs Capitalized<br>Subsequent to Acquisition (1)** | **Gross Amounts at which<br>Carried at the Close of Period** | **Gross Amounts at which<br>Carried at the Close of Period** | **Total** |
| **Description** | **Encumbrances** | **Land** | **Building<br>and<br>Equipment** | **Land** | **Building<br>and<br>Equipment** | **Carrying<br>Costs** | **Land** | **Building<br>and<br>Equipment** | **Total** |
| The District at Howell Mill—Atlanta, GA | 28036 | 10000 | 56040 |  | 7524 |  | 10000 | 63564 | 73564 |
| Grand Lakes Marketplace—Katy, TX | 23900 | 5215 | 34770 |  | 87 |  | 5215 | 34857 | 40072 |
| Oak Grove Plaza—Sachse, TX |  | 4434 | 18869 | (4434) | (19040) |  |  | (171) | (171) |
| Rancho Temecula Town Center—Temecula, CA | 28000 | 14600 | 41180 |  | 931 |  | 14600 | 42111 | 56711 |
| Skokie Commons—Skokie, IL | 23118 | 8859 | 25705 | 891 | 182 |  | 9750 | 25887 | 35637 |
| Whitestone Market—Austin, TX | 25750 | 7000 | 39868 |  | 622 |  | 7000 | 40490 | 47490 |
| Maui Mall—Maui, HI | 35492 | 44257 | 39454 | (547) | 10953 |  | 43710 | 50407 | 94117 |
| Silverstone Marketplace—Scottsdale, AZ |  | 8012 | 33771 |  | 287 |  | 8012 | 34058 | 42070 |
| Kierland Village Center—Scottsdale, AZ |  | 7037 | 26693 |  | 394 |  | 7037 | 27087 | 34124 |
| Timberland Town Center—Beaverton, OR | 19739 | 6083 | 33826 |  | 534 |  | 6083 | 34360 | 40443 |
| Montecito Marketplace—Las Vegas, NV |  | 11410 | 45212 |  | 673 |  | 11410 | 45885 | 57295 |
| Milford Crossing-Milford, MA |  | 1124 | 30869 |  | (89) |  | 1124 | 30780 | 31904 |
| Patterson Place-Durham, NC |  | 855 | 12169 |  |  |  | 855 | 12169 | 13024 |
| Silverado Square-Las Vegas, NV |  | 4293 | 16273 |  |  |  | 4293 | 16273 | 20566 |
| Woodlawn Point Shopping Center-Marrietta, GA |  | 4731 | 26881 |  |  |  | 4731 | 26881 | 31612 |
| **Total Retail Properties** | **184035** | **137910** | **481580** | **(4090)** | **3058** | **—** | **133820** | **484638** | **618457** |
| **Other Properties:** | **Other Properties:** |  |  |  |  |  |  |  |  |
| South Beach Parking Garage—Miami, FL |  |  | 21467 |  | 680 |  |  | 22147 | 22147 |
| **Total Other Properties** | **—** | **—** | **21467** | **—** | **680** | **—** | **—** | **22147** | **22147** |
| **Total Consolidated Properties:** | $**1318614** | $**729450** | $**3640561** | $**(4372)** | $**87952** | $**—** | $**725078** | $**3728507** | $**4453585** |

---

The unaudited aggregate cost and accumulated depreciation for tax purposes was approximately $4,819,347 and $491,584, respectively.

(1)Includes net provisions for impairment of real estate taken since acquisition of property.

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Col. A** | **Col. F** | **Col. G** | **Col. H** | **Col. I** |
| **Description** | **Accumulated<br>Depreciation** | **Date of<br>Construction** | **Date of<br>Acquisition** | **Life on which depreciation in latest income statement is computed** |
| **Industrial Properties:** | | | | |
| Kendall Distribution Center—Atlanta, GA | (4722) | 2002 | 6/30/2005 | 50 years |
| Suwanee Distribution Center—Suwanee, GA | (5268) | 2012 | 6/28/2013 | 50 years |
| Grand Prairie Distribution Center—Grand Prairie, TX | (2347) | 1980 | 12/18/2013 | 40 years |
| Charlotte Distribution Center—Charlotte, NC | (3325) | 2013 | 1/22/2014 | 50 years |
| 4050 Corporate Drive—Grapevine, TX | (3649) | 1991 | 6/27/2014 | 40 years |
| 4055 Corporate Drive—Grapevine, TX | (2918) | 1996 | 4/15/2015 | 40 years |
| 2501-2575 Allan Drive—Elk Grove, IL | (2171) | 1996 | 4/15/2015 | 40 years |
| 2601-2651 Allan Drive—Elk Grove, IL | (1450) | 1985 | 9/30/2015 | 40 years |
| 1300 Michael Drive—Wood Dale, IL | (1304) | 1985 | 9/30/2015 | 40 years |
| 1350 Michael Drive—Wood Dale, IL | (1023) | 1985 | 9/30/2015 | 40 years |
| 1225 Michael Drive—Wood Dale, IL | (1320) | 1985 | 9/30/2015 | 40 years |
| 200 Lewis Drive—Wood Dale, IL | (833) | 1985 | 9/30/2015 | 40 years |
| 1301-1365 Mittel Boulevard—Chicago, IL | (1024) | 1985 | 9/30/2015 | 40 years |
| Tampa Distribution Center- Tampa, FL | (3826) | 1985 | 9/30/2015 | 40 years |
| Aurora Distribution Center- Aurora, IL | (1928) | 2009 | 4/11/2016 | 40 years |
| 28150 West Harrison Parkway- Valencia, CA | (1501) | 2016 | 5/19/2016 | 50 years |
| 28145 West Harrison Parkway- Valencia, CA | (1644) | 1997 | 6/29/2016 | 40 years |
| 28904 Avenue Paine- Valencia, CA | (1832) | 1997 | 6/29/2016 | 40 years |
| 25045 Avenue Tibbitts- Santa Clarita, CA | (2291) | 1988 | 6/29/2016 | 40 years |
| 6000 Giant Road- Richmond, CA | (3367) | 1988 | 6/29/2016 | 40 years |
| 6015 Giant Road- Richmond, CA | (2931) | 2016 | 9/8/2016 | 50 years |
| 6025 Giant Road- Richmond, CA | (602) | 2016 | 9/8/2016 | 50 years |
| Mason Mill Distribution Center—Buford, GA | (2325) | 2016 | 12/29/2016 | 50 years |
| Fremont Distribution Center - Fremont, CA | (1219) | 1991 | 3/29/2019 | 40 years |
| 3324 Trinity Boulevard - Grand Prairie, TX | (1007) | 2015 | 5/31/2019 | 40 years |
| Taunton Distribution Center - Taunton, MA | (1573) | 2016 | 8/23/2019 | 50 years |
| Chandler Distribution Center - Chandler, AZ | (1541) | 2016 | 12/5/2019 | 50 years |
| Fort Worth Distribution Center--Fort Worth, TX | (1181) | 2020 | 10/23/2020 | 50 years |
| 4993 Anson Boulevard--Whitestown, IN | (841) | 2020 | 12/11/2020 | 50 years |
| 5102 E 500 South--Whitestown, IN | (1166) | 2020 | 12/11/2020 | 50 years |
| Louisville Distribution Center—Shepherdsville, KY | (3306) | 2020 | 1/21/2021 | 50 years |
| 6511 West Frye Road—Chandler, AZ | (743) | 2019 | 2/23/2021 | 50 years |
| 6565 West Frye Road—Chandler, AZ | (690) | 2019 | 2/23/2021 | 50 years |
| 6615 West Frye Road—Chandler, AZ | (661) | 2019 | 2/23/2021 | 50 years |
| 6677 West Frye Road—Chandler, AZ | (686) | 2019 | 2/23/2021 | 50 years |
| 5 National Way—Durham, NC | (531) | 2020 | 9/28/2021 | 50 years |
| 47 National Way—Durham, NC | (510) | 2020 | 9/28/2021 | 50 years |
| South San Diego Distribution Center—San Diego, CA | (3482) | 2020 | 10/28/2021 | 40 years |

---

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Col. A** | **Col. F** | **Col. G** | **Col. H** | **Col. I** |
| **Description** | **Accumulated<br>Depreciation** | **Date of<br>Construction** | **Date of<br>Acquisition** | **Life on which depreciation in latest income statement is computed** |
| 2451 Bath Road—Elgin, IL | (609) | 2020 | 11/16/2021 | 50 years |
| 1755 Britannia Drive—Elgin, IL | (319) | 2020 | 11/16/2021 | 50 years |
| 687 Conestoga Parkway—Shepardsville, KY | (724) | 2021 | 11/17/2021 | 50 years |
| Louisville Airport Distribution Center(2)—Louisville, KY | (804) | 2020 | 6/24/2021 | 50 years |
| Friendship Distribution Center-Buford, GA | (1882) | 2020 | 10/20/2021 | 50 years |
| 13500 Danielson Street-Poway, CA | (433) | 1997 | 7/2/2021 | 40 years |
| 237 Via Vera Cruz-San Marcos, CA | (331) | 1987 | 7/2/2021 | 40 years |
| 4211 Starboard-Fremont, CA | (524) | 1997 | 7/9/2021 | 40 years |
| 2840 Loker Avenue-Carlsbad, CA | (442) | 1998 | 11/30/2021 | 40 years |
| 15890 Bernardo Center Drive-San Diego, CA | (318) | 1991 | 11/30/2021 | 40 years |
| NE Atlanta DC-Jefferson, GA | (843) | 2016 | 04/08/2022 | 40 years |
| 6635 West Frye Road-Chandler, AZ | (245) | 2019 | 06/08/2022 | 50 years |
| 6575 West Frye Road-Chandler, AZ | (315) | 2019 | 06/08/2022 | 50 years |
| West Phoenix Distribution Center-Glendale, AZ | (475) | 2022 | 09/30/2022 | 50 years |
| Puget Sound Distribution Center-Lacey, WA | (87) | 2021 | 10/06/2022 | 50 years |
| **Total Industrial Properties** | (81089) |  |  |  |
| **Office Properties:** |  |  |  |  |
| Monument IV at Worldgate—Herndon, VA | (35832) | 2001 | 8/27/2004 | 50 years |
| 140 Park Avenue—Florham Park, NJ | (4869) | 2015 | 12/21/2015 | 50 years |
| San Juan Medical Center- San Juan Capistrano, CA | (2205) | 2015 | 4/1/2016 | 50 years |
| Genesee Plaza - San Deigo, CA | (6691) | 1983 | 7/2/2019 | 40 years |
| Fountainhead Corporate Park--Tempe, AZ | (3704) | 1985 | 2/6/2020 | 40 years |
| 170 Park Avenue-Florham Park, NJ | (1837) | 1998 | 2/2/2021 | 40 years |
| South Reno Medical Center-Reno, NV | (245) | 2004 | 12/28/2021 | 40 years |
| North Tampa Surgery Center-Odessa, FL | (127) | 2021 | 10/8/2021 | 50 years |
| 1203 SW 7 Highway-Blue Springs, MO | (59) | 2021 | 12/23/2021 | 40 years |
| 8600 NE 82nd Street-Kansas City, MO | (71) | 2021 | 12/23/2021 | 50 years |
| Sugar Land Medical Office-Sugar Land, TX | (198) | 2020 | 12/30/2021 | 50 years |
| Roeland Park Medical Office-Roeland Park, KS | (164) | 2021 | 12/28/2021 | 50 years |
| Durham Medical Center-Durham, NC | (743) | 2010 | 12/23/2021 | 40 years |
| 9101 Stony Point Drive(2)--Richmond, VA | (1013) | 2018 | 9/15/2021 | 50 years |
| Cedar Medical Center at Flagstaff-Flagstaff, AZ | (171) | 2022 | 4/29/2022 | 50 years |
| North Boston Medical Center-Haverhill, MA | (163) | 2017 | 6/28/2022 | 50 years |
| North Charlotte Medical Center-Denver, NC | (86) | 2017 | 6/28/2022 | 50 years |
| Grand Rapids Medical Center-Wyoming, MI | (50) | 2018 | 7/21/2022 | 50 years |
| Glendale Medical Center-Los Angeles, CA | (136) | 2018 | 7/29/2022 | 50 years |
| 6300 Dumbarton Circle-Fremont, CA | (128) | 1990 | 9/15/2022 | 40 years |
| 6500 Kaiser Drive-Fremont, CA | (213) | 1990 | 9/15/2022 | 40 years |
| Greater Sacramento Medical Center-Rancho Cordova, CA | (55) | 2012 | 9/16/2022 | 40 years |

---

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Col. A** | **Col. F** | **Col. G** | **Col. H** | **Col. I** |
| **Description** | **Accumulated<br>Depreciation** | **Date of<br>Construction** | **Date of<br>Acquisition** | **Life on which depreciation in latest income statement is computed** |
| **Total Office Properties** | (58760) |  |  |  |
| **Residential Properties:** |  |  |  |  |
| Townlake of Coppell—Coppell, TX | (7858) | 1986 | 5/22/2015 | 40 years |
| AQ Rittenhouse—Philadelphia, PA | (6031) | 2015 | 7/30/2015 | 50 years |
| Lane Park Apartments—Mountain Brook, AL | (9390) | 2014 | 5/26/2016 | 50 years |
| Dylan Point Loma—San Diego, CA | (9114) | 2016 | 8/9/2016 | 50 years |
| The Penfield—St. Paul, MN | (7098) | 2013 | 9/22/2016 | 50 years |
| 180 North Jefferson—Chicago, IL | (14672) | 2004 | 12/1/2016 | 40 years |
| Jory Trail at the Grove—Wilsonville, OR | (9419) | 2012 | 7/14/2017 | 50 years |
| The Reserve at Johns Creek Walk—Johns Creek, GA | (5498) | 2007 | 7/28/2017 | 40 years |
| Villas at Legacy—Plano, TX | (7567) | 1999 | 6/6/2018 | 40 years |
| Stonemeadow Farms - Bothell, WA | (6890) | 1999 | 5/13/2019 | 40 years |
| Summit at San Marcos - Chandler, AZ | (5509) | 2018 | 7/31/2019 | 50 years |
| Presley Uptown - Charlotte, NC | (3615) | 2016 | 9/30/2019 | 50 years |
| Princeton North Andover-North Andover, MA | (2197) | 2019 | 5/3/2021 | 50 years |
| The Preserve at the Meadows<sup>(2)--</sup>Fort Collins, CO | (1939) | 2001 | 8/23/2021 | 40 years |
| The Rockwell<sup>(2)--</sup>Berlin, MA | (1977) | 2020 | 8/31/2021 | 50 years |
| Miramont-Fort Collins, CO | (2331) | 1995 | 9/29/2021 | 40 years |
| Pinecone-Fort Collins, CO | (1680) | 1993 | 9/29/2021 | 40 years |
| Reserve at Venice-North Venice, FL | (1494) | 2021 | 12/17/2021 | 50 years |
| Woodside Trumbull-Trumbull, CT | (1999) | 2021 | 12/21/2021 | 50 years |
| Jefferson Lake Howell-Casselberry, FL | (2389) | 2021 | 03/30/2022 | 50 years |
| Oak Street Lofts-Tigard, OR | (854) | 2019 | 07/15/2022 | 50 years |
| Molly Brook on Belmont-North Haledon, NJ | (348) | 2022 | 09/27/2022 | 50 years |
| Single-Family Rental Portfolio II | (343) | Various | Various | 50 years |
| **Total Residential Properties** | (110212) |  |  |  |
| **Retail Properties:** |  |  |  |  |
| The District at Howell Mill—Atlanta, GA | (19498) | 2006 | 6/15/2007 | 50 years |
| Grand Lakes Marketplace—Katy, TX | (6547) | 2012 | 9/17/2013 | 50 years |
| Oak Grove Plaza—Sachse, TX | 169 | 2003 | 1/17/2014 | 40 years |
| Rancho Temecula Town Center—Temecula, CA | (9545) | 2007 | 6/16/2014 | 40 years |
| Skokie Commons—Skokie, IL | (4045) | 2015 | 5/15/2015 | 50 years |
| Whitestone Market—Austin, TX | (7452) | 2003 | 9/30/2015 | 40 years |
| Maui Mall—Maui, HI | (11281) | 1971 | 12/22/2015 | 40 years |
| Silverstone Marketplace—Scottsdale, AZ | (4406) | 2015 | 7/27/2016 | 50 years |
| Kierland Village Center—Scottsdale, AZ | (4276) | 2001 | 9/30/2016 | 40 years |

---

------

<u>[**Table of Contents**](#i8c39d713b53c47809e65903a90f52737_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Col. A** | **Col. F** | **Col. G** | **Col. H** | **Col. I** |
| **Description** | **Accumulated<br>Depreciation** | **Date of<br>Construction** | **Date of<br>Acquisition** | **Life on which depreciation in latest income statement is computed** |
| Timberland Town Center—Beaverton, OR | (4401) | 2015 | 9/30/2016 | 50 years |
| Montecito Marketplace—Las Vegas, NV | (6223) | 2007 | 8/8/2017 | 50 years |
| Milford Crossing-Milford, MA | (1784) | 2017 | 1/29/2020 | 50 years |
| Patterson Place-Durham, NC | (177) | 2010 | 5/31/2022 | 40 years |
| Silverado Square-Las Vegas, NV | (190) | 2018 | 6/1/2022 | 50 years |
| Woodlawn Point Shopping Center-Marrietta, GA | (338) | 1993 | 6/30/2022 | 40 years |
| **Total Retail Properties** | **(79994)** |  |  |  |
| **Other Properties:** |  |  |  |  |
| South Beach Parking Garage—Miami, FL | (5161) | 2001 | 1/28/2014 | 40 years |
| **Total Other Properties** | **(5161)** |  |  |  |
| **Total Consolidated Properties:** | $**(335216)** |  |  |  |

---

**Reconciliation of Real Estate**

---

| | | | |
|:---|:---|:---|:---|
| **Consolidated Properties** | **2022** | **2021** | **2020** |
| Balance at beginning of year | $3608923 | $2320336 | $2200514 |
| Additions | 885330 | 1372562 | 161947 |
| Assets sold/ written off | (40668) | (36438) | (5817) |
| Reclassed as held for sale |  | (47537) | (36308) |
| Balance at close of year | $4453585 | $3608923 | $2320336 |

---

**Reconciliation of Accumulated Depreciation**

---

| | | | |
|:---|:---|:---|:---|
| **Consolidated Properties** | **2022** | **2021** | **2020** |
| Balance at beginning of year | $259362 | $219833 | $176236 |
| Additions | 85007 | 49966 | 49134 |
| Assets sold/ written off | (9153) | (3676) | (2118) |
| Write-downs for impairment charges |  | (1822) |  |
| Reclassed as held for sale |  | (4939) | (3419) |
| Balance at close of year | $335216 | $259362 | $219833 |

---

## Exhibit 4.2

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Exhibit 4.2**

References herein to "we," "us," or "our" refer to JLL Income Property Trust, Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise.

The following summary of the material terms of our capital stock does not purport to be complete and is subject to and qualified in its entirety by reference to Maryland law and our charter and bylaws. Our charter authorizes us to issue up to 1,000,000,000 shares of common stock, par value $0.01, 200,000,000 of which are classified as Class A shares, 200,000,000 of which are classified as Class M shares, 200,000,000 of which are classified as Class A-I shares, 200,000,000 of which are classified as Class M-I shares and 200,000,000 of which are classified as Class D shares, and 50,000,000 shares of preferred stock, par value $0.01 per share. Our charter authorizes our board of directors to amend our charter from time to time to increase or decrease the aggregate number of authorized shares or the number of authorized shares of any class or series that we have authority to issue without stockholder approval.

**Common Stock**

Subject to the provisions of our charter regarding the restrictions on ownership and transfer of our stock and except as may otherwise be specified in the charter, the holders of shares of our common stock are entitled to one vote per share on all matters voted on by stockholders, including the election of our directors. Each holder of a share of common stock will vote together with the holders of all other shares of common stock entitled to vote on all matters (as to which a common stockholder is entitled to vote pursuant to applicable law) at all meetings of stockholders. Our charter does not provide for cumulative voting in the election of directors. Therefore, under the provisions of Maryland General Corporation Law, the holders of a majority of the outstanding shares of our common stock can elect our entire board of directors to hold office until the next annual meeting of stockholders and until their successors are elected and qualify. Subject to any preferential rights of any outstanding series of preferred stock and the provisions of our charter regarding the restrictions on ownership and transfer of our stock, the holders of shares of our common stock are entitled to such distributions as may be authorized from time to time by our board of directors out of legally available funds and declared by us and, upon liquidation, are entitled to receive all assets available for distribution to stockholders. All shares of our common stock issued in the offering will be fully paid and nonassessable shares of common stock. Holders of shares of our common stock will not have preemptive rights, which means that they will not have an option to purchase any new shares of common stock that we issue, or preference, conversion, exchange, sinking fund or redemption rights. Holders of shares of our common stock will not have appraisal rights, unless our board of directors determines that appraisal rights apply, with respect to all or any classes or series of our common stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise such rights. Stockholders are not liable for our acts or obligations.

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We will not issue certificates for shares of our common stock. Shares of our common stock will be held in "uncertificated" form, which will eliminate the physical handling and safekeeping responsibilities inherent in owning transferable share certificates and eliminate the need to return a duly executed share certificate to effect a transfer. SS&C Technologies acts as our registrar and as the transfer agent for shares of our common stock. Transfers can be effected by contacting the transfer agent at:

Jones Lang LaSalle Income Property Trust, Inc.

c/o SS&C GIDS, Inc.

P.O. Box 219165

Kansas City, MO 64121-9165

(855) 652-0277

*Class A Shares*

Each Class A share issued in the primary offering is subject to a selling commission of up to 3.0% of the net asset value ("NAV") per Class A share on the date of purchase. In addition, we pay our dealer manager a dealer manager fee that accrues daily in an amount equal to up to 1/365th of 0.85% of the amount of our NAV for the Class A shares for such day on a continuous basis from year to year, subject to certain limitations. Each Class A share sold in our offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the completion of the primary portion of our offering in which we, with the assistance of our dealer manager, determine that total underwriting compensation paid with respect to our offering equals 10% of the gross proceeds from the primary portion of our offering.

*Class M Shares*

No selling commissions are paid for sales of any Class M shares. We pay our dealer manager a dealer manager fee that accrues daily in an amount equal to up to 1/365th of 0.30% of the amount of our NAV for the Class M shares for such day on a continuous basis from year to year, subject to certain limitations. Class M shares are available for purchase in our offering only (1) through fee-based programs, also known as wrap accounts, of investment dealers, (2) through participating broker-dealers that have alternative fee arrangements with their clients, (3) through certain registered investment advisers, (4) through bank trust departments who charge fiduciary fees on the shares or any other organization or person authorized to act in a fiduciary capacity for its clients or customers for a fee, (5) by endowments, foundations, pension funds and other institutional investors or (6) by our executive officers and directors and their immediate family members, as well as officers and employees of our advisor, our sponsor or other affiliates and their immediate family members, and, if approved by our board of directors, joint venture partners, consultants and other service providers. Each Class M share sold in our offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the completion of the primary portion of our offering in which we, with the assistance of our dealer manager, determine that total underwriting compensation

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paid with respect to our offering equals 10% of the gross proceeds from the primary portion of our offering.

*Class A-I Shares*

Each Class A-I share issued in the primary offering is subject to a selling commission of up to 1.5% of the NAV per Class A-I share on the date of purchase. In addition, we pay our dealer manager a dealer manager fee that accrues daily in an amount equal to up to 1/365th of 0.30% of the amount of our NAV for the Class A-I shares for such day on a continuous basis from year to year, subject to certain limitations. Investors in Class A-I shares must purchase the minimum investment amount of at least $1,000,000 in shares, provided that the minimum initial investment amount may be reduced in the discretion of our dealer manager and by our advisor with respect to investments by our executive officers and directors and their immediate family members and officers and employees of our advisor, our sponsor or other affiliates. Each Class A-I share sold in our offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the completion of the primary portion of our offering in which we, with the assistance of our dealer manager, determine that total underwriting compensation paid with respect to our offering equals 10% of the gross proceeds from the primary portion of our offering.

*Class M-I Shares*

No selling commissions or dealer manager fees are paid in connection with the sale of any Class M-I shares. Class M-I shares are available for purchase in our offering only (1) through fee-based programs, also known as wrap accounts, of investment dealers, (2) through participating broker-dealers that have alternative fee arrangements with their clients, (3) through certain registered investment advisers, (4) through bank trust departments who charge fiduciary fees on the shares or any other organization or person authorized to act in a fiduciary capacity for its clients or customers for a fee, (5) by endowments, foundations, pension funds and other institutional investors or (6) by our executive officers and directors and their immediate family members, as well as officers and employees of our advisor, our sponsor or other affiliates and their immediate family members, and, if approved by our board of directors or our advisor, joint venture partners, consultants and other service providers. Investors in Class M-I shares must purchase the minimum investment amount of at least $1,000,000 in shares, provided that the minimum initial investment amount may be reduced in the discretion of our dealer manager and by our advisor with respect to investments by our executive officers and directors and their immediate family members and officers and employees of our advisor, our sponsor or other affiliates.

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*Class D Shares*

No Class D shares will be issued in our offering. Each Class D share sold in our private offering is subject to a selling commission of up to 1.0% of the NAV per Class D share on the date of purchase, provided that no selling commissions will be charged with respect to Class D shares sold pursuant to the distribution reinvestment plan. No dealer manager fee is payable with respect to the Class D shares. Class D shares are available for purchase by any investor which satisfies the investor suitability standards established by us and which satisfies the minimum initial investment amount of at least $10,000,000 in Class D shares.

*Rights Upon Liquidation*

In the event of any voluntary or involuntary liquidation, dissolution or winding up of our company, or any distribution of our assets, (i) the holder of each Class A share shall be entitled to be paid, out of our assets that are legally available for distribution, a liquidation preference equal to our NAV for Class A shares divided by the number of Class A shares outstanding, or the NAV per Class A share, (ii) the holder of each Class M share shall be entitled to be paid, out of our assets that are legally available for distribution, a liquidation preference equal to the NAV for Class M shares divided by the number of Class M shares outstanding, or the NAV per Class M share, (iii) the holder of each Class D share shall be entitled to be paid, out of our assets that are legally available for distribution, a liquidation preference equal to our NAV for Class D shares divided by the number of Class D shares outstanding, or the NAV per Class D share, (iv) the holder of each Class A-I share shall be entitled to be paid, out of our assets that are legally available for distribution, a liquidation preference equal to our NAV for Class A-I shares divided by the number of Class A-I shares outstanding, or the NAV per Class A-I share, and (v) the holder of each Class M-I share shall be entitled to be paid, out of our assets that are legally available for distribution, a liquidation preference equal to our NAV for Class M-I shares divided by the number of Class M-I shares outstanding, or the NAV per Class M-I share. If upon the voluntary or involuntary liquidation, dissolution or winding up of our company, our available assets, or proceeds thereof, distributable among our stockholders are insufficient to pay these liquidation preferences, then such assets, or the proceeds thereof, will be distributed among the holders of each of share class ratably in the same proportion as the respective amounts that would be payable on such share class if all amounts payable thereon were paid in full.

*Elective Conversion of Stock*

If a holder of Class A, Class A-I, or Class M shares has a change in circumstances (including for example a change in broker-dealer, financial advisor, or type of account in which the shares are held, or availability of a lower fee share class) and, in each case, satisfies the eligibility requirements to hold either Class A-I, Class M, or Class M-I shares, such holder may convert Class A, Class A-I, or Class M shares into an equivalent NAV amount of Class A-I, Class M, or Class M-I shares.

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**Preferred Stock**

Our charter authorizes our board of directors, without stockholder approval, to classify and reclassify any unissued shares of our common stock and preferred stock into other classes or series of stock. Prior to issuance of shares of each class or series, the board of directors is required by the Maryland General Corporation Law and by our charter to set, subject to our charter restrictions on transfer of our stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series. Thus, the board of directors could authorize the issuance of shares of common stock or preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. Our board of directors has no present plans to issue preferred stock, but may do so at any time in the future without stockholder approval. The issuance of preferred stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel. Our board of directors has passed a resolution that no preferred stock will be issued that has voting rights greater than any class of common stock, except that it may allow for the election of no more than three directors by the holders of preferred stock, provided, however, that a majority of directors shall be elected by the common stockholders.

**Meetings, Special Voting Requirements and Access to Records**

An annual meeting of the stockholders will be held each year at our principal executive office or such other location convenient to stockholders on a specific date which will be at least 30 days after delivery of our annual report. Special meetings of stockholders may be called upon the request of a majority of the directors, a majority of the independent directors, the chairman of the board, the chief executive officer or the president and must be called by the secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast at least 10% of the votes entitled to be cast on such matter at the meeting. The presence either in person or by proxy of stockholders entitled to cast at least 50% of the votes entitled to be cast at the meeting on any matter will constitute a quorum. Generally, the affirmative vote of a majority of all votes cast is necessary to take stockholder action, except as described in the next paragraph and except that the affirmative vote of a majority of the shares entitled to vote and represented in person or by proxy at a meeting at which a quorum is present is required to elect a director.

Under the mandatory provisions of Maryland General Corporation Law, stockholders are not entitled to vote to cause the company to dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business unless such matters are first declared advisable by the board of directors. Even if declared advisable by the board of directors, a Maryland corporation generally cannot perform any such action unless the action is approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for

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approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter provides for approval of these matters by the affirmative vote of stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Under Maryland General Corporation Law, stockholder approval is not required for certain mergers and transfers of all or substantially all of a corporation's assets. Such transactions include (1) mergers with a 90% or more owned subsidiary in which the charter is not amended and stockholder contract rights do not change, (2) mergers in which the corporation is the successor entity and the terms of its stock do not change, its charter is not otherwise amended and the number of shares of stock of any class or series outstanding immediately after the merger becomes effective does not increase by more than 20% of the number of shares of the class or series outstanding immediately before the merger becomes effective and (3) transfers of all or substantially all of the corporation's assets to a wholly owned subsidiary or by mortgage or pledge.

The advisory agreement is approved annually by our board of directors including a majority of the independent directors. While the stockholders do not have the ability to vote to replace our advisor or to select its replacements, stockholders do have the ability, by the affirmative vote of a majority of the votes entitled to be cast generally in the election of directors, to remove a director from our board of directors.

Under Maryland General Corporation Law, any stockholder and any designated representative will be permitted access to the following records: our charter, our bylaws, the minutes of the proceedings of our stockholders, our annual statements of affairs and voting trust agreements deposited with us. We will make any of these requested documents available at our principal office within seven days after receipt of a request; provided, however, that we will have up to 20 days to prepare and have available on file for inspection and copying certain requested statements of stock and securities issued. A requesting stockholder may inspect and copy any of these documents for a reasonable charge, upon reasonable notice and during normal business hours. In addition, we may require the stockholder to execute a confidentiality agreement prior to reviewing certain other corporate records relating to our proposed and existing investments. Inspection of our records by the office or agency administering the securities laws of a jurisdiction will be provided upon reasonable notice and during normal business hours. An alphabetical list of the names, addresses and telephone numbers of our stockholders, along with the number of shares of our stock held by each of them, will be maintained as part of our books and records and will be available for inspection by any stockholder or the stockholder's designated agent at our office. The stockholder list will be updated at least quarterly to reflect changes in the information contained therein. A copy of the list will be mailed to any stockholder who requests the list within 10 days of the receipt of the request. A stockholder may request a copy of the stockholder list in connection with matters relating to voting rights and the exercise of stockholder rights under federal proxy laws. A stockholder requesting a list will be required to pay reasonable costs of postage and duplication. We have the right to request that a requesting stockholder represent to us that the list will not be used to pursue commercial interests unrelated to the stockholder's interest in us. In addition to the foregoing, stockholders have rights under Rule 14a-7 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which provides that, upon the request of investors and the payment of the expenses of the distribution, we are

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required to distribute specific materials to stockholders in the context of the solicitation of proxies for voting on matters presented to stockholders or, at our option, provide requesting stockholders with a copy of the list of stockholders so that the requesting stockholders may make the distribution of proxies themselves. If a proper request for the stockholder list is not honored, then the requesting stockholder will be entitled to recover certain costs, including attorneys' fees, incurred in compelling the production of the list as well as actual damages suffered by reason of the refusal or failure to produce the list.

**Restriction on Ownership and Transfer of Shares of Capital Stock**

For us to qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes, no more than 50% in value of the outstanding shares of our stock may be owned, directly or indirectly through the application of certain attribution rules under the Internal Revenue Code of 1986, as amended (the "Code"), by any five or fewer individuals, as defined in the Code to include specified entities, during the last half of any taxable year. In addition, the outstanding shares of our stock must be owned by 100 or more persons independent of us and each other during at least 335 days of a 12-month taxable year or during a proportionate part of a shorter taxable year. These ownership tests do not apply in our first taxable year for which we elect to be taxed as a REIT. In addition, we must meet requirements regarding the nature of our gross income to qualify as a REIT. One of these requirements is that at least 75% of our gross income for each calendar year must consist of specified types of income, such as rents from real property and certain income from other real property investments. The rents received by us or our operating partnership from any tenant will not qualify as rents from real property, which could result in our loss of REIT status, if we own, actually or constructively within the meaning of certain provisions of the Code, 10% or more of the ownership interests in that tenant. To assist us in preserving our status as a REIT, our charter contains limitations on the ownership and transfer of shares of common stock which prohibit: (1) any person or entity from owning or acquiring, directly or indirectly, more than 9.8% of the value of our then outstanding capital stock or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock; and (2) any transfer of or other event or transaction with respect to shares of capital stock that would result in the beneficial ownership of our outstanding shares of capital stock by fewer than 100 persons. In addition, our charter prohibits any transfer of, or other event with respect to, shares of our capital stock that would (1) result in us being "closely held" within the meaning of Section 856(h) of the Code, (2) cause us to own, actually or constructively, 9.8% or more of the ownership interests in a tenant of our real property or the real property of our operating partnership or any of our respective direct or indirect subsidiaries or (3) otherwise cause us to fail to qualify as a REIT.

Our charter provides that the shares of our capital stock that, if transferred, would: (1) result in a violation of a 9.8% ownership limit; (2) result in us being "closely held" within the meaning of Section 856(h) of the Code; (3) cause us to own 9.8% or more of the ownership interests in a tenant of our real property or the real property of our operating partnership any of our respective direct or indirect subsidiaries; or (4) otherwise cause us to fail to qualify as a REIT, will be transferred automatically to a trust for the benefit of a charitable beneficiary effective as of the close of business on the business day before the purported transfer of such shares of our capital stock. We will designate a trustee of the share

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trust that will not be affiliated with us or the purported transferee or record holder. We will also name a charitable organization as beneficiary of the share trust. The trustee will receive all dividends or other distributions on the shares of our capital stock in the share trust and will hold such dividends or other distributions in trust for the benefit of the beneficiary. The trustee also will vote the shares of capital stock in the share trust and, subject to Maryland law, will have the authority (1) to rescind as void any vote cast by the intended transferee prior to our discovery that the shares have been transferred to the share trust and (2) to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast the vote. The intended transferee will acquire no rights in such shares of capital stock, unless, in the case of a transfer that would cause a violation of the 9.8% ownership limit, the transfer is exempted by the board of directors from the ownership limit (prospectively or retroactively) based upon receipt of information (including certain representations and undertakings from the intended transferee) establishing that such transfer would not violate the provisions of the Code for our qualification as a REIT. In addition, our charter provides that any transfer of shares of our capital stock that would result in shares of our capital stock being beneficially owned by fewer than 100 persons will be null and void and the intended transferee will acquire no rights in such shares of our capital stock.

The trustee will transfer the shares of our capital stock to a person whose ownership of shares of our capital stock will not violate the ownership limits. The transfer will be within 20 days after the trustee receives notice from us that shares of our capital stock have been transferred to the share trust or the date we determine that a purported transfer of shares of stock has occurred. Upon any such transfer, the purported transferee or holder will receive the lesser of (1) the price paid by the purported transferee or holder for the shares or, if the purported transferee or holder did not give value for the shares in connection with the event causing the shares to be transferred to the share trust (*e.g.*, a gift, devise or other similar transaction), the market price of the shares on the day of the event causing the shares to be transferred to the share trust and (2) the price received by the trustee from the sale or other disposition of the shares. The trustee may reduce the amount payable to the purported transferee or holder by the amount of dividends and other distributions which have been paid to the purported transferee or holder and are owed by the purported transferee or holder to the trustee. The charitable beneficiary will receive any excess amounts. If, prior to our discovery that shares of our capital stock have been transferred to the share trust, the shares are sold by the purported transferee or holder, then (1) the shares will be deemed to have been sold on behalf of the share trust and (2) to the extent that the purported transferee or holder received an amount for the shares that exceeds the amount such purported transferee or holder was entitled to receive, the excess must be paid to the trustee upon demand.

Any person who acquires shares of our capital stock in violation of the foregoing restrictions or who would have owned shares of our capital stock that were transferred to any such share trust is required to give written notice to us of such event promptly, and any person who proposes or attempts to transfer or receive shares of our capital stock subject to such limitations is required to give us 15 days prior written notice. In both cases, such persons must provide to us such other information as we may request to determine the effect, if any, of such event on our status as a REIT. The foregoing restrictions will

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continue to apply until the board of directors determines it is no longer in our best interest to continue to qualify as a REIT or that compliance is no longer required for REIT qualification.

The ownership limits do not apply to a person or persons that the board of directors exempts (prospectively or retroactively) from the ownership limit upon the receipt of certain representations and undertakings and other appropriate assurances that our qualification as a REIT is not jeopardized. Any person who owns more than 5% (or such lower percentage applicable under the regulations promulgated by the U.S. Treasury Department, or the Treasury Regulations) of the outstanding shares of our capital stock during any taxable year will be asked to deliver a statement or affidavit setting forth the number of shares of our capital stock beneficially owned.

**Distributions**

We intend to declare and pay distributions on a quarterly basis, subject to applicable law. In connection with a distribution to our stockholders, our board of directors will approve a quarterly distribution for each share of each class of our common stock. For purposes of calculating our NAV to account for any declared distributions, our advisor will accrue as our liability on the day after the record date (the distribution adjustment date) the amount of the declared distributions. Distributions will be payable only to stockholders of record at the close of business on the business day immediately preceding the distribution adjustment date.

Distributions will be made on all classes of our common stock at the same time. The per share amount of distributions on each class of shares will likely differ because of different allocations of class-specific expenses. We expect to use the record share method of determining the per share amount of distributions on each share class, although our board of directors may choose any other method. The record share method is one of several distribution calculation methods for multiple-class funds recommended, but not required, by the American Institute of Certified Public Accountants (AICPA). Under this method, the amount to be distributed on our common stock will be increased by the sum of all class-specific expenses accrued for such period. Such amount will be divided by the number of share of our common stock outstanding at the close of business on the record date. Such per share amount will be reduced for each class of common stock by the per share amount of any class-specific expenses allocable to such class.

We are required to pay distributions sufficient to satisfy the requirements for qualification as a REIT for federal income tax purposes. Generally, income we distribute to our stockholders will not be taxable to us under the Code if we qualify to be taxed as a REIT. Distributions will be authorized at the discretion of our board of directors, in accordance with our earnings, cash flow and general financial condition. Our board of directors' discretion will be directed, in substantial part, by its obligation to cause us to comply with the REIT requirements. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period and may be made in advance of actual receipt of funds in an attempt to pay relatively

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uniform distributions. We are authorized to borrow money, issue new securities or sell assets to pay distributions. There are no restrictions on the ability of our operating partnership to transfer funds to us.

We are not prohibited from distributing our own securities in lieu of making cash distributions to stockholders, provided that the securities distributed to stockholders are readily marketable. The receipt of marketable securities in lieu of cash distributions may cause stockholders to incur transaction expenses in liquidating the securities. We do not have any current intention to list the shares of our common stock on a national securities exchange, nor is it expected that a public market for the shares of common stock will develop.

Generally, our policy will be to pay distributions from cash flow from operations. However, we may pay distributions from any other source, including, without limitation, the sale of assets, borrowings, the net proceeds from our offering, the net proceeds from the issuance of additional securities and the deferral of fees and expense reimbursements by our advisor in its sole discretion. If we fund distributions from financings or the net proceeds from our offering, we will have less funds available for investment in properties, real estate-related assets and other investments. In addition, in each previous year in which we paid distributions, our total distributions for the year exceeded our U.S. generally accepted accounting principles ("GAAP") earnings due to the fact that GAAP earnings are reduced by non-cash charges for depreciation and amortization expenses and impairment of real estate. For the same reasons, we anticipate that we will pay distributions in excess of our earnings in the future. We will make certain payments to our advisor for services provided to us in connection with the selection, acquisition and management of our assets and certain administrative services, some of which are based on performance. Such payments, including advisory fees and expense reimbursements, will reduce the amount of cash available for distributions. Payments to fulfill repurchase requests under our share repurchase plan will also reduce funds available for distribution to remaining stockholders. However, our board of directors may modify or suspend our share repurchase plan if it deems such modification or suspension to be in the best interest of our stockholders, which may include the preservation of funds to pay distributions.

**Distribution Reinvestment Plan**

We have adopted a distribution reinvestment plan whereby stockholders (other than investors who reside in Alabama, Idaho, Kansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Vermont and Washington; and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan) will have their cash distributions automatically reinvested in additional shares of our common stock unless they elect to receive their distributions in cash. Investors who reside in Alabama, Idaho, Kansas, Kentucky, Maryland, Massachusetts, Nebraska, New New Jersey, North Carolina, Ohio, Vermont and Washington; and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan will automatically receive their distributions in cash unless they elect to have their cash distributions reinvested in additional shares of our common stock. All such distributions are reinvested in our shares on behalf of the participants on the business day such distribution would have been paid to such stockholder.

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The per share purchase price for shares purchased pursuant to the distribution reinvestment plan is equal to our NAV per share applicable to the class of shares purchased, calculated as of the distribution date. Stockholders do not pay selling commissions when purchasing shares pursuant to the distribution reinvestment plan. Because the dealer manager fee is calculated based on our NAV for Class A, Class A-I and Class M shares, it will reduce the NAV with respect to the shares of each such class, including shares issued under our distribution reinvestment plan. Shares acquired under the distribution reinvestment plan entitle the participant to the same rights and be treated in the same manner as shares of that class purchased in our offering.

We reserve the right to amend any aspect of our distribution reinvestment plan without the consent of our stockholders, provided that notice of any material amendment is sent to participants at least ten days prior to the effective date of that amendment. In addition, we may suspend or terminate the distribution reinvestment plan for any reason at any time upon ten days' prior written notice to participants. A stockholder's participation in the plan will be terminated to the extent that a reinvestment of such stockholder's distributions in our shares would cause the percentage ownership or other limitations contained in our charter to be violated. Participants may terminate their participation in the distribution reinvestment plan with ten days' prior written notice to us.

*Account Statements*

We provide on a quarterly basis to each participant in the distribution reinvestment plan a statement of account describing, as to such participant: (1) the distributions reinvested during the quarter; (2) the number of shares purchased during the quarter; (3) the per share purchase price for such shares; and (4) the total number of shares purchased on behalf of the participant under the plan. On an annual basis, tax information with respect to income earned on shares under the plan for the calendar year is provided to each applicable participant.

*Tax Consequences of Participation*

If a stockholder elects to participate in the distribution reinvestment plan, the stockholder will be treated as receiving, in lieu of the reinvested cash distribution, a distribution of additional shares of the same class of common stock on which the distribution is made. If the stockholder is subject to federal income taxation, the stockholder will be treated for federal income tax purposes as if he or she has received a dividend, to the extent of our current and accumulated earnings and profits, in an amount equal to the fair value on the relevant distribution date of the shares of the class of common stock purchased with the reinvested distributions, and will be taxed on the amount of such distribution as ordinary income (after taking into account up to a 20% deduction for ordinary REIT dividends received by non-corporate U.S. stockholders in taxable years beginning before January 1, 2026) to the extent such distribution is from current or accumulated earnings and profits, unless we have designated all or a portion of the distribution as a capital gain dividend or qualified dividend income, in which event the appropriate portion of the distribution will be treated as long-term capital gain to the extent the distribution does not exceed our current and accumulated earnings and profits.

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**Business Combinations**

Under Maryland General Corporation Law, business combinations between a Maryland corporation and an interested stockholder or the interested stockholder's affiliate are prohibited for five years after the most recent date on which the stockholder becomes an interested stockholder. For this purpose, the term "business combinations" includes mergers, consolidations, share exchanges or, in circumstances specified in the Maryland General Corporation Law, asset transfers and issuances or reclassifications of equity securities. An "interested stockholder" is defined for this purpose as: (1) any person who beneficially owns 10% or more of the voting power of the corporation's outstanding voting stock; or (2) an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation. A person is not an interested stockholder under Maryland General Corporation Law if the board of directors approved in advance the transaction by which he otherwise would have become an interested stockholder. However, in approving the transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors. After the five-year prohibition, any business combination between the corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (1) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation, voting together as a single voting group; and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of stock held by the interested stockholder or its affiliate with whom the business combination is to be effected or held by an affiliate or associate of the interested stockholder, voting together as a single voting group.

These super-majority vote requirements do not apply if the corporation's common stockholders receive a minimum price, as defined under Maryland General Corporation Law, for their shares of common stock in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares of common stock.

None of these provisions of the Maryland General Corporation Law will apply, however, to business combinations that are approved or exempted by the board of directors of the corporation prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the business combination statute, our board of directors has exempted any business combination involving us and any person, provided that such business combination is first approved by a majority of our board of directors, including a majority of our independent directors. Consequently, the five-year prohibition and the super majority vote requirements will not apply to business combinations between us and any person. As a result, any person may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and other provisions of the statute.

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Should our board of directors opt into the business combination statute or otherwise fail to first approve a business combination, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

**Control Share Acquisitions**

The Maryland General Corporation Law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of common stock owned by the acquiror, by officers or by employees who are directors of the corporation are not entitled to vote on the matter. "Control shares" are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or with respect to which the acquiror has the right to vote or to direct the voting of, other than solely by virtue of revocable proxy, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting powers:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one-tenth or more but less than one-third;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• one-third or more but less than a majority; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a majority or more of all voting power.

Control shares do not include shares of stock the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. Except as otherwise specified in the statute, a "control share acquisition" means the acquisition of issued and outstanding control shares. Once a person who has made or proposes to make a control share acquisition has undertaken to pay expenses and has satisfied other required conditions, the person may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares of stock. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. If voting rights are not approved for the control shares at the meeting or if the acquiring person does not deliver an "acquiring person statement" for the control shares as required by the statute, the corporation may redeem any or all of the control shares for their fair value, except for control shares for which voting rights have previously been approved. Fair value is to be determined for this purpose without regard to the absence of voting rights for the control shares, and is to be determined as of the date of the last control share acquisition or of any meeting of stockholders at which the voting rights for control shares are considered and not approved.

If voting rights for control shares are approved at a stockholders' meeting and the acquiror becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares of stock as determined for purposes of these appraisal rights may not be less than the highest price per share paid in the control share acquisition. Some of the limitations and restrictions otherwise applicable to the exercise of dissenters' rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares of stock acquired in a merger or consolidation or share exchange if the corporation is a party to the transaction or to acquisitions approved

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or exempted by the charter or bylaws of the corporation. As permitted by the Maryland General Corporation Law, we have provided in our bylaws that the control share provisions of the Maryland General Corporation Law will not apply to any acquisition by any person of shares of our stock, but the board of directors retains the discretion to change this provision at any time in the future.

**Unsolicited Takeover Statutes**

Subtitle 8 of Title 3 of the Maryland General Corporation Law permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, without a stockholder vote, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a classified board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring a two-thirds stockholder vote for removing a director;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring that the number of directors be fixed only by vote of the board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a majority requirement for the calling of a special meeting of stockholders.

Pursuant to Subtitle 8, we have elected to provide that vacancies on our board of directors be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our charter and bylaws unrelated to Subtitle 8, we vest in the board the exclusive power to fix the number of directors.

**Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws**

Our charter and bylaws and Maryland law contain provisions that may delay, defer or prevent a change of control or other transaction that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders, including the power of our board to issue additional shares of our common stock, the restrictions on ownership and transfer of our shares, advance notice requirements for director nominations and stockholder proposals and the application of the Maryland business combination provisions. Likewise, if the provision in the bylaws opting out of the control share acquisition provisions of the Maryland General Corporation Law were rescinded, these provisions of the Maryland General Corporation Law could have similar anti-takeover effects.

**Restrictions on Roll-Up Transactions**

In accordance with our charter, in connection with any proposed transaction considered a "roll-up transaction" (as defined below) involving us and the issuance of securities of an entity that would be created or would survive after the successful completion of the roll-up transaction, an appraisal of all of our assets shall be obtained from a competent independent appraiser. If the appraisal will be included in a prospectus used to offer the securities of a roll-up entity, the appraisal shall be filed with the Securities and Exchange Commission and the states as an exhibit to the registration statement for the offering. The

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assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed roll-up transaction. The appraisal shall assume an orderly liquidation of the assets over a 12-month period. The terms of the engagement of the independent appraiser shall clearly state that the engagement is for our benefit and the benefit of our stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to stockholders in connection with any proposed roll-up transaction.

A "roll-up transaction" is a transaction involving the acquisition, merger, conversion or consolidation, directly or indirectly, of us and the issuance of securities of another entity, or a roll-up entity, that would be created or would survive after the successful completion of such transaction. The term roll-up transaction does not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a transaction involving securities of our company that have been for at least 12 months listed on a national securities exchange; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a transaction involving our conversion to a corporate, trust, or association form if, as a consequence of the transaction, there will be no significant adverse change in any of the following: common stockholder voting rights; the term of our existence; compensation to our advisor; or our investment objectives.

In connection with a proposed roll-up transaction, the person sponsoring the roll-up transaction must offer to common stockholders who vote "no" on the proposal the choice of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;accepting the securities of a roll-up entity offered in the proposed roll-up transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;one of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)remaining as holders of shares of our common stock and preserving their interests therein on the same terms and conditions as existed previously; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)receiving cash in an amount equal to the stockholder's pro rata share of the appraised value of our net assets.

We are prohibited from participating in any proposed roll-up transaction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that would result in the common stockholders having voting rights in a roll-up entity that are less than those provided in our charter, including rights with respect to the election and removal of directors, annual and special meetings, amendment of our charter and our dissolution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• that includes provisions that would operate to materially impede or frustrate the accumulation of shares by any purchaser of the securities of the roll-up entity, except to the minimum extent necessary to preserve the tax status of the roll-up entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the roll-up entity on the basis of the number of shares held by that investor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in which investor's rights to access of records of the roll-up entity will be less than those provided in the section above entitled "Meetings, Special Voting Requirements and Access to Records;" or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in which any of the costs of the roll-up transaction would be borne by us if the roll-up transaction is rejected by the common stockholders.

**Tender Offers**

Our charter provides that any tender offer made by any person, including any "mini-tender" offer, must comply with the provisions of Regulation 14D of the Exchange Act, including the notice and disclosure requirements. Among other things, the offeror must provide us notice of such tender offer at least ten business days before initiating the tender offer. Any non-complying offeror will be responsible for all of our expenses in connection with that offeror's noncompliance.

**Advance Notice of Director Nominations and New Business**

Our bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors and the proposal of business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of the board of directors or (3) by a stockholder who is a stockholder of record both at the time of giving the advance notice required by the bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with the advance notice procedures of the bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of individuals for election to the board of directors at a special meeting may be made only (1) by or at the direction of the board of directors or (2) provided that the special meeting has been called in accordance with the bylaws for the purpose of electing directors, by a stockholder who is a stockholder of record both at the time of giving the advance notice required by the bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions of the bylaws.

## Exhibit 10.15

**Exhibit 10.15**

**<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**SEVENTH AMENDED AND RESTATED**

**JONES LANG LASALLE INCOME PROPERTY TRUST, INC.** 

**INDEPENDENT DIRECTORS COMPENSATION PLAN**

**<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**AS OF NOVEMBER 8, 2022**

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**SEVENTH AMENDED AND RESTATED**

**JONES LANG LASALLE INCOME PROPERTY TRUST, INC.** 

**INDEPENDENT DIRECTORS COMPENSATION PLAN**

**ARTICLE 1**

**PURPOSE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. *&nbsp;&nbsp;&nbsp;&nbsp;*<u>PURPOSE</u>*.* The purpose of the Plan is to attract, retain and compensate highly-qualified individuals who are not employees of Jones Lang LaSalle Income Property Trust, Inc. or any of its subsidiaries or affiliates for service as members of the Board by providing them with competitive compensation. The Plan is a sub-plan of the Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. *&nbsp;&nbsp;&nbsp;&nbsp;*<u>ELIGIBILITY</u>. Independent Directors of the Company who are Eligible Participants, as defined below, shall automatically be participants in the Plan.

**ARTICLE 2**

**DEFINITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;2.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>DEFINITIONS</u>*.* Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Incentive Plan. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Amended and Restated Plan</u>" means the Sixth Amended and Restated Jones Lang LaSalle Income Property Trust, Inc. Independent Directors Compensation Plan, approved by the Board on November 9, 2021.

"<u>Audit Committee</u>" means the Audit Committee of the Board.

"<u>Base Annual Retainer</u>" means the annual retainer (excluding Supplemental Annual Retainers and expenses) payable by the Company to an Independent Director pursuant to Section 5.1 hereof for service as an Independent Director, as such amount may be changed from time to time.

"<u>Board</u>" means the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Cash Base Annual Retainer</u>" has the meaning set forth in Section 5.1 of the Plan.

"<u>Charter</u>" means the articles of incorporation of the Company, as such articles of incorporation may be amended and supplemented from time to time.

"<u>Company</u>" means Jones Lang LaSalle Income Property Trust, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Effective Date</u>" of the Plan has the meaning set forth in Section 8.4 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Eligible Participant</u>" means any person who is an Independent Director on the Effective Date or becomes an Independent Director while this Plan is in effect; except that during any period a director is prohibited from participating in the Plan by his or her employer or otherwise waives participation in the Plan, such director shall not be an Eligible Participant.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Incentive Plan</u>" means the Jones Lang LaSalle Income Property Trust, Inc. 2012 Incentive Plan, as amended or replaced from time to time.

"<u>Independent Director</u>" means a director of the Company who is not a common law employee of the Company and who meets the additional requirements set forth for an "independent director" in the Charter.

"<u>Nominating, Governance and Compensation Committee</u>" means the Nominating, Governance and Compensation Committee of the Board.

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"<u>Plan</u>" means this Seventh Amended and Restated Jones Lang LaSalle Income Property Trust, Inc. Independent Directors Compensation Plan, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Plan Year(s)</u>" means a calendar year.

"<u>Stock</u>" means the $0.01 par value Class M, Class A, Class A-I, Class M-I and Class D common stock of the Company and such other securities of the Company as may be substituted for such class of Stock pursuant to Article 13 of the Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;"<u>Stock Base Annual Retainer</u>" has the meaning set forth in Section 5.1 of the Plan.

"<u>Supplemental Annual Retainer</u>" means the annual retainer (excluding the Base Annual Retainer and expenses) payable by the Company to an Independent Director pursuant to Section 5.2 hereof for service as the chair or a member of the Audit Committee, chair or a member of the Nominating, Governance and Compensation Committee, or as lead Independent Director, as such amount may be changed from time to time.

**ARTICLE 3**

**ADMINISTRATION**

&nbsp;&nbsp;&nbsp;&nbsp;3.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>ADMINISTRATION</u>*.* The Plan shall be administered by the Board. Subject to the provisions of the Plan, the Board shall be authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The Board's interpretation of the Plan, and all actions taken and determinations made by the Board pursuant to the powers vested in it hereunder, shall be conclusive and binding upon all parties concerned, including the Company, its stockholders and persons granted awards under the Plan. The Board may appoint a plan administrator to carry out the ministerial functions of the Plan, but the administrator shall have no other authority or powers of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.&nbsp;&nbsp;&nbsp;&nbsp;<u>RELIANCE</u>. In administering the Plan, the Board may rely upon any information furnished by the Company, its public accountants and other experts. No individual will have personal liability by reason of anything done or omitted to be done by the Company or the Board in connection with the Plan. This limitation of liability shall not be exclusive of any other limitation of liability to which any such person may be entitled under the Company's certificate of incorporation or otherwise.

**ARTICLE 4**

**SOURCE OF SHARES**

&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;&nbsp;&nbsp;<u>SOURCE OF SHARES</u>. The shares of Stock or other equity that may be issued pursuant to the Plan shall be issued under the Incentive Plan, subject to all of the terms and conditions of the Incentive Plan. The terms contained in the Incentive Plan are incorporated into and made a part of this Plan with respect to shares of Stock or other equity granted pursuant hereto and any such grant shall be governed by and construed in accordance with the Incentive Plan. In the event of any actual or alleged conflict between the provisions of the Incentive Plan and the provisions of this Plan, the provisions of the Incentive Plan shall be controlling and determinative. This Plan does not constitute a separate source of Shares for the grant of awards of Stock described herein.

**ARTICLE 5**

**RETAINERS AND EXPENSES**

&nbsp;&nbsp;&nbsp;&nbsp;5.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>BASE ANNUAL RETAINER</u>*.* Each Eligible Participant shall be paid a Base Annual Retainer for service as an Independent Director during each Plan Year. The amount of the Base Annual Retainer shall be established from time to time by the Board. Until changed by the Board, the Base Annual Retainer for a full Plan Year shall be $175,000.00 (which Base Annual Retainer includes fees for attendance at meetings of the Board or its committees), 40% of which shall be payable in Stock in accordance with Section 6.2 below (the "<u>Stock Base Annual Retainer</u>") and 60% of which shall be payable in cash in approximately equal quarterly installments in advance, beginning at the start of a Plan Year (the "<u>Cash Base Annual Retainer</u>"). A pro rata Base Annual Retainer will be paid to any person

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who becomes an Eligible Participant on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as an Independent Director during the Plan Year. Payment of such prorated Cash Base Annual Retainer shall begin on the date that the person first becomes an Eligible Participant, and shall resume on a quarterly basis thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.&nbsp;&nbsp;&nbsp;&nbsp;<u>SUPPLEMENTAL ANNUAL RETAINERS</u>*.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The chairperson of the Audit Committee shall be paid a Supplemental Annual Retainer for his or her service as such chairperson during a Plan Year, payable quarterly at the same times as installments of the Cash Base Annual Retainer. The amount of the Supplemental Annual Retainer for the chairperson of the Audit Committee shall be established from time to time by the Board. Until changed by the Board, the Supplemental Annual Retainer for a full Plan Year for the chairperson of the Audit Committee shall be $15,000.00. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes the chairperson of the Audit Committee on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as a chairperson of the Audit Committee during the Plan Year. Payment of such pro-rated Supplemental Annual Retainer shall begin on the date that the person first becomes chairperson of the Audit Committee and shall resume on a quarterly basis thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Each member of the Audit Committee, other than the chairperson of the Audit Committee whose supplemental retainer is set forth above, shall be paid a Supplemental Annual Retainer for his or her service as a member of the Audit Committee during a Plan Year, payable quarterly at the same times as installments of the Cash Base Annual Retainer. The amount of the Supplemental Annual Retainer for a member of the Audit Committee shall be established from time to time by the Board. Until changed by the Board, the Supplemental Annual Retainer for a full Plan Year for a member of the Audit Committee, other than the chairperson of the Audit Committee, shall be $5,000.00. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes a member of the Audit Committee on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as a member of the Audit Committee during the Plan Year. Payment of such pro-rated Supplemental Annual Retainer shall begin on the date that the person first becomes a member of the Audit Committee, and shall resume on a quarterly basis thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;The director elected as the lead Independent Director shall be paid a Supplemental Annual Retainer for his or her service as such lead Independent Director during a Plan Year, payable quarterly at the same times as installments of the Cash Base Annual Retainer. The amount of the Supplemental Annual Retainer for the lead Independent Director shall be established from time to time by the Board. Until changed by the Board, the Supplemental Annual Retainer for a full Plan Year for the lead Independent Director shall be $15,000.00. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes the lead Independent Director on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as lead Independent Director during the Plan Year. Payment of such pro-rated Supplemental Annual Retainer shall begin on the date that the person first becomes the lead Independent Director, and shall resume on a quarterly basis thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The chairperson of the Nominating, Governance and Compensation Committee shall be paid a Supplemental Annual Retainer for his or her service as such chairperson during a Plan Year, payable quarterly at the same times as installments of the Cash Base Annual Retainer. The amount of the Supplemental Annual Retainer for the chairperson of the Nominating, Governance and Compensation Committee shall be established from time to time by the Board. Until changed by the Board, the Supplemental Annual Retainer for a full Plan Year for the chairperson of the Nominating, Governance and Compensation Committee shall be $10,000.00. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes the chairperson of the Nominating, Governance and Compensation Committee on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as a chairperson of the Nominating, Governance and Compensation Committee during the Plan Year. Payment of such pro-rated Supplemental Annual Retainer shall begin on the date that the person first becomes chairperson of the Nominating Governance and Compensation Committee, and shall resume on a quarterly basis thereafter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;Each member of the Nominating, Governance and Compensation Committee, other than the chairperson of the Nominating, Governance and Compensation Committee whose supplemental retainer is set forth above, shall be paid a Supplemental Annual Retainer for his or her service as a member of the Nominating, Governance and Compensation Committee during a Plan Year, payable quarterly at the same times as installments of the Cash Base Annual Retainer. The amount of the Supplemental Annual Retainer for a member of the Nominating, Governance and Compensation Committee shall be established from time to time by the Board. Until changed by the Board, the Supplemental Annual Retainer for a full Plan Year for a member of the Nominating, Governance and Compensation Committee, other than the chairperson of the Nominating, Governance and Compensation Committee, shall be $2,500.00. A pro rata Supplemental Annual Retainer will be paid to any Eligible Participant who becomes a member of the Nominating, Governance and Compensation Committee on a date other than the beginning of a Plan Year, based on the number of full months he or she serves as a member of the Nominating, Governance and Compensation Committee during the Plan Year. Payment of such pro-rated Supplemental Annual Retainer shall begin on the date that the person first becomes a member of the Nominating, Governance and Compensation Committee, and shall resume on a quarterly basis thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;5.3.&nbsp;&nbsp;&nbsp;&nbsp;<u>TRAVEL EXPENSE REIMBURSEMENT</u>. All Eligible Participants shall be reimbursed for reasonable travel expenses in connection with attendance at meetings of the Board and its committees, or other Company functions at which the Chief Executive Officer or Chair of the Board requests the Independent Director to participate. Notwithstanding the foregoing, the Company's reimbursement obligations pursuant to this Section 5.3 shall be limited to expenses incurred during such director's service as an Independent Director. Such payments will be made within 30 days after delivery of the Independent Director's written requests for payment, accompanied by such evidence of expenses incurred as the Company may reasonably require, but in no event later than the last day of the Independent Director's tax year following the tax year in which the expense was incurred. The amount reimbursable in any one tax year shall not affect the amount reimbursable in any other tax year. Independent Directors' right to reimbursement pursuant to this Section 5.3 shall not be subject to liquidation or exchange for another benefit.

**ARTICLE 6**

**EQUITY COMPENSATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>INITIAL STOCK GRANT</u>. Subject to share availability under the Incentive Plan and the terms of this Section 6.1, on the first date an Independent Director is initially elected or appointed to the Board, he or she shall receive an award of fully-vested shares of Stock equal to 40% of the Base Annual Retainer (or $70,000.00), valued based on the net asset value per share on the grant date (which shares of Stock shall be Class M-I, or such other class of Stock as may be determined by the Board, and subject to the one-year holding period applicable to all Stock). Such shares of Stock shall be subject to the terms and conditions described herein and in the Incentive Plan and shall be in addition to any otherwise applicable annual grant of Stock granted to such Independent Director under Section 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;&nbsp;&nbsp;&nbsp;STOCK BASE ANNUAL RETAINER. Subject to share availability under the Incentive Plan, each Independent Director will receive fully-vested shares of Stock equal to the Stock Base Annual Retainer (or $70,000.00, subject to proration pursuant to Section 5.1), valued based on the net asset value per share on the grant date (which shares of Stock shall be Class M-I, or such other class of Stock as may be determined by the Board, and subject to the one-year holding period applicable to all Stock) on March 31 of each year, subject to the Independent Director's nomination by the Board for reelection as an Independent Director at the upcoming annual meeting of stockholders.

**ARTICLE 7**

**AMENDMENT, MODIFICATION AND TERMINATION**

&nbsp;&nbsp;&nbsp;&nbsp;7.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>AMENDMENT, MODIFICATION AND TERMINATION</u>. The Board may, at any time and from time to time, amend, modify or terminate the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board, require stockholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of a securities exchange on which the Stock is listed or traded, then such amendment shall

------

be subject to stockholder approval; and provided further, that the Board may condition any other amendment or modification on the approval of stockholders of the Company for any reason.

**ARTICLE 8**

**GENERAL PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1.&nbsp;&nbsp;&nbsp;&nbsp;<u>ADJUSTMENTS</u>. The adjustment provisions of the Incentive Plan shall apply with respect to equity awards granted pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;<u>DURATION OF THE PLAN</u>. The Plan shall remain in effect until terminated by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;8.3.&nbsp;&nbsp;&nbsp;&nbsp;<u>EXPENSES OF THE PLAN</u>*.* The expenses of administering the Plan shall be borne by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;8.4.&nbsp;&nbsp;&nbsp;&nbsp;<u>EFFECTIVE DATE</u>*.* This Plan will become effective on January 1, 2023 and replace the Amended and Restated Plan, which will expire as of that date (the "<u>Effective Date</u>").

\*\*\*\*\*

&nbsp;&nbsp;&nbsp;&nbsp;The foregoing is hereby acknowledged as being the Jones Lang LaSalle Income Property Trust, Inc. Independent Directors Compensation Plan as adopted by the Board on November 8, 2022.

JONES LANG LASALLE INCOME PROPERTY TRUST, INC.

By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ C. Allan Swaringen</u> 

Name:&nbsp;&nbsp;&nbsp;&nbsp;C. Allan Swaringen

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Chief Executive Officer

## Exhibit 21.1

**Exhibit 21.1**

---

| | | |
|:---|:---|:---|
| **Jones Lang LaSalle Income Property Trust, Inc. Subsidiaries as of March 27, 2023** | **State or Jurisdiction or Incorporation** | **Percent Owned** |
| &nbsp;&nbsp;&nbsp;&nbsp;Holding San Marcos LLC | Delaware | 78.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT San Marcos LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 140 Park Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Chestnut Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aquinas Realty Investors II, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aquinas Holdings II, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aquinas 2021 Chestnut Street, General Partner, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aquinas 2021 Chestnut Street, LP | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;JLLIPT Holdings GP | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;JLLIPT Holdings LP | Delaware | 99.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLL Exchange TRS, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Ardenwood Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Ardenwood I, DST | Delaware | 99.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Ardenwood II, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Diversified II, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Diversified II Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Friendship Distribution Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Friendship Distribution Center, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Johns Creek Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Johns Creek, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Johns Creek, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Mason Mill Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Mason Mill, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Milford Crossing Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Milford Crossing, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Penfield Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Penfield, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX San Marcos Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX San Marcos, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX SJC Medical Office Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX SJC Medical Office, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Villas at Legacy Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Villas at Legacy, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Montecito Marketplace Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Montecito Marketplace, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Whitestown Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Whitestown, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Louisville Airport Distribution Center Master Tenant | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Louisville Airport Distribution Center DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX The Preserve at the Meadows Master | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX The Preserve at the Meadows DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Rockwell Apartments Master Tenant | Delaware | 100.00 |

---

------

---

| | | |
|:---|:---|:---|
| **Jones Lang LaSalle Income Property Trust, Inc. Subsidiaries as of March 27, 2023** | **State or Jurisdiction or Incorporation** | **Percent Owned** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Rockwell Apartments DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Stony Point Master Tenant LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Stony Point DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Reserve at Venice, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX Reserve at Venice Master Tenant LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX West Phoenix Distribution Center, DST | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JLLX West Phoenix Distribution Center Master Tenant, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;ELPF Howell Mill LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;ELPF Kendall LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;ELPF Lafayette Subsidiary, Inc. | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holding Lafayette LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELPF Lafayette Member LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ELPF Lafayette LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;ELPF Norfleet LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 1225 Michael Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 1300-1350 Michael Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 170 Park Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 2212 Vermont Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 27th Avenue SE, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 3324 Trinity Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 47 National Way Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT 47 National Way, LP | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 4900 Boardwalk Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT 5 National Way Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT 5 National Way, LP | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Allan Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Ash Meadows Lane, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT ASP Valencia, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Bath Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Belmont Avenue Urban Renewal, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby JV, LLC | Delaware | 95.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby I, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby II, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby III, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby IV, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Bixby V, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Boulder Falls Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Boulder Falls Street JV, LLC | Delaware | 95.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Britannia Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Charles Colton Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Clermont Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Collins Avenue, LLC | Delaware | 100.00 |

---

------

---

| | | |
|:---|:---|:---|
| **Jones Lang LaSalle Income Property Trust, Inc. Subsidiaries as of March 27, 2023** | **State or Jurisdiction or Incorporation** | **Percent Owned** |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Colorado Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Conestoga Parkway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Corporate Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT East Germann Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT East Greenway Parkway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT East Kaahumanu Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Foothill Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Genesee Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Giant Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Grand Lakes GP LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cinco Grand & Fry Retail LP | Texas | 90.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Grand Lakes Retail LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Highway 114, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Hogum Bay Road LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Investors, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Johnson Ferry Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Kingston Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Lake Howell Apartments, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kingston JV Apartments LLC | Delaware | 80.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Lane Parke, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Lewis Mittel, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Loan HoldCo, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Madison Industrial Lane, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT MOB Portfolio I, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Gezon Parkway LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Gilman Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Northeast 82nd Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Primrose Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Roe Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Southwest 7 Highway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Summergate Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LIPT Virginia Station | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Zinfandel Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT NE Alderwood Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT North Dayton Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT North Jasper Drive, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT North Jefferson Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT North Moore Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coppell Properties, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Northport Court, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Northport Loop East, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT NW Buford Highway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT NW Cedar Falls Drive, LLC | Delaware | 100.00 |

---

------

---

| | | |
|:---|:---|:---|
| **Jones Lang LaSalle Income Property Trust, Inc. Subsidiaries as of March 27, 2023** | **State or Jurisdiction or Incorporation** | **Percent Owned** |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Oak Grove, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Ontario Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Orchard Gateway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Osgood Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Otay Mesa Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Presley, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presley Uptown Venture, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT PM, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Reems Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT San Diego, Inc. | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Sanyo Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT SFR Portfolio, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT SFR Portfolio II, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Shepherdsville Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Spokane Street LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Summergate Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT SW Fifth Avenue, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT SW Oak Street, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Sylvan Way, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Thomas Parkway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Touhy McCormick, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Tremington Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NWP Tremington JV LLC | Delaware | 75.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NWP Huntington Owner LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NWP Tremont Owner LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Trinity Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Twin Lakes Member, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Twin Lakes, LP | Delaware | 99.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Valencia Commerceplex, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT West Fountainhead Parkway, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT West Frye Road, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT West Frye Road Phase II, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Whitestone Boulevard, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Winchester Road, Inc. | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;LIPT Woodside Court, LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;MIVPO Member LLC | Delaware | 100.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MIVPO LLC | Delaware | 100.00 |

---

## Exhibit 31.1

**Exhibit 31.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

I, C. Allan Swaringen, certify that:

1. I have reviewed this annual report on Form 10-K of JLL Income Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | March 27, 2023 | /s/&nbsp;&nbsp;&nbsp;&nbsp;C. ALLAN SWARINGEN  |
| | | **C. Allan Swaringen<br>President and Chief Executive Officer** |

---

## Exhibit 31.2

**Exhibit 31.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

I, Gregory A. Falk, certify that:

1. I have reviewed this annual report on Form 10-K of JLL Income Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | March 27, 2023 | /s/&nbsp;&nbsp;&nbsp;&nbsp;GREGORY A. FALK |
| | | **Gregory A. Falk<br>Chief Financial Officer** |

---

## Exhibit 32.1

**Exhibit 32.1** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report of JLL Income Property Trust, Inc. (the "Company") on Form 10-K for the period ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, C. Allan Swaringen, in my capacity as Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/&nbsp;&nbsp;&nbsp;&nbsp;C. ALLAN SWARINGEN |
| **C. Allan Swaringen** |
| **President and Chief Executive Officer** |

---

March 27, 2023

## Exhibit 32.2

**Exhibit 32.2** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report of JLL Income Property Trust, Inc. (the "Company") on Form 10-K for the period ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory A. Falk, in my capacity as Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/&nbsp;&nbsp;&nbsp;&nbsp;GREGORY A. FALK  |
| **Gregory A. Falk** |
| **Chief Financial Officer** |

---

March 27, 2023

## Exhibit 99.1

**Exhibit 99.1**

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Consolidated Financial Statements

December 31, 2022 and 2021

(With Independent Auditors' Report Thereon)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

RH JOINT VENTURES, LLC AND SUBSIDIARIES

**Table of Contents**

---

| | |
|:---|:---|
| | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent Auditors' Report | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Assets, Liabilities and Members' Equity | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Operations | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Changes in Members' Equity | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Cash Flows | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Consolidated Financial Statements | 8 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

**Independent Auditors' Report**

The Members

RH Joint Ventures, LLC:

*Opinion*

We have audited the consolidated financial statements of RH Joint Ventures, LLC and its subsidiaries (the Company), which comprise the consolidated statements of assets, liabilities, and members' equity as of December 31, 2022 and 2021, and the related consolidated statements of operations, changes in members' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

*Basis for Opinion*

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

*Responsibilities of Management for the Consolidated Financial Statements*

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

*Auditors' Responsibilities for the Audit of the Consolidated Financial Statements*

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the consolidated financial statements.

------

In performing an audit in accordance with GAAS, we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exercise professional judgement and maintain professional skepticism throughout the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ KPMG LLP

Austin, Texas

March 1, 2023

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Consolidated Statement of Assets, Liabilities and Members' Equity

December 31, 2022 and 2021

(In thousands)

---

| | | |
|:---|:---|:---|
| **ASSETS** | **2022** | **2021** |
| Real estate investments, at fair value (cost $877,903 and $867,307 in 2022 and 2021, respectively) | $1361990 | $1351773 |
| Cash and cash equivalents | 8677 | 7446 |
| Restricted cash | 11827 | 11805 |
| Securitization certificates, at fair value (amortized cost $50,451 and $46,700 in 2022 and 2021, respectively) | 48889 | 51667 |
| Receivables from related parties | 38 | 54 |
| Other assets | 2131 | 3712 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1433552 | $1426457 |
| **Liabilities and Members' Equity** |  |  |
| Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Securitization, net | $803333 | $796832 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 15703 | 15154 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to related parties | 1038 | 2070 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 820074 | 814056 |
| Commitments and contingencies |  |  |
| Members' equity | 613478 | 612401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' equity | $1433552 | $1426457 |

---

See accompanying notes to consolidated financial statements.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES** 

Consolidated Statements of Operations

Years Ended December 31, 2022 and 2021

(In thousands)

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Revenues |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental revenue | $79531 | $77614 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income | 3753 | 3474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 83284 | 81088 |
| Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 23182 | 22943 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses | 16974 | 18428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | 12263 | 10935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 490 | 500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earn out payment |  | 7500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 1597 | 1379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 54506 | 61685 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income | 28778 | 19403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gain on sales of real estate investments | 320 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (loss) gain on real estate investments | (379) | 322775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (loss) gain on securitization certificates | (6529) | 4980 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in members' equity from operations | $22190 | $347250 |

---

See accompanying notes to consolidated financial statements.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES** 

Consolidated Statements of Changes in Members' Equity

Years Ended December 31, 2022 and 2021

(In thousands)

---

| | | | |
|:---|:---|:---|:---|
| | **GVI RH JV Investor, LLC** | **Amherst SFRP<br>Member 111-G , LLC** | **Total Members'<br>Equity** |
| | **GVI RH JV Investor, LLC** | **Amherst SFRP<br>Member 111-G , LLC** | **Total Members'<br>Equity** |
| Balance at December 31, 2020 | $233500 | $49239 | $282739 |
| Decrease in members' equity from capital transactions: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Contributions | 7125 | 375 | 7500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions | (21439) | (1128) | (22567) |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncash contributions | (531) | (1990) | (2521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease in members' equity from capital transactions | (14845) | (2743) | (17588) |
| Increase in members' equity from operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | 18433 | 970 | 19403 |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gain on sales of real estate investments | 87 | 5 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on real estate investments | 306636 | 16139 | 322775 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on securitization certificates | 4731 | 249 | 4980 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income allocation | (97562) | 97562 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in members' equity from operations | 232325 | 114925 | 347250 |
| Balance at December 31, 2021 | $450980 | $161421 | $612401 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impact of adopting New Lease Standard | (472) | (292) | (764) |
| Balance at January 1, 2022 | 450508 | 161129 | 611637 |
| Decrease in members' equity from capital transactions: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions | (19332) | (1017) | (20349) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease in members' equity from capital transactions | (19332) | (1017) | (20349) |
| Increase in members' equity from operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | 27339 | 1439 | 28778 |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gain on sales of real estate investments | 304 | 16 | 320 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss on real estate investments | (360) | (19) | (379) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss on securitization certificates | (6203) | (326) | (6529) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income allocation | (4557) | 4557 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in members' equity from operations | 16523 | 5667 | 22190 |
| Balance at December 31, 2022 | $447699 | $165779 | $613478 |

---

See accompanying notes to consolidated financial statements.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES** 

Consolidated Statements of Cash Flows

Years Ended December 31, 2022 and 2021

(In thousands)

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;Net increase in members' equity from operations | $22190 | $347250 |
| &nbsp;&nbsp;Adjustments to reconcile net increase in members' equity from operations to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gain on sales of real estate investments | (320) | (92) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss (gain) on real estate investments | 379 | (322775) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss (gain) on securitization certificates | 6529 | (4980) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 2745 | 2749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of loan discount | 3756 | 3477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of securitization certificates discount | (3751) | (3473) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables from related parties | 16 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 819 | (747) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 218 | 691 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payables to related parties | (1032) | 738 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 31549 | 22868 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;Purchases of real estate investments | (801) | (1769) |
| &nbsp;&nbsp;Proceeds from sales of real estate investments | 750 | 2240 |
| &nbsp;&nbsp;Real estate improvements | (9896) | (7561) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (9947) | (7090) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;Members' contributions |  | 7500 |
| &nbsp;&nbsp;Members' distributions | (20349) | (22567) |
| &nbsp;&nbsp;Payments of deferred financing costs |  | (80) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (20349) | (15147) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in cash and cash equivalents and restricted cash | 1253 | 631 |
| Cash and cash equivalents and restricted cash, beginning of year | 19251 | 18620 |
| Cash and cash equivalents and restricted cash, end of year | $20504 | $19251 |

---

(Continued)

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES** 

Consolidated Statements of Cash Flows

Years Ended December 31, 2022 and 2021

(In thousands)

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Supplemental cash flow information: |  |  |
| &nbsp;&nbsp;Interest paid | $16604 | $16693 |
| Noncash investing activities: |  |  |
| &nbsp;&nbsp;Change in accrued improvements of real estate investments | $325 | $237 |
| &nbsp;&nbsp;Net working capital liabilities acquired as part of purchases of real estate investments | $4 | $19 |
| Noncash financing activities: |  |  |
| &nbsp;&nbsp;Distribution of real estate investments to members | $— | $2521 |
| Reconciliation of cash and cash equivalents and restricted cash reported in the consolidated statements of assets, liabilities and members' equity to the consolidated statements of cash flows: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $8677 | $7446 |
| &nbsp;&nbsp;Restricted cash | 11827 | 11805 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash and cash equivalents and restricted cash | $20504 | $19251 |

---

See accompanying notes to consolidated financial statements.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

&nbsp;&nbsp;&nbsp;&nbsp;**(1)Nature of Business**

RH Joint Ventures, LLC (Company), a Delaware limited liability company, was formed on June 12, 2018, and commenced operations on July 31, 2018. It was formed by Amherst SFRP Member III-G, LLC (Amherst Member), and GVI RH JV Investor, LLC (Investor Member), collectively referred to as the Members, with the purpose of acquiring, holding, improving, repairing, operating, leasing, managing, financing, and disposing of single-family rental homes. The Company's term is indefinite and it may be dissolved by either unanimous approval of the Members or the entry of a decree of judicial dissolution, whichever occurs first.

All decisions by and on behalf of the Company are be made by the Members. The Members elected the Amherst Member as the Administrative Member, which shall act as a manager of the Company. The Administrative Member has the day-to-day responsibility for the management of the business and affairs of the Company. All major decisions made by the Company need majority approval of the Members of the Company.

In addition, the Company created an Investment Committee comprised of three representatives appointed by Investor Member and two representatives appointed by Amherst Member. All decisions of the Investment Committee are determined based on a majority vote of the representatives.

&nbsp;&nbsp;&nbsp;&nbsp;**(2)Significant Accounting Policies**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Basis of Presentation***

These consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (GAAP) whereby revenue is recognized in the period earned and expenses are recognized in the period incurred.

The Company applies Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946, *Financial Services – Investment Companies*, by analogy based on guidance published by the National Council of Real Estate Investment Fiduciaries (NCREIF) and the Pension Real Estate Association (PREA): The NCREIF PREA Reporting Standards Fair Value Accounting Policy Manual. Specifically, as a substantial majority of the Company's investment interests are owned by investors who are required to measure their investments at fair value under GAAP, the Company applies a fair value-based accounting model to its investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Principles of Consolidation***

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)Adoption of New Accounting Standard***

In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), an update to FASB ASC Topic 842, Leases (New Lease Standard), that requires the Company to begin recording assets and liabilities arising from leases on the consolidated statements of assets, liabilities and members' equity. Lessor accounting remains similar to previous guidance, while aligning with the FASB's revised revenue recognition guidance for non-lease components of lease agreements under FASB ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

The Company adopted the New Lease Standard using the optional transition approach as of January 1, 2022. As such, previously reported financial information was not updated, and additional disclosures required under the New Lease Standard are not provided for periods prior to January 1, 2022. Additionally, the Company elected the practical expedient package related to lease identification, lease classification, and initial direct costs. As such, existing contracts and leases for these items were not reassessed. The Company did not elect the hindsight practical expedient, which permits entities to use hindsight in determining lease term and assessing impairment.

As a lessor, leases with residents are classified as operating leases under the New Lease Standard, and thus the pattern of recognition of rental revenue and other property income remains unchanged from previous lease accounting guidance as adjusted by ASC 606. The Company elected the practical expedient to not separate the lease component, comprised of rents from single-family rental homes, from the associated non-lease component, comprised of fees from single-family rental homes. The combined component is accounted for as rental revenue, net of uncollectible amounts, under the New Lease Standard.

Under the New Lease Standard, when collectability is not deemed probable, tenant receivables are written off and rental revenue is limited to amounts deemed probable of collection. This requires amounts historically recorded as bad debt expense to be recorded as a direct reduction in rental revenue. Additionally, this required the Company to review its existing leases and determine if the future lease payments are probable of collection. If collection is not probable, the Company accounts for these leases on a cash basis. Prior to the adoption of the New Lease Standard, the Company maintained an allowance for doubtful accounts and classified bad debt expense within property operating expenses on the consolidated statements of operations. As permitted upon adoption, previously reported property operating expenses were not restated and the Company recorded a $764 adjustment to opening members' equity, which is reflected in the consolidated statement of changes in members' equity for the year ended December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(d)Use of Estimates***

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates, interest rates, and inflation rates. As a result, determining investment values involves

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

many assumptions. Amounts ultimately realized from each investment may vary significantly from the fair values presented. The Company's most significant accounting estimate relates to the determination of the fair value of its investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Real Estate Investments***

Real estate investments are initially recorded at the purchase price, including acquisition costs. Improvements made subsequent to acquisition are capitalized if they enhance the value or extend the useful life of an existing asset. The cost of normal repairs and maintenance are expensed as incurred. Additionally, certain services are either performed or subcontracted by Main Street Renewal LLC (MSR), a Delaware limited liability company and related party of the Amherst Member. MSR invoices the Company its costs incurred plus a markup of 15%. These costs, including markup, are either capitalized or expensed depending on their nature in accordance with the policy above. Real estate investments are not subject to depreciation; however, they are subject to adjustment to fair value, as described below.

The Members establish valuation processes and procedures to ensure that valuation techniques are fair and consistent and valuation inputs are supportable. Valuations are supported by market data, third-party pricing sources, industry-accepted pricing models, counterparty prices, or other methods determined in good faith by a majority of the Members, including the use of internal proprietary pricing models. Any material modifications to the valuation procedures must be approved by the Investor Member.

Fair value of real estate investments is determined periodically throughout the year, including at year-end. When real estate investments are adjusted to fair value, the difference between cost and fair value is included as unrealized gain or loss within real estate investments on the consolidated statements of assets, liabilities and members' equity. The net change in unrealized gain or loss on real estate investments is reflected in the consolidated statements of operations as unrealized (loss) gain on real estate investments. During the year ended December 31, 2022, the Company recorded $379 in unrealized loss on real estate investments. During the year ended December 31, 2021, the Company recorded $322,775 in unrealized gain on real estate investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(f)Cash and Cash Equivalents and Restricted Cash***

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of demand deposits as of December 31, 2022 and 2021.

Restricted cash represents cash deposited in accounts related to certain rent deposits and collections, security deposits, property taxes, and capital expenditures, as well as certain lender reserve accounts. Amounts deposited in the reserve accounts associated with the securitization loan can only be used as provided for in the loan agreement, and security deposits held pursuant to lease agreements are required to be segregated. In addition, the Company considers cash advances from residents for maintenance and repairs of properties to be restricted cash. Accordingly, these items are separately presented within the consolidated statements of assets, liabilities and member's equity.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)Securitization Certificates***

In connection with the securitization transaction described below, the Company purchased and retained securitization certificates. The securitization certificates retained pursuant to the Risk Retention Rules defined below are recorded at fair value on the consolidated statements of assets, liabilities and members' equity. Interest income, including amortization of any premium or discount, is included within interest and other income on the consolidated statements of operations. For purposes of classification within the consolidated statements of cash flows, purchases of and repayments from these securities are classified as investing activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(h)Other Assets***

Other assets as of December 31, 2022 and 2021, consisted of the following:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Prepaid expenses | $1057 | $960 |
| Leasing commissions, net | 593 | 582 |
| Accounts receivable, net of allowance | 426 | 2069 |
| Auction and other deposits | 55 | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $2131 | $3712 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(i)Accrued Liabilities***

Accrued liabilities as of December 31, 2022 and 2021, consisted of the following:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| Real estate and other taxes payable | $5950 | $5536 |
| Security and other deposits | 5700 | 6321 |
| Interest payable | 1384 | 1384 |
| Prepaid rent | 985 | 571 |
| Accrued construction costs | 634 | 444 |
| Other accrued liabilities | 1050 | 898 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $15703 | $15154 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(j)Rental Revenue***

Real estate investments are generally leased with a one-year initial term at market rental rates. The Company classifies single-family rental home leases as operating leases. Generally, credit investigations are performed for prospective residents and security deposits are obtained. Expenses are recognized when incurred and rental revenue, net of concessions, is recognized on a straight-line basis over the term of the related leases. The Company recognizes rental revenue when it has a signed lease with a resident, collectability of rent is probable, and services

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

have been rendered. Rents received in advance of rents recognized, if any, are included in accrued liabilities on the consolidated statements of assets, liabilities and members' equity.

Future rental revenue due to the Company under leases existing as of December 31, 2022, is $38,151 in 2023 and is not material thereafter.

Upon adoption of the New Lease Standard, there is no longer an allowance for doubtful accounts. Prior to the adoption of the New Lease Standard, the Company maintained an allowance for doubtful accounts for estimated losses that may have resulted from the inability of residents to make required rent or other payments. This allowance was estimated based on, among other considerations, payment histories, overall delinquencies, and available security deposits. The allowance for doubtful accounts as of December 31, 2021, was $3,877 and is included within other assets on the consolidated statements of assets, liabilities and members' equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(k)Income Taxes***

The Company is not subject to federal income taxes. Instead, the Members are individually liable for federal income taxes on their respective share of the Company's taxable income. Therefore, no provision or liability for federal income taxes has been included in these consolidated financial statements. The Company is subject to income taxes in various states; however, resulting income taxes have not been material to date.

The Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement, which could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that there are no unrecognized tax positions that would have a material impact on the Company's financial position or results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;**(3)Fair Value Measurements**

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price methodology). The carrying value of cash and cash equivalents, restricted cash, amounts receivable from or payable to related parties, certain other assets, and accrued liabilities approximates fair value due to their short-term maturities.

Determining fair value includes a hierarchy used to classify inputs used in measuring fair value. The hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels which are either observable or unobservable. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect an entity's view of market assumptions in the absence of observable market information. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

Level 1 – &nbsp;&nbsp;&nbsp;&nbsp;Inputs based on quoted prices in active markets for identical assets or liabilities. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – &nbsp;&nbsp;&nbsp;&nbsp;Observable inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent from the entity.

Level 3 – &nbsp;&nbsp;&nbsp;&nbsp;Unobservable inputs that reflect the entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available.

The Company applies NCREIF PREA Reporting Standards and marks its real estate investments to market (marked-to-market) each reporting period. The Company values its real estate investments based on three general techniques that are used to measure fair value: cost approach – uses the amount that currently would be required to replace the service capacity of an asset (replacement cost), income approach – uses valuation techniques to convert future cash flows to present value based on current market expectations, or market approach – uses prices generated by market transactions involving identical or comparable assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Real Estate Investments***

Real estate investments are adjusted to fair value each reporting period with fair value determined using either the cost, income, or market approach. As of December 31, 2022, the Company held a total of 4,039 properties, of which 1 property was valued using the cost approach, and 4,038 properties were valued using the income approach. As of December 31, 2021, the Company held a total of 4,040 properties, of which 2 properties were valued using the cost approach, and 4,038 properties were valued using the income approach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i) Cost Approach*

For newly acquired properties, the Company has determined that their cost basis, which is adjusted for improvements, approximates fair value. Generally, cost basis properties represent properties purchased within the last three months of year-end that are in the process of being improved. Normally, after properties become rentable or three months has passed, they become valued using either the income or market approach. The cost approach of determining fair value for real estate investments is considered a Level 3 measurement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ii)Income Approach*

The Company considers a property Stabilized when improvements are made to the property such that it meets the Company's quality standards. Properties that do not meet this standard are either properties with a tenant in place that have planned renovations once the current lease expires (TIP Stabilized) or properties under renovation (Unstabilized).

Stabilized and TIP Stabilized properties are valued using the direct capitalization method. The Company projects net rental income for each property based upon actual rents for occupied properties and properties with tenants in place, or projected rents as well as projected occupancy rates for unoccupied properties.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

Projected occupancy rates account for lost rentals due to lease turnover, credit losses, and other similar matters. The Company's occupancy rates were determined based upon published market data from peer companies. The Company then applies an expense ratio to projected net rental income to arrive at projected net operating income associated with portfolio properties. Expense ratios are estimated based upon a combination of historical data (e.g., actual property tax invoices and related property operating costs) and peer data. A capitalization rate (Cap Rate) is then applied on the projected net operating income to estimate the fair value of Stabilized and TIP Stabilized properties. Cap Rates used by the Company are adjusted periodically based upon observable market Cap Rates for companies with portfolios of similar properties, principally via observable bulk asset purchases and sales.

Unstabilized properties are valued using a discounted cash flow method that projects cash flows over a 10-year discrete period with the following assumptions: a discount rate, a terminal capitalization rate, annualized market rents that are projected over the discrete period, property operating expenses that are projected over the discrete period, and projected selling expenses at the end of the discrete period. A discount rate is applied to the projected cash flows of these Unstabilized properties based on the rate of return a market participant would require in order to complete renovations, identify a resident meeting the Company's underwriting criteria, and place the resident. A terminal capitalization rate is the projected capitalization rate used at the end of the discrete period estimated as the Cap Rates applied to Stabilized and TIP Stabilized properties plus a weighted average 50-basis point premium. The income approach of determining fair value for real estate investments is considered a Level 3 measurement because it is determined based on a variety of unobservable inputs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Securitization Certificates***

In connection with the Company's securitization transaction, the Company has retained and purchased certificates (Retained Certificates) totaling $48,889 and $51,667 as of December 31, 2022 and 2021, respectively. As the Company's Retained Certificates do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value. The fair value of the Retained Certificates is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumption used in the discounted cash flow model is the discount rate. The discount rate is determined using interpolation based on observable trades for similar type securities. The Retained Certificates are included as securitization certificates on the Company's consolidated statements of assets, liabilities, and members' equity and classified as Level 3 in the fair value hierarchy.

Due to the level of subjectivity associated with these estimates, actual results could vary significantly, and that variance could substantially decrease (or increase) the Company's unrealized gain or loss related to its investments.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

*Fair Value Hierarchy*

The following table presents the placement in the fair value hierarchy of assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **2022** |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate investments | $— | $— | $1361990 | $1361990 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securitization certificates |  |  | 48889 | 48889 |
| **2021** |  |  |  |  |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate investments | $— | $— | $1351773 | $1351773 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securitization certificates |  |  | 51667 | 51667 |

---

The Company's accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers into or out of Level 3 during the years ended December 31, 2022 and 2021.

The changes in real estate investments classified as Level 3 are as follows:

---

| | |
|:---|:---|
| | **Level 3** |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2020 | $1024081 |
| Real estate investments purchased | 1788 |
| Real estate investments distributed | (2521) |
| Real estate investments sold | (2148) |
| Real estate improvements | 7798 |
| Unrealized gain on real estate investments | 322775 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2021 | 1351773 |
| Real estate investments purchased | 805 |
| Real estate investments sold | (430) |
| Real estate improvements | 10221 |
| Unrealized loss on real estate investments | (379) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2022 | $1361990 |

---

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

The changes in securitization certificates classified as Level 3 are as follows:

---

| | |
|:---|:---|
| | **Level 3** |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2020 | $43214 |
| Discount amortization | 3473 |
| Unrealized gain on securitization certificates | 4980 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2021 | 51667 |
| Discount amortization | 3751 |
| Unrealized loss on securitization certificates | (6529) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, December 31, 2022 | $48889 |

---

*Significant Unobservable Inputs*

The table below presents the significant unobservable inputs used to value the Company's Level 3 real estate investments as of December 31, 2022:

---

| | | |
|:---|:---|:---|
| **Level 3 Assets** | **Significant Unobservable<br>Inputs by Valuation Technique** | **Significant<br>Unobservable Inputs** |
| Real estate investments - | Direct Capitalization Method: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income approach | &nbsp;&nbsp;&nbsp;&nbsp;Capitalization Rate | 4.75% |
| &nbsp;&nbsp;&nbsp;&nbsp;Stabilized | &nbsp;&nbsp;&nbsp;&nbsp;Projected Occupancy Rate | 95.28% |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Expense Ratio | 28.88% |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Average Monthly Rent (in dollars) | $1975 |
| Real estate investments - | Direct Capitalization Method: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income approach | &nbsp;&nbsp;&nbsp;&nbsp;Capitalization Rate | 4.68% |
| &nbsp;&nbsp;&nbsp;&nbsp;TIP Stabilized | &nbsp;&nbsp;&nbsp;&nbsp;Projected Occupancy Rate | 95.29% |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Expense Ratio | 34.61% |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Average Monthly Rent (in dollars) | $2161 |
| Real estate investments - | Discounted Cash Flow Method: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income approach | &nbsp;&nbsp;&nbsp;&nbsp;Discount Rate | 7.50% |
| &nbsp;&nbsp;&nbsp;&nbsp;Unstabilized | &nbsp;&nbsp;&nbsp;&nbsp;Terminal Capitalization Rate | 5.42% |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Average Monthly Rent (in dollars) | $2312 |

---

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**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

The table below presents the significant unobservable inputs used to value the Company's Level 3 real estate investments as of December 31, 2021:

---

| | | |
|:---|:---|:---|
| **Level 3 Assets** | **Significant Unobservable Inputs by Valuation Technique** | **Significant Unobservable Inputs** |
| Real estate investments - Income approach&nbsp;&nbsp;&nbsp;&nbsp;Stabilized | &nbsp;&nbsp;Direct Capitalization Method:<br>&nbsp;&nbsp;&nbsp;&nbsp;• Capitalization Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Projected Occupancy Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Expense Ratio<br>&nbsp;&nbsp;&nbsp;&nbsp;• Average Monthly Rent (in dollars) | &nbsp;&nbsp;<br>&nbsp;&nbsp;&nbsp;&nbsp;• 4.29%<br>&nbsp;&nbsp;&nbsp;&nbsp;• 95.28%<br>&nbsp;&nbsp;&nbsp;&nbsp;• 29.13%<br>&nbsp;&nbsp;&nbsp;&nbsp;• $1,795 |
| Real estate investments - Income approach&nbsp;&nbsp;&nbsp;&nbsp;TIP Stabilized | &nbsp;&nbsp;Direct Capitalization Method:<br>&nbsp;&nbsp;&nbsp;&nbsp;• Capitalization Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Projected Occupancy Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Expense Ratio<br>&nbsp;&nbsp;&nbsp;&nbsp;• Average Monthly Rent (in dollars) | &nbsp;&nbsp;<br>&nbsp;&nbsp;&nbsp;&nbsp;• 4.24%<br>&nbsp;&nbsp;&nbsp;&nbsp;• 95.17%<br>&nbsp;&nbsp;&nbsp;&nbsp;• 32.06%<br>&nbsp;&nbsp;&nbsp;&nbsp;• $2,084 |
| Real estate investments - Income approach&nbsp;&nbsp;&nbsp;&nbsp;Unstabilized | &nbsp;&nbsp;Discounted Cash Flow Method:<br>&nbsp;&nbsp;&nbsp;&nbsp;• Discount Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Terminal Capitalization Rate<br>&nbsp;&nbsp;&nbsp;&nbsp;• Average Monthly Rent (in dollars) | &nbsp;&nbsp;<br>&nbsp;&nbsp;&nbsp;&nbsp;• 8.00%<br>&nbsp;&nbsp;&nbsp;&nbsp;• 4.79%<br>&nbsp;&nbsp;&nbsp;&nbsp;• $1,849 |

---

The table below presents the significant unobservable inputs used to value the Company's Level 3 securitization certificates as of December 31, 2022:

---

| | | |
|:---|:---|:---|
| **Level 3 Assets** | **Significant Unobservable Inputs by Valuation Technique** | **Significant Unobservable Input** |
| Securitization certificates | &nbsp;&nbsp;Discounted Cash Flow Method:<br>&nbsp;&nbsp;&nbsp;&nbsp;• Discount Rate | X<br>&nbsp;&nbsp;&nbsp;&nbsp;• 8.95% |

---

The table below presents the significant unobservable inputs used to value the Company's Level 3 securitization certificates as of December 31, 2021:

---

| | | |
|:---|:---|:---|
| **Level 3 Assets** | **Significant Unobservable Inputs by Valuation Technique** | **Significant Unobservable Input** |
| Securitization certificates | &nbsp;&nbsp;Discounted Cash Flow Method:<br>&nbsp;&nbsp;&nbsp;&nbsp;• Discount Rate | X<br>&nbsp;&nbsp;&nbsp;&nbsp;• 5.14% |

---

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**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

&nbsp;&nbsp;&nbsp;&nbsp;**(4)Portfolio Diversification**

The Company has real estate investments located throughout the United States of America. The diversification of the Company's holdings based on the estimated fair values and NCREIF divisions and states as of December 31, 2022 and 2021, are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **State %** | **State %** |
| | | **2022** | **2021** | **2022** | **2021** |
| Southeast | GA | $420945 | $421165 | 30.9% | 31.2% |
|  | TN | 141908 | 135936 | 10.4 | 10.0 |
|  | FL | 121996 | 116600 | 9.0 | 8.6 |
| Mountain | AZ | 155550 | 144240 | 11.4 | 10.7 |
|  | CO | 76612 | 79928 | 5.6 | 5.9 |
| Southwest | TX | 155538 | 163746 | 11.4 | 12.1 |
| Mideast | NC | 151345 | 155440 | 11.1 | 11.5 |
| East North Central | IN | 61268 | 62491 | 4.5 | 4.6 |
|  | OH | 14891 | 13484 | 1.1 | 1.0 |
| West North Central | MO | 39643 | 37278 | 2.9 | 2.8 |
|  | KS | 22294 | 21465 | 1.7 | 1.6 |
| Total |  | $1361990 | $1351773 | 100.0% | 100.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(5)Related Party Transactions**

On September 29, 2020, at execution of the securitization transaction described below, MSR entered into an Asset Management Agreement with Amherst Residential Asset Management, LLC (ARAM), a related party of the Amherst Member. ARAM provides portfolio asset management services including, but not limited to, cash management, accounting, budgeting, leveraging, and reporting services. The Company reimburses ARAM based on actual costs incurred. Related party asset management fees are included within general and administrative on the consolidated statements of operations and were $1,104 and $908 for the years ended December 31, 2022 and 2021, respectively.

On September 29, 2020, at execution of the securitization transaction described below, the Company, through its wholly owned subsidiary, RH Partners OwnerCo, LLC (OwnerCo), entered into a Property Management Services Agreement (PMSA) with MSR to provide property management services, leasing, construction, brokerage and certain other services for fees as described in the PMSA. The PMSA requires the Company to maintain a working capital bank account balance to be used by MSR for the benefit of the Company for maintenance and repair of the real estate investments. The working capital balance was $2,421 and $2,408 as of December 31, 2022 and 2021, respectively, and is included within cash and cash equivalents on the consolidated statements of assets, liabilities and members' equity. In the ordinary course of business, MSR earns fees for its services and also pays property-related costs on the Company's behalf and seeks reimbursement plus any applicable markup. For the year ended December 31, 2022, the Company incurred related party property management fees of $9,401, of which $1,507 was capitalized within real estate investments on the consolidated statements of assets, liabilities and members' equity, $1,322 was capitalized to

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

leasing commissions within other assets on the consolidated statements of assets, liabilities and members' equity, and $6,572 was expensed within property operating expenses on the consolidated statements of operations. For the year ended December 31, 2021, the Company incurred related party property management fees of $8,109, of which $872 was capitalized within real estate investments on the consolidated statements of assets, liabilities and members' equity, $1,323 was capitalized to leasing commissions within other assets on the consolidated statements of assets, liabilities and members' equity, and $5,914 was expensed within property operating expenses on the consolidated statements of operations.

On July 31, 2018, the Company entered into a Purchase and Sale Agreement (PSA) with MSR II, LP and Vaca Morada Partners LP (VM), collectively, the Sellers and related parties of the Company's indirect parent, to purchase single-family rental properties at different times throughout its term. For the years ended December 31, 2022, and 2021, the Company purchased 2 and 7 single-family rental homes, respectively, from VM at a gross purchase price of $785 and paid capitalized closing costs of $16 and a gross purchase price of $1,769, respectively. The PSA calls for post-closing adjustments and prorations between the Company and Sellers to be made 90 days subsequent to each closing. These include collected rents, security deposits, real estate taxes and other operating expenses. As of December 31, 2022, no adjustment or proration amounts are due from the Sellers.

The Company had the following receivables from related parties as of December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| VM | $4 | $— |
| ARAM |  | 4 |
| Other Amherst Member related parties | 34 | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $38 | $54 |

---

The Company had the following payables to related parties as of December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
| | **2022** | **2021** |
| MSR | $898 | $1916 |
| Amherst Residential, LLC | 121 |  |
| VM |  | 2 |
| Other Amherst Member related parties | 19 | 152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $1038 | $2070 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(6)Acquisition of TPG Portfolio**

On June 29, 2020, the Company, through its wholly owned subsidiary RH Partners EquityCo, LLC, entered into a Purchase Agreement with Suburban Housing Partners, LLC (Suburban), a related party of the Amherst Member, to

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

purchase 100% of the limited liability company interests of Single Family Rental Holdings, LLC and Single Family Rental Holdings Two, LLC (Holding Companies). The Holding Companies owned 100% of Safari One Asset Company, LLC and Safari Two Asset Company, LLC, which in turn owned a portfolio of single-family rental homes (TPG Portfolio). In conjunction with the acquisition of the TPG Portfolio, the Company entered into an Earn Out Agreement, in which the Company agreed to pay to Suburban an earn out payment of $7,500 if the Company achieved a certain target IRR on its investment in the TPG Portfolio. During 2021, the Company achieved the target IRR and paid the earn out payment to Suburban. The payment is included in earn out payment on the consolidated statements of operations.

&nbsp;&nbsp;&nbsp;&nbsp;**(7)Securitization, Net**

The Company, through its wholly owned subsidiary, OwnerCo, entered into a securitization transaction whereby it executed a loan agreement (Loan) on September 29, 2020, with a third-party lender for a total amount of $823,661 with a discount of $20,562. The Loan includes ten components summarized as follows as of December 31, 2022 and 2021:

---

| | | | |
|:---|:---|:---|:---|
| | **Outstanding Loan Principal** | **Outstanding Loan Principal** | |
|<br>**Component** | **2022** | **2021** |<br>**Loan Rate** |
| A | $319958 | $319958 | 1.43% |
| B | 91737 | 91737 | 1.78% |
| C | 46987 | 46987 | 1.93% |
| D | 55936 | 55936 | 2.08% |
| E1 | 31325 | 31325 | 2.28% |
| E2 | 62649 | 62649 | 2.53% |
| F | 57056 | 57056 | 2.93% |
| G1 | 39156 | 39156 | 4.08% |
| G2 | 55937 | 55937 | 4.94% |
| H | 62920 | 62920 | —% |
| Total securitization | $823661 | $823661 |  |
| Less: deferred financing costs, net | (7845) | (10590) |  |
| Less: deferred financing costs, net | (12483) | (16239) |  |
| Total securitization, net | $803333 | $796832 |  |

---

As of December 31, 2022 and 2021, the weighted average interest rate was 2.02%, and the weighted average effective interest rate was 2.61%. The Loan requires interest-only payments until maturity on November 9, 2025, when the entire principal balance is due. The Loan is collateralized by all of the single-family rental homes of OwnerCo and is subject to debt covenants. As of December 31, 2022, the Company was in compliance with its debt covenants. As of December 31, 2022 and 2021, the Company incurred total deferred financing costs of $14,042 relating to the Loan, with accumulated amortization of $6,197 and $3,452, respectively. For the years ended December 31, 2022 and 2021, amortization of deferred financing costs relating to the Loan was $2,745 and $2,749, respectively, which is included

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

within interest expense on the statements of operations. The Company recorded loan discount amortization of $3,756 and $3,477 within interest expense on the statements of operations for the years ended December 31, 2022 and 2021, respectively.

Concurrent with the execution of the Loan, the third-party lender sold the Loan it originated to a wholly owned subsidiary of the Company (Depositor) who subsequently transferred the Loan to a securitization-specific trust entity (Trust). The transfer of the securitization from the Depositor to the Trust was accounted for as a sale under ASC 860, *Transfers and Servicing*, with no resulting gain or loss as the securitization was originated by the lender and immediately transferred at the same fair market value, and the Company had no continuing involvement after the sale.

As consideration for the transfer of the Loan to the Trust, the Trust issued classes of certificates which mirror the components of the Loan (collectively, the Certificates) to the Depositor, except that Class R certificates do not have related loan components as they represent residual interest in the Trust. The Certificates represent the entire beneficial interest in the Trust. Following receipt of the Certificates, the Depositor sold the Certificates to investors and used the proceeds as consideration for the Loan sold to the Depositor by the third-party lender. These transactions had no effect on the Company's consolidated financial statements other than with respect to securitization certificates the Company retained in connection with the securitization, which are referred to as securitization certificates on the consolidated statements of assets, liabilities and members' equity.

The Trust is structured as a pass-through entity that receives interest payments from the securitization and distributes those payments to the holders of the Certificates. The assets of the Trust are restricted and can only be used to fulfill the obligations of the Trust. The obligations of the Trust do not have any recourse to the general credit of any entities in these consolidated financial statements. Management has evaluated the Company's interest in the Certificates of the Trust (through ownership of the securitization certificates) and determined that the securitization certificates do not provide the Company with any ability to direct the activities that could impact the Trust's economic performance. Therefore, the Company does not consolidate the Trust.

As the Trust made Certificates available for sale to both domestic and foreign investors, sponsors of the loans are required to retain a portion of the risk that represents a material net economic interest in each loan pursuant to Regulation RR (the Risk Retention Rules) under the Securities Exchange Act of 1934, as amended. As such, loan sponsors are required to retain a portion of the credit risk that represents not less than 5% of the aggregate fair value of the loan as of the closing date. For the securitization, the Company retained all of the Class H certificates to meet the Risk Retention Rules (Retained Certificates). These Retained Certificates had a principal balance of $62,920 and an initial discount of $20,539, representing a fair value of $42,381 at the closing date. For the years ended December 31, 2022 and 2021, the Company recorded discount amortization of $3,751 and $3,473, respectively, within interest and other income on the consolidated statements of operations related to these Retained Certificates. These Retained Certificates are a principal-only class and are not entitled to distributions of interest.

The Company utilized the proceeds from the securitization to fund: (i) repayments of then-outstanding indebtedness on certain real estate investments; (ii) initial deposits into securitization reserve accounts; (iii) closing costs in connection with the securitization; (iv) general costs associated with operations; and (v) returns to the Members.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

The Company reports securities held to maturity in the consolidated statements of assets, liabilities and members' equity at fair value. The Company has concluded that the unrealized losses on its held-to-maturity investments are temporary in nature since (i) they are caused by increases in interest rates, which lower the fair value of these investments, (ii) they are not related to the underlying credit quality of the issuer, (iii) the entire contractual principal and interest due on these investments is currently expected to be recoverable, and (iv) the Company is contractually required to retain these investments until maturity per the Risk Retention Rules defined above. Accordingly, the Company does not consider the held-to-maturity investments to be other-than-temporarily impaired as of December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;**(8)Commitments and Contingencies**

In the ordinary course of business, the Company may be involved in various claims and legal proceedings and does not believe the ultimate resolution of any such matters that have arisen to date will have a material adverse effect on its consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;**(9)Members' Equity**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Contributions***

The Members have been deemed to make capital contributions in amounts and percentage interests as set forth in the Limited Liability Company Agreement (Agreement). As of December 31, 2022, the Members have fully funded their member commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Allocations and Distributions***

Per the Agreement, distributions to the Members shall be made in the following order and priority:

First, (i) 100% to the Members in accordance with their respective Sharing Percentages, until each Member has received distributions equal to such Member's applicable capital contributions, then (ii) 100% to the Members in accordance with respective Sharing Percentages, until Investor Member has received distributions sufficient to achieve an IRR equal to ten percent (10%) per annum, compounded quarterly.

Second, (i) 20% to the Amherst Member (First Promote), and (ii) 80% to the Members in accordance with respective Sharing Percentages, until Investor Member has received distributions sufficient to achieve an IRR equal to fifteen percent (15%) per annum, compounded quarterly.

Third, (i) 25% to the Amherst Member (Second Promote), and (ii) 75% to the Members in accordance with respective Sharing Percentages, until Investor Member has received distributions sufficient to achieve an IRR equal to twenty percent (20%) per annum, compounded quarterly, and a return to Investor Member of 200% of its actual capital contributions made to the Company.

Fourth, (i) 35% to the Amherst Member (Third Promote), and (ii) 65% to the Members in accordance with respective Sharing Percentages.

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

The capital accounts reflect the promote to the Amherst Member as if the Company had realized all assets and settled all liabilities at the fair value reported in the consolidated financial statements and allocated all gains and losses and distributed the net assets to the Members at the reporting date consistent with the provisions of the Company's governing documents. The promote to the Amherst Member will remain provisional until final liquidation of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)TPG Portfolio***

The TPG Portfolio is held and invested in as a separate pool of properties for purposes of capital contributions, member commitments, and distributions under the Agreement. The member commitment set forth in the Agreement shall not apply with respect to the TPG Portfolio. The following applies specifically to the TPG Portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i) Contributions*

The Members account for capital contributions made with respect to the TPG Portfolio on a pooled basis such that no capital contributions made with respect to the TPG Portfolio are attributable to any other properties held by the Company or its subsidiaries nor are capital contributions made with respect to other properties attributable to the TPG Portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ii)Sharing Percentage*

The Sharing Percentage with respect to the TPG Portfolio means, with respect to each Member, as of any date, the fraction, expressed as a percentage, the numerator of which is the aggregate capital contributions made by such Member with respect to the TPG Portfolio and the denominator of which is the aggregate capital contributions made by all of the Members with respect to the TPG Portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(iii)Allocations and Distributions*

Net operating cash flow attributable to the TPG Portfolio is distributed per the following order and priority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)First, (x) 100% to the Members in accordance with their respective Sharing Percentages attributable to the TPG Portfolio, until each Member has received distributions equal to such Member's applicable capital contributions attributable to the TPG Portfolio, then (y) 100% to the Members in accordance with their respective Sharing Percentages attributable to the TPG Portfolio, until Investor Member has received distributions sufficient to achieve the first hurdle return requirement (applied solely with respect to capital contributions for the TPG Portfolio), and no distributions will be made pursuant to the following clauses b) through d) when such first hurdle return requirement has not been satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Second, (x) 20% to Amherst Member, and (y) 80% to the Members in accordance with their respective Sharing Percentages attributable to the TPG Portfolio, until Investor Member has received distributions sufficient to achieve the second hurdle return requirement (applied solely with respect to capital contributions for the TPG Portfolio), and no distributions will be made pursuant to the following clauses c) through d) when such second hurdle return requirement has not been satisfied;

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Third, (x) 25% to Amherst Member, and (y) 75% to the Members in accordance with their respective Sharing Percentages attributable to the TPG Portfolio, until Investor Member has received distributions sufficient to achieve (1) the third hurdle return requirement (applied solely with respect to capital contributions for the TPG Portfolio) and (2) a return to Investor Member of 200% of its actual capital contributions made to the Company with respect to the TPG Portfolio, and no distributions will be made pursuant to the following clause d) when such third hurdle return requirement and such return to Investor Member of 200% of its actual capital contributions made to the Company with respect to the TPG Portfolio has not been satisfied; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Fourth, (x) 35% to Amherst Member, and (y) 65% to the Members in accordance with their respective Sharing Percentages attributable to the TPG Portfolio.

First hurdle return requirement means an IRR on a Member's capital contributions equal to ten percent (10.0%) per annum, compounded quarterly. Second hurdle return requirement means an IRR on a Member's capital contributions equal to fifteen percent (15.0%) per annum, compounded quarterly. Third hurdle return requirement means an IRR on a Member's capital contributions equal to twenty percent (20.0%) per annum, compounded quarterly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(e)Income Allocation***

The Company follows the Hypothetical Liquidation at Book Value (HLBV) method for purposes of determining the allocation of net income or loss to the members. Under the HLBV method, net income or loss is allocated amongst the members to achieve each Member's claim on the net assets of the Company. Each member's claim on the net assets of the Company is calculated as the amount that the member would receive if the Company were to liquidate all of its assets at year end at net book value and distribute the resulting cash to creditors and members in accordance with their respective priorities.

&nbsp;&nbsp;&nbsp;&nbsp;**(10)Risk Factors**

The Company is exposed to market risk, credit risk and liquidity risk. The Amherst Member oversees the management of these risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)Market Risk***

Market risk is that risk that the market value of certain assets held by the Company may fluctuate because of changes in market interest rates and market prices. Exposure to market risk is inherent in the Company's business strategy. The Amherst Member attempts to monitor and manage the Company's market risk; however, market risks may arise unexpectedly. The assets held by the Company that are affected by market risk are principally the Company's real estate investments and its securitization certificates.

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world has caused significant volatility in U.S. markets. There continues to be significant uncertainty around the breadth and duration of potential business disruptions related to COVID-19, as well as its impact on U.S. single-

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

family rental homes. For the years ended December 31, 2022 and 2021, the Company recorded $272 and $312, respectively, of rent forgiveness included within rental revenue on the consolidated statements of operations as a result of COVID-19. Following the guidance of the FASB Staff Q&A *Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic*, the Company has elected to not account for these concessions as lease modifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b)Credit Risk***

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or resident contract, leading to a financial loss. The Company is exposed to credit risk from its leasing and financing activities, including risk related to deposits with banks and financial institutions. The Company has a credit policy in place, and the exposure to this is monitored on an ongoing basis by management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i) Tenant Receivables*

The Company's ability to lease its real estate properties is subject to many factors, including supply and demand, unemployment rates, general economic conditions, and other factors that may be unique to a geographic region. The Company may not be able to fully lease its residential real estate properties at all times or lease them at rates that allow it to generate a profit. Additionally, when leases on these properties expire or the properties otherwise become vacant, the Company will be subject to then-applicable market conditions, which may not be as favorable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ii)Cash Deposits*

Credit risk from balances with banks and financial institutions is managed by the Amherst Member in accordance with the Company's policy. This risk pertains to cash and cash equivalents (including restricted cash) that are deposited and held with financial institutions. While the Company's cash and cash equivalents and restricted cash are on deposit with FDIC insured financial institutions, at times such deposits exceed the insured limits. The Company has not experienced any loss in such accounts. The maximum exposure to credit risk for cash and cash equivalents is the carrying value of cash and cash equivalents as of each reporting date held on deposit with financial institutions less federally insured amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c) Liquidity Risk***

Liquidity risk is the risk that an investment position cannot be easily exited at the prevailing market price. The Company's exposure to liquidity risk relates primarily to its real estate investments. The Investment Committee monitors liquidity risks in the markets in which the Company purchases and owns properties on an ongoing basis, but it may not always be possible to execute a transaction at a desired price due to market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;**(11)Recent Accounting Pronouncements**

*New Accounting Pronouncement to be Adopted*

In June 2016, the FASB issued ASU 2016-13, *Measurement of Credit Losses on Financial Instruments (Topic 326)*, which introduced an expected credit loss methodology for the impairment of financial assets measured at amortized

------

**RH JOINT VENTURES, LLC AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

($ amounts in thousands)

cost basis. That methodology replaces the probable, incurred loss model for those assets. In November 2018, the FASB issued ASU 2018-19, which clarifies that operating lease receivables are outside the scope of the new standard. In November 2019, the FASB issued ASU 2019-10, which delayed the effective date of ASU 2016-13 for private companies, such as the Company, to fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures and does not expect it to be material.

&nbsp;&nbsp;&nbsp;&nbsp;**(12)Subsequent Events**

The Company evaluated subsequent events through March 1, 2023, the date the consolidated financial statements were available to be issued, and did not identify any events that warrant adjustment to or disclosure in the consolidated financial statements.

## Exhibit 99.2

**Exhibit 99.2**

**Madison NYC Core Retail Partners, LP**

**(a Delaware limited partnership)**

Financial Statements

December 31, 2022

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Contents**

<u><br></u>

---

| | |
|:---|:---|
| Independent Auditors' Report | 3 |
| Financial Statements: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Assets, Liabilities and Partners' Capital | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Schedule of Investments | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Operations | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Changes in Partners' Capital | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of Cash Flows | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes to Financial Statements | 10-18 |

---

------

**Independent Auditors' Report**

To the Partners

Madison NYC Core Retail Partners, LP:

*Opinion*

We have audited the consolidated financial statements of Madison NYC Core Retail Partners, LP (the Fund), which comprise the statement of assets, liabilities, and partners' capital, including the schedule of investments, as of December 31, 2022, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and the results of its operations, changes in its partners' capital, and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles..

*Basis for Opinion*

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Fund and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion..

*Responsibilities of Management for the Financial Statements*

Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error..

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

*Auditors' Responsibilities for the Audit of the Financial Statements*

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

------

In performing an audit in accordance with GAAS, we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Exercise professional judgement and maintain professional skepticism throughout the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly, no such opinion is expressed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Fund's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ KPMG LLP

New York, New York

February 27, 2023

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Statement of Assets, Liabilities and Partners' Capital**

**December 31, 2022**

---

| | |
|:---|:---|
| **ASSETS** | |
| Investment in real estate ventures (Cost: $284,819,976) | $284383819 |
| Cash | 1199091 |
| Deferred credit facility costs (net of accumulated amortization of $184,143) | 635715 |
| Interest rate cap | 289062 |
| Interest rate swaps | 159380 |
| Other receivable | 28770 |
| Prepaid expenses | 16215 |
| Due from related parties | 2802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $286714854 |
| **LIABILITIES AND PARTNERS' CAPITAL** |  |
| Credit facility payable | $13760000 |
| Due to related parties | 206907 |
| Accrued expenses | 162551 |
| Credit facility costs payable | 33321 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 14162779 |
| Partners' capital | 272552075 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and partners capital** | $286714854 |

---

See Notes to Financial Statements.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Schedule of Investments**

**December 31, 2022**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Location** | **Asset Type** | **Total Asset Size** | **Date of Acquisition** | **Ownership %** | **Cost** | **Fair Value** | **% of Capital** |
| Madison NYC Core Portfolio | New York Metro Area | Retail | 1,625,000 sf | Dec 2015 | 49%\* | $182492426 | $219553819 | 80.6% |
| Madison (42nd Street) NYC Core Portfolio | New York Metro Area | Retail | 312,000 sf | Dec 2015 | 49%\*\* | 102327550 | 64830000 | 23.8% |
|  |  |  |  |  | Total | $284819976 | $284383819 | 104.4% |

---

\* As of December 31, 2022, the Madison NYC Core Portfolio consists of seven core retail properties owned in a joint venture with an affiliate, Madison NYC Core Retail Partners II, LP, which owns 51% of the equity interest.

\*\* As of December 31, 2022, the Madison (42nd Street) NYC Core Portfolio consists of one core retail property owned jointly with a third party, Forest City Realty Trust, Inc., which owns 51% of the equity interest.

See Notes to Financial Statements.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Statement of Operations**

**For the Year Ended December 31, 2022**

---

| | |
|:---|:---|
| Revenue: |  |
| &nbsp;&nbsp;&nbsp;Dividend income | $3403749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total revenue** | 3403749 |
| Expenses: |  |
| &nbsp;&nbsp;&nbsp;Asset management fees | 1097733 |
| &nbsp;&nbsp;&nbsp;Financing costs | 593297 |
| &nbsp;&nbsp;&nbsp;Salary expense | 496349 |
| &nbsp;&nbsp;&nbsp;Professional fees | 273977 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred credit facility costs | 258505 |
| &nbsp;&nbsp;&nbsp;Administration fees | 159750 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 56402 |
| &nbsp;&nbsp;&nbsp;Insurance expense | 32430 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total expenses** | 2968443 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net investment income** | 435306 |
| Realized gain on interest rate cap | 57423 |
| Net change in unrealized gain on interest rate swaps and cap | 66314 |
| Net change in unrealized loss on investment in real estate ventures | (34240689) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net loss** | $(33681646) |

---

See Notes to Financial Statements.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Statement of Changes in Partners' Capital**

**December 31, 2022**

---

| | | | |
|:---|:---|:---|:---|
| | **General Partner** | **Limited Partners** | **Total** |
| **Balance at January 1, 2022** | $612457 | $305621264 | $306233721 |
| Net loss | (67362) | (33614284) | (33681646) |
| **Balance at December 31, 2022** | $545095 | $272006980 | $272552075 |

---

See Notes to Financial Statements.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Statement of Cash Flows**

**For the Year Ended December 31, 2022**

---

| | |
|:---|:---|
| Cash Flows From Operating Activities: |  |
| Net loss | $(33681646) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |
| &nbsp;&nbsp;&nbsp;Net change in unrealized loss on investment in real estate ventures | 34240689 |
| &nbsp;&nbsp;&nbsp;Net change in unrealized gain on interest rate swaps and cap | (66314) |
| &nbsp;&nbsp;&nbsp;Realized gain on interest rate cap | (57423) |
| &nbsp;&nbsp;&nbsp;Amortization of deferred credit facility costs | 258505 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in prepaid expenses | (16215) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in other receivable | (28770) |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease in due from related parties | 79718 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in due to related parties | 77804 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in accrued expenses | 3904 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in credit facility costs payable | 25239 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in investment in real estate ventures | (7154227) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from interest rate cap | 57423 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from return of capital of investment in real estate ventures | 3679525 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | (2581788) |
| Cash Flows From Financing Activities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit facility borrowing | 14444000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit facility repayment | (9839000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment for interest rate cap | (382128) |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit facility costs | (840879) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by financing activities** | 3381993 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net increase in cash** | 800205 |
| Cash: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning | 398886 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending | $1199091 |
| Supplemental disclosure of cash flow information: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $620859 |

---

See Notes to Financial Statements.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

**Note 1.&nbsp;&nbsp;&nbsp;&nbsp;Organization and Principal Business Activities**

Madison NYC Core Retail Partners, LP (the "Partnership") is a limited partnership formed pursuant to the laws of the State of Delaware on October 15, 2015, in accordance with the Limited Partnership Agreement. Madison International Holdings NYC Core Retail, LLC is the general partner of the Partnership (the "General Partner"). Madison International Realty NYC Core, LLC, is the asset manager for the Partnership ("Asset Manager"). Madison International Realty PM, LLC is the property manager of the real estate properties in the underlying portfolios ("Property Manager"), which engaged a third party property manager. As of December 31, 2022, the Partnership has capital commitments of $308,687,572 from Limited Partners and $618,601 of capital commitments from the General Partner. All capitalized terms not defined herein shall have the meaning ascribed to them in the partnership agreement, as amended ("Partnership Agreement").

On September 14, 2017, the Limited Partners and General Partner executed an amended and restated Partnership Agreement, which allowed the Partnership to sponsor a 51% joint venture recapitalization of the Joint Venture. The recapitalization closed on 10 of the 13 properties on December 22, 2017, which converted the Partnership's 49% common equity interest, to a 98% common equity interest, while the Joint Venture partner, Forest City Realty Trust, Inc. retained a 2% common equity interest and received a 100% preferred equity interest. During 2018, Forest City Realty Trust, Inc.'s ("Forest City") equity interest (2% common and 100% preferred) in 11 core retail properties in and around New York City (the "Madison NYC Core Portfolio"), was redeemed through the distribution of the Partnership's equity interest in University Park at MIT, 80 DeKalb and 3700M to Forest City. Following the redemption of Forest City's equity interest in the Madison NYC Core Portfolio, its equity interest was converted to a 51% common equity interest in Madison NYC Core Retail Holdings, LLC ("HoldCo"), an entity formed to hold the indirect common equity ownership interests in the Madison NYC Core Portfolio. Concurrent to the 51% common equity conversion, the Partnership contributed its then 49% common equity interest in the Madison NYC Core Portfolio into HoldCo. Subsequent to the 51% common equity conversion, and the Partnership's contribution of its 49% common equity interest into HoldCo, the Partnership's affiliate, Madison NYC Core Retail Partners II, LP ("51%Co"), converted its acquisition loan into the 51% common equity interest in HoldCo. The common equity of HoldCo is now owned 49% by the Partnership and 51% by 51%Co. HoldCo owns 100% of Madison NYC Core Retail Partners REIT ("REIT") that owns the Madison NYC Core Portfolio. In addition, outside of HoldCo, the Partnership owns a 49% joint venture equity interest in 42nd Street Entertainment & Retail Complex with Forest City as its joint venture partner, "Madison (42nd Street) NYC Core Portfolio". From the Partnership's perspective, the recapitalization of the Joint Venture did not impact the Partnership's indirect ownership of the underlying properties. The Partnership continues to own an indirect 49% equity interest in the remaining eight core retail properties. Such ownership is in joint venture with either 51%Co or Forest City. The Madison NYC Core Portfolio together with Madison (42nd Street) NYC Core Portfolio is hereinafter referred to as "Combined NYC Core Portfolio."

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

The sole purpose of the Partnership is to manage equity investments in HoldCo and Madison (42nd Street) NYC Core Portfolio, which consists of 42nd Street Entertainment & Retail Complex. The strategy of the Partnership is to own partnership interests that own and manage core retail properties in and around New York City. The Partnership will directly or indirectly hold for investment, oversee the liquidation or other disposition of, and otherwise manage and exercise all of the rights of an owner of the investments, and to do any and all other acts or things which the General Partner may determine are necessary thereto.

As of December 31, 2022, the Partnership has called $321,306,173 or 103.9% of the total capital commitments. This capital call in excess of the original capital commitments is pursuant to Section 4.03(a) of the Partnership Agreement.

The Partnership shall continue until December 31, 2030, unless terminated earlier, or extended for additional consecutive five-year periods by a Super-Majority in Interest of the Limited Partners.

**Note 2.&nbsp;&nbsp;&nbsp;&nbsp;Summary of Significant Accounting Policies**

*Basis of Presentation.* The accompanying financial statements of the Partnership have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") pursuant to which investments in real estate ventures are presented on a fair value basis. The Partnership qualifies as an Investment Company as defined in Accounting Standards Codification ("ASC") 946, *Financial Services─Investment Companies*.

*Allocation of Profits and Losses.* The General Partner shall allocate profits and losses and make cash distributions in accordance with the Partnership Agreement. The capital account balances at December 31, 2022 represent each Partner's cumulative contributions, allocation of profits, losses and cash distributions paid pursuant to the distribution priority described in the Partnership Agreement. In addition, the capital account balances at December 31, 2022 reflect each Partner's share of cash which would be distributed to the Partners under a hypothetical liquidation of the Partnership at net book value as of December 31, 2022.

*Use of Estimates.* The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and accompanying notes. Actual results could differ from those estimates. The most significant estimates and assumptions for the Partnership relate to the valuation of the investment in real estate ventures.

------

**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

The valuations presented herein were performed based on various inputs and direct comparisons as of December 31, 2022. These inputs and comparables may be subject to favorable or unfavorable changes subsequent to December 31, 2022, depending on numerous factors including, among other things, jurisdiction, property-type and tenant status, and the Partnership's determination of any investment's fair value (or the value that would have been determined had such facts been known as of December 31, 2022) may be materially impacted for current and future periods. Therefore, during this period of continued uncertainty, disruption, and volatility in the economic and financial markets, fair values of investments in real estate ventures and financial instruments may be subject to significant fluctuation. External events such as COVID-19 and geopolitical events such as the Ukraine-Russian conflict and inflation are just a few of the major issues driving global economic uncertainty today. Inflation has accelerated during the year ended December 31, 2022 and is currently expected to continue at an elevated level in the near-term. Rising inflation has resulted in tightening monetary policy, which has had an impact on valuations of investments in real estate ventures and financial instruments and the interest rate on certain debt obligations.

*Cash.* The Partnership maintains its cash account with a financial institution which, at times, may exceed federally insured limits. The Partnership has not experienced any losses on the account.

*Income Taxes*. No provision for income taxes has been made in the financial statements since the income or loss from the Partnership is allocated to each partner in accordance with the provisions mandated by the Partnership Agreement, and is passed through directly to each partner and reported on their individual tax returns.

The Partnership evaluates the uncertainties of tax positions taken or expected to be taken on a return based on the probability of whether the position taken will be sustained upon examination by taxing authorities. The Partnership uses a more-likely-than-not threshold for recognition and derecognition of tax positions taken or to be taken on a tax return. In accordance with the accounting guidance on the accounting for uncertainty in income taxes, the Partnership assessed its tax positions for the open tax years 2018 through 2022. The Partnership concluded that it has no material uncertain tax liabilities to be recognized at this time.

*Revenue and Expense Recognition*. Operating distributions received by the Partnership are reported on the Statement of Operations as dividend income. Realized gains are recognized when liquidating proceeds in excess of investment cost are received. Expenses are recognized when incurred. Interest income is recognized on an accrual basis.

*Deferred Credit Facility Costs.* Debt issuance costs related to the credit facility payable are amortized over the life of the facility. The Partnership presents credit facility debt issuance costs, net of amortization, as an asset.

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

*Derivatives.* The Partnership uses derivative financial instruments, such as interest rate caps and swaps to hedge its interest rate risk. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of the derivatives are recognized directly in the Statement of Operations.

*Investment Valuation.* The Partnership's investments are composed of equity interests in real estate ventures. These investments are accounted for at fair value and reflect the Partnership's allocable share of the fair value of each such investment. The General Partner has estimated a value for such investments based upon available information concerning the market for real property investments including, but not limited to, the estimated liquidation value of investments, the value of comparable assets, the replacement costs, impact on value due to ground leases and the income and cash flows expected to be generated by the investments. Specifically, fair value is the cost of the investment, net of distributions of capital from its acquisition date through the date of the financial statements, plus an estimate of any unrealized appreciation or depreciation. Valuation methods for investment in real estate ventures may include, but are not limited to, the following:

1)Discounted Cash Flows - forecasts of future net cash flows during the holding period, anticipated net proceeds from the sale, disposition or resolution of the investment, discounted at prevailing market rates;

2)Income Capitalization - prevailing market capitalization rates or earnings multiples applied to stabilized income or adjusted earnings from the investment and other observable market data;

3)Sales Comparable - recent sales of comparable investments;

4)Offer Price - sale negotiations and bona fide purchase offers, contracts received from independent parties, or estimated proceeds from sold assets.

ASC 820, *Fair Value Measurements and Disclosures*, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of the fair value measurements. This standard defines fair value as the price that the Partnership would receive upon selling an investment in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. The standard establishes a three-level hierarchy based on inputs to fair value measurements. Inputs refer broadly to the assumptions that market participants would use in pricing the investment, including assumptions about risk.

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

The three levels of the fair value hierarchy under this standard are described below:

· Level 1 – Unadjusted quoted prices in active markets for identical investments that the Partnership has the ability to access at the measurement date. This level of the fair value hierarchy provides the most reliable evidence of fair value and is used to measure fair value whenever available.

· Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. These inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, and inputs other than quoted prices that are observable for the investment. These are inputs that are derived principally from or corroborated by observable market data by correlation or other means.

· Level 3 – Inputs that are unobservable inputs for the investments that are used to measure fair value when observable inputs are not available. Unobservable inputs reflect the Partnership's own assumptions about the assumptions that market participants would use in pricing the investment. These are inputs that are developed based on the best information available in the circumstances, which might include the Partnership's own data.

Because of the inherent uncertainty of real estate valuations related to assumptions regarding highest and best use, capitalization rates, discount rates, leasing and other factors, the estimated fair values reflected in the financial statements may differ significantly from values that would be determined by negotiation between independent parties in sales transactions, and the difference could be material. These valuations are generally classified within Level 3 of the valuation hierarchy.

**Note 3. Investment Valuation**

The following is a summary of valuation level inputs used at December 31, 2022 in valuing the Partnership's investments and other financial instruments carried at fair value:

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| | | |
|:---|:---|:---|
| **Valuation Level Inputs** | **Real Estate Ventures** | **Other Financial Instruments** |
| Level 1 - Quoted Prices | $— | $— |
| Level 2 - Other Significant Observable Inputs |  | 448442 |
| Level 3 - Significant Unobservable Inputs | 284383819 |  |
| Total | $284383819 | $448442 |

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There was funding of Level 3 investments of $7,154,227 and no transfers into or out of Level 3 measurements for the year ended December 31, 2022.

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

The following table shows quantitative information about unobservable inputs related to the Level 3 fair value measurements used as of December 31, 2022.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Asset Class** | **Fair Value** | **Valuation Techniques** | **Unobservable Inputs** | **Range** |
| Retail | $282505769 | Discounted Cash Flows (DCF) | Terminal Capitalization Rate | 5.75% - 6.50% |
|  |  |  | Discount Rate | 6.14% - 10.02% |
|  |  |  | DCF Term | 10.0 -11.0 years |
|  |  |  | Market Rent Growth Rate | 3.00% - 3.50% |
|  | $1878050 | Net Present Value (NPV) | Discount Rate | 7.64% - 8.25% |
|  |  |  | NPV Term | 25.0 -25.4 years |
| Total | $284383819 |  |  |  |

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Unobservable inputs used to determine Level 3 valuations may have similar or diverging impacts on valuation. Significant increases or decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurements than noted in the table above.

**Note 4. Interest Rate Derivatives**

The Partnership has interest rate swap and cap agreements to hedge itself against the risk of uncertain variable cash flows in the future of the underlying BankUnited Revolving Credit Agreement with a notional amount of $30,500,000, as disclosed in Note 7. Interest rate derivative contracts consist of the following as of December 31, 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Nature of Derivative** | **Notional** | **Maturity** | **Rate** | **Benchmark** | **Fair Value at December 31, 2022** |
| Cap | $19465000 | 5/12/2025 | 4.00% | 1 mo. USD-SOFR CME Term | $289062 |
| Swap | 7200000 | 5/12/2025 | 3.60% | 1 mo. USD-SOFR CME Term | 101377 |
| Swap | 1935000 | 5/12/2025 | 2.96% | 1 mo. USD-SOFR CME Term | 55497 |
| Swap | 1900000 | 5/12/2025 | 4.16% | 1 mo. USD-SOFR CME Term | 2506 |

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**Note 5. Investment Funding and Other Commitments**

The Partnership discloses financial support provided or contractually required to be provided to any of its investments. The disclosures include (i) the type and amount of financial support provided to investee companies, including situations in which the Partnership assisted an investee in obtaining financial support, (ii) the primary reasons for providing the financial support, (iii) the type and amount of financial support the Partnership is contractually required to provide to an investee, but has not yet provided, and (iv) the primary reasons for the contractual requirement to provide the financial support.

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

During the year ended December 31, 2022, the Partnership made $7.2 million of investment contributions for capital expenditures and leasing costs. The Partnership has no unfunded commitment to its investments in existing real estate ventures as of December 31, 2022.

The Partnership's right to redeem or sell its investments is subject to restrictions per the terms of the underlying investment operating agreements.

**Note 6. Related Party Transactions**

In accordance with the Partnership Agreement, the Partnership pays asset management fees quarterly, in advance, to the Asset Manager, an affiliate of the General Partner, equal to 0.40% per annum of the aggregate Capital Contributions of each Partner less the portion of such Capital Contributions in respect of (i) Partnership Expenses other than Investment Expenses; (ii) any portion of the Investments that have been sold or written-off; and (iii) the portion of such Capital Contributions that have been returned unused. During the year ended December 31, 2022, the Partnership paid asset management fees of $1,097,733.

As part of the closing and execution of the Partnership Agreement, the Limited Partners approved the reimbursement of expenses, subject to annual limits, for Owner's Representatives (who may be employees or consultants of the General Partner and its affiliates) in connection with the ownership and operation of the Properties. The Advisory Board amended section 6.06 of the Partnership Agreement in October 2018 to increase the annual limits of such Owner's Representatives expenses. In addition, the Partnership also approved reimbursements for advisory or consultant services, including legal, tax and/or accounting related services incurred by the General Partner and its affiliates for its employees or consultants, subject to annual limits, as provided for in Section 6.06 of the Partnership Agreement and subsequently amended in October 2018. For the year ended December 31, 2022, the Partnership incurred expenses for Owner's Representatives and advisory or consulting services of $445,226 and $51,123 respectively, which equaled the annual limits per the Partnership Agreement. During the year ended December 31, 2022, the Partnership paid a total of $406,201 for Owner's Representatives and advisory or consulting services, $289,442 of which is included in salary expense in the Statement of Operations and $116,759 included in the decrease in due to related parties in the Statement of Cash Flows. As of December 31, 2022, the Partnership has a due to related parties' balance of $206,907 which consists of $206,907 for Owner's Representatives and advisory or consulting services paid by an affiliate of the General Partner.

The Partnership reimbursed $177,436 to an affiliate of the General Partner for operating expenses paid on behalf of the Partnership for the year ended December 31, 2022. The expenses are included in the Statement of Operations.

As of December 31, 2022, the Partnership had over-reimbursed the affiliate of the General Partner, resulting in a due from related parties' balance of $2,802, which is due from an affiliate of the General Partner and is expected to be repaid in the first quarter of 2023.

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

**Note 7. Credit Facility Payable**

On May 23, 2019, the Partnership entered into a revolving credit agreement ("Revolving Credit Agreement") with Signature Bank collateralized by the net asset value ("NAV") of the Partnership. The Revolving Credit Agreement with Signature Bank was paid off and terminated on May 12, 2022. On May 12, 2022, the Partnership entered into a revolving credit agreement ("BankUnited Revolving Credit Agreement") with BankUnited collateralized by the NAV of the Partnership. The BankUnited Revolving Credit Agreement is a NAV based facility with a maximum commitment of $30,500,000. The BankUnited Revolving Credit Agreement has a maturity date of May 12, 2025.

The BankUnited Revolving Credit Agreement was subject to a one-time upfront fee of 1.25% and carries no unused commitment fees. Borrowings bear interest at the Secured Overnight Financing Rate ("SOFR") in either 1, 3, or 6 month durations plus 4.00%.

Availability under the BankUnited Revolving Credit Agreement is subject to the accuracy of representations and warranties and the absence of a default. The BankUnited Revolving Credit Agreement contains customary restrictive covenants, including limitations on debt, investments and maximum leverage, all of which are in compliance during the year ended December 31, 2022. As of December 31, 2022, the Partnership has outstanding borrowings of $13,760,000, and remaining capacity of $16,740,000. The Partnership had average daily borrowings of $9,630,983 at a weighted average interest rate of 7.54% during the year ended December 31, 2022.

**Note 8. Financial Highlights**

The Partnership is required to disclose financial highlights for Limited Partners in accordance with the provisions of ASC 946. These financial highlights consist of net investment income, expenses and carried interest allocation ratios for the year ended December 31, 2022 and the internal rate of return since inception ("IRR") of the Limited Partners, net of all expenses, through December 31, 2021 and December 31, 2022.

The following summarizes the Limited Partners' financial highlights:

<u>Ratios and Supplemental Data</u>

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| | |
|:---|:---|
| | **Year Ended December 31, 2022** |
| Net Investment Income | 0.15% |
| Expenses | 0.99% |
| Carried Interest allocation | —% |
| Expenses and Carried Interest allocation | 0.99% |
| Cumulative internal rate of return through December 31, 2021 | 3.09% |
| Cumulative internal rate of return through December 31, 2022 | 1.06% |

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**Madison NYC Core Retail Partners, LP**

(a Delaware limited partnership)

**Notes to Financial Statements**

**For the Year Ended December 31, 2022**

The net investment income, expenses and carried interest allocation ratios are computed as a percentage of weighted average Limited Partners' capital.

The IRR was computed based on the daily cash inflows (capital contributions), outflows (distributions) and the Limited Partners' capital at the end of the period (residual value) as of the measurement date.

**Note 9. Subsequent Events**

Subsequent to December 31, 2022 and through February 27, 2023, the date through which management evaluated subsequent events and on which the financial statements were available for issuance, the Partnership noted no subsequent events that require disclosure.

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