INRE 10-K & 10-Q changes, risk factors and insider trading

There are many factors that can affect the availability and timing of distributions paid to our stockholders including the outcome of our board’s review of strategic alternatives. We may not generate sufficient cash flow from operations to fund any distributions to our stockholders. The actual amount and timing of distributions, if any, is determined by our board of directors in its discretion, based on its analysis of our actual and expected cash flow, capital expenditures and investments, as well as general financial conditions. Actual cash available for distribution may vary substantially from estimates made by our board. The sale of assets and delayed reinvestment or reinvestment at lower yields will negatively impact the amount available to pay distributions. In addition, to the extent we invest in development or redevelopment projects that do not immediately generate cash flow, or in real estate assets that have significant capital requirements, our ability to make distributions will be negatively impacted. Our board will continue to review our distribution policy as our strategic plan evolves. There is no assurance we will be able to pay distributions in the future at any particular amount.

Historically,We in the years prior to 2020, we did not consistently generate sufficient cash flow from operations tomay fund distribution payments. Our organizational documents permit us to pay distributions from sources other than cash flow from operations.operations Specifically,such some or all of our distributions may be paidas from retained cash flow, if any, borrowings, cash flow from investing activities, the net proceeds from the sale of our assets or from future proceeds generated from sale of shares pursuantincluding sales made through the DRP. In the years prior to the2020, DRPwe (infunded thedistributions eventfrom thesources planother isthan reinstated).cash flow from operations. We have not established any limit on the extent to which we may use these alternative sources.

Funding distributions from these other sources reduceswould reduce the funds available for other purposes, including to acquire properties or other real estate-related investments. Likewise, funding distributions from the sale of additional securities, including shares issued under the DRP (if reinstated),DRP, would dilute our stockholders’ interest in us on a percentage basis and may impact the value of the investment, especially if we sell these securities at prices less than the price our stockholders paid for their shares. As a result, the return our stockholders realize on their investment may be reduced. Doing so may also negatively impact our ability to generate cash flows. There is no assurance we will continue to generate sufficient cash flow from operations to cover distributions. If these sources are not available or are not adequate, our board may have to consider reducing or eliminating distributions.

TheA SRP has been suspended. Even when in effect, stockholders’stockholder’s ability to sell their shares pursuant to the SRP is limited. There is no assurance that stockholdersshares willcan be able to resell their sharesresold at a price equal to or greater than the price paid for the shares.

Even if reinstated, ourOur SRP contains numerous restrictions that limit our stockholders’ ability to sell their shares even if the plan is reactivated.shares. Our board of directors,board, in its sole discretion, may amend or terminate our SRP. The SRP will immediately terminate if our shares become listed for trading on a national securities exchange. Further, our board reserves the right in its sole discretion to change the repurchase prices or reject any requests for repurchases. Any amendments to, or termination of, the SRP may restrict or eliminate our stockholders’ ability to have us repurchase their shares and otherwise prevent our stockholders from liquidating their investment. Therefore, our stockholders may not have the opportunity to make a repurchase request prior to a potential termination of the SRP and our stockholders may not be able to sell any of their shares of common stock back to us. As a result of these restrictions and circumstances, the ability of our stockholders to sell their shares should they require liquidity is significantly restricted. Moreover, under the SRP, any shares accepted for “ordinary repurchases” or “exceptional repurchases” are repurchased at a discount to the then-current Estimated Per Share NAV. Therefore, even if our stockholders are able to sell their shares of common stock back to us pursuant to the SRP, they may be forced to do so at a discount to the purchase price such stockholders paid for their shares.

There is no established public trading market for our shares of common stock and the prior Estimated Per Share NAV should not be used.stock.

Our shares of common stock are not listed or included for trading on any national securities exchange. There is no established market for our shares. Our board is neither required to sell our assets and liquidate the Company by any specified date, nor is the board required to list our shares for trading on a national securities exchange by a specified date. As noted herein, there is no assurance the board will pursue a listing or other liquidity event as a result of the board’s review of strategic alternatives or otherwise at any time in the future.event. Even if the board decided to pursue a listing of our shares of common stock, we may not satisfy the listing requirements or otherwise be approved for listing. Thus, holders of our common stock should be prepared to hold their shares for an unlimited period of time. Our charter also prohibits the ownership of more than 9.8% in value of the aggregate of the outstanding shares of our stock or more than 9.8% (in value or number whichever is more restrictive) of the aggregate of the outstanding shares of our common stock by any single investor unless exempted by our board.

Future issuances of common stock will reduce the percentage of our outstanding shares owned by our other stockholders. Further, our board of directors could authorize the issuance of stock with terms and conditions that could subordinate the rights of the holders of our current common stock, adversely affect the Estimated Per Share NAV or 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.

Our board of directors may change our investment policies without stockholder approval, which could alter the nature of our investments.

inability to achieve necessary zoning or other governmental permits; and difficulty or inability to obtain any required consents of third parties, such as tenants and,and mortgage lenders.

Our future success depends on the continuing efforts of our executive officers and other key personnel, including Mr. Zalatoris,Michael, ourwho was elected president and chief executive officer.officer effective February 2, 2026. We rely on the leadership, knowledge, and experience that our executive officers provide. They foster our corporate culture, which has been instrumental to our ability to attract and retain new talent. Personnel turnover, including changes in our management team or failure to manage executive succession effectively, could disrupt our business. Mr. Michael was elected to succeed Mark Zalatoris after the latter’s agreement with us ended. We do not have entereda intoseparate the CEO Agreementagreement with Mr. Zalatoris to compensate him for performing services as our president and chief executive officer. The term of the CEO Agreement, as amended, began on February 1, 2024 and ends on February 2, 2026, and the CEO Agreement may be terminated by us at any time for “Cause,” as defined in the CEO Agreement, immediately upon written notice of termination to Mr. Zalatoris, or at any time by us other than for Cause or by Mr. Zalatoris for any reason or no reason upon ninety (90) days’ written notice. Additionally, we have a right to terminate the CEO Agreement if we close or complete a “Liquidity Event” as defined in the CEO Agreement, as amended.Michael. Future leadership transitions and management changes may cause uncertainty in, or a disruption to, our business, and may increase the likelihood of senior management or key personnel turnover.

We depend on IREIC and its affiliates and subsidiaries to manage and conduct our operations. IREIC, through one or more of its subsidiaries, owns and controls our Business Manager and Real Estate Manager,Manager. Our agreement with the Business Manager terminates on March 31, 2027 and wedoes wouldnot incurhave substantialautomatic costsrenewal provisions. We have the right to terminate our business managementthe agreement withearlier ourbut must pay the Business Manager,Manager whichthe fee that would includehave ourbeen paid for the remaining term of the agreement. The Business Manager’s right to be paid the business management fee for the remainder of the term of the agreement (through March 31, 2027) using the calculations made for the calendar quarter in which the agreement was terminated. The right to this payment willis bealso triggered upon a merger or sale of the Company. The Business Manager is also entitled to receive an incentive fee if a “Qualifying Internalization” as defined in the businessBusiness managementManagement agreementAgreement occurs. IREIC and its affiliates are under no obligation to waive or otherwise reduce any fees or amounts to which it or they are entitled. Further, IREIC and its affiliates or subsidiaries may from time to time be parties to litigation or other claims arising from sponsoring other entities or providing these services. As such, IREIC and these other entities may incur costs, liabilities or other expenses arising from litigation or claims that are either not reimbursable or not covered by insurance. Future waivers or deferrals of fees, additional capital contributions or costs, liabilities or other expenses arising from litigation or claims could have a material adverse effect on IREIC’s financial condition and ability to fund our Business Manager or Real Estate Manager to the extent necessary.

In addition, governmental and societal attention to environmental, social, and governance (“ESG”) matters, including expanding mandatory and voluntary reporting, diligence and disclosure on ESG topics such as climate change, carbon emissions, water usage, waste management, human capital and risk oversight, could expand the nature, scope and complexity of matters that we or IREIC is required to control, assess and report. We may face reputational damage in the event thatif we or IREIC do not satisfy the corporate responsibility standards set by various constituencies, which may negatively impact our tenants and our ability to lease our properties to tenants. If we or IREIC elects not to or are unable to satisfy new ESG criteria or do not meet the criteria of a specific third-party provider, some investors or tenants may conclude that our policies with respect to corporate responsibility are inadequate. If we or IREIC fails to satisfy the expectations of investors, tenants and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely affected.

We are externally managed andbut havein nocertain employees.circumstances, Onesuch potentialas outcomein connection with a listing of theour reviewcommon of strategic alternatives is the possible decision bystock, our board may decide to internalize our management functions in lieu of engaging the Business Manager and its affiliates including the Real Estate Manager.functions. Doing so would expose us to the risk of being unable to hire certain key employees of the Business Manager and its affiliates, even if we exercise certain rights to solicit these personspeople under the provisions contained in the businessBusiness managementManagement agreement.Agreement. Failure to hire or retain key personnel could result in increased costs and deficiencies in our disclosure controls and procedures or our internal control over financial reporting. These deficiencies could cause us to incur additional costs and divert management’s attention from most effectively managing our investments, which could result in us being sued and incurring litigation-associated costs in connection with the internalization transaction. In addition, the costs that we would incur to internalize our management functions may be substantial including amounts due the Business Manager if the businessBusiness managementManagement agreementAgreement is terminated including a fee in one lump sum for the remainder of the term ending on March, 31, 2027 plus any incentive fee to which the Business Manager might be entitled in the event of “Qualifying Internalization” as defined in the businessBusiness managementManagement agreement.Agreement. We would also lose the benefit of the experience of our Business Manager.

Additionally, a continuing or permanent impact resulting from a pandemic on the retail business could make it difficult for us to renew or re-lease our properties at rental rates equal to or above historical rates. We could also incur more significant re-leasing costs, and the re-leasing process could take longer. Because substantially all of our income is derived from rentals of commercial real property, our business, income, cash flow, results of operations, financial condition, liquidity and ability to comply with the terms of, draw upon or increase the size of our credit facility (the “Credit Facility,”)facility, prospects and ability to service our debt obligations, our ability to consummate future property acquisitions and our ability to pay future distributions to our stockholders could be materially adversely affected if a significant number of tenants become unable to meet their obligations to us as a result of another pandemic.

In addition, events affecting economic conditions in the United States or globally, such as the general negative performance of the real estate sector or market volatility (including as a result of uncertainties regarding actual and potential shifts in U.S. and foreign trade, economic and other policies, including with respect to treaties and tariffs, inflationary pressures or higher interest rates, actual or perceived instability in the U.S. banking system and related bank failures, ongoing hostilities betweenin Israelvarious andparts Hamasof andthe between Russia and Ukraine, NATOworld, and the international community’s response thereto and other geopolitical events affecting the financing markets generally), could result in a decline in economic growth generally or in the retail sector particularly and thus the demand for retail space and the rent existing or potential tenants are able or willing to pay as well as the potential for increased defaults under existing leases.

In the retail sector, a tenant occupying all or a large portion of the gross leasable area of a retail center, commonly referred to as an anchor tenant, may become insolvent, may suffer a downturn in business, for example, because of increased competition from internet retailers, or may decide not to renew its lease. For example, REI vacated 26,500 square feet, at Settlers Ridge in February 2021lease and thatmay spacevacate remainsits vacant.space. ThisSuch vacancy and similar events at other propertiesvacancies have resulted and could result again in a reduction or cessation in rental payments to us and would adversely affect our results of operations and financial condition. A lease termination by an anchor tenant could result in lease terminations or reductions in rent by other tenants whose leases may permit cancellation or rent reduction, generally within six to twelve months following the termination of the other tenant’s lease. For example, MidTowne Shopping Center continues to be impacted by a co-tenancy failure with sixthree tenants actively paying a reduced substitute rent in lieu of their full lease obligated payments.payments and three others with the right to pay substitute rent effective December 1, 2025, that have not yet claimed co-tenancy failure. On November 3, 2024, American Freight filed for bankruptcy and eventually rejected and closed their location at Harris Plaza. American Freight is a named co-tenant in Ulta’s lease at this center. In addition, Ross Stores has co-tenancy rights requiring the American Freight unit to be occupiedoccupy and operating. Furthermore, two additional tenants at Pentucket Shopping Center cited known co-tenancy failuresoperate in Septemberits 2024, both of these tenant’s substitute rent rights were originally triggered by the closure of Bed Bath & Beyond and were effective retroactive to July 1, 2023.space. Similarly, the leases of some tenants may permit the tenant to transfer its lease to another retailer. Further, theThe transfer to a new tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center impacting our ability to enter into new or renewal leases on terms equivalent to, or better than, the terms of any expiring lease at the center. A lease transfer to a new tenant could also allow other tenants to make reduced rental payments or to terminate their leases in accordance with lease terms. In the event thatIf we are unable to re-lease the vacated spaces to new qualified tenants, we may incur additional expenses in order to remodel the space to be able to re-lease the space to more than one tenant.

Our results of operations depend to a significant degree on our ability to continue to lease our properties, including renewing expiring leases, leasing vacant space and re-leasing space in properties where leases are expiring. As of December 31, 2024,2025, our portfolio had physical and economic occupancy of 93.1%92.0% and 93.4%,92.2%, respectively, and the weighted average lease expiration for our portfolio was 4.64.5 years. In 2025,2026, leases for moreapproximately than 10%7.6% of our portfolio, measured by total ABR expire, and in 2026,2027, leases for moreapproximately than 9%12.0% of our portfolio, measured by total ABR expire. The existing tenants may decline to renew leases and we may not be able to find replacement tenants. We cannot guarantee that leases that are renewed or new leases will have terms that are as economically favorable to us as the expiring leases, or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to retain tenants or attract new tenants or that we will be able to lease a property at all. We may experience significant costs in connection with re-leasing a significant number of our properties, which could materially and adversely affect us.

Bankruptcy filings by our tenants or any guarantor of a tenant’s lease obligation can occur in the course of operations, and in recent years, several companies in the retail industry, including certain of our tenants, have declared bankruptcy. See “Properties – Tenancy Highlights” for more information regarding vacancies arising from material tenant bankruptcies. A bankruptcy filing of our tenants or any guarantor of a tenant’s lease obligations would bar all efforts to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently. If a lease is assumed, all pre-bankruptcy balances owing under it must be paid in full. Leases have been rejected by some tenants in the past, and if a lease is rejected by a tenant in bankruptcy in the future, we would only have a general unsecured claim for damages. If a lease is rejected, it is unlikely we would receive any payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid. This claim could be paid only if the funds were available, and then only in the same percentages as that realized on other unsecured claims.

OnlyLess twentythan ten of our leases, generally limited to leases for less than 5,000 square feet, contain annual rental rate escalations based on increases in the Consumer Price Index. Some others contain fixed annual rent escalations. If the fixed rent increases begin to lag behind inflation, and our expenses increase with or greater than the inflation rate, then our profitability would be negatively impacted. Future leases may not contain escalation provisions, and even those that do include rent escalation provisions may not be sufficient to protect our revenues from the adverse effects of inflation. Moreover, if we are not able tocannot increase rents at a rate that keeps pace with inflation, the purchasing power of the dollars that we receive will be lower that it would have been in the absence of inflation.

Although asAs of December 31, 2024,2025, the weighted average lease expiration for our portfolio was 4.64.5 years,years. weWe have entered into both short-term leases, with lease terms of fewer than three years, and long-term leases, with lease terms of greater than seven years, both of which expose us to risk. Our short-term leases expose us to the effects of declining market rent. There is no assurance that we will be able to renew these short-term leases as they expire or attract replacement tenants on comparable terms, if at all. Therefore, the returns we earn on this type of investment may be more volatile than the returns generated by properties with longer term leases.

A retail property’s revenues and value may be adversely affected by several factors, many of which apply to real estate investment generally, but which also include trends in the retail industry and perceptions by retailers or shoppers of the safety, convenience and attractiveness of the retail property. Our properties are located in public places, and any incidents of crime or violence, including acts of protest or terrorism, would result in a reduction of business traffic to tenant stores located in our properties. Any such incidents may also expose us to civil liability. In addition, to the extent that the investing public has a negative perception of the retail sector, the value of our retail properties may be negatively impacted.

The Company is the lessee under one long-term leasehold,leasehold at the Milford Marketplace property, commonly known as a ground lease, to operate a property that is on land owned by a third party. The ground lease, which commenced on July 1, 2007, was assumed as part of a property purchased in October 2015 and extends through June 30, 2037 with six 5-year renewal options which the Company assumes will be exercised. Although we have a right to use the property on land leased to us pursuant to a ground lease, we do not own the underlying land. Accordingly, we will have no economic interest in the land at the expiration of the ground lease and will not share in any increase in value of the land or the improvements once our ground lease ends. If we are found to be in breach of a ground lease, and that breach cannot be cured, we could lose our interest in the improvements and the right to operate the property. Further, because we do not own the underlying land, the lessor could take certain actions to disrupt our use of the property or our tenant’s operation of the property.

Operating expenses, such as expenses for fuel, utilities, labor, building materials and insurance, are not fixed and may fluctuate from time to time. TheOur operating expenses increased 8.4% for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was also greater than the rate of inflation as reported by the U.S. Bureau of Labor Statistics (the “BLS”). The BLS reported in February 20252026 that the consumer price index, a commonly referenced measure of inflation, rose by 3.0%2.4% over the 12 months ended January 2025.2026. Unless specifically provided for in a lease, there is no guarantee that we will be able to pass increases on to our tenants. To the extent these increases cannot be passed on to our tenants, any increases would cause our cash flow and our operating results to decrease, which could have a material adverse effect on our ability to pay or sustain distributions.

WeIn November 2025, we entered into a secondthird amended and restated credit agreement in Februaryconnection 2022with forour acredit $475.0facility (the “Credit Facility”), increasing the aggregate total commitments thereunder from $775.0 million to $860.0 million. The Credit Facility consistingconsists of a revolving credit facility providing initial revolving credit commitments in an aggregate amount of $200.0$285.0 million (the “Revolving Credit Facility”) and a term loan facility providing initial term loan commitments in an aggregate amount of $275.0$575.0 million (the “Term Loan”). On May 17, 2022, we entered into a First Amendment to Credit Agreement Regarding Incremental Term Loans (the “First Amendment”), amending the terms of the Credit Agreement primarily to draw an additional $300.0 million to fund the acquisition of investment properties during May 2022 discussed in “Note 4 – Acquisitions.” The credit agreement provides us with the ability from time to time to increase the size of the Credit Facility in an amount not to exceed $1.2 billion, subject to certain conditions. Our performance of the obligations under the credit agreement, including the payment of any outstanding indebtedness, is secured by a minimum pool of 15 unencumbered properties withthat anmust unencumberedhave poola value of at least $300.0 millionmillion. orThe aboveobligations andare also required to be guaranteed by aeach guarantysubsidiary byowning certainthe properties that are part of ourthe subsidiaries.pool. As of both March 5,11, 20252026 and December 31, 2024,2025, we had $125$267 million and $248 million, respectively, outstanding of the $200$285 million available under the Revolving Credit Facility. Our maximum availability under the Revolving Credit Facility was $75$18 million and $37 million as of both March 5,11, 20252026 and December 31, 2024,2025, respectively, subject to thevarious terms and conditions, including compliance with the covenants, of the Amendedcredit and Restated Credit Agreement that governs the Credit Facility. Although $75 million is the maximum available, covenant limitations, particularly the leverage ratio, affect what we can actually draw. As of both March 5, 2025 and December 31, 2024, approximately $39 million is available to draw as additional debt under the Revolving Credit Facility. By “additional debt,” we mean debt in addition to existing debt such as existing mortgages.agreement. The properties comprising the borrowing base for the Credit Facility are not available to be used as collateral for other debt unless removed from the borrowing base, which would reduce availability under the Credit Facility. Under the terms of the credit agreement, our leverage ratio generally cannot exceed 65%. As of December 31, 2024,2025, our leverage ratio was 57%. There has been substantially less available to actually draw or undertake as additional debt than the maximum amount available, and there may be additional periods during which the amount we can actually draw or otherwise incur as additional debt is considerably less than the maximum amount available, for example, if new variants of the coronavirus, high inflation or high interest rates were to negatively affect our tenants.

The credit agreement provides for several customary events of default, including, among other things, the failure to comply with our covenants under the credit agreement, such as the “Consolidated Tangible Net Worth” covenant as defined in the credit agreement, and the failure to pay when amounts outstanding under the credit agreement become due or defaulting by us or our subsidiaries in the payment of an amount due under, or in the performance of any term, provision or condition contained in, any agreement providing for another debt arrangement, such as a mortgage, beyond certain dollar thresholds specified in our Credit Facility. Tenant bankruptcies negatively impact our compliance with the Consolidated Tangible Net Worth covenant even if the tenant continues to pay rent. There is no guarantee that our lenders under the credit agreement will grant anothera waiver of this covenant or any other covenant that we might be in danger of violating or required representation that we cannot make. Any merger, sale of assets, consolidation or change of control may constitute a default under the credit agreement. Defaults under the credit agreement could restrict our ability to borrow additional monies and could cause all amounts to become immediately due and payable, which would materially adversely affect our liquidity and financial condition.

We have funded our capital needs almost exclusivelyprimarily through cash flow from operations (to the extent positive) and through draws on the Credit Facility, if needed. The domestic and international commercial real estate debt markets have been volatile resulting in increases in interest rates or changes in the expected or anticipated rate of decline and, from time to time, the tightening of underwriting standards by lenders and credit rating agencies, which limits the availability of credit and increase costs for what is available. We may also face a heightened level of interest rate risk, for example, if the U.S. Federal Reserve Board increases interest rates or decreases the pace of any reductions in response to, among other things, changing inflationary expectations. All these actions will likely lead to increases in our borrowing costs and may impact our ability to access capital on favorable terms, in a timely manner, or at all, which could adversely affect our ability to obtain funding for our capital needs, such as future acquisitions. If the overall cost of borrowing increases, either by increases in the index rates or by increases in lender spreads, the increased costs may result in existing or future acquisitions generating lower overall economic returns and potentially reducing future cash flow available to us. Volatility in the debt markets may negatively impact our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets. In addition, we may find it difficult, costly or impossible to refinance indebtedness which is maturing. If we are unable to borrow monies on terms and conditions that we find acceptable, the return on our properties may be lower.

If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt secured by a property, then the amount of cash flow from operations available for distributions to stockholders will be reduced. Many of the mortgages on our properties contain provisions which under certain circumstances require that cash received from tenants be paid into a cash maintenance escrow account or a lockbox or other account controlled by the lender, for example, when the borrower is not in compliance with certain covenants in the mortgage. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In such a case, we could lose the property securing the loan that is in default, thus reducing the value of our investments. For federal income tax purposes, a foreclosure is treated as a sale of the property or properties for a purchase price equal to the outstanding balance of the debt secured by the property or properties. If the outstanding balance of the debt exceeds our tax basis in the property or properties, we would recognize taxable gain on the foreclosure action and we would not receive any cash proceeds. In this event, we may be unable to pay the amount of distributions required in order to maintain our REIT status. We also may fully or partially guarantee any monies that subsidiaries borrow to purchase or operate properties. In these cases, we will likely be responsible to the lender for repaying the loans if the subsidiary is unable to do so. Our Credit Facility contains a cross-default provision that could be triggered if certain defaults by our subsidiary borrowers were to occur under their mortgages, and mortgages themselves could contain cross-collateralization or cross-default provisions, so the Company or more than one property may be materially adversely affected by a mortgage default.

We do not have any employees. We rely on personspeople performing services for our Business Manager and Real Estate Manager and their affiliates to manage our day-to-day operations. Some of these personspeople also provide services to one or more investment programs currently or previously sponsored by IREIC. These individuals face competing demands for their time and service, and are required to allocate their time between our business and assets and the business and assets of IREIC, its affiliates and the other programs formed and organized by IREIC. Certain of these individuals have fiduciary duties to both us and our stockholders.us. If these persons are unable to devote sufficient time or resources to our business due to the competing demands of the other programs, they may violate their fiduciary duties to us and our stockholders,us, which could harm our business and cause us to be unable to maintain or increase the value of our assets, and our operating cash flows and ability to pay distributions could be adversely affected.

We pay fees, which may be significant, to our Business Manager, Real Estate Manager and other affiliates of IREIC for services provided to us. Our Business Manager receives fees based on the aggregate book value, including acquired intangibles, of our invested assetsassets. andOur Business Manager is entitled to receive its business management fee for the remainder of the term ending March 31, 2027 in one lump sum upon termination of the businessBusiness managementManagement agreementAgreement by the Company except for cause or upon a Liquidity Event (as defined in the Fourth Business Management Agreement). Further, our Real Estate Manager receives fees based on the gross income from properties under management and may also receive leasing and construction management fees. Other parties related to, or affiliated with, our Business Manager or Real Estate Manager may also receive fees or cost reimbursements from us. These compensation arrangements may cause these entities to take or not take certain actions. For example, these arrangements may provide an incentive for our Business Manager to: (1) borrow more money than prudent to increase the amount we can invest; or (2) retain instead of sell assets, even if our stockholders may be better served by a sale or other disposition of the assets. The interests of these parties in receiving fees may conflict with the interest of our stockholders in earning income on their investment in our common stock.

We rely on the real estate professionals employed by Inland Real Estate Acquisitions, LLC (“IREA”) and other affiliates of our Sponsor to source potential investments in properties, real estate-related assets and other investments in which we may be interested. Our Sponsor and its affiliates maintain an investment committee (“Investment Committee”) that reviews each potential investment and determines whether an investment is acceptable for acquisition. In determining whether an investment is suitable, the Investment Committee considers investment objectives, portfolio and criteria of all programs currently advised by our Sponsor or its affiliates (collectively referred to as the “Programs”). Other factors considered by the Investment Committee may include cash flow, the effect of the acquisition on portfolio diversification, the estimated income or unrelated business tax effects of the purchase, policies relating to leverage, regulatory restrictions and the capital available for investment. Our Business Manager will not recommend any investments for us unless the investment is approved for consideration in advance by the Investment Committee. Once an investment has been approved for consideration by the Investment Committee, the Programs are advised and provided an opportunity to elect to acquire the investment. If more than one Program is interested in acquiring an investment, then the Program that has had the longest period of time elapse since it was allocated and invested in a contested investment is awarded the investment by the allocation committee. We may not, therefore, be able to acquire properties that we otherwise would be interested in acquiring.

Our properties may compete with the properties owned by other programs sponsored by IREICan oraffiliate IPC.of IREIC.

Certain programs sponsored by IREIC or its subsidiary, Inland Private Capital Corporation (“IPC”), a subsidiary of IREIC, own and manage the type of properties that we own or seek to acquire, including in the same geographical areas. Therefore, our properties, especially those located in the same geographical area, may compete for tenants or purchasers with other properties owned and managed by other IREIC- or IPC-sponsored programs. PersonsPeople performing services for our Real Estate Manager may face conflicts of interest when evaluating tenant leasing opportunities for our properties and other properties owned and managed by IREIC- or IPC-sponsored programs, and these conflicts of interest may have an adverse impact on our ability to attract and retain tenants. In addition, a conflict could arise in connection with the resale of properties in the event that we and another IREIC- or IPC-sponsored program were to attempt to sell similar properties at the same time, including in particular in the event another IREIC- or IPC-sponsored program engages in a liquidity event at approximately the same time as us, thus impacting our ability to sell the property or complete a proposed liquidity event.

Our charter places limits on the amount of common stock that any person may own without the prior approval of our board of directors.board.

No more than 50% of the outstanding shares of our common stock may be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year (other than the first taxable year for which an election to be a REIT has been made). Our charter prohibits any persons or groups from owning more than 9.8% in value of our outstanding stock or more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding common stock without the prior approval of our board of directors.board. These provisions 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 involve a premium price for holders of our common stock. Further, any person or group attempting to purchase shares exceeding these limits could be compelled to sell the additional shares and, as a result, to forfeit the benefits of owning the additional shares.

Our board of directors is divided into three classes of directors. At each annual meeting, directors of one class are elected to serve until the annual meeting of stockholders held in the third year following the year of their election and until their successors are duly elected and qualify. The classification of our board of directors may have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any transaction that could result from such offers, even if the acquisition would be in our stockholders' best interests, and may therefore prevent our stockholders from receiving a premium price for their stock in connection with a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets).

We elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013 and intend to operate in a manner that would allow us to continue to qualify as a REIT for U.S. federal income tax purposes. However, we may terminate our REIT qualification, if our board of directors determines that not qualifying as a REIT is in the best interests of our stockholders, or inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We have structured and intend to continue structuring our activities in a manner designed to satisfy all the requirements for qualification as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, including tax counsel, as to our eligibility to remain qualified as a REIT is not binding on the Internal Revenue Service (the “IRS”) and is not a guarantee that we will continue to qualify as a REIT. Accordingly, we cannot be certain that we will be successful in operating so we can remain qualified as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income or quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the IRS, such recharacterization would jeopardize our ability to satisfy all requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

Distributions that we make to our taxable stockholders out of current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. Noncorporate stockholders are entitled to a 20% deduction with respect to these ordinary REIT dividends which would result in a maximum effective federal income tax rate of 29.6% (or 33.4% including the 3.8% surtax on net investment income); however, the 20% deduction will end after December 31, 2025.. However, a portion of our distributions may: (1) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us; (2) be designated by us as qualified dividend income, taxable at capital gains rates, generally to the extent they are attributable to dividends we receive from any taxable REIT subsidiaries or certain other taxable “C corporations” in which we own shares of stock; or (3) constitute a return of capital generally to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable but has the effect of reducing the tax basis of a stockholder’s investment in our common stock. Distributions that exceed our current and accumulated earnings and profits and a stockholder’s tax basis in our common stock generally will be taxable as capital gain.

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of our management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Annual Report on Form 10-K, which include the risks described below:10-K.

As of December 31, 2024,2025, we owned 52 retail properties, totaling 7.2 million square feet located in 24 states. A majority of our properties are multi-tenant, necessity-based retail shopping centers located primarily in major regional markets and growing secondary markets throughout the United States. As of December 31, 2024,2025, grocery-anchored or grocery shadow-anchored shopping center properties represented 87% of our annualized base rent. A grocery shadow-anchored shopping center is a shopping center near a grocery store that we do not own and is not a part of our shopping center but that we believe generates traffic for our shopping center. On September 18, 2024, we announced our board’s decision to review strategic alternatives including the sale of the Company. As of December 31, 2024,2025, our portfolio had physical and economic occupancy of 93.1%92.0% and 93.4%,92.2%, respectively. As of December 31, 2024,2025, 20232024 and 2022,2023, annualized base rent (“ABR”) per square foot averaged $19.72,$19.57, $19.61$19.72 and $19.10,$19.61, respectively, for all owned properties. ABR is calculated by annualizing the monthly base rent for leases in-place as of the applicable date, excluding ground leases. ABR including ground leases averaged $16.93,$17.23, $16.79$16.93 and $16.42$16.79 as of December 31, 2024,2025, 20232024 and 2022,2023, respectively. There were no acquisitions or dispositions during the year ended December 31, 2024.2025.

We have no employees and are externally managed and advised by the Business ManagerManager, toan whomindirect wewholly owned subsidiary of our Sponsor. We pay fees to and reimburse certain expenses incurred by the Business Manager for the services provided to us. OurThis fee was reduced dollar-for-dollar for amounts we paid to Mark Zalatoris during the time he served as the Company’s president and chief executive officer,officer. MarkThe Zalatoris,agreement serveswith inMr. theseZalatoris capacitiesended pursuanton toFebruary 2, 2026, and Mr. Zalatoris resigned from his positions as president and chief executive officer effective the termssame of the CEO Agreement.date. The feeBusiness thatManager will now directly pay Mr. Michael, our newly elected president and chief executive officer effective February 2, 2026, and we will pay to the Business Manager is reduced dollar for dollar for amounts we pay to Mr. Zalatoris under the CEOfull Agreement. Mr. Zalatoris is not an employeeamount of the Companyfee andit is entitled to under our agreement with the Business Manager. We do not an officer or director ofreimburse the Business Manager butfor hasany thecompensation authorityit under the CEO Agreement and the Fourth Business Management Agreementpays to directany theperson day-toserving dayas operationsone of theour Businessexecutive Manager.officers. Our properties are managed by Inland Commercial Real Estate Services LLC, also an indirect wholly owned subsidiary of our Sponsor.

Inflationary pressures andpressures, volatility in interest rates, inthe particular,imposition of new duties, tariffs, trade barriers and retaliatory countermeasures by the U.S. and other governments, could all reduce consumer spending and adversely impact retailer profitability, particularly if rates rise which may impact our ability to increase rents as well as tenant demand for new and existing store locations. Regardless of inflation levels, base rent under most of our long-term anchor leases remain constant (subject to tenants’ exercise of renewal options at pre-negotiated rent increases) until the expiration of their lease terms, regardless of the inflation rate for any particular period. While many of our leases require tenants to pay their share of shopping center operating expenses (including common area maintenance, real estate tax and insurance expenses), our ability to collect the expense increases passed through to tenants is dependent on their ability to absorb and pay these increases. Inflation may also impact other aspects of our operating costs, including fees paid to service providers, the cost to complete redevelopments and build-outs of recently leased vacancies and interest rate costs relating to variable rate loans and refinancing of lower fixed-rate indebtedness. While we have not been significantly impacted by any of these items to date, no assurances can be provided that these inflationary pressures will not have a material adverse effect on our business in the future.

As of December 31, 2025 and December 31, 2024, we had total debt outstanding of $841.7 million and $837.7 million, respectively, excluding unamortized debt issuance costs,costs. whichAs of December 31, 2025 and December 31, 2024, the outstanding debt bore interest at a weighted average interest rate of 4.65% per annum and 4.55% per annum.annum, respectively. As of December 31, 2024,2025, the weighted average years to maturity for our debt was 1.83.2 years.years, not taking into account any extension options that may be exercised at our option. As of both December 31, 20242025 and December 31, 2023,2024, our borrowings were 52% of the purchase price of our investment properties. As of December 31, 20242025, our cash and cash equivalents balance was $6.4$8.0 million. See “Risk Factors—Risks Associated with Debt Financing—The financial covenants under our credit agreement may restrict our ability to make distributions and our operating and acquisition activities. If we breach the financial covenants we could be held in default under the credit agreement, which could accelerate our repayment date and materially adversely affect our liquidity and financial condition” for further information.

During the year ended December 31, 2024,2025, we investedused $13.9$22.0 million onto invest in capital expenditures and tenant improvements, which iswas approximately $3.6$8.1 million more than we didinvested induring the year ended December 31, 2023.2024. For 2025,2026, we haveanticipate budgetedinvesting approximately $21.2$22.0 million for capital expenditures and tenant improvements. Capital expenditures and tenant improvements are funded by cash flows generated from operations during current or prior periods.

Cash provided by operating activities decreased $0.6 million during 2025 compared to 2024 and increased $3.9 million during 2024 compared to 20232023. The decrease from 2024 to 2025 was primarily due to the timing of tenant receipts and decreasedan $5.4increase millionin duringleasing 2023commissions comparedin to 2022.2025. The increase from 2023 to 2024 was primarily due to an increase in property net operating income primarily due to higher base rent, a decrease in cash paid for interest due to lower average debt outstanding and a decrease in business management fees in 2024 resulting from a change in the fee that became effective April 1, 2023. The decrease from 2022 to 2023 was primarily due to higher interest payments, the timing of payments to related parties and a decrease in prepaid rent.

During 2025, 2024 and 2023, cash wasand proceeds from Revolving Credit Facility were used to repay debt. DuringThere 2022,were weno drewdistributions approximatelyreinvested $278 million onthrough the CreditDRP Facilityor toshares fundrepurchased purchasethrough ofthe properties.SRP during the year ended December 31, 2025. During the years ended December 31, 2024, 20232024 and 2022,2023, we generated proceeds from the sale of shares pursuant to the DRP of $5.0 million, $7.0 million and $7.3$7.0 million, respectively. During the years ended December 31, 2024, 20232024 and 2022,2023, share repurchases through the SRP were $5.0 million, $6.0 million and $3.6$6.0 million, respectively. During the years ended December 31, 2024,2025, 20232024 and 2022,2023, we paid $19.6 million, $19.6 million and $19.6 million, respectively, in distributions. As noted herein, in connection with the board’s review of strategic alternatives, the DRP and SRP havewere both been suspended.suspended effective October 1, 2024 and have been reinstated effective February 1, 2026.

The following table presents the property net operating income broken out between same store and non-same store, prior to straight-line income (expense), net, amortization of intangibles, interest, and depreciation and amortization for the years ended December 31, 2024 and 2023, along with a reconciliation to net loss, calculated in accordance with GAAP.

General and administrative expenses. General and administrative expenses increased $580 in 2024 compared to 2023 primarily due to the amount paid to Mr. Zalatoris under the CEO Agreement and an increase in professional fees. Amounts paid to Mr. Zalatoris reducereduced the amount paid by the Company to the Business Manager under the Business Management Agreement on a dollar-for-dollar basis.

Business management fee. Business management fees decreased $669 in 2024 compared to 2023. The decrease is primarily due to an amendment to the Business Management Agreement that reduced the base fee. As noted herein, the amount we paypaid to Mr. Zalatoris under the CEO Agreement reducesreduced our payment under the Business Management Agreement on a dollar-for-dollar basis. During the year ended December 31, 2024, total costs incurred under the CEO Agreement were $323, which are included in general and administrative expenses.

ThereThe arefollowing norisk materialfactors changesamend toand supplement, and should be read in conjunction with, the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.2025:

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of Inland Real Estate Income Trust, Inc. (which we refer to herein as the “Company,” “we,” “our” or “us”) based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on March 11, 2026, some of which are summarized below:

As part of the review of strategic alternatives, our board decided not to pursue the sale of the Company or a listing of the Company’s common stock on a national securities exchange at the present time. There is no assurance that we will pursue an alternative liquidity event in the near future, if at all. We have limited sources of capital and thus a limited ability to increase our asset base or to fund other needs including share repurchases;

Volatility in the financial markets and challenging economic conditions including market disruptions and uncertainties resulting from any future global pandemic or epidemic, ongoing hostilities in various parts of the world and other geopolitical events affecting the financing markets generally such as tariffs, changes in governmental programs or spending, volatility in interest rates, supply chain shortages that affect our tenants or other disruptions caused by events beyond our control, may adversely impact the economy generally and the retail sector in particular. Volatility and market disruptions,disruptions could adversely affect our ability to secure debt financing on attractive terms and our ability to service any future indebtedness that we may incur;

Our Business Manager and its affiliates face conflicts of interest caused by, among other things, their compensation arrangements with us, the allocation of personnel and resources between its affiliates, our Business Manager and our Real Estate Manager and overlapping leadership roles that certain of our executive officers have with the Business Manager and its affiliates, which could result in actions that are not in our long-term best interests;

The following discussion and analysis relates to the three and six months ended MarchJune 31,30, 2026 and 2025 and as of MarchJune 31,30, 2026 and December 31, 2025. Our stockholders should read the following discussion and analysis along with our consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q.

We were formed as a Maryland corporation on August 24, 2011 to acquire and manage a portfolio of commercial real estate investments located in the United States. We elected to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with the tax year ended December 31, 2013. Our business plan focuses primarily on acquiring and owning a portfolio substantially all of which is comprised of grocery-anchored properties. The Business Manager continues to evaluate our business plan and strategy, including considering and presenting alternatives and enhancements for board review with a view towards being able to increase the Company’s assets and cash flow on an accretive basis as well as to enhance the Company’s capital (primarily equity). andThe provideboard liquiditydecided not to stockholderspursue overa sale of the Company or a listing of its common stock on a national securities exchange at this time. In the future, the Company may pursue other alternatives to raise capital, including but not limited to, for example, a joint venture with a third party.

We raised equity capital through a “best efforts” offering that commenced on October 18, 2012 and concluded on October 16, 2015. We sold 33,534,022 shares of common stock in the offering generating gross proceeds of $834.4 million. We have not raised any further equity capital throughon an underwritten or best-efforts basis since the offering was completed. We have also generated equity capital through the sale of shares through our DRP. As noted herein, the DRP was suspended ineffective SeptemberOctober 1, 2024 untiland reinstated effective February 1, 2026. SinceFrom inception untilthrough MarchJune 31,30, 2026, we had issued a total of 6,760,6596,761,869 shares through the DRP generating aggregate proceeds of $148$148.2 million. Although the DRP was recently reinstated, there is no assurance that stockholders will continue to participate at the level before suspension. We have also used, and may continue to use, various sources of debt capital to fund acquisitions and other capital and operating needs as further described.

As of MarchJune 31,30, 2026, we owned 5251 retail properties, totaling 7.27.0 million square feet located in 24 states. A majority of our properties are multi-tenant, necessity-based retail shopping centers located primarily in major regional markets and growing secondary markets throughout the United States. As of MarchJune 31,30, 2026, grocery-anchored or grocery shadow-anchored shopping center properties represented 87% of our annualized base rent. A grocery shadow-anchored shopping center is a shopping center near a grocery store that we do not own and is not a part of our shopping center but that we believe generates traffic for our shopping center. As of MarchJune 31,30, 2026, our portfolio had physical and economic occupancy of 92.4%92.9% and 92.6%,93.1%, respectively. Physical and economic occupancy both increased approximately 0.4%0.5% compared to March 31, 2026, and has increased compared to physical and economic occupancy of 92.0% and 92.2%, respectively, as of December 31, 2025. As of MarchJune 31,30, 2026, annualized base rent (“ABR”) per square foot averaged $20.19$20.17 for all owned properties. ABR is calculated by annualizing the monthly base rent for leases in-place as of the applicable date, excluding ground leases. ABR including ground leases averaged $17.28$17.21 as of MarchJune 31,30, 2026. There were no completed acquisitions or dispositions during the three months ended March 31, 2026.

We have no employees and are externally managed and advised by IREIT Business Manager & Advisor, Inc. (the “Business Manager”), an indirect wholly-owned subsidiary of Inland Real Estate Investment Corporation, referred to herein as our “Sponsor” pursuant to an agreement that expires on March 31, 2027. UnderEither thisparty agreement,may terminate the agreement upon giving 60 days’ prior notice. Currently, we pay fees to and reimburse certain expenses incurred by the Business Manager for the services provided to us. This fee was reduced dollar-for-dollar for amounts we paid to Mark Zalatoris during the time he served as the Company’s president and chief executive officer. Mr. Zalatoris resigned from his positions as president and chief executive officer effective February 2, 2026. Effective as of the same date, Bernard Michael was appointed as the Company’s president and chief executive officer. As a result of this transition, the Business Manager now directly compensates Mr. Michael. Accordingly, beginning in February 2026, we pay the Business Manager the full fee it is entitled to under our agreement with the Business Manager. We do not reimburse the Business Manager for any compensation it pays to any person serving as one of our executive officers. Our properties are managed by Inland Commercial Real Estate Services LLC, also an indirect wholly-owned subsidiary of our Sponsor. The agreement governing these services expires on December 31, 2026 but will automatically renew for another one year term unless either party provides notice of intent to terminate not less than 60 days prior to the expiration date.

Inflationary pressures, volatility in interest rates, and the imposition of new duties, tariffs, trade barriers and retaliatory countermeasures by the U.S. and other governments, could all reduce consumer spending and adversely impact retailer profitability, particularly if rates rise which may impact our ability to increase rents as well as tenant demand for new and existing store locations. Regardless of inflation levels, base rent under most of our long-term anchor leases remainremains constant (subject to tenants’ exercise of renewal options at pre-negotiated rent increases) until the expiration of their lease terms, regardless of the inflation rate for any period. While many of our leases require tenants to pay their share of shopping center operating expenses (including common area maintenance, real estate tax and insurance expenses), our ability to collect the expense increases passed through to tenants is dependent on their ability to absorb and pay these increases. Inflation may also impact other aspects of our operating costs, including fees paid to service providers, the cost to complete redevelopments and build-outs of recently leased vacancies and interest rate costs relating to variable rate loans and refinancing of lower fixed-rate indebtedness. While we have not been significantly impacted by any of these items to date, no assurances can be provided that these inflationary pressures will not have a material adverse effect on our business in the future.

Weighted average remaining lease term is based on a weighting by ABR as of MarchJune 31,30, 2026.

The table below presents information for each of our investment properties as of MarchJune 31,30, 2026.

All of our properties are included in the pool of properties comprising the borrowing base under our Credit Facility as of MarchJune 31,30, 2026.

The following table presents information regarding the top ten tenants in our portfolio based on annualized base rent for leases in-place as of MarchJune 31,30, 2026.

The following table sets forth a summary of our tenant diversity for our entire portfolio and is based on leases in-place as of MarchJune 31,30, 2026.

The following table sets forth a summary, as of MarchJune 31,30, 2026, of the percent of total annualized base rent and the weighted average lease expiration by size of tenant.

Party City, which leased space at four of our properties, filed for bankruptcy protection in December 2024. All four stores were closed as of March 31, 2025. Party City rejected theirits leases at all four of our locations and we currently have possession of these spaces. We have executed new leases with replacement tenants for two of these spaces. We are marketing the remaining two spaces.

Painted Tree, which leased space at one of our properties, closed theirits location and filed for bankruptcy in April 2026. We have executed a replacement lease to backfill the space.

The following table sets forth a summary, as of MarchJune 31,30, 2026, of lease expirations scheduled to occur during the remainder of 2026 and each of the calendar years from 2027 to 2035 and thereafter, assuming no exercise of renewal options or early termination rights for leases commenced on or prior to MarchJune 31,30, 2026. Annualized base rent represents the rent in-place for the applicable property as of MarchJune 31,30, 2026. The table below includes ground leases. If ground leases are excluded, annualized base rent would equal $104,763$102,624 or $20.19$20.17 per square foot for total expiring leases.

Refer to “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Leasing Activity” for details regarding the leasing activity during the threesix months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we had total debt outstanding of $840$810 million, excluding unamortized debt issuance costs, which bore interest at a weighted average interest rate of 4.66%4.62% per annum. As of MarchJune 31,30, 2026, the weighted average years to maturity for our debt was 3.02.8 years, not taking into account any extension options that may be exercised at our option. As of bothJune March 31,30, 2026 and December 31, 2025, our borrowings were 52%51% and 52%, respectively, of the purchase price of our investment properties. As of MarchJune 31,30, 2026, our cash and cash equivalents balance was $9$11 million.

As of MarchJune 31,30, 2026, we had $265$235 million outstanding under the Revolving Credit Facility and $575 million outstanding under the Term Loan. As of MarchJune 31,30, 2026, the interest rates on the Revolving Credit Facility and the Term Loan were 5.58%5.55% per annum and 4.24%4.23% per annum, respectively. As of MarchJune 31,30, 2025, the interest rates on the Revolving Credit Facility and the Term Loan were 6.33%6.32% per annum and 4.30% per annum, respectively. As of June 30, 2026, we have hedged $525 million of the Term Loan using interest rate swap contracts that mature on February 3, 2027. We have entered into forward-starting interest rate swap contracts with an aggregate notional amount of $525 million that become effective on February 3, 2027 and mature on April 1, 2029. The fixed rates payable under the forward-starting swaps are higher than those payable under the current swaps. Refer to Note 7–“Debt and Derivative Instruments,” which is included in our June 30, 2026 Notes to Consolidated Financial Statements in Item 1, for additional information on these interest rate swap contracts. Each of the Revolving Credit Facility and the Term Loan matures on April 1, 2029, subject to a twelve month extension at our option. As of both MayAugust 6,5, 2026 and MarchJune 31,30, 2026, we had $20$50 million available for borrowing under the Revolving Credit Facility, subject to various terms and conditions, including compliance with the covenants which could further limit the amount available of the credit agreement that governs the Credit Facility. See “Risk Factors—The financial covenants under our credit agreement may restrict our ability to make distributions and our operating and acquisition activities. If we breach the financial covenants we could be held in default under the credit agreement, which could accelerate our repayment date and materially adversely affect our liquidity and financial condition” in our Annual Report on Form 10-K for the year ended December 31, 2025 for further information.

As of both MayAugust 6,5, 2026 and MarchJune 31,30, 2026, all of our properties comprised the borrowing base for the Credit Facility. We may not use any property to secure debt on any particular property without removing the property from the borrowing base. Doing so would, however, reduce the amount that we may draw under the Credit Facility. As of MarchJune 31,30, 2026, we have paid all interest and principal amounts when due, and were in compliance with all financial covenants under the Credit Facility, as amended.

During the threesix months ended MarchJune 31,30, 2026, we used $2.9$9.5 million to invest in capital expenditures and tenant improvements, which was approximately $2.2$1.5 million lessmore than we invested during the threesix months ended MarchJune 31,30, 2025. For the remainder of 2026, we anticipate investing approximately $14.5$9.1 million for capital expenditures and tenant improvements. Capital expenditures and tenant improvements are funded by cash flows generated from operations during current or prior periods.

The decrease in cash from operating activities during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 was primarily due to timing of receipts from tenants.

The decreaseincrease in cash usedprovided inby investing activities during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 was primarily due to athe decreasesale inof capitalthe expenditures.Village at Burlington Creek property.

During the threesix months ended MarchJune 31,30, 2026, cash used related to debt increased $1.6$28.6 million from the threesix months ended MarchJune 31,30, 2025 primarily due to a $2.0$32 million paydown on the credit facility. During the threesix months ended MarchJune 31,30, 2026, share repurchases were $1.0 million. During the six months ended June 30, 2026, we paid $4.9$9.8 million in distributions on our common stock. As noted herein, in connection with the board’s review of strategic alternatives, the DRP and SRP were both suspended effective October 1, 2024 and have been reinstated effective February 1, 2026. For the three months ended March 31, 2026, there were no share repurchases.

Distributions when declared are paid quarterly in arrears. A summary of the distributions declared, distributions paid and cash flows provided by operations for the threesix months ended MarchJune 31,30, 2026 and 2025 follows (Dollar amounts in thousands except per share amounts):

Distributions were funded by cash flows from operating activities during the threesix months ended MarchJune 31,30, 2026 and 2025.

This section describes and compares our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025. Dollar amounts are stated in thousands.

The following tables present the property net operating income prior to straight-line income (expense), net, amortization of intangibles, interest, and depreciation and amortization for the three and six months ended MarchJune 31,30, 2026 and 2025, along with a reconciliation to net loss,income (loss), calculated in accordance with GAAP.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Net loss.income (loss). Net income (loss) was $2,249$1,067 and $2,601$(2,156) for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Total property net operating income. DuringOn a “same store” basis, comparing the results of operations of investment properties owned during the three months ended MarchJune 31,30, 2026,2026 with the results of the same investment properties owned during the three months ended June 30, 2025, property net operating income decreasedincreased $103,$694, total property income increased $167,$633, and total property operating expenses including real estate tax expense increaseddecreased $270.$61.

The increase in “same store” total property income is primarily due to an increase in base rent in new leases and step-up rent on existing leases.leases and an increase in percentage rent. The increasedecrease in property operating expenses is primarily due to decreases in the following: (i) $173 in direct recovery expense (ii) $87 of non-recoverable expense and (iii) $74 in management fee and payroll expense, partially offset by increases in the following: (i) $147$130 in repairs and maintenance expense due to the timing of projects, (ii) $88$68 in landscaping expense,expense and (iii) $79 in utility expense, (iv) $59$45 in insurance expense, (v) $36 in direct recovery expenses and (vi) $35 in management fee and payroll expense, partially offset by a decrease of $411 in non-recoverable expenses.expense.

Straight-line income (expense), income, net. Straight-line income (expense), income, net decreasedincreased $87$644 in 2026 compared to the same period in 2025. The decreaseincrease is primarily due to loweran rentincrease abatementsin write-offs due to early tenant move-outs in 2026.

Amortization of intangibles and lease incentives. Income from the amortization of intangibles and lease incentives increaseddecreased $25$126 in 2026 compared to the same period in 2025. The increasedecrease is primarily due to fully amortized acquired above market leases.

General and administrative expenses. General and administrative expenses decreasedincreased $600$30 in 2026 compared to the same period in 2025. The decreaseincrease is primarily due to professionalan fees incurredincrease in connectionstate withtax the review of strategic alternatives in 2025 that did not recur in 2026.estimates.

Business management fee. Business management fees increased $85$98 in 2026 compared to the same period in 2025. The increase is primarily due to a reduction in amounts paid to Mr. Zalatoris in 2026 under the CEO agreement,Agreement as a result of Mr. Zalatoris’ resignation from his positions as president and chief executive officer of the Company effective February 2, 2026, which amounts had previously reduced our payment under the Business Management Agreement on a dollar-for-dollar basis. Because we do not reimburse the Business Manager for any amounts it pays to Mr. Michael, our newly elected president and chief executive officer, effective February 2, 2026, the fee that we pay to the Business Manager is no longer reduced, resulting in increased fees in 2026.

Depreciation and amortization. Depreciation and amortization decreasedincreased $171$1,125 in 2026 compared to the same period in 2025. The decreaseincrease is primarily due to aan larger amount of fully amortized assetsincrease in 2026write compared to 2025.offs.

Interest expense. Interest expense increased $167$244 in 2026 compared to the same period in 2025. The increase is primarily due to higher average borrowings and higher average interest rate.

Interest and other income. Interest and other income decreased $2$15 in 2026 compared to the same period in 2025.