UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM                  TO                 

Commission File Number: 000-56655

_______________________________________________________________

Invesco Real Estate Income Trust Inc.

(Exact name of Registrant as specified in its charter)

_______________________________________________________________

Maryland	83-2188696
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2001 Ross Avenue Suite 3400 Dallas, Texas (Address of principal executive office)	75201 (Zip Code)
Registrant’s telephone number, including area code: (972)715-7400

_______________________________________________________________

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

Title of each class Trading Symbol(s) Name of each exchange on which registered

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.    Yes  x    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).    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

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.    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes  ¨    No  x

As of May 13, 2024, the issuer had the following shares outstanding: 627,863 shares of Class T common stock, 679,160 shares of Class S common stock, 880,575 shares of Class D common stock, 4,611,955 shares of Class I common stock, 1,203,358 shares of Class E common stock and 14,059,932 shares of Class N common stock.

Table of Contents

		Page
PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS	1
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	2
	Unaudited Condensed Consolidated Statements of Changes in Equity and Redeemable Equity Instruments for the three months ended March 31, 2024 and 2023	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	5
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	54
ITEM 4.	CONTROLS AND PROCEDURES	55
PART II	OTHER INFORMATION	56
ITEM 1.	LEGAL PROCEEDINGS	56
ITEM 1A.	RISK FACTORS	56
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES	57
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	58
ITEM 4.	MINE SAFETY DISCLOSURES	58
ITEM 5.	OTHER INFORMATION	59
ITEM 6.	EXHIBITS	60
SIGNATURES		61

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Invesco Real Estate Income Trust Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

$ in thousands except share amounts	March 31, 2024		December 31, 2023
ASSETS
Investments in real estate, net	$	681,852	$	685,603
Investments in unconsolidated entities	119,997		121,319
Investments in commercial loans, at fair value	34,680		34,626
Investments in real estate-related securities, at fair value	35,775		28,030
Investments in affiliated fund, at fair value	27,170		27,717
Intangible assets, net	19,836		20,730
Cash and cash equivalents	36,742		36,046
Restricted cash	11,375		7,326
Other assets	12,346		11,367
Total assets	$	979,773	$	972,764
LIABILITIES
Mortgages payable, net	$	336,996	$	336,744
Financing obligation, net	53,747		53,752
Due to affiliates	22,018		21,994
Accounts payable, accrued expenses and other liabilities	16,025		17,989
Total liabilities	428,786		430,479
Commitments and contingencies (See Note 17)	—		—
Class N redeemable common stock, $0.01 par value per share, 13,947,862 and 13,783,204 shares issued and outstanding, respectively	410,314		405,479
Redeemable non-controlling interest in INREIT OP	4,735		5,658
EQUITY
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; 125 shares issued and outstanding ($500.00 per share liquidation preference)	41		41
Common stock, Class T shares, $0.01 par value per share, 600,000,000 shares authorized; 622,795 and 613,405 shares issued and outstanding, respectively	6		6
Common stock, Class S shares, $0.01 par value per share, 600,000,000 shares authorized; 645,665 and 528,268 shares issued and outstanding, respectively	6		5
Common stock, Class D shares, $0.01 par value per share, 600,000,000 shares authorized; 868,626 and 832,598 shares issued and outstanding, respectively	9		8
Common stock, Class I shares, $0.01 par value per share, 600,000,000 shares authorized; 4,467,271 and 4,332,740 shares issued and outstanding, respectively	45		43
Common stock, Class E shares, $0.01 par value per share, 600,000,000 shares authorized; 1,193,374 and 1,190,589 shares issued and outstanding, respectively	12		12
Additional paid-in capital	222,126		214,297
Accumulated deficit and cumulative distributions	(126,456)		(118,388)
Total stockholders' equity	95,789		96,024
Non-controlling interests in consolidated joint ventures	40,149		35,124
Total equity	135,938		131,148
Total liabilities, redeemable equity instruments and equity	$	979,773	$	972,764

See accompanying notes to condensed consolidated financial statements.

1

Invesco Real Estate Income Trust Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
$ in thousands except share data	2024		2023
Revenues
Rental revenue	$	14,494	$	15,500
Income from commercial loans	1,130		1,255
Other revenue	740		725
Total revenues	16,364		17,480
Expenses
Rental property operating	6,639		5,824
General and administrative	998		1,164
Management fee - related party	465		396
Depreciation and amortization	6,024		7,391
Total expenses	14,126		14,775
Other income (expense), net
Income (loss) from unconsolidated entities, net	1,002		(453)
Gains from real estate-related securities, net	1,018		118
Income (loss) from investment in affiliated fund, net	651		(933)
Gain (loss) on derivative instruments, net	1,723		(1,118)
Unrealized gain on commercial loans	54		—
Interest income	298		—
Interest expense	(5,959)		(6,549)
Other expense	(188)		(13)
Total other income (expense), net	(1,401)		(8,948)
Net income (loss) attributable to Invesco Real Estate Income Trust Inc.	$	837	$	(6,243)
Dividends to preferred stockholders	$	(2)	$	(2)
Net loss attributable to non-controlling interests in consolidated joint ventures	22		755
Net loss attributable to non-controlling interest in INREIT OP	39		40
Net income (loss) attributable to common stockholders	$	896	$	(5,450)
Loss per share:
Net income (loss) per share of common stock, basic and diluted	$	0.04	$	(0.26)
Weighted average shares of common stock outstanding, basic and diluted	21,631,918		20,583,532

See accompanying notes to condensed consolidated financial statements.

2

Invesco Real Estate Income Trust Inc.

Condensed Consolidated Statements of Changes in Equity and Redeemable Equity Instruments

(Unaudited)

$ in thousands	Series A Preferred Stock		Class T Common Stock		Class S Common Stock		Class D Common Stock		Class I Common Stock		Class E Common Stock		Class N Common Stock		Additional Paid-in Capital		Accumulated Deficit and Cumulative Distributions		Total Stockholders' Equity		Non-controlling Interests in Consolidated Joint Ventures		Total Equity		Class N Redeemable Common Stock		Redeemable Non-controlling Interest in INREIT OP
Balance at December 31, 2023	$	41	$	6	$	5	$	8	$	43	$	12	$	—	$	214,297	$	(118,388)	$	96,024	$	35,124	$	131,148	$	405,479	$	5,658
Proceeds from issuance of common stock, net of offering costs	—		—		1		1		4		—		—		14,781		—		14,787		—		14,787		—		—
Distribution reinvestment	—		—		—		—		—		—		—		444		—		444		—		444		4,835		—
Common stock repurchased	—		—		—		—		(2)		—		—		(7,361)		—		(7,363)		—		(7,363)		—		(867)
Share-based compensation	—		—		—		—		—		—		—		19		—		19		—		19		—		—
Net income (loss)	—		—		—		—		—		—		—		—		898		898		(22)		876		—		(39)
Preferred stock dividends	—		—		—		—		—		—		—		—		(2)		(2)		—		(2)		—		—
Common stock and INREIT OP unit distributions ($0.4182 gross per share/unit)	—		—		—		—		—		—		—		—		(8,964)		(8,964)		—		(8,964)		—		(71)
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		—		—		5,472		5,472		—		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		—		—		—		(425)		(425)		—		—
Adjustment to carrying value of redeemable equity instruments	—		—		—		—		—		—		—		(54)		—		(54)		—		(54)		—		54
Balance at March 31, 2024	$	41	$	6	$	6	$	9	$	45	$	12	$	—	$	222,126	$	(126,456)	$	95,789	$	40,149	$	135,938	$	410,314	$	4,735

See accompanying notes to condensed consolidated financial statements.

3

Invesco Real Estate Income Trust Inc.

Condensed Consolidated Statements of Changes in Equity and Redeemable Equity Instruments

(Unaudited)

$ in thousands	Series A Preferred Stock		Class T Common Stock		Class S Common Stock		Class D Common Stock		Class I Common Stock		Class E Common Stock		Class N Common Stock		Additional Paid-in Capital		Accumulated Deficit and Cumulative Distributions		Total Stockholders' Equity		Non-controlling Interests in Consolidated Joint Ventures		Total Equity		Class N Redeemable Common Stock		Redeemable Non-controlling Interest in INREIT OP
Balance at December 31, 2022	$	41	$	4	$	4	$	6	$	38	$	18	$	—	$	167,611	$	(66,856)	$	100,866	$	30,024	$	130,890	$	432,604	$	2,797
Proceeds from issuance of common stock, net of offering costs	—		1		—		1		2		—		—		12,729		—		12,733		—		12,733		(3)		—
Distribution reinvestment	—		—		—		—		—		—		—		270		—		270		—		270		—		—
Common stock repurchased	—		—		—		—		—		(4)		—		(13,021)		—		(13,025)		—		(13,025)		—		—
Share-based compensation	—		—		—		—		—		—		—		20		—		20		—		20		—		—
Net loss	—		—		—		—		—		—		—		—		(5,448)		(5,448)		(755)		(6,203)		—		(40)
Preferred stock dividends	—		—		—		—		—		—		—		—		(2)		(2)		—		(2)		—		—
Common stock and INREIT OP unit distributions ($0.4162 gross per share/unit)	—		—		—		—		—		—		—		—		(8,500)		(8,500)		—		(8,500)		—		(78)
Issuance of Class E OP Units to non-controlling interests	—		—		—		—		—		—		—		—		—		—		—		—		—		3,976
Contributions from non-controlling interests	—		—		—		—		—		—		—		—		—		—		28		28		—		—
Distributions to non-controlling interests	—		—		—		—		—		—		—		—		—		—		(226)		(226)		—		—
Adjustment to carrying value of redeemable equity instruments	—		—		—		—		—		—		—		12,324		—		12,324		—		12,324		(12,892)		568
Balance at March 31, 2023	$	41	$	5	$	4	$	7	$	40	$	14	$	—	$	179,933	$	(80,806)	$	99,238	$	29,071	$	128,309	$	419,709	$	7,223

See accompanying notes to condensed consolidated financial statements.

4

Invesco Real Estate Income Trust Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
$ in thousands	2024		2023
Cash flows from operating activities:
Net income (loss)	$	837	$	(6,243)
Adjustments to reconcile net loss to net cash provided by operating activities:
Management fee - related party	465		396
(Income) loss from unconsolidated entities, net	(1,002)		453
Depreciation and amortization	6,024		7,391
Share-based compensation	19		20
Straight-line rents	(175)		(305)
Amortization of below-market lease intangibles	(99)		(99)
Amortization of above-market lease intangibles	43		44
Amortization of deferred financing costs	312		406
(Income) loss from investment in affiliated fund, net	(653)		933
Unrealized (gain) loss on real estate-related securities, net	(2,154)		322
Unrealized gain on commercials loans	(54)		—
Unrealized (gain) loss on derivative instruments, net	(332)		2,346
Distributions of earnings from investments in unconsolidated entities	672		795
Realized loss (gain) on sale of real estate-related securities	1,618		(15)
Other items	97		221
Change in assets and liabilities, net of assets and liabilities acquired in acquisitions:
Decrease (increase) in other assets	341		(261)
(Decrease) increase in due to affiliates	(649)		1,026
Decrease in accounts payable, accrued expenses and other liabilities	(3,744)		(2,915)
Net cash provided by operating activities	1,566		4,515
Cash flows from investing activities:
Investments in unconsolidated entities	(142)		(369)
Proceeds from unconsolidated entities	646		—
Investment in affiliated fund	—		(15,000)
Redemption of investment in affiliated fund	547		—
Distribution from affiliated fund	653		—
Origination of commercial loans	—		(13,007)
Pre-acquisition deposits	(1,000)		—
Capital improvements to real estate	(1,302)		(685)
Purchase of real estate-related securities	(15,465)		(6,249)
Proceeds from sale of real estate-related securities	8,281		287
Distributions of capital from investments in unconsolidated entities	1,148		1,413
Net cash used in investing activities	(6,634)		(33,610)
Cash flows from financing activities:
Proceeds from issuance of common stock	15,030		12,737
Offering costs paid	(38)		(86)
Repurchase of common stock and OP units	(13,377)		(13,025)
Subscriptions received in advance	6,853		1,257
Proceeds from revolving credit facility	—		23,000
Repayment of revolving credit facility	—		(14,000)
Borrowings from mortgages payable	—		464
Payment of deferred financing costs	—		(300)
Payment of financing obligation	(5)		—
Common stock and INREIT OP unit distributions	(3,697)		(7,737)
Preferred stock dividends	—		(2)
Contributions from non-controlling interests	5,472		28
Distributions to non-controlling interests	(425)		(226)
Net cash provided by financing activities	9,813		2,110
Net change in cash and cash equivalents and restricted cash	4,745		(26,985)
Cash and cash equivalents and restricted cash, beginning of period	43,372		45,242
Cash and cash equivalents and restricted cash, end of period	$	48,117	$	18,257

5

Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents	$	36,742	$	12,609
Restricted cash	11,375		5,648
Total cash and cash equivalents and restricted cash	$	48,117	$	18,257
Supplemental disclosures:
Interest paid	$	5,760	$	4,824
Non-cash investing and financing activities:
Issuance of Class E OP Units to non-controlling interests	$	—	$	3,976
Issuance of Class E shares for payment of management fees	$	465	$	399
Accrued capital expenditures	$	731	$	280
Accrued preferred dividends	$	2	$	—
Distributions payable	$	3,038	$	2,894
Distribution reinvestment	$	5,279	$	270
Accrued offering costs due to affiliates	$	670	$	320
Adjustment to carrying value of redeemable equity instruments	$	54	$	(12,324)
Accrued common stock repurchases	$	(5,148)	$	—

See accompanying notes to condensed consolidated financial statements.

6

Invesco Real Estate Income Trust Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Organization and Business Purpose

Invesco Real Estate Income Trust Inc. (the “Company” or “we”) is focused on investing in stabilized, income-oriented commercial real estate in the United States. To a lesser extent, we also originate and acquire private real estate debt and invest in real estate-related securities. We own, and expect to continue to own, all or substantially all of our assets through Invesco REIT Operating Partnership L.P. (the “Operating Partnership” or “INREIT OP”), of which we are the sole general partner.

We were incorporated in October 2018 as a Maryland corporation and commenced real estate operations in September 2020. We qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2020. We are externally managed by Invesco Advisers, Inc. (the “Adviser”), a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd. (“Invesco”), a leading independent global investment management firm.

In May 2021, we registered a public offering with the Securities and Exchange Commission (“SEC”) of up to $3.0 billion in shares of common stock, consisting of up to $2.4 billion in shares in our primary offering (the “Primary Offering”) and up to $600.0 million in shares under our distribution reinvestment plan (collectively, the “Offering”). We are offering to sell any combination of five classes of shares of our common stock in the Offering: Class T shares, Class S shares, Class D shares, Class I shares and Class E shares, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and dealer manager fees and different ongoing stockholder servicing fees.

We are also conducting private offerings of up to $1.0 billion in shares of our Class N common stock (“Class N shares” or “Class N common stock”) (the “Class N Private Offering”) and up to $20.0 million in shares of our Class E common stock (the “Class E Private Offering”) (collectively, the “Private Offerings”).

In February 2023, we, through our Operating Partnership, initiated a private placement program (the “DST Program”) to issue and sell up to $3.0 billion of beneficial interests (“Interests”) in specific Delaware statutory trusts (the “DSTs”) holding real properties (the “DST Properties”), which may be sourced from our real properties or from third parties.

2.Summary of Significant Accounting Policies

Basis of Presentation

Certain disclosures included in our Annual Report on Form 10-K are not required to be included on an interim basis in our quarterly reports on Form 10-Q. We have condensed or omitted these disclosures. Therefore, this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and consolidate the financial statements of the Company and its controlled subsidiaries. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for a fair statement of our financial condition and results of operations for the periods presented.

7

Revision of Previously Issued Financial Statements

During the third quarter of 2023, the Company identified errors in Note 19 — “Segment Reporting” in the summary of our financial results by segment tables in the previously filed 2022 and 2021 annual consolidated financial statements and unaudited quarterly condensed consolidated financial statements for each of the quarterly periods of 2021, 2022 and for the first two quarterly periods of 2023. The prior period errors impacted income from unconsolidated investments, net, segment net operating income and segment depreciation and amortization for the healthcare and corporate and other sectors. The errors identified did not impact the consolidated or condensed consolidated balance sheets, statements of operations, statements of changes in equity and redeemable equity instruments or the statements of cash flows in any prior period. We concluded that the errors are not material to each of the annual consolidated financial statements which were included in our Annual Report on Form 10-K for the years ended December 31, 2022 and 2021 and our interim report on Form 10-Q for each of the quarterly periods in 2021, 2022 and for the quarters ended March 31, 2023 and June 30, 2023. We have revised the summary of our financial results by segment in Note 19 — “Segment Reporting” for the previous periods included in this filing on Form 10-Q and will correct any prior period segment disclosures for these errors as they are presented in future periodic filings.

The following changes have been made to our financial results by segment tables:

	For the Three Months Ended March 31, 2023
	As Reported		Adjustment		As Revised
Income from unconsolidated investments, net	$	3,985	$	(1,879)	$	2,106
Segment net operating income	$	14,826	$	(1,879)	$	12,947
Segment depreciation and amortization	$	(11,829)	$	1,879	$	(9,950)
Segment income from unconsolidated entities	$	3,985	$	(1,879)	$	2,106
Depreciation and amortization attributable to unconsolidated entities	$	(4,438)	$	1,879	$	(2,559)

Consolidation

We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity, we consider whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. We are the primary beneficiary of a VIE when we have both the power to direct the most significant activities impacting the economic performance of the VIE and the obligation to absorb losses or receive benefits significant to the VIE. See additional information on our VIEs in Note 14 — “Variable Interest Entities.”

For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities and operations of each joint venture is included in non-controlling interests in consolidated joint ventures and reported as equity of the Company on our consolidated balance sheets. The non-controlling partner’s interest is generally calculated as the joint venture partner’s ownership percentage. Certain of the joint ventures formed by the Company provide the joint venture partner a profits interest based on certain internal rate of return hurdles being achieved. Any profits interest due to the joint venture partner is reported as net loss attributable to non-controlling interests in consolidated joint ventures on our consolidated statements of operations.

We apply the equity method of accounting if we have significant influence over an entity, typically when we hold 20% or more of the voting common stock (or equivalent) of an investee but do not have a controlling financial interest. In certain circumstances, such as with investments in limited liability companies or limited partnerships, we apply the equity method of accounting when we own as little as three to five percent. See Note 4 — “Investments in Unconsolidated Entities” for further information about our investments in partially owned entities.

Reclassifications

Certain prior period reported amounts have been reclassified to be consistent with the current presentation. Such reclassifications have no impact on total assets, net income or equity attributable to common stockholders.

8

Income Taxes

For the three months ended March 31, 2024 and 2023, we recorded a net tax expense of $0.1 million and approximately $14,000, respectively, located within other expense on our condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, we had a deferred tax asset of $0.2 million and approximately $24,000, respectively, both of which are offset by a full valuation allowance. Deferred tax assets and valuation allowances are recorded within other assets on our condensed consolidated balance sheets. As of March 31, 2024, our tax years 2020 through 2023 remain subject to examination by the United States tax authorities.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Earnings (Loss) per Share

We calculate basic earnings (loss) per share (“EPS”) by dividing net earnings (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period, including redeemable common stock. All classes of common stock are allocated net earnings (loss) at the same rate per share and receive the same gross distribution per share. We calculate diluted EPS considering the effect of dilutive instruments, such as unvested restrictive stock awards, by dividing net income (loss) attributable to common stockholders for the period by the weighted average number of common shares and common share equivalents outstanding (unless their effect is antidilutive) for the period.

As of March 31, 2024 and 2023, the effects of dilutive instruments on basic and diluted EPS were not material to our consolidated financial statements.

Pending Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board issued an accounting standards update intended to improve reportable segment disclosure requirements on an annual and interim basis. The amendments require, among other items, enhanced disclosures around significant segment expenses regularly provided to the chief operating decision maker (“CODM”), as well as the CODM's title and position. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. The amendments must be applied on a retrospective basis and early adoption is permitted. We are currently evaluating the impact of these amendments on our disclosures.

Significant Accounting Policies

There have been no changes to our accounting policies included in Note 2 — “Summary of Significant Accounting Policies” to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2023.

3.Investments in Real Estate, net

Investments in real estate, net consist of:

$ in thousands	March 31, 2024		December 31, 2023
Building and improvements	$	565,308	$	563,958
Land and land improvements	148,485		148,411
Furniture, fixtures and equipment	11,345		11,349
Total	725,138		723,718
Accumulated depreciation	(43,286)		(38,115)
Investments in real estate, net	$	681,852	$	685,603

9

Impairment

We did not record any impairment losses on our investments in real estate, net, for the three months ended March 31, 2024 and March 31, 2023, respectively.

4.Investments in Unconsolidated Entities

As of March 31, 2024, we held five investments in unconsolidated entities for an aggregate investment balance of $120.0 million that are accounted for using the equity method of accounting. The amounts reflected in the following tables (except for our share of equity and income) are based on the historical financial information of the individual unconsolidated entities. We do not record operating losses of an unconsolidated entity in excess of its investment balance unless we are liable for the obligations of the entity or are otherwise committed to provide financial support to the entity.

Our investments in unconsolidated entities as of March 31, 2024 and December 31, 2023 were as follows:

$ in thousands		Carrying Amount
Entity	Ownership Percentage(1)	March 31, 2024		December 31, 2023
Vida JV LLC(2)	42.5%	$	70,884	$	72,234
San Simeon Preferred Equity(3)	—	27,364		27,488
PTCR Holdco, LLC(4)	—	8,574		8,484
Retail GP Fund(5)	4.5% to 13.5%	13,145		13,150
Homestead Communities, LLC (6)	50.0%	30		(37)
Total		$	119,997	$	121,319

(1)Ownership percentage represents our entitlement to residual distributions after payments of priority returns, where applicable. Preferred equity investment ownership percentages are not presented.

(2)We formed a joint venture (the “Invesco JV”) with Invesco U.S. Income Fund L.P., an affiliate of Invesco, to acquire an interest in a portfolio of medical office buildings located throughout the United States (the “Sunbelt Medical Office Portfolio”). As of March 31, 2024, the Invesco JV owned an 85% interest in a joint venture (“Vida JV LLC”) with an unaffiliated third party. As of March 31, 2024, Vida JV LLC owned a portfolio of twenty medical office buildings.

(3)We own a preferred membership interest in San Simeon Holdings LLC (“San Simeon Preferred Equity”), a limited liability company that owns a multifamily property. The common member of San Simeon Preferred Equity had two one-year options that would extend the mandatory redemption date of our preferred membership interest to December 15, 2025. The original mandatory redemption was due to occur on December 15, 2023. However, on December 15, 2023, San Simeon Preferred Equity exercised the first extension option which makes our preferred membership interest mandatorily redeemable on December 15, 2024. The common member of San Simeon Preferred Equity has one remaining one-year extension. As of March 31, 2024, the investment yields a preferred return rate of 7.25%, which includes both the current pay and the deferred pay rates, as well as a preferred accrued return of 4.00% due upon redemption.

(4)We hold an 85% ownership interest in a consolidated joint venture, ITP Investments LLC (“ITP LLC”). ITP LLC holds a preferred equity investment in PTCR Holdco, LLC, a fully integrated retail platform operating company.

(5)ITP LLC has a 90% interest in PT Co-GP Fund, LLC (“Retail GP Fund”), which was formed to invest in retail properties through non-controlling general partner interests. ITP LLC holds non-controlling general partner interests through its interest in the Retail GP Fund ranging from 4.5% to 13.5% in eight retail properties.

(6)We hold a 50% ownership interest in a real estate operating company focused on the aggregation and asset management of manufacturing housing through a joint venture, Homestead Communities, LLC (“Homestead”). An affiliate Invesco fund owns the remaining 50% ownership interest. An unaffiliated third party has a promote incentive that could dilute our ownership percentage if certain performance milestones are exceeded.

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Our share of the unconsolidated entities’ income (loss) for the three months ended March 31, 2024 and 2023 were as follows:

	Company’s Share of Unconsolidated Entities' Income (Loss)
$ in thousands	Three Months Ended March 31,
Entity	2024		2023
Vida JV LLC	$	(202)	$	(1,192)
San Simeon Preferred Equity	773		713
PTCR Holdco, LLC	268		266
Retail GP Fund	238		(240)
Homestead Communities, LLC	(75)		—
Total	$	1,002	$	(453)

The following tables provide summarized balance sheets of our investments in unconsolidated entities:

	March 31, 2024					December 31, 2023
$ in thousands	Total assets		Total liabilities	Total equity		Total assets		Total liabilities	Total equity
Vida JV LLC	$	394,783	(228,542)	$	166,241	$	391,584	(222,238)	$	169,346
San Simeon Preferred Equity	129,419		(74,931)	54,488		128,759		(77,428)	51,331
Other	498,287		(272,411)	225,876		507,962		(281,256)	226,706

The following tables provide summarized operating data of our investments in unconsolidated entities:

	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
$ in thousands	Revenue	Net income (loss)	Revenue	Net income (loss)
Vida JV LLC	9,761	(472)	9,470	$	(2,802)
San Simeon Preferred Equity	2,703	575	2,661	613
Other	11,359	(1,032)	14,580	6,361
Total	23,823	(929)	26,711	4,172

We did not record any impairment losses on our investments in unconsolidated entities for the three months ended March 31, 2024 and March 31, 2023, respectively.

5.Investments in Commercial Loans

As of March 31, 2024, we have the following investments in commercial loans:

				Current Principal Balance				Fair Value
$ in thousands	Origination Date	Loan Type	Interest Rate(1)	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		Maturity Date
9801 Blue Grass Loan	9/1/2022	Mezzanine	12.54%	$	21,800	$	21,800	$	21,728	$	21,689	9/9/2024
5805 N Jackson Gap Loan	1/20/2023	Mezzanine	13.33%	13,007		13,007		12,952		12,937		2/9/2025
Total				$	34,807	$	34,807	$	34,680	$	34,626

(1)Represents the interest rate as of period end. Loans earn interest at Secured Overnight Financing Rate (“SOFR”) plus a spread.

We elected the fair value option and, accordingly, there are no capitalized origination costs or fees associated with the loans.

For the three months ended March 31, 2024 and 2023, we recognized interest income from our investments in commercial loans of $1.1 million and $1.3 million, respectively, in our condensed consolidated statements of operations. For the three months ended March 31, 2024, we recorded an unrealized gain on commercial loans of $0.1 million. For the three months ended March 31, 2023, we did not record an unrealized gain or loss on the commercial loans because the outstanding par value approximated fair value.

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6.Investments in Real Estate-Related Securities

The following tables summarize our investments in real estate-related securities by asset type:

	March 31, 2024
$ in thousands	Principal Balance		Unamortized Premium (Discount)		Amortized Cost / Cost(1)		Unrealized Gain (Loss), Net		Fair Value		Period-end Weighted Average Yield		Weighted-Average Maturity Date
Non-agency CMBS	$	32,956	$	(1,247)	$	31,710	$	(251)	$	31,459	7.60	%	7/22/2026
Common stock of REITs	N/A		N/A		4,065		251		4,316		5.28	%	N/A
Total	$	32,956	$	(1,247)	$	35,775	$	—	$	35,775

	December 31, 2023
$ in thousands	Principal Balance		Unamortized Premium (Discount)		Amortized Cost / Cost(1)		Unrealized Gain (Loss), Net		Fair Value		Period-end Weighted Average Yield		Weighted-Average Maturity Date
Non-agency CMBS	$	25,202	$	(1,160)	$	24,042	$	(741)	$	23,301	7.26	%	2/13/2039
Preferred stock of REITs	N/A		N/A		2,107		(171)		1,936		6.71	%	N/A
Common stock of REITs	N/A		N/A		4,034		(1,241)		2,793		5.51	%	N/A
Total	$	25,202	$	(1,160)	$	30,183	$	(2,153)	$	28,030

(1)For non-agency CMBS, the amount presented represents amortized cost. For preferred and common stock of REITs, the amount presented represents cost.

7.Intangibles

The gross carrying amount and accumulated amortization of our intangible assets and liabilities are:

	March 31, 2024
$ in thousands	Total Cost		Accumulated Amortization		Intangible Assets, net
Intangible assets, net:
In-place lease intangibles	$	46,969	$	(32,771)	$	14,198
Leasing commissions	5,768		(1,671)		4,097
Above-market lease intangibles	1,951		(410)		1,541
Total intangible assets, net	$	54,688	$	(34,852)	$	19,836
	Total Cost		Accumulated Amortization		Intangible Liabilities, net
Intangible liabilities, net:
Below-market lease intangibles	$	2,726	$	(1,055)	$	1,671
Total intangible liabilities, net	$	2,726	$	(1,055)	$	1,671

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	December 31, 2023
$ in thousands	Total Cost		Accumulated Amortization		Intangible Assets, net
Intangible assets, net:
In-place lease intangibles	$	46,969	$	(32,085)	$	14,884
Leasing commissions	5,768		(1,506)		4,262
Above-market lease intangibles	1,951		(367)		1,584
Total intangible assets, net	$	54,688	$	(33,958)	$	20,730
	Total Cost		Accumulated Amortization		Intangible Liabilities, net
Intangible liabilities, net:
Below-market lease intangibles	$	2,726	$	(956)	$	1,770
Total intangible liabilities, net	$	2,726	$	(956)	$	1,770

The estimated future amortization of our intangibles for each of the next five years and thereafter as of March 31, 2024 is:

$ in thousands	In-place Lease Intangibles		Leasing Commissions		Above-market Lease Intangibles		Below-market Lease Intangibles
2024 (remainder)	$	1,838	$	466	$	132	$	(262)
2025	2,110		612		176		(361)
2026	2,073		610		176		(361)
2027	1,726		531		176		(274)
2028	1,593		496		176		(222)
2029	1,166		340		164		(72)
Thereafter	3,692		1,042		541		(119)
	$	14,198	$	4,097	$	1,541	$	(1,671)

8.Other Assets

The following table summarizes the components of other assets:

$ in thousands	March 31, 2024		December 31, 2023
Derivative instruments	$	5,150	$	4,818
Deferred rent	3,169		2,994
Capitalized tax abatement, net(1)	1,322		1,363
Deposits	1,077		—
Prepaid expenses	583		713
Receivables, net	518		688
Other	527		791
Total	$	12,346	$	11,367

(1)We obtained a tax abatement in conjunction with our purchase of the 3101 Agler property with an expiration date of December 31, 2031. We are amortizing the tax abatement over its remaining useful life as a component of property operating expenses in the condensed consolidated statements of operations. As of March 31, 2024, accumulated amortization of the capitalized tax abatement was $0.3 million.

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Derivative Instruments

We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate risk, primarily by managing the amount, sources, and duration of our investments, borrowings, and the use of derivative financial instruments. Specifically, we use derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings.

The following table summarizes the notional amount and other information related to our interest rate caps and interest rate swaps as of March 31, 2024 and December 31, 2023:

	March 31, 2024
$ in thousands	Number of Instruments	Notional Amount(1)		Fixed Amount		Fair Value(2)		Weighted Average Strike Rate/Fixed Rate	Weighted Average Remaining Term In Years
Interest rate caps	4	$	178,500	$	2,601	$	2,960	2.81%	0.89
Interest rate swap	1	52,500		N/A		2,190		2.73%	3.08
Total	5	$	231,000	$	2,601	$	5,150

	December 31, 2023
$ in thousands	Number of Instruments	Notional Amount(1)		Fixed Amount		Fair Value(2)		Weighted Average Strike Rate/Fixed Rate	Weighted Average Remaining Term In Years
Interest rate caps	4	$	178,500	$	2,601	$	3,320	2.64%	1.14
Interest rate swap	1	52,500		N/A		1,498		2.73%	3.33
Total	5	$	231,000	$	2,601	$	4,818

(1)The notional amount represents the amount of the mortgage note and revolving credit facility borrowings that we are hedging. It does not represent our exposure to credit, interest rate or market risks.

(2)The fair value of each derivative instrument is included in other assets on our condensed consolidated balance sheets. For the three months ended March 31, 2024 and March 31, 2023, we reported an increase in fair value of $0.3 million and a decrease of $2.3 million, respectively. These changes are included as a component of gain (loss) on derivative instruments, net in our condensed consolidated statements of operations.

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9.Borrowings

Revolving Credit Facility

As of March 31, 2024 and December 31, 2023, the Company did not have an outstanding principal balance on its revolving credit facility.

Borrowings under the Revolving Credit Facility carry interest at a rate equal to (i) SOFR, (ii) SOFR with an interest period of one, three or six-months, or (iii) a Base Rate, where the base rate is the highest of (a) federal funds rate plus 0.5%, (b) the rate of interest as publicly announced by Bank of America N.A. as its “prime rate”, (c) SOFR with an interest period of one month plus 1.0%, or (d) 1.0%, in each case, plus an applicable margin that is based on our leverage ratio. In September 2023, we entered into an amendment to the existing Revolving Credit Facility. The interest rate and spread terms remained identical to the terms outlined above. The amendment extended the maturity date to September 6, 2024 and grants an option to extend the term to September 5, 2025, subject to certain conditions. The weighted-average interest rate for the three months ended March 31, 2024 and March 31, 2023 was 7.11% and 6.21%, respectively.

The current maturity date is September 6, 2024 and the amendment grants an option to extend the term to September 5, 2025, subject to certain conditions. As a result of the amendment, the aggregate commitments were reduced to $100.0 million with an ability to request an increase up to $150.0 million in aggregate commitments. As of March 31, 2024, the borrowing capacity on the Revolving Credit Facility was $80.3 million. The borrowing capacity is less than the difference between the current facility capacity of $100.0 million and the current principal outstanding balance as the calculation of borrowing capacity is limited by the aggregate fair value and cash flows of our unencumbered properties.

As of March 31, 2024, we were in compliance with all loan covenants in our revolving credit facility agreement.

15

Mortgage Notes Payable, Net

The following table summarizes certain characteristics of our mortgage notes that are secured by the Company’s properties:

$ in thousands						Principal Balance Outstanding
Indebtedness	Interest Rate(1)	Initial Maturity Date	Extended Maturity Date	Maximum Principal Amount		March 31, 2024		December 31, 2023
Bixby Kennesaw	S + applicable margin(2)	9/24/2026	N/A	$	53,000	$	53,000	$	53,000
The Carmin	S + applicable margin(3)	1/1/2025	1/1/2027	$	65,500	65,500		65,500
Cortlandt Crossing	3.13%	3/1/2027	N/A	$	39,660	39,660		39,660
Everly Roseland	S + applicable margin(4)	4/28/2027	4/28/2029	$	113,500	110,874		110,874
Midwest Industrial Portfolio	4.44% and S + applicable margin(5)	7/5/2027	N/A	$	70,000	70,000		70,000
Total mortgages payable						339,034		339,034
Deferred financing costs, net						(2,038)		(2,290)
Mortgage notes payable, net						$	336,996	$	336,744

(1)The term “S” refers to the relevant floating benchmark rate, SOFR.

(2)The mortgage note secured by Bixby Kennesaw bears interest at the sum of (i) 1.71% plus (ii) SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 7.04% and 5.98%, respectively.

(3)The mortgage note secured by The Carmin bears interest at 1.75% plus SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 7.09% and 5.77%, respectively.

(4)The mortgage note secured by Everly Roseland bears interest at 1.45% plus SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 6.79% and 6.00%, respectively.

(5)The mortgage note secured by Meridian Business 940, Capital Park 2919, 3101 Agler and Earth City 13330 (collectively the “Midwest Industrial Portfolio”) bears interest at two rates. Of the $70.0 million principal balance, $35.0 million bears interest at a fixed rate of 4.44%, and $35.0 million bears interest at a floating rate of the greater of (a) 2.20% or (b) the sum of 1.70% plus SOFR. The weighted-average interest rate of the combined $70.0 million principal balance for the three months ended March 31, 2024 and 2023 was 5.74% and 5.31%, respectively.

As of March 31, 2024, we were in compliance with all loan covenants in our mortgage notes agreements.

Financing Obligation, Net

In connection with The Carmin property, as of March 31, 2024, we hold a financing obligation on our condensed consolidated balance sheets of $53.7 million, net of debt issuance costs.

The following table presents the future principal payments due under our outstanding borrowings as of March 31, 2024:

Year ($ in thousands)	Revolving Credit Facility		Mortgages Payable		Financing Obligation		Total
2024 (remaining)	$	—	$	—	$	4	$	4
2025	—		65,500		9		65,509
2026	—		53,000		12		53,012
2027	—		220,534		15		220,549
2028	—		—		18		18
2029	—		—		21		21
Thereafter	—		—		36,270		36,270
Total	$	—	$	339,034	$	36,349	$	375,383

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10.Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the components of accounts payable, accrued expenses and other liabilities:

$ in thousands	March 31, 2024		December 31, 2023
Subscriptions received in advance	$	6,853	$	3,503
Real estate taxes payable	2,558		2,121
Intangible liabilities, net	1,671		1,770
Accrued interest expense	1,453		1,566
Tenant security deposits	1,324		1,293
Accounts payable and accrued expenses	683		1,359
Prepaid rental income	637		441
Distributions payable	536		478
Common stock repurchases	310		5,458
Total	$	16,025	$	17,989

11.Class N Redeemable Common Stock

The following table details our Class N redeemable common stock activity with Massachusetts Mutual Life Insurance Company (“MassMutual”):

	As of March 31, 2024			As of December 31, 2023
$ in thousands, except share amounts	Shares	Amount		Shares	Amount
Class N Redeemable Common Stock issued	16,485,652	$	486,133	16,320,994	$	481,299
Class N Redeemable Common Stock repurchased	2,537,790	$	74,795	2,537,790	$	74,795

For the three months ended March 31, 2024, there was no adjustment to the value of the Class N shares held by MassMutual to our March 31, 2024 NAV per Class N share. For the three months ended March 31, 2023, we recorded a decrease to Class N redeemable common stock and an increase to additional paid-in capital of $12.9 million to adjust the value of the Class N shares held by MassMutual to our March 31, 2023 NAV per Class N share. The change in the redemption value does not affect income available to common stockholders.

MassMutual committed to purchase $400.0 million of Class N common stock in our Class N Private Offering and fully met its commitment as of March 31, 2024.

Through December 31, 2024, we may choose to repurchase Class N shares from MassMutual on a monthly basis at the then current Class N transaction price in an amount with an aggregate repurchase price no greater than (1) the aggregate purchase price paid by MassMutual for Class N shares less (2) $200.0 million less (3) the aggregate repurchase price paid to MassMutual by the Company. In any month, however, MassMutual may require use to make or elect to forego the next monthly repurchase. Under the terms of MassMutual’s subscription agreements, through December 31, 2024, we may require MassMutual to purchase additional Class N shares in an amount equal to the aggregate purchase price paid by MassMutual for Class N shares that were subsequently repurchased by us on a monthly basis.

Beginning January 1, 2025 and continuing until we have repurchased $200.0 million of MassMutual shares, we are required to repurchase MassMutual shares on a monthly basis, subject to certain thresholds based on monthly net offering proceeds. In any month, MassMutual may choose to waive our obligation to repurchase shares. We are required to limit repurchases to ensure that the aggregate NAV of MassMutual shares is at least $50.0 million.

Beginning January 1, 2025, MassMutual holds the right to request that we repurchase MassMutual shares on a monthly basis, subject to thresholds based on monthly net offering proceeds and the Company’s NAV. This right to request that we repurchase MassMutual shares is in addition to the requirement to repurchase MassMutual shares described in the preceding paragraph.

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Exchange Rights and Registration Agreement

We have entered into an exchange rights and registration agreement with MassMutual (the “Registration Rights Agreement”). After September 28, 2025, MassMutual may require us to exchange all or a portion of its Class N shares for any class of shares of our common stock being sold in the Primary Offering and file and maintain an effective registration statement with the SEC (for no longer than three years) registering the offer and sale of the new shares issued in the exchange. MassMutual's rights under the Registration Rights Agreement will terminate when its shares of our common stock have an aggregate NAV of less than $20.0 million.

12.Equity and Redeemable Non-controlling Interest

Preferred Stock

As of March 31, 2024 and December 31, 2023, 125 shares of preferred stock are issued and outstanding. Holders of our 12.5% Series A Redeemable Cumulative Preferred Stock (“Series A Preferred Stock”) are entitled to receive dividends at an annual rate of 12.5% of the liquidation preference of $500.00 per share, or $62.50 per share per annum. Dividends are cumulative and payable semi-annually. We have the option to redeem shares of our Series A Preferred Stock in whole or in part at any time for the price of $500.00 per share, plus any accrued and unpaid dividends through the date of redemption.

Common Stock

The following tables detail the movement in the Company’s outstanding shares of common stock:

	Three Months Ended March 31, 2024
	Class T Shares	Class S Shares	Class D Shares	Class I Shares	Class E Shares	Class N Shares	Total
Balance at December 31, 2023	613,405	528,268	832,598	4,332,740	1,190,589	13,783,204	21,280,804
Issuance of common stock	7,631	115,782	32,613	371,514	15,742	—	543,282
Common stock repurchased	(226)	—	(262)	(242,673)	(15,463)	—	(258,624)
Distribution reinvestment	1,985	1,615	3,677	5,690	2,506	164,658	180,131
Balance at March 31, 2024	622,795	645,665	868,626	4,467,271	1,193,374	13,947,862	21,745,593

	Three Months Ended March 31, 2023
	Class T Shares	Class S Shares	Class D Shares	Class I Shares	Class E Shares	Class N Shares	Total
Balance at December 31, 2022	449,680	351,856	604,538	3,764,505	1,827,018	13,523,324	20,520,921
Issuance of common stock	83,872	—	53,224	265,404	13,601	—	416,101
Common stock repurchased	—	—	—	—	(401,116)	—	(401,116)
Distribution reinvestment	474	—	1,133	4,436	2,430	—	8,473
Balance at March 31, 2023	534,026	351,856	658,895	4,034,345	1,441,933	13,523,324	20,544,379

As discussed in Note 11 — “Class N Redeemable Common Stock”, as of March 31, 2024 and December 31, 2023, all of MassMutual’s Class N shares have been classified as redeemable common stock because MassMutual has the contractual right to redeem the shares under certain circumstances. As of March 31, 2024 and December 31, 2023, as MassMutual was the sole shareholder of Class N shares, all outstanding Class N shares were classified as redeemable common stock.

Distributions

We generally intend to distribute substantially all of our taxable income to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code. Taxable income does not necessarily equal net income as calculated in accordance with GAAP.

For the three months ended March 31, 2024 and 2023, we declared distributions of $9.0 million and $8.6 million, respectively. We accrued $2.5 million and $2.5 million for distributions payable to related parties as a component of due to affiliates in our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. Additionally, as of March 31, 2024 and December 31, 2023, we accrued $0.5 million and $0.5 million, respectively, for distributions payable to third parties as a component of accounts payable and accrued expenses in our condensed consolidated balance sheets.

18

The following tables detail the aggregate distributions declared per share for each applicable class of stock for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31, 2024
	Series A Preferred Stock		Class T Common Stock		Class S Common Stock		Class D Common Stock		Class I Common Stock		Class E Common Stock		Class N Common Stock
Aggregate distributions declared per share	$	—	$	0.4182	$	0.4182	$	0.4182	$	0.4182	$	0.4182	$	0.4182
Stockholder servicing fee per share(1)	—		(0.0259)		(0.0229)		(0.0104)		—		—		—
Net distributions declared per share	$	—	$	0.3923	$	0.3953	$	0.4078	$	0.4182	$	0.4182	$	0.4182

	Three Months Ended March 31, 2023
	Series A Preferred Stock		Class T Common Stock		Class S Common Stock		Class D Common Stock		Class I Common Stock		Class E Common Stock		Class N Common Stock
Aggregate distributions declared per share	$	—	$	0.4162	$	0.4162	$	0.4162	$	0.4162	$	0.4162	$	0.4162
Stockholder servicing fee per share(1)	—		(0.0193)		—		(0.0085)		—		—		—
Net distributions declared per share	$	—	$	0.3969	$	0.4162	$	0.4077	$	0.4162	$	0.4162	$	0.4162

(1)See Note 16 — “Related Party Transactions” for a discussion of our stockholder servicing fee.

Redeemable Non-controlling Interest in INREIT OP

In connection with its performance participation interest, the Invesco REIT Special Limited Partner L.L.C. (“the Special Limited Partner”), a wholly-owned subsidiary of Invesco, holds Class E units in INREIT OP. See Note 16 — “Related Party Transactions” for further details of the Special Limited Partner’s performance participation interest. Because the Special Limited Partner has the ability to redeem its Class E units for cash, at its election, we have classified these Class E units as redeemable non-controlling interest in INREIT OP on our condensed consolidated balance sheets. The redeemable non-controlling interest in INREIT OP is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period. For the three months ended March 31, 2024 and 2023, we recorded an allocation adjustment of approximately $54,000 and $0.6 million, respectively, from additional paid-in capital to redeemable non-controlling interest in INREIT OP on our condensed consolidated balance sheets.

The following table details the non-controlling interest activity related to the Special Limited Partner:

	Three Months Ended March 31,
$ in thousands	2024		2023
Net loss allocated	$	(39)	$	(40)
Distributions	$	71	$	78
Adjustment to carrying value	$	54	$	568

As of March 31, 2024 and December 31, 2023, distributions payable to the Special Limited Partner were approximately $22,000 and $26,000, respectively.

Distribution Reinvestment Plan

We have adopted a distribution reinvestment plan whereby stockholders will have their cash distributions automatically reinvested in additional shares of common stock unless they elect to receive their distributions in cash. The per share purchase price for shares purchased under the distribution reinvestment plan will be equal to the offering price before upfront selling commissions and dealer manager fees (the “transaction price”) at the time the distribution is payable. The transaction price will generally be equal to our prior month’s NAV per share for that share class. Stockholders will not pay upfront selling commissions or dealer manager fees when purchasing shares under the distribution reinvestment plan. The stockholder servicing fees for shares of our Class T shares, Class S shares and Class D shares are calculated based on the NAV for those shares and may reduce the NAV or, alternatively, the distributions payable with respect to shares of each such class, including shares issued in respect of distributions on such shares under the distribution reinvestment plan.

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Share Repurchase Plan

We have adopted a share repurchase plan. On a monthly basis, our stockholders may request that we repurchase all or any portion of their shares. We may choose, in our discretion, to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any month, subject to any limitations in the share repurchase plan. For the three months ended March 31, 2024, we repurchased 250,163 shares of common stock for $7.1 million and fulfilled all repurchase requests that were made. For the three months ended March 31, 2023, we repurchased 401,116 shares of common stock for $13.0 million and fulfilled all repurchase requests that were made.

Share-Based Compensation Plan

For the three months ended March 31, 2024 and 2023, we awarded independent members of our board of directors shares under our 2019 Equity Incentive Plan (the “Incentive Plan”). In November 2023, we granted 2,472 Class E restricted shares. The restricted shares will become unrestricted shares of common stock on the first anniversary of the grant date unless forfeited, subject to certain conditions that accelerate vesting. For the three months ended March 31, 2024, we recognized approximately $19,000 of compensation expense related to these awards. The unrecognized stock compensation expense on the unvested awards is approximately $45,000. For the three months ended March 31, 2023, we awarded independent members of our board of directors 604 Class E shares and recognized approximately $20,000 of compensation expense related to these awards. As of March 31, 2024, 184,463 shares of common stock remain available for future issuance under the Incentive Plan.

13.Fair Value Measurements

A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The three levels are defined as follows:

Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. We do not adjust the quoted price for these investments.

Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.

Certain investments that are measured at fair value using NAV per share as a practical expedient are not required to be categorized in the fair value hierarchy tables. The total fair value of these investments is included in the tables below to permit reconciliation of the fair value hierarchy to amounts presented on our condensed consolidated balance sheets. As of March 31, 2024 and December 31, 2023, none of these investments were expected to be sold at a value materially different than NAV.

Valuation of Assets Measured at Fair Value

The following table details our financial instruments measured at fair value on a recurring basis:

	March 31, 2024
	Fair Value Measurements Using:
$ in thousands	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total at Fair Value
Investments in real estate-related securities	$	4,316	$	31,459	$	—	$	—	$	35,775
Investments in commercial loans	—		—		34,680		—		34,680
Investment in affiliated fund	—		—		—		27,170		27,170
Interest rate caps	—		2,960		—		—		2,960
Interest rate swap	—		2,190		—		—		2,190
Total	$	4,316	$	36,609	$	34,680	$	27,170	$	102,775

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	December 31, 2023
	Fair Value Measurements Using:
$ in thousands	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total at Fair Value
Investments in real estate-related securities	$	4,729	$	23,301	$	—	$	—	$	28,030
Investments in commercial loans	—		—		34,626		—		34,626
Investment in affiliated fund	—		—		—		27,717		27,717
Interest rate caps	—		3,320		—		—		3,320
Interest rate swap	—		1,498		—		—		1,498
Total	$	4,729	$	28,119	$	34,626	$	27,717	$	95,191

Our investments in commercial loans consist of two floating rate mezzanine loans we originated and are classified as Level 3. The commercial loans are carried at fair value based on significant unobservable inputs. The following table details our investments in commercial loans:

$ in thousands	Investments in Commercial Loans
Balance as of December 31, 2023	$	34,626
Net unrealized gain	54
Balance as of March 31, 2024	$	34,680

The following table shows the significant unobservable inputs related to the Level 3 fair value measurement of our investments in commercial loans as of March 31, 2024.

Type	Asset Class	Valuation Technique	Unobservable Input	Weighted Average Rate
Commercial loans	Industrial	Discounted cash flow	Discount rate	8.30%

The discount rate above is subject to change based on changes in economic and market conditions both current and anticipated, in addition to changes in use or timing of exit if applicable. These rates are also based on the location, type and nature of each property and related industry publications. Changes in discount rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. It is not possible for us to predict the effect of future economic or market conditions based on our estimated fair values.

Valuation of Liabilities Not Carried at Fair Value

The following table presents the carrying value and estimated fair value of our liabilities that are not carried at fair value on the consolidated balance sheets:

	March 31, 2024				December 31, 2023
$ in thousands	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Mortgage notes payable(1)	$	339,034	$	334,739	$	339,034	$	333,605
Total	$	339,034	$	334,739	$	339,034	$	333,605

(1)The mortgage notes payable does not include unamortized debt issuance costs.

The fair value of our borrowings is estimated by modeling the cash flows required by our debt agreements and discounting them back to present value using the appropriate discount rate. Additionally, we consider current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value of our borrowings are considered Level 3.

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14.Variable Interest Entities

Unconsolidated Variable Interest Entities

Included in our investments as of March 31, 2024 is Homestead, an unconsolidated real estate operating company, which is a VIE where we are not the primary beneficiary. We hold a 50% ownership in through a joint venture with an affiliated Invesco fund which owns the remaining 50% ownership interest. An unaffiliated third party has a promote incentive that could dilute our ownership percentage if certain performance milestones are exceeded. This investment was deemed a VIE primarily based on the fact that the equity investors at risk lacked the ability to make decisions that significantly impacted the economic performance of the entity. We have determined that we are not the primary beneficiary of this VIE based on the fact that we have shared power of this entity and therefore do not have a controlling financial interest. As of March 31, 2024, our investment in this VIE is approximately $30,000, which is included in investments in unconsolidated entities on our condensed consolidated balance sheets. Our maximum future exposure to loss as a result of our involvement with this VIE is estimated to be $2.7 million, which is the capital commitment obligation. We have not provided financial support to this VIE that we were not previously contractually required to provide. All future costs will be funded with capital contributions from us and the affiliated Invesco fund in accordance with our respective ownership percentages.

Included in our investments as of March 31, 2024 is San Simeon Preferred Equity, a limited liability company that owns a multifamily property, which is a VIE where we are not the primary beneficiary. The investment is structured as a preferred membership interest and our membership interest is structured to receive a fixed return. We do not participate in any economic upside or downside of San Simeon Preferred Equity. Further, because there is a mandatory redemption feature associated with our preferred membership interest, our future involvement with San Simeon Preferred Equity is limited. We have concluded that San Simeon Preferred Equity is a VIE primarily based on the fact that the at risk equity investors lack the power over the entity’s most significant activities. We have determined that we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact San Simeon Preferred Equity’s economic performance. As of March 31, 2024, our investment in this VIE is $27.4 million, which is included in investments in unconsolidated entities on our condensed consolidated balance sheets. We have not provided financial support to this VIE that we were not previously contractually required to provide. Our economic risk with respect to our investment is limited to our membership interest and any uncollected distributions.

Included in our investments as of March 31, 2024 is Retail GP Fund, an unconsolidated limited liability company formed to invest in retail properties, which is a VIE of which we are not the primary beneficiary. We hold an 85% ownership interest in ITP LLC. ITP LLC has a 90% interest in Retail GP Fund. However, major decisions require unanimous approval between ITP LLC and the other 10% member of the Retail GP Fund, effectively rendering our voting rights to 50% for any major decisions that would most significantly impact Retail GP Fund’s economic performance. Thus, the voting rights of ITP LLC are not proportional to its obligations to absorb gains and losses while substantially all of the Retail GP Funds activities are conducted on behalf of ITP LLC. As such, we have concluded that the Retail GP Fund is a VIE. We are not the primary beneficiary as we share the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance due to the fact that a unanimous approval of major decisions is required. As of March 31, 2024, our investment in this VIE is $13.1 million, which is included in investments in unconsolidated entities on our condensed consolidated balance sheets. We have not provided financial support to this VIE that we were not previously contractually required to provide. Our economic risk with respect to our investment is limited to our contributions and any uncollected distributions.

Consolidated Variable Interest Entities

Included within our condensed consolidated financial statements as of March 31, 2024 is a VIE for which we are the primary beneficiary. The entity was established in connection with our DST Program. See additional information on the DST Program in Note 15 — “DST Program.” Our involvement with this entity is through our majority ownership and a master lease agreement between the VIE and the Company. The entity was deemed a VIE primarily because any equity ownership in the entity does not provide the equity owners voting rights. We determined that we were the primary beneficiary as (1) the VIE has limited ongoing significant activities and the Company was responsible for the key decisions of the VIE that were made at formation and has the power to direct the remaining activities of the VIE such as the ability to exercise a fair market value purchase option and (2) the Company has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE through the Company’s variable interests.

The majority of the operations of the VIE are funded with cash flows from the master lease between the VIE and a wholly-owned subsidiary of the Operating Partnership. We have not provided any financial support to the VIE other than the interests described above.

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15.DST Program

In February 2023, we, through our Operating Partnership, initiated the DST Program to issue and sell up to a maximum aggregate offering amount of $3.0 billion of beneficial interests in specific DSTs holding the DST Properties. Under the DST Program, each DST Property may be sourced from our real properties or from third parties, will be held in a separate DST, and will be leased by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement will be guaranteed by the Operating Partnership, which will retain a fair market value purchase option (the “FMV Option”) giving it the right, but not the obligation, to acquire the interests in the applicable DST from the investors any time after two years from the closing of the applicable DST offering in exchange for units of the Operating Partnership (“OP Units”) or cash, at our sole discretion. After a one-year holding period, investors who receive OP Units under the FMV Option generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of common stock, cash, or a combination of both.

The sale of beneficial interests in the DST are accounted for as sales of equity interests. As of March 31, 2024, we have raised $12.8 million related to the DST Program which is included in non-controlling interests on our condensed consolidated balance sheets.

As of March 31, 2024, the 13034 Excelsior and 5201 Industry properties are included in our DST Program and are included in investments in real estate, net in our condensed consolidated financial statements.

Under the master lease, we are responsible for subleasing the DST Properties to tenants and for covering all costs associated with operating the underlying DST Properties. The rental revenues and operating property expenses associated with the underlying property are included in the respective line items on our condensed consolidated statements of operations. 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 relevant DST and could fluctuate over time.

16.Related Party Transactions

Due to Affiliates

The following table details the components of due to affiliates:

$ in thousands	March 31, 2024		December 31, 2023
Advanced general and administrative expenses	$	7,891	$	9,448
Advanced offering costs	6,376		6,134
Distributions payable	2,504		2,501
Accrued stockholder servicing fee	2,428		2,112
Advanced organization expenses	1,474		1,474
Accrued affiliate service provider expenses	1,035		16
Accrued management fee	310		309
Total	$	22,018	$	21,994

Management Fee and Performance Participation Interest

We are externally managed by the Adviser, a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco. The Adviser is at all times subject to the supervision and oversight of our board of directors and has only such functions and authority as we delegate to it.

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We pay the Adviser a management fee equal to 1.0% of NAV for Class T shares, Class S shares, Class D shares and Class I shares per annum calculated and payable monthly. We will not pay a management fee on Class E shares. Commencing on January 16, 2030, ten years after the commencement of the Class N Private Offering, we will pay the Adviser a management fee equal to 1.0% of NAV for Class N shares per annum payable monthly. In addition, we will pay the Adviser 1.0% per annum payable monthly of the total consideration received by us for selling interests in the DST Program to third-party investors, which will be allocated among each class of shares based on each class’s relative percentage of aggregate NAV. The Adviser may elect to receive its management fee in cash, shares of our Class I common stock, shares of our Class E common stock, INREIT OP Class I units or INREIT OP Class E units. During the three months ended March 31, 2024 and 2023, we incurred management fees of $0.5 million and $0.4 million, respectively. As of March 31, 2024 and December 31, 2023, we accrued $0.3 million of management fees, respectively, as components of due to affiliates on our condensed consolidated balance sheets. During the three months ended March 31, 2024 and 2023, we issued 15,574 and 12,336 Class E shares, respectively, as payment for the management fees earned. The shares issued to the Adviser for payment of the management fee were issued at the applicable NAV per share at the end of each month for which the fee was earned. During the three months ended March 31, 2024, the Adviser submitted 8,461 Class E shares for repurchase by the Company, for a total repurchase amount of $0.3 million. During the three months ended March 31, 2023, we did not repurchase any Class E shares from the Adviser as no repurchase requests were made.

The Special Limited Partner holds a performance participation interest in INREIT OP that entitles it to receive an allocation from INREIT OP equal to (1) with respect to all INREIT OP units other than Class N units and Class E units, 12.5% of the Total Return, subject to a 6.0% Hurdle Amount and a High Water Mark, with a Catch-Up (each such term as defined in the limited partnership agreement of INREIT OP), and (2) with respect to Class N units, 10.0% of the Class N Total Return, subject to a 7.0% Class N Hurdle Amount and a Class N High Water Mark, with a Catch-Up (each such term as defined in the limited partnership agreement of INREIT OP). The performance participation interest is calculated and payable on an annual basis. The Special Limited Partner may elect to receive payment of the performance participation interest in cash, INREIT OP Class I units or INREIT OP Class E units. For the three months ended March 31, 2024 and 2023, the Special Limited Partner did not earn a performance participation interest. During the three months ended March 31, 2024, the Special Limited Partner submitted 28,982 Class E units for repurchase by the Company, for a total repurchase amount of $0.9 million. During the three months ended March 31, 2023, we did not repurchase any Class E units from the Special Limited Partner as no repurchase requests were made.

Reimbursement of Expenses Incurred by Adviser

The Adviser and its affiliates provide us with our management team, including our officers and appropriate support personnel. Each of our officers is an employee of the Adviser or one of its affiliates. We do not have any employees. In addition, the Adviser and its affiliates facilitate the payment of certain operational costs and bundled contracts to third-party vendors that directly relate to the ongoing management operations of the Company. These expenses may include costs for third-party software, tenant relations, property management assessment, regulatory compliance and IT support. The Adviser and its affiliates also facilitate the payment of travel expenses incurred by the management team and support personnel on behalf of the Company. During the three months ended March 31, 2024 and 2023, we incurred $0.3 million for these expenses, respectively, that were provided by the Adviser.

Stockholder Servicing Fees and Other Selling Commissions

Invesco Distributors, Inc. (“the Dealer Manager”) is a registered broker-dealer affiliated with the Adviser and is entitled to receive selling commissions, dealer manager fees and stockholder servicing fees for Class T, Class S and Class D shares sold in the Offering. The Dealer Manager reallows (pays) all or a portion of the stockholder servicing fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers and will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services.

We accrue the full amount of stockholder servicing fees payable as an offering cost at the time each Class T, Class S and Class D share is sold during the Primary Offering. As of March 31, 2024 and December 31, 2023, we have paid approximately $95,000 and $0.3 million, respectively, of commissions, dealer manager fees and stockholder servicing fees with respect to the outstanding Class T, Class S and Class D shares.

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The following table presents the upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees per annum for each class of shares sold in the Offering:

	Class T Shares	Class S Shares	Class D Shares	Class I Shares	Class E Shares
Maximum Upfront Selling Commissions (% of Transaction Price)	up to 3.0%(1)	up to 3.5%	up to 1.5%	—	—
Maximum Upfront Dealer Manager Fees (% of Transaction Price)	0.5%(1)	—	—	—	—
Stockholder Servicing Fee (% of NAV)	0.85%(2)	0.85%	0.25%	—	—

(1)For Class T shares sold in the Offering (other than as part of our distribution reinvestment plan), investors will pay upfront selling commissions of up to 3.0% of the transaction price and upfront dealer manager fees of 0.5% of the transaction price, however such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price.

(2)Consists of a representative stockholder servicing fee (0.65% per annum) and a dealer stockholder servicing fee (0.20% per annum).

We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account at the end of the month in which the Dealer Manager, in conjunction with the transfer agent, determines that total upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-dealers, a lower limit as set forth in the applicable agreement between the Dealer Manager and a participating broker-dealer at the time such Class T shares were issued) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under our distribution reinvestment plan upon the reinvestment of distributions paid with respect thereto or with respect to any shares issued under our distribution reinvestment plan directly or indirectly attributable to such shares). At the end of such month, each such Class T share, Class S share or Class D share will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such share.

DST Program Fees and Expenses

Invesco Distributors, Inc. serves as the dealer manager for the DST Program. Invesco Real Estate Exchange LLC, an indirect wholly owned subsidiary of the Company (the “DST Sponsor”), pays the dealer manager upfront selling commissions of up to 5.0% of Interests sold, upfront dealer manager fees of up to 1.0% of Interests sold and placement fees of up to 1.0% of the Interests sold, some or all of which may be waived or reallowed to participating broker-dealers. For the three months ended March 31, 2024, we incurred upfront selling commissions, upfront dealer manager and placement fees of approximately $32,000.

An affiliate of Invesco currently receives an organizational and offering expense reimbursement of 0.5% of Interests sold. For the three months ended March 31, 2024, we incurred organizational and offering expense reimbursement fees of approximately $28,000.

Our Operating Partnership receives a closing cost reimbursement equal to 0.5% of Interests sold. For the three months ended March 31, 2024, we recorded income from closing cost reimbursements of approximately $28,000 recorded as a component of other revenue on our condensed consolidated statement of operations.

Invesco DST Manager LLC, which is indirectly owned by the Adviser and is an affiliate of the Sponsor, serves as the manager for the DST Program and receives a management fee equal to 0.15% per annum of Interests sold. The Dealer Manager receives an investor servicing fee equal to 0.25% per annum of Interests sold. For the three months ended March 31, 2024, the expense incurred for management and investor servicing fees of approximately $10,000.

For the three months ended March 31, 2023, we did not incur upfront selling commissions, upfront dealer manager, placement, organizational and offering expense reimbursement, management or investor servicing fees as the DST program commenced in February 2023 and the first sale of beneficial interest in the DST occurred in September 2023.

See additional information on the DST Program in Note 15 — “DST Program.”

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Related Party Share Ownership

The table below shows the amount of shares and the total purchase price of those shares which have been purchased by affiliates as of March 31, 2024. Any share repurchases or exchanges are not a component of the table but have been described in further detail below.

$ in thousands, except share amounts	Class T Shares	Class S Shares	Class D Shares	Class I Shares	Class E Shares	Class N Shares	Total Purchase Price
MassMutual(1)	—	—	—	—	—	16,485,652	$	486,133
Invesco Global Property Plus Fund(2)	—	—	—	—	1,994,164	1,992,224	119,500
Invesco Realty, Inc.(3)	165,126	165,126	165,126	416,893	—	738,701	48,216
Members of our board of directors and employees of our Adviser(4)	—	—	—	195	24,648	75,128	2,742
	165,126	165,126	165,126	417,088	2,018,812	19,291,705	$	656,591

(1)In accordance with MassMutual’s subscription agreement, we have repurchased 2,537,790 of MassMutual Shares for $74.8 million. The amount presented is inclusive of the shares subsequently repurchased.

(2)Invesco Global Property Plus Fund (“IGP+”) purchased 1,992,224 of Class N shares for $61.0 million, and we subsequently exchanged these Class N shares for 2,028,086 Class I shares. Additionally, we have repurchased a total of 1,711,078 Class E shares and Class I shares from IGP+ for $54.0 million. The amount presented is inclusive of the shares subsequently repurchased.

(3)Invesco Realty, Inc. purchased 738,701 of Class N shares for $20.0 million, and we subsequently exchanged these Class N shares for 186,731 Class T shares, 186,731 Class S shares, 186,731 Class D shares and 186,208 Class I shares. Additionally, we have repurchased 291,818 Class I shares from Invesco Realty, Inc. for $9.2 million. The amount presented is inclusive of the shares subsequently repurchased.

(4)Members of our board of directors and employees of our Adviser who are officers of the Company or serve on the Company’s steering committee purchased 75,128 Class N shares for $2.0 million, and we subsequently exchanged these Class N shares for 75,128 Class E shares.

Organization and Offering Expenses

The Adviser advanced all of our organization and offering expenses (other than upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees) incurred through December 31, 2022. We will begin reimbursement of advanced organization and offering expenses on the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. We will reimburse the Adviser for all of our advanced expenses ratably over the 60 months following such date. Additionally, we will reimburse the Adviser for any organization and offering expenses incurred subsequent to December 31, 2022 that were paid on our behalf. In January 2023, we began reimbursing the Adviser on a quarterly basis for organization and offering expenses incurred subsequent to December 31, 2022. As of March 31, 2024 and December 31, 2023, the Adviser and its affiliates have advanced organization costs and offering expenses of $7.9 million and $7.6 million, respectively, on our behalf in connection with the Offering and Private Offerings that are recorded as a component of due to affiliates on our condensed consolidated balance sheets.

Operating Expenses Reimbursement

The Adviser has advanced all of our operating expenses (excluding the organizational and offering expenses discussed above) on our behalf through December 31, 2021. From January 2022 to September 2022, we began ratably reimbursing the Adviser over 60 months for the operating expenses incurred prior to December 31, 2021 and will recommence reimbursements to the Adviser following the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. Additionally, we will reimburse the Adviser for any operating expenses incurred subsequent to December 31, 2022 that were paid on our behalf. In January 2022, we began reimbursing the Adviser on a quarterly basis for operating expenses incurred subsequent to December 31, 2021. As of March 31, 2024 and December 31, 2023, the Adviser advanced on our behalf $7.9 million and $9.4 million, respectively, for general and administrative expenses. The amount due to the Adviser is recorded as a component of due to affiliates on our condensed consolidated balance sheets.

Under our charter, we may reimburse the Adviser, at the end of each fiscal quarter, for total operating expenses paid by the Adviser. However, we may not reimburse the Adviser at the end of any fiscal quarter for total operating expenses (as defined in our charter) that, in the four consecutive fiscal quarters then ended, exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of our assets for that period (the “2%/25% Guidelines”).

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We may reimburse the Adviser for expenses in excess of the 2%/25% Guidelines if a majority of our independent directors determines that such excess expenses (an “Excess Amount”) are justified based on unusual and non-recurring factors. Operating expenses for the four consecutive fiscal quarters ended March 31, 2024 did not exceed the charter-imposed limitation.

Accrued Affiliate Service Provider Expenses

We have engaged and expect to continue to engage Pine Tree Commercial Realty, LLC (“Pine Tree”), a wholly owned subsidiary of PTCR Holdco, LLC, in which we have a preferred equity investment, to provide property management services (including leasing, revenue management, accounting, legal and contract management, expense management and capital expenditure project services) for Cortlandt Crossing. The cost for such services is a percentage of the gross receipts and project costs, respectively.

During the three months ended March 31, 2024 and 2023, we incurred approximately $42,000 and $35,000, respectively, of expenses due to Pine Tree for services in connection with the property management of Cortlandt Crossing. All property management fees paid to Pine Tree are included in rental property operating expenses on our condensed consolidated statements of operations.

Co-Investments with Affiliated Products

We formed a joint venture with Invesco U.S. Income Fund L.P., an affiliate of Invesco, to acquire an 85% interest in the Sunbelt Medical Office Portfolio. INREIT OP and Invesco U.S. Income Fund L.P. each hold a 50% interest in the joint venture.

We hold a 50% ownership interest in a real estate operating company focused on the aggregation and asset management of manufacturing housing through Homestead Communities, LLC. Invesco U.S. Income Fund L.P. owns the remaining 50% ownership interest.

We hold our interest in Everly Roseland through a 60% consolidated ownership interest in Everly Roseland Co-Invest, a co-investment between INREIT OP and Invesco Real Estate Atlas US Everly LLC, an affiliate of Invesco and a majority owned subsidiary of IGP+. The Everly Roseland Co-Invest holds a 95% consolidated ownership interest in a joint venture with a third-party.

See additional discussion in Note 4 — “Investments in Unconsolidated Entities.”

Investment in Affiliated Fund

As of March 31, 2024, we have an investment of $27.2 million in Invesco Commercial Mortgage Income - U.S. Fund, L.P. (“CMI”), an affiliate of Invesco managed by our Adviser. CMI invests primarily in mortgage loans that are collateralized by commercial residential real estate throughout the United States.

Other

We have a $30.0 million commitment from Invesco Realty, Inc. that collateralizes our Revolving Credit Facility. We may be required to call capital under this commitment to repay outstanding obligations under our Revolving Credit Facility in the event of default, however this commitment is not available to fund our operating or investing activities. As of March 31, 2024, we have not called any of the $30.0 million commitment.

MassMutual, an affiliate of Invesco, is the sole holder of our Class N redeemable common stock. See additional information on MassMutual’s investment in the Company in Note 11 — “Class N Redeemable Common Stock.”

17.Commitments and Contingencies

Commitments and contingencies may arise in the ordinary course of business. As of March 31, 2024, we have no material off-balance sheet commitments and contingencies.

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2024, we were not subject to any material litigation or aware of any pending or threatened material litigation.

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18.Tenant Leases

Our real estate properties are leased to tenants under operating lease agreements that expire on various dates. Our tenants have the option to extend or terminate certain leases at their discretion and also have termination options that may result in additional fees due to the Company.

We recognize rental revenue on a straight-line basis over the life of the lease, including any rent steps or abatement provisions. Our tenant leases do not have material residual value guarantees or material restrictive covenants.

The following table details the components of operating lease income:

	Three Months Ended March 31,
$ in thousands	2024		2023
Fixed lease payments	$	12,891	$	13,774
Variable lease payments	1,603		1,726
Rental revenue	$	14,494	$	15,500

Aggregate minimum annual rentals for our consolidated real estate investments through the non-cancelable lease term are as follows:

$ in thousands	Future Minimum
Year	Rents
2024 (remainder)	$	8,822
2025	11,269
2026	11,447
2027	11,254
2028	11,418
2029	8,565
Thereafter	41,863
Total	$	104,638

Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts or contractual increases as defined in the lease agreement. These contractual contingent rentals are not included in the table above.

19.Segment Reporting

As of March 31, 2024, we operated in eight reportable segments: healthcare, office, industrial, self-storage, multifamily, student housing, grocery-anchored retail, as well as real estate debt, which includes originated commercial loans, the preferred equity investment in San Simeon Preferred Equity and our investment in an affiliated debt fund. We allocate resources and evaluate results based on the performance of each segment individually. We believe that segment net operating income is the key performance metric that captures the unique operating characteristics of each segment. We define segment net operating income as real estate revenue, income from commercial loans, property operating expenses and the net of revenues and property operating expenses of unconsolidated entities that is allocable to our ownership interest.

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The following table summarizes our total assets by segment:

$ in thousands	March 31, 2024		December 31, 2023
Healthcare	$	70,884	$	72,234
Office	30,161		30,612
Industrial	140,305		141,081
Self-Storage	99,539		100,181
Multifamily	161,161		161,303
Student Housing	228,136		229,225
Grocery-Anchored Retail	64,333		64,733
Real Estate Debt	89,400		90,019
Corporate and Other	95,854		83,376
Total assets	$	979,773	$	972,764

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The following table summarizes our financial results by segment for the three months ended March 31, 2024:

$ in thousands	Healthcare		Office		Industrial		Self-Storage		Multifamily		Student Housing		Grocery-Anchored Retail		Real Estate Debt		Corporate and Other		Total
Revenues:
Rental revenue	$	—	$	741	$	2,465	$	2,081	$	2,855	$	5,013	$	1,339	$	—	$	—	$	14,494
Income from commercial loans	—		—		—		—		—		—		—		1,130		—		1,130
Other revenue	—		—		117		221		56		317		1		—		28		740
Total revenues	—		741		2,582		2,302		2,911		5,330		1,340		1,130		28		16,364
Expenses:
Rental property operating	—		136		694		2,099		1,083		2,096		476		—		55		6,639
Total expenses	—		136		694		2,099		1,083		2,096		476		—		55		6,639
Income from unconsolidated entities, net	1,476		—		—		—		—		—		—		775		991		3,242
Income from investment in affiliated fund, net	—		—		—		—		—		—		—		651		—		651
Income from real estate-related securities, net	—		—		—		—		—		—		—		—		1,018		1,018
Segment net operating income	$	1,476	$	605	$	1,888	$	203	$	1,828	$	3,234	$	864	$	2,556	$	1,982	$	14,636
Segment depreciation and amortization	$	(1,678)	$	(416)	$	(1,376)	$	(637)	$	(1,346)	$	(1,749)	$	(500)	$	—	$	(562)	$	(8,264)
General and administrative																			(998)
Gain on derivative instruments, net																			1,723
Unrealized gain from commercial loans																			54
Interest income																			298
Interest expense																			(5,959)
Management fee - related party																			(465)
Other expense																			(188)
Net income attributable to Invesco Real Estate Income Trust Inc.																			$	837
Dividends to preferred stockholders																			$	(2)
Net loss attributable to non-controlling interests in consolidated joint ventures																			22
Net loss attributable to non-controlling interest in INREIT OP																			39
Net income attributable to common stockholders																			$	896

The following table reconciles our segment income from unconsolidated entities to income from unconsolidated entities, net on our condensed consolidated statement of operations for the three months ended March 31, 2024:

$ in thousands
Segment income from unconsolidated entities	$	3,242
Depreciation and amortization attributable to unconsolidated entities	(2,240)
Income from unconsolidated entities, net	$	1,002

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The following table reconciles our segment depreciation and amortization to depreciation and amortization on our condensed consolidated statement of operations for the three months ended March 31, 2024:

$ in thousands
Segment depreciation and amortization	$	(8,264)
Depreciation and amortization attributable to unconsolidated entities	2,240
Depreciation and amortization	$	(6,024)

The following table summarizes our financial results by segment for the three months ended March 31, 2023:

$ in thousands	Healthcare		Office		Industrial		Self-Storage		Multifamily		Student Housing		Grocery-Anchored Retail		Real Estate Debt		Corporate and Other		Total
Revenues:
Rental revenue	$	—	$	725	$	2,878	$	2,061	$	4,041	$	4,440	$	1,355	$	—	$	—	$	15,500
Income from commercial loans	—		—		—		—				—		—		1,255		—		1,255
Other revenue	—		—		81		230		145		269		—		—		—		725
Total revenues	—		725		2,959		2,291		4,186		4,709		1,355		1,255		—		17,480
Expenses:
Rental property operating	—		150		1,055		1,040		1,514		1,572		443		—		50		5,824
Total expenses	—		150		1,055		1,040		1,514		1,572		443		—		50		5,824
Income from unconsolidated entities, net	694		—		—		—		—		—		—		714		698		2,106
Loss from investments in affiliated fund	—		—		—		—		—		—		—		(933)		—		(933)
Income from real estate-related securities	—				—		—		—		—		—		—		118		118
Segment net operating income	$	694	$	575	$	1,904	$	1,251	$	2,672	$	3,137	$	912	$	1,036	$	766	$	12,947
Segment depreciation and amortization	$	(1,887)	$	(416)	$	(1,373)	$	(1,904)	$	(1,602)	$	(1,596)	$	(498)	$	—	$	(674)	$	(9,950)
General and administrative																			(1,164)
Loss on derivative instruments, net																			(1,118)
Interest expense																			(6,549)
Management fee - related party																			(396)
Other expense																			(13)
Net loss attributable to Invesco Real Estate Income Trust Inc.																			$	(6,243)
Dividends to preferred stockholders																			$	(2)
Net loss attributable to non-controlling interests in consolidated joint ventures																			755
Net loss attributable to non-controlling interest in INREIT OP																			40
Net loss attributable to common stockholders																			$	(5,450)

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The following table reconciles our segment income from unconsolidated entities to loss from unconsolidated entities, net on our condensed consolidated statement of operations for the three months ended March 31, 2023:

$ in thousands
Segment income from unconsolidated entities	$	2,106
Depreciation and amortization attributable to unconsolidated entities	(2,559)
Loss from unconsolidated entities, net	$	(453)

The following table reconciles our segment depreciation and amortization to depreciation and amortization on our condensed consolidated statement of operations for the three months ended March 31, 2023:

$ in thousands
Segment depreciation and amortization	$	(9,950)
Depreciation and amortization attributable to unconsolidated entities	2,559
Depreciation and amortization	$	(7,391)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this quarterly report on Form 10-Q, or this “Quarterly Report,” we refer to Invesco Real Estate Income Trust Inc. and its consolidated subsidiaries as “we,” “us,” “our Company,” or “our,” unless we specifically state otherwise or the context indicates otherwise. We refer to our external manager, Invesco Advisers, Inc., as our “Adviser,” and we refer to the indirect parent company of our Adviser, Invesco Ltd. together with its consolidated subsidiaries (which does not include us), as “Invesco.”

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes to our unaudited condensed consolidated financial statements, which are included in Item 1 of this Quarterly Report, as well as the information contained in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

Forward Looking Statements

This Quarterly Report may include statements that constitute “forward-looking statements” within the meaning of the United States securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements about possible or assumed future results of our business, investment strategies, financial condition, liquidity, results of operations, distributions, repurchases, plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “project,” “forecast” or similar expressions and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” and any other statement that necessarily depends on future events, we intend to identify forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are difficult to predict and are generally beyond our control. Although we make such statements based on assumptions we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. We caution you not to rely unduly on any forward-looking statements and urge you to carefully consider the factors described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report and our Annual Report on Form 10-K. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a Maryland corporation formed in October 2018. We invest primarily in stabilized, income-oriented commercial real estate in the United States. To a lesser extent, we also originate and acquire private real estate debt and invest in real estate-related securities. We own, and expect to continue to own, all or substantially all of our assets through Invesco REIT Operating Partnership L.P. (“INREIT OP” or “Operating Partnership”), of which we are the sole general partner.

We are externally managed and advised by our Adviser, a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd., an independent global investment management firm. Our Adviser utilizes the personnel and global resources of Invesco Real Estate, the real estate investment center of Invesco, to provide investment management services to us. We qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2020. To maintain our REIT qualification, we must meet a number of organizational and operational requirements, including that we are generally required to distribute at least 90% of our REIT taxable income to our stockholders annually. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income (determined without regard to our net capital gain and dividends-paid deduction) to stockholders and maintain our qualification as a REIT. We operate our business in a manner that permits our exclusion from the definition of “Investment Company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

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Our board of directors will at all times have ultimate oversight and policy-making authority over us, including responsibility for governance, financial controls, compliance and disclosure. However, under the advisory agreement between us and the Adviser, we have delegated to the Adviser the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of directors.

As of March 31, 2024, we own or have invested in 49 properties. See “Investment Portfolio—Real Estate” below for additional information on these investments. As of March 31, 2024, we also own real estate-related securities, have an investment in two commercial loans and have invested in an affiliated fund which invests primarily in mortgage loans that are collateralized by commercial and multifamily residential real estate throughout the United States.

Initial Public Offering

We have registered a public offering of up to $3.0 billion in shares of common stock, consisting of up to $2.4 billion in shares in our primary offering (the “Primary Offering”) and up to $600.0 million in shares under our distribution reinvestment plan (collectively, the “Offering”). We are offering to sell any combination of five classes of shares of our common stock, Class T shares, Class S shares, Class D shares, Class I shares and Class E shares, in the Offering, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and dealer manager fees and different ongoing stockholder servicing fees. The purchase price per share for each class of our common stock sold in the Offering will vary and will generally equal our prior month’s net asset value (“NAV”) per share for such class, as determined monthly, plus any applicable upfront selling commissions and dealer manager fees.

As of May 13, 2024, we have received aggregate gross proceeds of $195.7 million from the Offering. We intend to continue selling shares on a monthly basis.

Private Offerings

We are conducting private offerings of up to $1.0 billion in shares of our Class N common stock (“Class N shares” or “Class N common stock”) (the “Class N Private Offering”) and up to $20 million in shares of our Class E common stock (“Class E shares” and the “Class E Private Offering,” respectively) (collectively, the “Private Offerings”). As of May 13, 2024, we have received gross proceeds of $576.9 million in the Private Offerings, and we have repurchased $74.8 million of Class N shares, funded by proceeds from both the Offering and Private Offerings. All of the Class N shares that were repurchased were classified as Class N redeemable common stock on our condensed consolidated balance sheets.

In August 2022, our board of directors authorized management to initiate, through the Operating Partnership, a program (the “DST Program”) to issue and sell up to a maximum aggregate offering amount of $3.0 billion of beneficial interests (“Interests”) in specific Delaware statutory trusts (the “DSTs”) holding real properties (the “DST Properties”). These Interests will be issued and sold to “accredited investors,” as that term is defined under Regulation D promulgated by the SEC under the Securities Act of 1933, as amended (the “Securities Act”) in private placements exempt from registration pursuant to Section 4(a)(2) of the Securities Act (the “DST Offerings”). Under the DST Program, each DST Property may be sourced from our real properties or from third parties, will be held in a separate DST, and will be leased back by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement will be guaranteed by the Operating Partnership, which will retain a fair market value purchase option (the “FMV Option”) giving it the right, but not the obligation, to acquire the interests in the applicable DST from the investors any time after two years from the closing of the applicable DST offering in exchange for units of the Operating Partnership (“OP Units”) or cash. After a one-year holding period, investors who acquire OP Units under the FMV Option generally have the right to cause the 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.

The DST Program is giving 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 Internal Revenue Code of 1986, as amended. Certain affiliates of the Adviser receive fees in connection with the sale of the Interests and the management of the DSTs. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, fund the repurchase of shares of all classes of our common stock under our share repurchase plan and for other corporate purposes. We commenced our first DST Offering in February 2023. As of May 13, 2024, we have raised $16.1 million in proceeds from the DST program.

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Factors Affecting Operating Results

Our results of operations are affected by a number of factors and depend on the rental income we generate from the properties that we acquire, the timing of lease expirations, operating expenses, income or loss from unconsolidated entities, general market conditions and the competitive environment for real estate assets. Of these factors, inflation, interest rates and economic uncertainty had the most direct impacts on our performance and financial condition during the first quarter of 2024.

Market Conditions

Our business is affected by conditions in the financial markets and economic conditions in the United States and to a lesser extent, elsewhere in the world. Global markets have continued to experience significant volatility and economic uncertainty, due to factors including concerns over persistent inflation, restrictive monetary policy resulting in rising financing costs, potential for slowing economic growth, actual or perceived instability in the U.S. banking system, geopolitical uncertainty and challenges in certain commercial real estate sectors. These factors can affect financing costs, property and securities valuations, capital raising, real estate transaction volume, rental income and operating expenses.

Rental Property Operating Results

We generate rental property income primarily from rental revenue received by the properties that we acquire. The amount of rental revenue depends upon a number of factors, including our ability to enter into leases with above or at market value rents for the properties that we acquire, and rent collection, which primarily relates to each future tenant’s financial condition and ability to make rent payments to us on time. Rental property operating expenses include real estate taxes, property insurance, repairs and maintenance, property management fees, utilities and other costs associated with owning real estate.

Higher market rents, particularly from student housing and residential properties, are contributing to net operating income growth. Our investments are diversified across sectors, including student-housing, multifamily, self-storage, industrial and healthcare.

While market volatility and certain fundamental factors have affected and may continue to affect the commercial real estate market and our performance, we believe there are positive long-term fundamentals within our portfolio. In addition, we believe we are protected in the near-term from refinancing risk with no maturities on our secured mortgages occurring until 2025. It remains difficult, however, to predict the full impact of these market conditions, future changes in interest rates or inflation, or other challenges to the commercial real estate sector.

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Q1 2024 Highlights

Operating Results

•We declared monthly net distributions totaling $9.0 million for the three months ended March 31, 2024. The details of the average annualized distributions rates and total returns are show in in the following table:

	Class T	Class S	Class D	Class I	Class E	Class N
Average Annualized Distribution Rate(1)	5.6%	5.6%	5.8%	6.0%	5.7%	5.8%
Year-to-Date Total Return, without upfront selling commissions(2)	(0.1)%	—%	—%	—%	0.2%	0.2%
Year-to-Date Total Return, assuming maximum upfront selling commissions(2)	(3.6)%	(3.5)%	(1.5)%	—%	0.2%	0.2%
Inception-to-Date Total Return, without upfront selling commissions(2)(3)	5.9%	6.0%	6.1%	6.5%	8.1%	10.1%
Inception-to-Date Total Return, assuming maximum upfront selling commissions(2)(3)	4.5%	4.7%	5.5%	6.5%	8.1%	10.1%

(1)The annualized distribution rate is calculated as the current month’s distribution annualized and divided by the prior month’s NAV, which is inclusive of all fees and expenses. The percent shown is the average annualized distribution rate for the three months ended March 31, 2024.

(2)Total return is calculated as the change in NAV per share during the respective periods plus any distributions per share declared in the period and assumes any distributions are reinvested in accordance with our distribution reinvestment plan.

(3)The inception date was June 1, 2021 for Class T, S and D shares; May 21, 2021 for Class I shares; May 14, 2021 for Class E shares and September 28, 2020 for Class N shares.

Capital Activity

•We raised $20.3 million of net proceeds from the sale of our common stock during the three months ended March 31, 2024 and also raised a total of $12.8 million in proceeds from the DST program as of March 31, 2024.

Investments

•We purchased $15.5 million and sold $8.3 million in real estate-related securities, increasing our investment to $35.8 million.

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Investment Portfolio

Summary of Portfolio

The following chart summarizes the allocation of our investment portfolio based on fair value as of March 31, 2024:

The following charts describe the diversification of our investments in real estate based on fair value as of March 31, 2024:

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(1)Investment allocation is measured as the asset value of each investment category (real estate property investments, private real estate debt, real estate-related securities or cash) against the total asset value of all investment categories, excluding the value of any third-party interests in such assets. The Real Estate Property Investments segment includes non-controlling interests in retail properties through INREIT’s interest in ITP Investments LLC. See “—Real Estate” and “—Real Estate Debt” below for additional information on these investments. Totals may not sum to 100% due to rounding.

(2)Property Type weighting is measured as the asset value of real estate investments for each sector category (Healthcare, Industrial, Office, Multifamily, Grocery-Anchored Retail, Self-Storage, Student Housing, Private Real Estate Debt, Other) against the total asset value of all real estate investments, excluding the value of any third-party interests in such real estate investments. The Other segment includes non-controlling interests in retail properties through our interest in ITP Investments LLC. Real estate investments include our direct property investments, unconsolidated investments, private real estate debt, and our non-controlling interests in retail properties. Totals may not sum to 100% due to rounding.

(3)Geography weighting excludes the asset value of any investments in private real estate debt, real estate-related securities or cash and is measured as the asset value of direct real estate properties and unconsolidated investments for each geographical category (East, Midwest, South, West) against the total asset value of all real estate property investments. Totals may not sum to 100% due to rounding.

As of March 31, 2024, we own interests in 49 properties, which we acquired for a total purchase price of $867.2 million, inclusive of closing costs. Our diversified portfolio of income producing assets consists of healthcare, office, industrial, self-storage, multifamily, student housing and grocery-anchored retail properties, as well as real estate debt investments, concentrated in growth markets across the United States.

The following table provides a summary of our real estate portfolio as of March 31, 2024:

Segment	Number of Properties(1)	Sq. Feet / Units /Beds(1)	Occupancy Rate	Gross Asset Value ($ in thousands)(2)		Segment Revenue ($ in thousands)(3)		Percentage of Total Segment Revenue(4)
Healthcare	20	1,030,397 sq. ft.	94%	$	168,105	$	1,476	7%
Office	1	80,980 sq. ft.	100%	29,500		741		4%
Industrial	6	1,432,432 sq. ft.	78%	146,600		2,582		13%
Self-Storage	10	627,190 sq. ft.	89%	116,611		2,302		11%
Multifamily	1	360 units	98%	155,993		2,911		14%
Student Housing	2	1,489 beds	99%	286,631		5,330		26%
Grocery-Anchored Retail	1	122,225 sq. ft.	100%	60,447		1,340		7%
Other(5)	8	2,364,525 sq. ft.	92%	34,468		1,019		5%
Total	49			$	998,355	$	17,701	87%

(1)The full amount of unconsolidated properties are included in the amounts presented. The Other segment includes 2.4 million square feet for properties in which we have a non-controlling interest through our interest in ITP Investments LLC. See “—Real Estate” below for additional information on these properties.

(2)Based on fair value as of March 31, 2024. The Gross Asset Value includes investments in both consolidated and unconsolidated real estate. The unconsolidated investments, excluding preferred equity investments, are included at our pro-rata share of the investment. For our preferred equity investments, we include the fair value of our preferred equity investment. See “—Real Estate” below for additional information on these investments.

(3)Segment revenue is presented for the three months ended March 31, 2024. Healthcare and Other segment revenue includes income (loss) from unconsolidated entities.

(4)The Percentage of Total Segment Revenue does not equal 100% as it is exclusive of real estate debt. See the table below for the remainder of our segment revenue.

(5)The full amount of the Other segment is comprised of non-controlling interests we own in retail properties through our interest in ITP Investments LLC. See “—Real Estate” below for additional information on these investments.

The following table provides a summary of our real estate debt as of March 31, 2024:

Segment	Number of Instruments	Fair Value ($ in thousands)(1)		Segment Revenue ($ in thousands)(2)		Percentage of Total Segment Revenue(3)
Real Estate Debt	4	$	88,955	$	2,556	13%

(1)Based on fair value as of March 31, 2024. The Fair Value includes investments in commercial mortgages, the investment in an affiliated debt fund and unconsolidated preferred equity. See “—Real Estate Debt” below for additional information on these investments.

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(2)Segment revenue is presented for the three months ended March 31, 2024. The Real Estate Debt segment revenue includes income from unconsolidated entities as a result of the San Simeon Holdings LLC (“San Simeon Preferred Equity”) investment and income from the investment in an affiliated fund.

(3)The Percentage of Total Segment Revenue is exclusive of the real estate portfolio. See the table above for the remainder of our segment revenue.

Real Estate

The following table provides information regarding our portfolio of real estate as of March 31, 2024:

Segment and Investment	Number of Properties	Location(s)	Acquisition Date(s)	Ownership Interest	Purchase Price ($ in thousands)		Sq. Feet / Units /Beds		Occupancy
Healthcare:
Sunbelt Medical Office Portfolio(1)	20	CA, CO, FL, TN, TX	September 2020 / December 2020 / February 2021	42.5%	$	86,416	1,030,397	sq. ft.	94%
Total Healthcare	20				86,416		1,030,397	sq. ft.
Office:
Willows Commerce 9805	1	Redmond, WA	December 2020	100%	35,729		80,980	sq. ft.	100%
Total Office	1				35,729		80,980	sq. ft.
Industrial:
13034 Excelsior	1	Norwalk, CA	December 2020	100%	18,594		53,527	sq. ft.	100%
5201 Industry	1	Pico Rivera, CA	December 2020	100%	12,483		40,480	sq. ft.	100%
Midwest Industrial Portfolio(2)	4	IL, OH, MO	September 2021 / January 2022 / March 2022	95%	115,566		1,338,425	sq. ft.	76%
Total Industrial	6				146,643		1,432,432	sq. ft.
Self-Storage:
Salem Self-Storage Portfolio	3	Salem, OR	September 2021	100%	47,872		240,704	sq. ft.	91%
South Loop Storage	1	Houston, TX	September 2021	100%	11,141		66,981	sq. ft.	88%
University Parkway Storage	1	Winston-Salem, NC	April 2022	100%	12,154		52,275	sq. ft.	93%
Bend Self-Storage Portfolio	2	Bend, OR	June 2022	100%	18,078		62,805	sq. ft.	90%
Clarksville Self-Storage Portfolio	3	Clarksville, TN	July 2022	100%	24,529		204,425	sq. ft.	84%
Total Self-Storage	10				113,774		627,190	sq. ft.
Multifamily:
Everly Roseland(3)	1	Roseland, NJ	April 2022	57%	162,023		360	units	98%
Total Multifamily	1				162,023		360	units
Student Housing:
Bixby Kennesaw	1	Kennesaw, GA	September 2021	98%	78,663		656	beds	100%
The Carmin	1	Tempe, AZ	December 2021	98%	163,692		833	beds	98%
Total Student Housing	2				242,355		1,489	beds
Grocery-Anchored Retail:
Cortlandt Crossing	1	Mohegan Lake, NY	February 2022	100%	65,553		122,225	sq. ft.	100%
Total Grocery-Anchored Retail	1				65,553		122,225	sq. ft.
Other:
Retail GP Fund(4)	8	Various(3)	Various(3)	4.5% - 13.5%	14,658		2,364,525	sq. ft.	92%
Total Other	8				14,658		2,364,525	sq. ft.
Total Investment Properties	49				$	867,151

(1)We hold our interest in the Sunbelt Medical Office Portfolio through a 50% ownership interest in the Invesco JV, a joint venture between INREIT OP and Invesco U.S. Income Fund L.P., an affiliate of Invesco. The Invesco JV holds an 85% ownership interest in a joint venture with a third-party. We account for our investment using the equity method of accounting. The dates of acquisition and aggregate purchase price in the table above reflect the dates of our investments and the total amount of our investment in the Invesco JV.

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(2)Meridian Business 940, Capital Park 2919, 3101 Agler and Earth City 13330 are collectively presented as Midwest Industrial Portfolio.

(3)We hold our interest in Everly Roseland through a 60% consolidated ownership interest in Everly Roseland Co-Invest, a co-investment between INREIT OP and Invesco Real Estate Atlas US Everly LLC (“Atlas US”), an affiliate of Invesco. Invesco Global Property Plus Fund, the majority owner in Atlas US, owns more than 10% of our outstanding common stock as of the date of this Report. The Everly Roseland Co-Invest holds a 95% consolidated ownership interest in a joint venture with a third-party.

(4)We hold an 85% ownership interest in a joint venture, ITP Investments LLC (“ITP LLC”). ITP LLC has a 90% interest in PT Co-GP Fund, LLC (“Retail GP Fund”), which was formed to invest in retail properties through non-controlling general partner interests. The ownership interest and aggregate purchase price in the table above reflects ITP LLC’s ownership interest and the total amount paid by ITP LLC to obtain non-controlling general partner interests in the retail properties. The properties were acquired over several transactions from October 2021 to October 2023 and are located throughout the United States.

Lease Expirations

The following schedule details the expiring leases at our consolidated office, industrial, and grocery-anchored retail properties, as well as our unconsolidated healthcare properties by annualized base rent and square footage as of March 31, 2024. The table below excludes our self-storage, multifamily and student housing properties as substantially all leases at such properties expire within 12 months.

Year	Number of Expiring Leases	Annualized Base Rent ($ in thousands) (1)(2)		% of Total Annualized Base Rent Expiring	Square Feet	% of Total Square Feet Expiring
2024 (remaining)	34	$	3,543	8%	348,217	15%
2025	33	2,773		7%	100,163	4%
2026	38	6,551		16%	292,968	13%
2027	25	1,893		5%	65,791	3%
2028	33	4,757		11%	135,419	6%
2029	23	5,516		13%	439,935	19%
2030	10	2,390		6%	94,170	4%
2031	8	1,220		3%	129,658	6%
2032	9	724		2%	23,319	1%
2033	4	286		1%	9,595	1%
Thereafter	29	11,619		28%	635,922	28%
Total	246	$	41,272	100%	2,275,157	100%

(1)Annualized base rent is determined from the annualized March 31, 2024 base rent per leased square foot of the applicable year and excludes tenant recoveries, straight-line rent and above-market and below-market lease amortization.

(2)Includes 100% of the Sunbelt Medical Office Portfolio.

Real Estate Debt

We hold an investment in San Simeon Preferred Equity. San Simeon Preferred Equity owns San Simeon Apartments, a 431 unit multifamily property in Houston, Texas which is 94% occupied. Our investment is structured as a preferred membership interest, and we account for our investment in the San Simeon Apartments using the equity method of accounting. At March 31, 2024, we hold a total equity investment of $27.4 million.

We have an investment in Invesco Commercial Mortgage Income - U.S. Fund, L.P. (“CMI”), an affiliate of Invesco managed by our Adviser, which invests primarily in mortgage loans that are collateralized by commercial and residential real estate throughout the United States. As of March 31, 2024, our investment in CMI was $27.2 million.

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As of March 31, 2024, we have the following investments in commercial loans:

				Current Principal Balance				Fair Value
$ in thousands	Origination Date	Loan Type	Interest Rate(1)	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		Maturity Date
9801 Blue Grass Loan	9/1/2022	Mezzanine	12.54%	$	21,800	$	21,800	$	21,728	$	21,689	9/9/2024
5805 N Jackson Gap Loan	1/20/2023	Mezzanine	13.33%	13,007		13,007		12,952		12,937		2/9/2025
Total				$	34,807	$	34,807	$	34,680	$	34,626

(1)Represents the interest rate as of period end. Loans earn interest at Secured Overnight Financing Rate (“SOFR”) plus a spread.

We elected the fair value option and, accordingly, there are no capitalized origination costs or fees associated with the loans.

For the three months ended March 31, 2024 and 2023, we recognized interest income and loan origination fee income from our investments in commercial loans of $1.1 million and $1.3 million, respectively, in our condensed consolidated statements of operations. For the three months ended March 31, 2024, we recorded an unrealized gain on commercial loans of $0.1 million. As of March 31, 2023, we did not record an unrealized gain or loss on the commercial loans, as the outstanding par value approximated fair value.

Investments in Liquid Real Estate-Related Securities

As of March 31, 2024, our liquid real estate-related securities portfolio consisted of investments in commercial mortgage backed securities (“CMBS”) and common stock of REITs. The following table details our investments in real estate-related securities as of March 31, 2024:

	March 31, 2024
$ in thousands	Principal Balance		Unamortized Premium (Discount)		Amortized Cost / Cost(1)		Unrealized Gain (Loss), Net		Fair Value		Period-end Weighted Average Yield		Weighted-Average Maturity Date
Non-agency CMBS	$	32,956	$	(1,247)	$	31,710	$	(251)	$	31,459	7.60	%	7/22/2026
Common stock of REITs	N/A		N/A		4,065		251		4,316		5.28	%	N/A
Total	$	32,956	$	(1,247)	$	35,775	$	—	$	35,775

(1)For non-agency CMBS, the amount presented represents amortized cost. For common stock of REITs, the amount presented represents cost.

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Results of Operations

The following table sets forth the results of our operations:

	Three Months Ended March 31,				Change
$ in thousands	2024		2023		2024 vs. 2023
Revenues
Rental revenue	$	14,494	$	15,500	$	(1,006)
Income from commercial loans	1,130		1,255		(125)
Other revenue	740		725		15
Total revenues	16,364		17,480		(1,116)
Expenses
Rental property operating	6,639		5,824		815
General and administrative	998		1,164		(166)
Management fee - related party	465		396		69
Depreciation and amortization	6,024		7,391		(1,367)
Total expenses	14,126		14,775		(649)
Other income (expense), net
Income (loss) from unconsolidated entities, net	1,002		(453)		1,455
Gains from real estate-related securities, net	1,018		118		900
Income (loss) from investment in affiliated fund, net	651		(933)		1,584
Gain (loss) on derivative instruments, net	1,723		(1,118)		2,841
Unrealized gain on commercial loans	54		—		54
Interest income	298		—		298
Interest expense	(5,959)		(6,549)		590
Other expense	(188)		(13)		(175)
Total other income (expense), net	(1,401)		(8,948)		7,547
Net income (loss) attributable to Invesco Real Estate Income Trust Inc.	$	837	$	(6,243)	$	7,080
Dividends to preferred stockholders	$	(2)	$	(2)	$	—
Net loss attributable to non-controlling interests in consolidated joint ventures	22		755		(733)
Net loss attributable to non-controlling interest in INREIT OP	39		40		(1)
Net income (loss) attributable to common stockholders	$	896	$	(5,450)	$	6,346

Rental Revenue, Other Revenue and Rental Property Operating Expenses

Our rental revenue primarily consists of fixed contractual base rent from our tenants and is recognized on a straight-line basis over the non-cancelable terms of the related leases. Our rental property operating expenses generally include the costs of ownership of real estate, including insurance, utilities, real estate taxes and repair and maintenance expense. Rental revenue decreased by $1.0 million, other revenue was consistent and rental property operating expenses increased by $0.8 million, for the three months ended March 31, 2024 as compared to the same period in 2023. The decrease in rental revenue is largely due to the sale of a multifamily property at the end of 2023. This has reduced multi-family rent revenue by $0.7 million for the comparative periods. The increase in rental property operating expenses for the three months ended March 31, 2024 is primarily due to a $1.0 million accrual of promote fees at our self-storage properties which was not present during the same period in 2023.

Income from Commercial Loan and Unrealized Gain on Commercial Loan

During the three months ended March 31, 2024, income from commercial loans decreased $0.1 million compared to the three months ended March 31, 2023, as there was fee income from the origination of a loan in January 2023 that did not recur in 2024. Unrealized gains on commercial loans increased by $0.1 million compared to the three months ended March 31, 2023, driven by changes to the interest rate environment.

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General and Administrative Expenses

During the three months ended March 31, 2024, general and administrative expenses decreased $0.2 million compared to the three months ended March 31, 2023. The decrease was due to reductions of corporate level expenses during 2024 compared to the prior period.

Management Fee

During the three months ended March 31, 2024, the management fee increased $0.1 million compared to the three months ended March 31, 2023 due to the increase of our NAV, on which the management fee is based.

Depreciation and Amortization

During the three months ended March 31, 2024, depreciation and amortization decreased $1.4 million compared to the three months ended March 31, 2023, primarily due to the sale of a large multifamily property at the end of 2023 which is no longer contributing toward this expense in 2024.

Income from Unconsolidated Entities, Net

During the three months ended March 31, 2024, our income from unconsolidated entities, net increased $1.5 million compared to the three months ended March 31, 2023. The increase was primarily due to favorable changes on the unrealized losses attributable to the derivative swap for Vida JV LLC combined with increased income across all of our unconsolidated investments.

Gains from Real Estate-Related Securities, Net

During the three months ended March 31, 2024, our unrealized gains from real estate-related securities increased by $0.9 million compared to the three months ended March 31, 2023. The increase in unrealized gains was primarily due to improved market conditions on CMBS investments.

Income from Investment in Affiliated Fund, Net

During the three months ended March 31, 2024, income from investment in affiliated fund increased by $1.6 million compared to the three months ended March 31, 2023. In the prior period, the investment in affiliated fund had net realized and unrealized losses of $1.6 million which did not recur in the current period.

Gain on Derivative Instruments, Net

During the three months ended March 31, 2024, gains from derivative instruments increased by $2.8 million compared to the three months ended March 31, 2023. The majority of the change is due to a favorable change in unrealized valuations in the current period as compared to the prior period.

Interest Income

During the three months ended March 31, 2024, interest income increased by $0.3 million compared to the three months ended March 31, 2023. The increase was primarily due to the commencement of interest earned on cash and cash equivalents beginning at the end of 2023.

Interest Expense

During the three months ended March 31, 2024, interest expense decreased $0.6 million compared to the three months ended March 31, 2023. The decrease is primarily due to the repayment of the mortgage associated with a property sold towards the end of 2023 and no outstanding balance on our revolving line of credit.

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Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution

We believe funds from operations (“FFO”) is a meaningful non-GAAP measure. Our condensed consolidated financial statements are presented in accordance with GAAP under historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments will decrease evenly over a set time period. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income or loss (computed in accordance with GAAP), excluding (i) gains or losses from sales of depreciable real property, (ii) impairment write-downs on depreciable real property, plus (iii) real estate-related depreciation and amortization and (iv) similar adjustments for non-controlling interests and unconsolidated entities.

We also believe that adjusted FFO (“AFFO”) is a meaningful non-GAAP measure of our operating results. AFFO further adjusts FFO to reflect the performance of our portfolio by adjusting for items we believe are not directly attributable to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income, (ii) amortization of capitalized tax abatements, (iii) amortization of above- and below-market lease intangibles, (iv) amortization of deferred financing costs, (v) organization expenses advanced by the Adviser, as well as repayment of those expenses, (vi) unrealized losses (gains) from changes in fair value of financial instruments, (vii) non-cash share based compensation awards and amortization of unvested restricted stock awards, (viii) non-cash performance participation interest or other non-cash incentive compensation even if repurchased by us (ix) debt extinguishment charges and (x) similar adjustments for non-controlling interests and unconsolidated entities. We may add additional adjustments from FFO to arrive at AFFO as appropriate. Beginning December 31, 2023 and going forward, the accrued preferred returns and other operating expenses advanced by the Adviser will be included as a component of FAD and excluded from AFFO so that AFFO more appropriately reflects the performance of our portfolio as these items are directly attributable to our operations. AFFO and FAD in this Form 10-Q for the three months ended March 31, 2024 and 2023 have been adjusted to reflect this change.

We also believe funds available for distribution (“FAD”) is a meaningful non-GAAP measure that provides useful information for considering our operating results and certain other items relative to the amount of our distributions by removing the impact of certain non-cash items from our operating results. FAD is calculated as AFFO excluding (i) realized losses (gains) on investments in financial instruments and (ii) management fees paid in shares of our common stock or INREIT OP units even if repurchased by us, and including deductions for (a) recurring tenant improvements, leasing commissions, and other capital projects, (b) stockholder servicing fees paid during the period (c) certain operating expenses advanced by the Adviser, as well as repayment of those expenses, (d) accrued preferred return from preferred membership interest (e) accrued preferred return from preferred equity investment (f) accrued property incentive fees and (g) similar adjustments for non-controlling interests and unconsolidated entities. FAD is not indicative of cash available to fund our cash needs and does not represent cash flows from operating activities in accordance with GAAP, as it excludes adjustments for working capital items and actual cash receipts from interest income recognized on investments in commercial loans. Cash flows from operating activities in accordance with GAAP would generally be adjusted for such items. Furthermore, FAD is adjusted for stockholder servicing fees and recurring tenant improvements, leasing commissions and other capital expenditures, which are not considered when determining cash flows from operating activities in accordance with GAAP.

FFO, AFFO, and FAD should not be considered to be more relevant or accurate than the GAAP methodology in calculating net income (loss) or in evaluating our operating performance. In addition, FFO, AFFO, and FAD should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO, AFFO, and FAD are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. In addition, our methodology for calculating AFFO and FAD may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported AFFO and FAD may not be comparable to the AFFO and FAD reported by other companies.

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The following table presents a reconciliation of FFO, AFFO and FAD to net income attributable to our stockholders:

	Three Months Ended March 31,
$ in thousands	2024		2023
Net income (loss)	$	896	$	(5,450)
Adjustments to arrive at FFO:
Real estate depreciation and amortization	6,024		7,391
Amount attributed to unconsolidated entities for above adjustment	2,240		2,567
Amount attributed to non-controlling interests for above adjustment	(672)		(564)
Amount attributed to unconsolidated entities for net gain on disposition of real estate	(106)		(47)
FFO attributable to our stockholders	8,382		3,897
Adjustments to arrive at AFFO:
Straight-line rental income	(175)		(305)
Amortization of capitalized tax abatement(1)	41		144
Amortization of above-market and below-market lease intangibles	(56)		(55)
Amortization of deferred financing costs	312		406
Unrealized losses (gains) from changes in the fair value of financial instruments(2)	(2,541)		3,891
Non-cash share based compensation awards	19		20
Amount attributed to unconsolidated entities for unrealized losses (gains) on fair value of financial instruments	393		1,222
Amount attributed to unconsolidated entities for above adjustments	(47)		(195)
Amount attributed to non-controlling interests for above adjustments	258		(375)
AFFO attributable to our stockholders	6,586		8,650
Adjustments to arrive at FAD:
Non-cash management fee	465		396
Recurring tenant improvements, leasing commissions and other capital expenditures(3)	(30)		(315)
Accrued preferred return from preferred membership interest	(285)		(261)
Accrued preferred return from preferred equity investment	(86)		(88)
Stockholder servicing fees	(38)		(15)
Recurring capital expenditures attributed to unconsolidated entities(3)	(861)		(584)
Recurring capital expenditures attributed to non-controlling interests(3)	14		69
Realized losses on financial instruments (4)	1,618		341
Accrued property incentive fees	1,023		—
FAD attributable to our stockholders	$	8,406	$	8,193

(1)We obtained tax abatements in conjunction with our purchases of the Cortona at Forest Park and 3101 Agler properties with expiration dates of December 31, 2038 and December 31, 2031, respectively. We are amortizing the tax abatements over their remaining useful life as a component of property operating expenses in the condensed consolidated statements of operations in this Quarterly Report on Form 10-Q. In November 2023, Cortona at Forest Park was sold and as of the sale date we are no longer amortizing the tax abatement related to Cortona at Forest Park.

(2)Unrealized losses (gains) from changes in fair value of financial instruments primarily relates to mark-to-market changes on our investments in real estate-related securities, investment in affiliated fund, investments in commercial loans and derivatives.

(3)Recurring capital expenditures are required to maintain our investments. Capital expenditures exclude underwritten tenant improvements, leasing commissions and capital expenditures with useful lives over 10 years.

(4)Realized losses on financial instruments relates to the sale of real estate related securities and realized losses on our investment in affiliated fund.

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Net Asset Value

We calculate our NAV for each class of shares based on the net asset values of our investments (including loans and real estate-related securities), the addition of any other assets (such as cash on hand), and the deduction of any liabilities (including mortgages, other indebtedness, the allocation/accrual of any performance participation to the Special Limited Partner and the deduction of any stockholder servicing fees specifically applicable to such class of shares). NAV is not a measure used under GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV will differ from GAAP. You should not consider NAV to be equivalent to stockholders’ equity or any other GAAP measure.

The following table reconciles stockholders’ equity under GAAP per our condensed consolidated balance sheets to our NAV:

$ in thousands	March 31, 2024
Stockholders' equity	$	95,789
Adjustments:
Class N redeemable common stock(1)	410,314
Unrealized net real estate and borrowings appreciation(2)	3,589
Accumulated depreciation and amortization(3)	100,765
Organization costs, offering costs and certain operating expenses(4)	12,000
Redeemable non-controlling interests attributable to INREIT OP(5)	4,735
Accrued stockholder servicing fee(6)	2,413
Impairment of investments in real estate(7)	6,182
Straight-line rent receivable(8)	(6,492)
NAV	$	629,295

(1)MassMutual’s Class N shares have been classified as redeemable common stock, which is not a component of stockholders’ equity on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q, because MassMutual has the contractual right to redeem the shares under certain circumstances. MassMutual's redemption rights are not transferable. We include the value of these shares as a component of our NAV.

(2)Our investments in real estate are presented under historical cost in our consolidated financial statements included herein. Additionally, our mortgage notes, revolving credit facility and financing obligation (“Borrowings”) are presented at their carrying value in our consolidated financial statements. As such, any increases or decreases in the fair market value of our investments in real estate or our Borrowings are not included in our condensed consolidated financial statements. For purposes of determining our NAV, our investments in real estate and our Borrowings are recorded at fair value.

(3)We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization, including depreciation and amortization related to our investments in unconsolidated entities, is excluded for purposes of determining our NAV.

(4)The Adviser advanced all of our organization and offering expenses (other than upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees) incurred through December 31, 2022. We will reimburse the Adviser for all of our advanced expenses ratably over the 60 months following the earlier of (1) the date our NAV reaches $1.0 billion and (2) December 31, 2027. We will reimburse the Adviser for any organization and offering expenses incurred subsequent to December 31, 2022 as incurred.

The Adviser advanced all of our operating expenses on our behalf through December 31, 2021. These costs include certain prepaid expenses that are classified as other assets in our GAAP consolidated financial statements that have also been excluded from our NAV. From January 2022 to September 2022, we began ratably reimbursing the Adviser over 60 months for the operating expenses incurred prior to December 31, 2021 and will recommence reimbursements to the Adviser following the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027.

Under GAAP, organization and operating costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, all such costs will be recognized as a reduction to NAV as they are reimbursed ratably over 60 months. The adjustment presented represents the difference between the organization costs, offering costs and certain operating expenses advanced by the Adviser and the amount that has been reimbursed to the Adviser.

(5)The Class E units in INREIT Operating Partnership held by Invesco REIT Special Limited Partner L.L.C. have been classified as redeemable common stock, which is not a component of stockholders’ equity on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q. We include the value of these units as a component of our NAV. These Class E units are classified as redeemable non-controlling interest in INREIT Operating Partnership on our condensed consolidated balance sheets because Invesco REIT Special Limited Partner L.L.C. has the contractual right to redeem the units under certain circumstances.

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(6)Accrued stockholder servicing fee represents the accrual for the cost of the stockholder servicing fee for Class T, Class S, and Class D shares. Under GAAP, we accrued the full cost of the stockholder servicing fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum stockholder servicing fee) as an offering cost at the time we sold the Class T, Class S, and Class D shares. For purposes of calculating NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis when such fee is paid.

(7)We record impairment of investments in real estate in accordance with GAAP. Any impairment recorded for GAAP is excluded for purposes of determining our NAV.

(8)We record straight-line rent in accordance with GAAP. Any resulting straight-line rent receivable or liability is excluded for purposes of determining our NAV.

The following table provides a breakdown of the major components of our total NAV as of March 31, 2024:

$ in thousands, except share/unit data
Components of NAV	March 31, 2024
Investments in real estate	$	795,773
Investments in unconsolidated entities	143,638
Investments in real estate-related securities	35,775
Investments in commercial loans	34,680
Investments in affiliated fund	27,170
Cash and cash equivalents	36,742
Restricted cash	11,375
Other assets	7,698
Mortgage notes, revolving credit facility and financing obligation, net	(386,448)
Subscriptions received in advance	(6,853)
Other liabilities	(14,782)
Management fee payable	(310)
Accrued stockholder servicing fees	(15)
Non-controlling interests in joint-ventures	(55,148)
Net asset value	$	629,295
Number of outstanding shares/units	21,906,300

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The following table provides a breakdown of our total NAV and NAV per share/unit by class as of March 31, 2024:

$ in thousands, except share/unit data
NAV Per Share/Unit	Class T Shares		Class S Shares		Class D Shares		Class I Shares		Class E Shares		Class N Shares		Third-party Operating Partnership Units(1)		Total
Net asset value	$	17,404	$	18,078	$	24,292	$	125,436	$	35,165	$	404,186	$	4,736	$	629,295
Number of outstanding shares/units	622,795		645,665		868,626		4,467,271		1,193,373		13,947,862		160,708		21,906,300
NAV Per Share/Unit as of March 31, 2024	$	27.9451	$	27.9986	$	27.9657	$	28.0789	$	29.4666	$	28.9783	$	29.4666

(1)Includes the limited partnership interest of the Operating Partnership held by the Special Limited Partner.

Our real estate properties are valued by an independent advisor using a discounted cash flow methodology. The following table summarizes the weighted averages of the key unobservable inputs used in the March 31, 2024 valuations:

Property Type	Discount Rate	Exit Capitalization Rate
Healthcare	7.0%	5.7%
Office	8.5%	7.3%
Industrial	7.1%	5.9%
Self-Storage	7.8%	5.8%
Multifamily	7.0%	5.5%
Student Housing	7.2%	5.6%
Retail	8.3%	7.3%

These assumptions are determined by Capright, one of our independent valuation advisors, and reviewed by the Adviser. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:

Input	Hypothetical Change	Healthcare Investment Values	Office Investment Values	Industrial Investment Values	Self-Storage Investment Values	Multifamily Investment Values	Student Housing Investment Values	Retail Investment Values
Discount Rate (weighted average)	0.25% decrease	+1.9%	+1.8%	+2.0%	+1.9%	+2.0%	+1.9%	+1.6%
Discount Rate (weighted average)	0.25% increase	(1.9)%	(1.8)%	(2.0)%	(1.8)%	(1.9)%	(1.9)%	(1.6)%
Exit Capitalization Rate (weighted average)	0.25% decrease	+2.9%	+2.0%	+2.9%	+2.7%	+3.0%	+2.8%	+1.9%
Exit Capitalization Rate (weighted average)	0.25% increase	(2.6)%	(1.9)%	(2.7)%	(2.4)%	(2.7)%	(2.6)%	(1.8)%

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Distributions

The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor. The table below details the net distribution for each of our share classes for the three months ended March 31, 2024:

Declaration Date	Class T Shares		Class S Shares		Class D Shares		Class I Shares		Class E Shares		Class N Shares
January 31, 2024	$	0.1307	$	0.1325	$	0.1359	$	0.1395	$	0.1395	$	0.1395
February 29, 2024	0.1309		0.1325		0.1359		0.1392		0.1392		0.1392
March 28, 2024	0.1307		0.1303		0.1360		0.1395		0.1395		0.1395
Total	$	0.3923	$	0.3953	$	0.4078	$	0.4182	$	0.4182	$	0.4182

For the three months ended March 31, 2024 and 2023, we declared distributions of $9.0 million and $8.6 million, respectively.

The following tables summarizes our distributions declared during the three months ended March 31, 2024 and 2023:

	Three Months Ended
	March 31, 2024				March 31, 2023
$ in thousands	Amount		Percentage		Amount		Percentage
Distributions
Payable in cash	$	3,713	41	%	$	8,289	97	%
Reinvested in shares	5,323		59	%	289		3	%
Total distributions	$	9,036	100	%	$	8,578	100	%
Sources of Distributions
Cash flows from operating activities	$	1,566	17	%	$	4,515	53	%
Distributions of capital from investments in unconsolidated entities(1)	1,148		13	%	1,413		16	%
DRIP(3)	5,323		59	%	270		3	%
Financing proceeds	999		11	%	2,380		28	%
Total sources of distributions	$	9,036	100	%	$	8,578	100	%
Cash flows from operating activities	$	1,566			$	4,515
Funds from Operations(2)	$	8,382			$	3,897

(1)Represents distributions received from equity method investments that are classified as cash flows from investing activities. These equity method investments currently include our interest in a joint venture through which we own our interest in the Sunbelt Medical Office Portfolio, our preferred membership interest in San Simeon Preferred Equity, which owns a multifamily property, and our interest in a joint venture through which we hold our interests in a fully integrated retail platform operating company and non-controlling interests we own in eight retail properties. Distributions received from equity method investments are classified as either cash flows from operating or investing activities based on the cumulative earnings approach. See Note 2 — “Summary of Significant Accounting Policies” to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2023 for additional details on the cumulative earnings approach. In addition, this amount represents distributions from our investment in an affiliated fund. As we elected the fair value option, the distributions received from this investment are classified as investing activities.

(2)See “—Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution” above for description of Funds from Operations (“FFO”), for reconciliation of FFO to GAAP net income (loss) attributable to INREIT stockholders and for considerations on how to review this metric.

(3)Shareholders may elect to have their distributions reinvested in shares of our common stock through our distribution reinvestment plan.

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Liquidity and Capital Resources

Liquidity

We believe that with respect to liquidity, we are well positioned with $117.1 million of immediate liquidity as of March 31, 2024, made up of $80.3 million of undrawn capacity on our Revolving Credit Facility and $36.7 million of cash and cash equivalents. In addition, we hold $35.8 million in investments in real estate-related securities that could be liquidated to satisfy any potential liquidity requirements.

Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock under our share repurchase plan, to pay our offering costs and operating fees and expenses and to pay interest on our borrowings. We will obtain the funds required to purchase investments and conduct our operations from the net proceeds of our Private Offerings, our Offering, DST Program and any future offerings we may conduct, including through the DST Program, from secured and unsecured borrowings from banks and other lenders and from any undistributed funds from operations. Generally, cash needs for items other than asset acquisitions are met from operations, and cash needs for asset acquisitions are funded by our Private Offerings, the Offering, DST Program and debt financings. However, there may be a delay between the sale of our shares and our purchase of assets that could result in a delay in the benefits to our stockholders, if any, of returns generated from our investment operations.

Our target leverage ratio is approximately 50% to 60%. As used herein, “leverage ratio” is measured by dividing (x) the sum of the Company’s consolidated property-level debt, entity-level debt and debt-on-debt, net of cash and restricted cash, by (y) the asset value of the Company’s real estate investments, private real estate debt investments and equity in the Company’s real estate-related securities portfolio (in each case measured using the greater of fair market value and cost), including the Company’s net investment in unconsolidated investments. For purposes of determining the asset value of the Company’s real estate investments, the Company includes the asset value of the DST Properties (as defined in any Prospectus) due to the master lease structure, including the Company’s fair market value purchase option. The leverage ratio calculation does not include (i) indebtedness incurred in connection with funding a deposit in advance of the closing of an investment, (ii) indebtedness incurred as other working capital advances, (iii) indebtedness on the Company’s real estate securities investments or (iv) the pro rata share of debt within the Company’s unconsolidated investments. Further, the refinancing of any amount of existing indebtedness will not be deemed to constitute incurrence of new indebtedness for purposes of the leverage ratio calculation so long as no additional amount of net indebtedness is incurred in connection therewith (excluding the amount of transaction expenses associated with such refinancing). Our charter prohibits us from borrowing more than 300% of our net assets, which approximates borrowing 75% of the cost of our investments. We may exceed this limit if a majority of our independent directors approves each borrowing in excess of the limit and we disclose the justification for doing so to our stockholders.

If we are unable to raise substantial funds in the Offering or Private Offerings, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make. Further, we have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in the Offering and Private Offerings. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

Our offering and operating fees and expenses include, among other things, the management fee we pay to the Adviser, the performance participation interest that INREIT OP will pay to the Special Limited Partner, selling commissions, dealer manager fees and stockholder servicing fees we will pay to the Dealer Manager, legal, audit and valuation expenses, federal and state filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution expenses and fees related to acquiring, financing, appraising and managing our properties. The Adviser and its affiliates provide us with our management team, including our officers and appropriate support personnel. The Adviser or the Adviser's affiliates may provide us services that would otherwise be performed by third parties. In such event, we will reimburse the Adviser or the Adviser's affiliate the cost of performing such services provided that such reimbursements will not exceed the amount that would be payable if such services were provided by a third party in an arms-length transaction.

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The Adviser advanced all of our organization and offering expenses (other than upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees) incurred through December 31, 2022. We will begin reimbursement of advanced organization and offering expenses on the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. We will reimburse the Adviser for all of our advanced expenses ratably over the 60 months following such date. Additionally, we will reimburse the Adviser for any organization and offering expenses incurred subsequent to December 31, 2022 that were paid on our behalf. In January 2023, we began reimbursing the Adviser on a quarterly basis for organization and offering expenses incurred subsequent to December 31, 2022. As of March 31, 2024 and December 31, 2023, the Adviser and its affiliates have advanced organization costs and offering expenses of $7.9 million and $7.6 million, respectively, on our behalf in connection with the Offering and Private Offerings that are recorded as a component of due to affiliates on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q.

The Adviser has advanced all of our operating expenses (excluding the organizational and offering expenses discussed above) on our behalf through December 31, 2021. From January 2022 to September 2022, we began ratably reimbursing the Adviser over 60 months for the operating expenses incurred prior to December 31, 2021 and will recommence reimbursements to the Adviser following the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. Additionally, we will reimburse the Adviser for any operating expenses incurred subsequent to December 31, 2022 that were paid on our behalf. In January 2022, we began reimbursing the Adviser on a quarterly basis for operating expenses incurred subsequent to December 31, 2021. As of March 31, 2024 and December 31, 2023, we have $7.9 million and $9.4 million, respectively, due to the Adviser for general and administrative expenses. These are recorded as a component of due to affiliates on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q.

Under our charter, we may reimburse the Adviser, at the end of each fiscal quarter, for total operating expenses paid by the Adviser. However, we may not reimburse the Adviser at the end of any fiscal quarter for total operating expenses (as defined in our charter) that, in the four consecutive fiscal quarters then ended, exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of our assets for that period (the “2%/25% Guidelines”). We may reimburse the Adviser for expenses in excess of the 2%/25% Guidelines if a majority of our independent directors determines that such excess expenses (an “Excess Amount”) are justified based on unusual and non-recurring factors. Operating expenses for the four consecutive fiscal quarters ended March 31, 2024 did not exceed the charter-imposed limitation.

MassMutual committed to purchase $400.0 million of Class N common stock in our Class N Private Offering and has fully met its commitment as of March 31, 2024.

Through December 31, 2024, we may choose to repurchase Class N shares from MassMutual on a monthly basis at the then current Class N transaction price in an amount with an aggregate repurchase price no greater than (1) the aggregate purchase price paid by MassMutual for Class N shares less (2) $200.0 million less (3) the aggregate repurchase price paid to MassMutual by the Company. In any month, however, MassMutual may require use to make or elect to forego the next monthly repurchase. Under the terms of MassMutual’s subscription agreements, through December 31, 2024, we may require MassMutual to purchase additional Class N shares in an amount equal to the aggregate purchase price paid by MassMutual for Class N shares that were subsequently repurchased by us on a monthly basis.

Beginning January 1, 2025 and continuing until we have repurchased $200.0 million of MassMutual shares, we are required to repurchase MassMutual shares on a monthly basis, subject to certain thresholds based on monthly net offering proceeds. In any month, MassMutual may choose to waive our obligation to repurchase shares. We are required to limit repurchases to ensure that the aggregate NAV of MassMutual shares is at least $50.0 million.

Beginning January 1, 2025, MassMutual holds the right to request that we repurchase MassMutual shares on a monthly basis, subject to thresholds based on monthly net offering proceeds and the Company’s NAV. This right to request that we repurchase MassMutual shares is in addition to the requirement to repurchase MassMutual shares described in the preceding paragraph.

Capital Resources

As of March 31, 2024, our indebtedness includes five mortgages secured by their corresponding properties and a financing obligation. We also have additional funds available to us through our revolving credit facility.

As of March 31, 2024 and December 31, 2023, the Company did not have an outstanding principal balance for its revolving credit facility.

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Borrowings under the Revolving Credit Facility carry interest at a rate equal to (i) SOFR, (ii) SOFR with an interest period of one, three or six-months, or (iii) a Base Rate, where the base rate is the highest of (a) federal funds rate plus 0.5%, (b) the rate of interest as publicly announced by Bank of America N.A. as its “prime rate”, (c) SOFR with an interest period of one month plus 1.0%, or (d) 1.0%, in each case, plus an applicable margin that is based on our leverage ratio. In September 2023, we entered into an amendment to the existing Revolving Credit Facility. The interest rate and spread terms remained identical to the terms outlined above. The amendment extended the maturity date to September 6, 2024 and grants an option to extend the term to September 5, 2025, subject to certain conditions. The weighted-average interest rate for the three months ended March 31, 2024 and March 31, 2023 was 7.11% and 6.21%, respectively.

The current maturity date is September 6, 2024 and the amendment grants an option to extend the term to September 5, 2025, subject to certain conditions. As a result of the amendment, the aggregate commitments were reduced to $100.0 million with an ability to request an increase up to $150.0 million in aggregate commitments. As of March 31, 2024, the borrowing capacity on the Revolving Credit Facility was $80.3 million. The borrowing capacity is less than the difference between the current facility capacity of $100.0 million and the current principal outstanding balance as the calculation of borrowing capacity is limited by the aggregate fair value and cash flows of our unencumbered properties.

As of March 31, 2024, we were in compliance with all loan covenants in our revolving credit facility agreement.

The following table summarizes certain characteristics of our mortgage notes that are secured by our properties:

$ in thousands						Principal Balance Outstanding
Indebtedness	Interest Rate(1)	Initial Maturity Date	Extended Maturity Date	Maximum Principal Amount		March 31, 2024		December 31, 2023
Bixby Kennesaw	S + applicable margin(2)	9/24/2026	N/A	$	53,000	$	53,000	$	53,000
The Carmin	S + applicable margin(3)	1/1/2025	1/1/2027	$	65,500	65,500		65,500
Cortlandt Crossing	3.13%	3/1/2027	N/A	$	39,660	39,660		39,660
Everly Roseland	S + applicable margin(4)	4/28/2027	4/28/2029	$	113,500	110,874		110,874
Midwest Industrial Portfolio	4.44% and S + applicable margin(5)	7/5/2027	N/A	$	70,000	70,000		70,000
Total mortgages payable						339,034		339,034
Deferred financing costs, net						(2,038)		(2,290)
Mortgage notes payable, net						$	336,996	$	336,744

(1)The term “S” refers to the relevant floating benchmark rate, SOFR.

(2)The mortgage note secured by Bixby Kennesaw bears interest at the sum of (i) 1.71% plus (ii) SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 7.04% and 5.98%, respectively.

(3)The mortgage note secured by The Carmin bears interest at 1.75% plus SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 7.09% and 5.77%, respectively.

(4)The mortgage note secured by Everly Roseland bears interest at 1.45% plus SOFR. The weighted-average interest rate for the three months ended March 31, 2024 and 2023 was 6.79% and 6.00%, respectively.

(5)The mortgage note secured by Meridian Business 940, Capital Park 2919, 3101 Agler and Earth City 13330 (collectively the “Midwest Industrial Portfolio”) bears interest at two rates. Of the $70.0 million principal balance, $35.0 million bears interest at a fixed rate of 4.44%, and $35.0 million bears interest at a floating rate of the greater of (a) 2.20% or (b) the sum of 1.70% plus SOFR. The weighted-average interest rate of the combined $70.0 million principal balance for the three months ended March 31, 2024 and 2023 was 5.74% and 5.31%, respectively.

As of March 31, 2024, we were in compliance with all loan covenants in our mortgage notes.

In connection with The Carmin property, as of March 31, 2024 we hold a financing obligation on our condensed consolidated balance sheets of $53.7 million, net of debt issuance costs.

See Note 9 — “Borrowings” to our condensed consolidated financial statements included herein for a discussion of our borrowing arrangements.

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Other potential future sources of capital include incremental secured or unsecured financings from banks or other lenders and proceeds from the sale of assets. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures. We have not yet identified any sources for these types of financings.

At March 31, 2024, we had cash and cash equivalents of $36.7 million and restricted cash of $11.4 million. Our restricted cash consists of subscriptions received in advance, an interest reserve that we are contractually required to maintain on deposit under the terms of our preferred membership interest in a limited liability company, amounts in escrow for taxes and insurance related to mortgages at certain properties and security deposits.

We currently have no deposits or lines of credit with community or regional banking organizations, as such terms are defined by the Federal Reserve. Both of the commercial loans we hold are mezzanine loans for which the senior loan is held by a community or regional banking organization and in each case the senior loan is fully funded with no future funding obligation. Our Adviser and its affiliates use a formal bank monitoring program to seek to ensure a comprehensive and disciplined approach for the selection and ongoing monitoring of the financial institutions with whom funds and companies managed by our Adviser and its affiliates, such as our Company, do business. All financial institutions with which we do business must be initially approved by Invesco’s treasurer and are subject to ongoing monitoring.

We believe that our current level of cash and borrowing capacity under our Revolving Credit Facility, together with expected future cash flows from our Offering, Private Offerings, DST offerings and future operations, will be sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash:

	Three Months Ended March 31,
$ in thousands	2024		2023
Cash flows provided by operating activities	$	1,566	$	4,515
Cash flows used in investing activities	(6,634)		(33,610)
Cash flows (used in) provided by financing activities	9,813		2,110
Net (decrease) increase in cash and cash equivalents and restricted cash	$	4,745	$	(26,985)

Operating Activities

Cash flows provided by operating activities decreased $2.9 million for the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due to an increase in interest expense from the rise in interest rates.

Investing Activities

Cash flows used in investing activities decreased $27.0 million during the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due to a decrease in investment activity and proceeds from sales of real estate-related securities. These decreases were partially offset by increases due to the purchase of real estate-related securities.

Financing Activities

Cash flows provided by financing activities increased $7.7 million for the three months ended March 31, 2024 compared to the corresponding period in 2023 primarily due to increases in proceeds from common stock, subscriptions in advance, contributions from non-controlling interests and common stock and OP unit distributions totaling $17.4 million. These increases were partially offset by a decrease in net proceeds from borrowings of $9.5 million from the Revolving Credit Facility and mortgages payable.

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Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates that are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Pending Accounting Pronouncements

See Note 2 — “Summary of Significant Accounting Policies” to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of pending accounting pronouncements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary components of our market risk are related to interest rates, credit and real estate values. While we do not seek to avoid risk completely, we believe that risk can be quantified from historical experience, and we seek to actively manage that risk, to earn sufficient compensation to justify taking those risks and to maintain capital levels consistent with the risks we undertake.

Interest Rate Risk

We are exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations. Market fluctuations in real estate financing affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets.

Interest rate risk is highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. We are subject to interest rate risk in connection with floating rate debt secured by our properties, our Revolving Credit Facility, our investments in real estate securities, our investment in commercial loans and our investment in an affiliated debt fund. We are also subject to interest rate risk through our investments in unconsolidated entities that have been financed with floating rate debt. We seek to manage our exposure to interest rate risk by utilizing a combination of fixed- and floating-rate financing with staggered maturity dates and through interest rate protection agreements to cap a portion of our variable rate debt. Additionally, we may hedge our interest rate risk by using derivative contracts to fix the interest expense on a portion of our floating-rate debt.

Certain of our mortgage notes and Revolving Credit Facility financings are variable rate and indexed to SOFR. As of March 31, 2024, we had borrowed $339.0 million under our mortgage notes and fully repaid the Revolving Credit Facility. Of our total borrowings, $264.4 million bears variable rate interest. As of March 31, 2024, a 100 basis point increase or decrease in SOFR assuming no changes in the composition of our borrowings over a twelve-month period results in a projected increase or decrease in interest expense of $0.3 million, net of the impact of our interest rate hedges.

We have invested a portion of our portfolio in fixed and floating rate real estate-related debt securities. On floating-rate securities, our net income will increase or decrease depending on interest rate movements. As of March 31, 2024, a 100 basis point increase or decrease in SOFR assuming no changes in the composition of our portfolio of real estate-related securities over a twelve-month period results in a projected increase or decrease in interest income of $0.2 million.

As of March 31, 2024, we have originated $34.8 million of variable rate mezzanine commercial loans that are indexed to SOFR. As of March 31, 2024, a 100 basis point increase or decrease in SOFR assuming no changes in the composition of our commercial loan portfolio results in a projected increase or decrease in interest income of $0.3 million.

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Credit Risk

We are exposed to credit risk with respect to the tenants that occupy properties we own. To mitigate this risk, we undertake a credit evaluation of major tenants prior to making an investment. This analysis includes extensive due diligence of a potential tenant’s creditworthiness and business, as well as an assessment of the strategic importance of the property to the tenant’s core business operations.

Additionally, we are exposed to credit risk in the real estate-related debt investments that we make with respect to a borrower’s ability to make required interest and principal payments on scheduled due dates. We manage this risk by conducting a credit analysis prior to making an investment and by actively monitoring our portfolio and the underlying credit quality, including subordination and diversification of our real estate-related debt portfolio. In addition, we re-evaluate the credit risk inherent in our investments on a regular basis under fundamental considerations such as gross domestic product, unemployment, interest rates, retail sales, store closing/openings, corporate earnings, housing inventory, affordability and regional home price trends.

Finally, we may be exposed to counterparty credit risk under the terms of a derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We will seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

Real Estate Market Value Risks

Commercial property values are subject to volatility and may be adversely affected by a number of factors, including but not limited to: national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. Changes in commercial property values are difficult to predict with accuracy. We model a range of valuation scenarios and the resulting impacts to our business.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report was made under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon this evaluation, our CEO and CFO have concluded that as of the end of the period covered by this Quarterly Report our disclosure controls and procedures (a) are effective to reasonably ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2024, we were not involved in any material legal proceedings.

ITEM 1A. RISK FACTORS

Except as set forth below, there were no material changes during the period covered by this Quarterly Report to the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.

The following disclosure modifies the risk factor under the same caption contained in our Annual Report:

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

In addition to any potential withholding tax on ordinary dividends, a non-U.S. holder, other than a “qualified shareholder” or a “qualified foreign pension fund,” as each is defined in Section 897 of the Code, that disposes of a “U.S. real property interest” (“USRPI”) (which includes shares of stock of a U.S. corporation whose assets consist principally of USRPIs), or that receives a distribution from a REIT that is attributable to gains from such a disposition, is generally subject to U.S. federal income tax under the Foreign Investment in Real Property Tax Act of 1980, as amended (“FIRPTA”), on the amount received from (or, in the case of a distribution, to the extent attributable to gains from) such disposition. Subject to certain exceptions, 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 gain on the 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 time 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 repurchases) would be subject to tax under FIRPTA, unless (1) our shares of common stock were regularly traded on an established securities market and (2) the non-U.S. holder did not, at any time during a specified testing period, hold more than 10% of our common stock. We do not expect our shares to be regularly traded on an established securities market. Final Treasury regulations that are effective as of April 25, 2024 (the “Final Regulations”), modify prior tax guidance relating to the manner in which we determine whether we are a domestically controlled REIT. The Final Regulations provide a look-through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment companies, or non-public domestic C corporations owned more than 50% directly or indirectly by foreign persons (“foreign-controlled domestic corporations”) and treat “qualified foreign pension funds” as foreign persons. The look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will not apply to a REIT for a period of up to ten years if it is able to satisfy certain requirements, including not undergoing a significant change in its ownership and not acquiring a significant amount of new USRPIs, in each case since April 24, 2024, the date the Final Regulations were issued. If a REIT fails to satisfy such requirements during the ten-year period, then the look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will apply to such REIT beginning on the day immediately following the date of such failure. While we cannot predict when we will commence being subject to such look-through rule in the Final Regulations, we may not be able to satisfy the applicable requirements for the duration of the ten-year period. Prospective investors are urged to consult with their tax advisors regarding the application and impact of these rules.

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 us 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.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

Unregistered Sales of Equity Securities

On January 1, 2024, we issued 5,076 unregistered Class E shares of common stock to the Adviser for payment of management fees for total consideration of $0.2 million.

On February 1, 2024, we issued 5,244 unregistered Class E shares of common stock to the Adviser for payment of management fees for total consideration of $0.2 million.

On March 1, 2024, we issued 5,254 unregistered Class E shares of common stock to the Adviser for payment of management fees for total consideration of $0.2 million.

On January 12, 2024, we issued 295 unregistered Class E shares of common stock as part of the distribution reinvestment program for total consideration of approximately $8,866.

On February 12, 2024, we issued 290 unregistered Class E shares of common stock as part of the distribution reinvestment program for total consideration of approximately $8,661.

On March 12, 2024, we issued 293 unregistered Class E shares of common stock as part of the distribution reinvestment program for total consideration of approximately $8,682.

On January 12, 2024, we issued 54,241 unregistered Class N shares of common stock as part of the distribution reinvestment program for total consideration of $1.6 million.

On February 12, 2024, we issued 54,981 unregistered Class N shares of common stock as part of the distribution reinvestment program for total consideration of $1.6 million.

On March 12, 2024, we issued 55,437 unregistered Class N shares of common stock as part of the distribution reinvestment program for total consideration of $1.6 million.

The transactions described above were exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) thereof because they were not part of any public offering and did not involve any general solicitation or general advertising.

Use of Offering Proceeds from the Offering

On May 14, 2021, our Registration Statement on Form S-11 (File No. 333-254931) for the Offering of up to $3.0 billion in shares of common stock (in any combination of purchases of Class T, Class S, Class D, Class I and Class E shares of our common stock), consisting of up to $2.4 billion in shares in our primary offering and up to $600 million in shares pursuant to its distribution reinvestment plan, was declared effective under the Securities Act. The offering price for each class of our common stock is determined monthly and is made available on our website and in prospectus supplement filings.

The following table presents information about the Offering and use of proceeds there from as of March 31, 2024:

$ in thousands (except share data)	Class T Shares		Class S Shares		Class D Shares		Class I Shares		Class E Shares		Total
Offering proceeds:
Shares sold	271,758		293,899		522,626		2,977,422		2,035,552		6,101,257
Gross offering proceeds	$	8,700	$	8,636	$	16,239	$	91,719	$	59,825	$	185,119
Selling commissions and other dealer manager fees	(252)		(89)		(19)		—		—		(360)
Stockholder servicing fees	(76)		(28)		(44)		—		—		(148)
Net offering proceeds	$	8,372	$	8,519	$	16,176	$	91,719	$	59,825	$	184,611

We intend to use the net proceeds from such sales for the purposes set forth in the prospectus for the Offering.

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We primarily used the net proceeds from the Offering, along with net proceeds from unregistered sales of common stock, towards the acquisition of $942.1 million of real estate and real estate-related investments, $43.9 million in real estate-related securities and the repurchase of $149.8 million of shares of common stock. In addition to the net proceeds from the Offering and unregistered sales of common stock, we financed our investments with $424.1 million from mortgages payable and financing obligations. The amounts of real estate and real estate-related investments acquired and financing from mortgages payable and financing obligations reflect our pro-rata share with respect to joint ventures. See Item 2— “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources” for additional details on our borrowings.

Issuer Purchases of Equity Securities

We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares of any class, subject to the terms and conditions of the share repurchase plan. We may choose to repurchase all, some or none of the shares that have been requested to be repurchased in any month, in our discretion, subject to any limitations in the share repurchase plan.

The aggregate amount of share repurchases is limited to no more than 2% of our aggregate NAV per month (measured using the aggregate NAV as of the end of the immediately preceding month) and no more than 5% of our aggregate NAV per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding three months).

Under our share repurchase plan, to the extent we choose to repurchase shares in any month, we will only repurchase shares as of the opening of the last calendar day of that month (each such date, a “Repurchase Date”). Repurchases will be made at the transaction price in effect on the Repurchase Date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price, subject to certain limited exceptions. Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on our company as a whole, or should we otherwise determine that investing our liquid assets in real properties or other investments rather than repurchasing our shares is in the best interests of our company as a whole, we may choose to repurchase fewer shares in any month than have been requested to be repurchased, or none at all. Further, our board of directors may make exceptions to modify or suspend our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders.

If the transaction price for the applicable month is not made available by the tenth business day prior to the last business day of the month (or is changed after such date), then no repurchase requests will be accepted for such month and stockholders who wish to have their shares repurchased the following month must resubmit their repurchase requests.

During the three months ended March 31, 2024, we repurchased shares of our common stock in the following amounts:

Month of:	Total Number of Shares Repurchased	Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs(1)	Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs (2)
January 2024	132,819	$	28.51	132,819	—
February 2024	109,358	28.34		109,358	—
March 2024	7,986	28.40		7,986	—
	250,163	$	28.43	250,163	—

(1)Publicly announced plans or programs include share repurchases under our share repurchase plan, if any.

(2)All repurchase requests under our share repurchase plan were satisfied.

During the three months ended March 31, 2024, we repurchased 8,461 Class E shares from the Adviser outside of the share repurchase plan related to shares that were previously issued to the Adviser as payment of management fees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Exhibit Description
3.1	Second Articles of Amendment and Restatement of Invesco Real Estate Income Trust Inc. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-11 filed on March 31, 2021 and incorporated herein by reference).
3.2	Bylaws of Invesco Real Estate Income Trust Inc. (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-11 filed on March 31, 2021 and incorporated herein by reference).
4.1	Distribution Reinvestment Plan (filed as Exhibit 4.1 on Form 10-Q filed on May 12, 2023 and incorporated herein by reference).
10.1	Amendment to the Amended and Restated Advisory Agreement, dated April 24, 2024 (filed as Exhibit 10.1 on Form 8-K on April 29, 2024).
31.1*	Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Changes in Equity and Redeemable Equity Instruments; and (iv) Condensed Consolidated Statements of Cash Flows
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith

The agreements and other documents filed as exhibits to this quarterly report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Invesco Real Estate Income Trust Inc.
	/s/ R. Scott Dennis
	R. Scott Dennis
	Chairperson of the Board, President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ R. Lee Phegley, Jr.
	R. Lee Phegley, Jr.
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)
Date: May 13, 2024

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