Equity and Redeemable Non-controlling Interest

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Equity and Redeemable Non-controlling Interest

Equity and Redeemable Non-controlling Interest

Preferred Stock

On June 30, 2024, we redeemed all issued and outstanding shares of our Series A Preferred Stock for approximately $62,500, plus accrued and unpaid dividends. The cash redemption price for each share of Series A Preferred Stock was $500.00. The excess of the consideration transferred over carrying value was accounted for as a deemed dividend and resulted in a reduction of approximately $24,000 in net income (loss) attributable to common stockholders during the nine months ended September 30, 2024. Prior to redemption, holders of our Series A Preferred Stock were entitled to receive dividends at an annual rate of 12.5% of the liquidation preference of $500.00 per share or $62.50 per annum. Dividends were cumulative and payable quarterly in arrears.

Common Stock

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

	Nine Months Ended September 30, 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
Issuance of common stock	3,665	32,743	11,187	379,827	16,418	—	443,840
Common stock repurchased	(257)	—	(18,190)	(252,147)	(8,542)	—	(279,136)
Exchange of common stock	—	—	—	(574)	547	—	(27)
Distribution reinvestment	2,065	2,806	3,852	6,686	2,512	169,005	186,926
Balance at June 30, 2024	628,268	681,214	865,475	4,601,063	1,204,309	14,116,867	22,097,196
Issuance of common stock	1,721	43,634	7,599	245,305	21,750	—	320,009
Common stock repurchased	(3,485)	(16,467)	(5,997)	(230,174)	(15,383)	—	(271,506)
Distribution reinvestment	2,047	3,166	3,839	7,443	2,522	172,736	191,753
Balance at September 30, 2024	628,551	711,547	870,916	4,623,637	1,213,198	14,289,603	22,337,452

	Nine Months Ended September 30, 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
Issuance of common stock	36,963	13,951	93,684	235,524	15,596	—	395,718
Common stock repurchased	—	—	—	(39,210)	(284,496)	—	(323,706)
Distribution reinvestment	1,193	—	1,938	4,846	2,543	—	10,520
Balance at June 30, 2023	572,182	365,807	754,517	4,235,505	1,175,576	13,523,324	20,626,911
Issuance of common stock	18,462	96,942	34,096	408,889	14,796	—	573,185
Common stock repurchased	(503)	—	(1,373)	(221,839)	(5,640)	—	(229,355)
Distribution reinvestment	1,600	195	2,486	4,109	2,624	102,368	113,382
Balance at September 30, 2023	591,741	462,944	789,726	4,426,664	1,187,356	13,625,692	21,084,123

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 and nine months ended September 30, 2024, we declared distributions of $9.3 million and $27.5 million, respectively. For the three and nine months ended September 30, 2023, we declared distributions of $8.8 million and $25.9 million, respectively. We accrued $2.5 million for distributions payable to related parties as a component of due to affiliates in our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. Additionally, as of September 30, 2024 and December 31, 2023, we accrued $0.6 million and $0.5 million, respectively, for distributions payable to third parties as a component of accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

The following tables detail the aggregate distributions declared per share for each applicable class of stock for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30, 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	$	—	$	0.4170	$	0.4170	$	0.4170	$	0.4170	$	0.4170	$	0.4170
Stockholder servicing fee per share(1)	—		(0.0259)		(0.0295)		(0.0103)		—		—		—
Net distributions declared per share	$	—	$	0.3911	$	0.3875	$	0.4067	$	0.4170	$	0.4170	$	0.4170

	Three Months Ended September 30, 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	$	—	$	0.4170	$	0.4170	$	0.4170	$	0.4170	$	0.4170	$	0.4170
Stockholder servicing fee per share(1)	—		(0.0255)		(0.0101)		(0.0102)		—		—		—
Net distributions declared per share	$	—	$	0.3915	$	0.4069	$	0.4068	$	0.4170	$	0.4170	$	0.4170

	Nine Months Ended September 30, 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	$	31.2500	$	1.2507	$	1.2507	$	1.2507	$	1.2507	$	1.2507	$	1.2507
Stockholder servicing fee per share(1)	—		(0.0774)		(0.0806)		(0.0310)		—		—		—
Net distributions declared per share	$	31.2500	$	1.1733	$	1.1701	$	1.2197	$	1.2507	$	1.2507	$	1.2507

	Nine Months Ended September 30, 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	$	31.2500	$	1.2487	$	1.2487	$	1.2487	$	1.2487	$	1.2487	$	1.2487
Stockholder servicing fee per share(1)	—		(0.0684)		(0.0109)		(0.0285)		—		—		—
Net distributions declared per share	$	31.2500	$	1.1803	$	1.2378	$	1.2202	$	1.2487	$	1.2487	$	1.2487

(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, 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 and nine months ended September 30, 2024, we recorded an allocation adjustment of approximately $15,000 and $0.1 million, respectively, from additional paid-in capital to redeemable non-controlling interest in INREIT OP on our condensed consolidated balance sheets. For the three and nine months ended September 30, 2023, we recorded an allocation adjustment of $0.1 million and $0.5 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 September 30,				Nine Months Ended September 30,
in thousands	2024		2023		2024		2023
Net loss allocated	$	(15)	$	(11)	$	(57)	$	(43)
Distributions	$	47	$	94	$	177	$	267
Adjustment to carrying value	$	15	$	(73)	$	96	$	514

As of September 30, 2024 and December 31, 2023, distributions payable to the Special Limited Partner were approximately $14,000 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.

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 and nine months ended September 30, 2024, we repurchased 257,652 and 778,489 shares of common stock for $7.1 million and $21.8 million, respectively, and fulfilled all repurchase requests that were made. For the three and nine months ended September 30, 2023, we repurchased 223,715 and 948,536 shares of common stock for $6.7 million and $29.9 million, respectively, and fulfilled all repurchase requests that were made.