Jones Lang Lasalle Income Property Trust Inc.

11/08/2024 | Press release | Distributed by Public on 11/08/2024 14:05

Supplemental Prospectus - Form 424B3

Document

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-256823

JLL INCOME PROPERTY TRUST, INC.
SUPPLEMENT NO. 11 DATED NOVEMBER 8, 2024
TO THE PROSPECTUS DATED APRIL 12, 2024
This supplement No. 11 is part of the prospectus of JLL Income Property Trust, Inc. and should be read in conjunction with the prospectus. Terms used in this supplement No. 11 and not otherwise defined herein have the same meanings as set forth in our prospectus and any supplements thereto. The purpose of this supplement is to disclose:
•the status of our offering;
•update to the "Directors and Executive Officers" section of the prospectus;
•an update to the "Stock Ownership by Our Sponsor and its Affiliates" section of the Prospectus; and
•our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
Status of the Offering
On December 21, 2021, our Second Extended Public Offering was terminated and we commenced our Third Extended Public Offering of up to $3,000,000,000, in shares of which $2,700,000,000 in shares can be issued pursuant to our primary offering and $300,000,000 in shares can be issued pursuant to our distribution reinvestment plan.
As of November 8, 2024, we have received aggregate gross proceeds of approximately $1,023,432,000 including $370,050,000 from the sale of 26,056,602 Class A shares, $106,000,000 from the sale of 7,553,056 Class M shares, $4,301,000 from the sale of 291,132 Class A-I shares, and $543,081,000 from the sale of 38,796,578 Class M-I shares pursuant to our primary offering. There were $1,676,568,000 in shares of our common stock in our primary offering available for sale. As of November 8, 2024, we have received approximately $232,624,000 pursuant to our distribution reinvestment plan, including $111,724,000 from the sale of 8,435,369 Class A shares, $25,049,000 from the sale of 1,891,699 Class M shares, $5,873,000 from the sale of 433,582 Class A-I shares, and $89,978,000 from the sale of 6,817,525 Class M-I shares. There were $67,376,000 in shares of our common stock available for sale pursuant to our distribution reinvestment plan.
We are structured as an institutionally managed, daily valued perpetual-life REIT. This means that, subject to regulatory approval of our filing for additional offerings, we plan to sell shares of our common stock on a continuous basis and for an indefinite period of time. We will endeavor to take all reasonable actions to avoid interruptions in the continuous offering of our shares of common stock. There can be no assurance, however, that we will not need to suspend our continuous offering. The offering must be registered in every state in which we offer or sell shares. Generally, such registrations are for a period of one year. Thus, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. We reserve the right to terminate this offering at any time and to extend our offering term to the extent permissible under applicable law.
Since the beginning of 2012, we raised a total of approximately $5,640,134,000 through our ongoing public and various private offerings, as well as our distribution reinvestment plan. As of November 8, 2024, our total Company NAV across all share classes was approximately $2,541,743,000.
Directors and Executive Officers
On November 5, 2024, Jacques N. Gordon tendered his resignation from his position as a member of the Board of Directors of the Company effective November 5, 2024 and the Board of Directors accepted his resignation. In addition, effective as of November 5, 2024 Mr. Gordon resigned from all his positions with our advisor. As a result, all references to Mr. Gordon are deleted.
On November 5, 2024, the Board of Directors elected Lisa L. Kaufman to the Board of Directors to serve as a director and to fill the vacancy created by Mr. Gordon's resignation, effective November 5, 2024.
The following disclosure is added to the "Directors and Executive Officers" table on page 101 of the Prospectus:

Name Age Position
Lisa L. Kaufman
58 Director




The following disclosure is added to the "Directors and Executive Officers" section of the prospectus on page 101:

Lisa L. Kaufman has served as one of our directors since November 2024. Ms. Kaufman has been the Head of LaSalle Global Solutions since March 2023. As Head of Global Solutions, Ms. Kaufman is responsible for the LaSalle's indirect real estate business including Securities, Multi-Manager and Structured Investments. Prior to her current role, Ms. Kaufman was Head of LaSalle Securities from September 2018 and a Portfolio Manager from September 2016, responsible for US accounts and special sectors globally. Ms. Kaufman has served as a member of the Global Management Committee of LaSalle Investment Management since September, 2018. From 1998 through March 2023, Ms. Kaufman was part of LaSalle Securities. Throughout her career in real estate securities as both an analyst and portfolio manager, Ms. Kaufman covered and analyzed all property types in the global listed universe. Ms. Kaufman joined LaSalle in 1994 in the private equity acquisitions group where she focused on entity level investments in real estate, recapitalizing existing portfolios, private real estate companies and public REITs. Ms. Kaufman is a member of the Advisory Board of Governors and the Real Estate Investment Advisory Council (REIAC) Steering Committee at Nareit. She holds a Master of Business Administration in Finance from Columbia University's Business School and a B.A. in Urban Studies and Political Science from Brown University.
The following disclosure is added to the "Directors and Executive Officers" section of the prospectus on page 105:
•Lisa L. Kaufman has significant experience in both public and private global real estate investing and investment management, with an emphasis on listed REITs, including how they correlate to private real estate investments.
Mr. Gordon's biography on page 103 of the prospectus is deleted.
Stock Ownership by Our Sponsor and its Affiliates
The following disclosure is added to the "Stock Ownership by Our Sponsor and its Affiliates" section on page 22 and the "Ownership by Our Sponsor and its Affiliates" section on page 153 of the Prospectus:
On November 5, 2024, we entered into a subscription agreement with Jones Lang LaSalle Co-Investment, Inc., an affiliate of our sponsor and advisor, to sell $100 million worth of Class D common stock. The offer and sale of the shares is exempt from the registration provisions of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) because it was not part of any public offering. The shares will be purchased no later than March 31, 2025 at a price per Share equal to the publicly reported net asset value on the date of purchase . The shares will be subject to a three-year lock-up from the purchase date and will thereafter be eligible for repurchase on a quarterly basis in an amount up to $12.5 million. The shares will not be subject to, nor eligible for repurchase under, the terms of our share repurchase plan.
Quarterly Report on Form 10-Q
The prospectus is hereby supplemented with the Quarterly Report on Form 10-Q, excluding exhibits, for the quarter ended September 30, 2024 that was filed with the SEC on November 7, 2024, a copy of which is attached to this supplement as Appendix A.


Appendix A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM 10-Q
_________________________________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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: 000-51948
_________________________________
JLL Income Property Trust, Inc.
(Exact name of registrant as specified in its charter)
_________________________________
Maryland 20-1432284
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
333 West Wacker Drive, Chicago IL, 60606
(Address of principal executive offices, including Zip Code)
(312) 897-4000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
_________________________________
Securities registered pursuant to Section 12(b) of the Act: None
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 ☑ 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 ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☑ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares of the registrant's common stock, $.01 par value, outstanding on November 7, 2024 were 90,140,518 shares of Class A common stock, 20,290,320 shares of Class M common stock, 3,044,545 shares of Class A-I common stock, 103,411,545 shares of Class M-I common stock and 2,407,370 shares of Class D common stock.


JLL Income Property Trust, Inc.
INDEX

PAGE
NUMBER
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
3
Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023
3
Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 (unaudited)
4
Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited)
5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)
6
Notes to Consolidated Financial Statements (unaudited)
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
29
Item 3. Quantitative and Qualitative Disclosures About Market Risk
54
Item 4. Controls and Procedures
54
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
54
Item 1A. Risk Factors
55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
55
Item 3. Defaults Upon Senior Securities
55
Item 4. Mine Safety Disclosures
55
Item 5. Other Information
55
Item 6. Exhibits
56
SIGNATURES
57

2

Item 1. Financial Statements.
JLL Income Property Trust, Inc.
CONSOLIDATED BALANCE SHEETS
$ in thousands, except per share amounts
September 30, 2024 December 31, 2023
ASSETS (Unaudited)
Investments in real estate:
Land (including from VIEs of $81,679 and $78,865, respectively)
$ 708,872 $ 734,350
Buildings and equipment (including from VIEs of $285,141 and $271,596, respectively)
3,722,532 3,804,636
Less accumulated depreciation (including from VIEs of $(42,369) and $(35,833), respectively)
(453,231) (421,204)
Net property and equipment 3,978,173 4,117,782
Investments in unconsolidated real estate affiliates 148,397 176,135
Real estate fund investments 341,260 343,021
Investments in real estate and other assets held for sale 73,918 -
Net investments in real estate 4,541,748 4,636,938
Investment in marketable securities - 50,200
Mortgage notes receivable 102,735 94,145
Cash and cash equivalents (including from VIEs of $9,838 and $10,027, respectively)
88,596 87,887
Restricted cash (including from VIEs of $3,719 and $2,522, respectively)
31,009 26,918
Tenant accounts receivable, net (including from VIEs of $1,145 and $791, respectively)
7,714 8,964
Deferred expenses, net (including from VIEs of $4,748 and $3,835, respectively)
22,434 21,533
Acquired intangible assets, net (including from VIEs of $1,894 and $3,904, respectively)
192,901 223,612
Deferred rent receivable, net (including from VIEs of $2,317 and $1,579, respectively)
42,269 38,636
Prepaid expenses and other assets (including from VIEs of $9,201 and $11,060, respectively)
35,920 35,254
TOTAL ASSETS $ 5,065,326 $ 5,224,087
LIABILITIES AND EQUITY
Mortgage notes and other debt payable, net (including from VIEs of $115,727 and $116,066, respectively)
$ 1,768,221 $ 2,025,054
Liabilities held for sale 42,665 -
Accounts payable and other accrued expenses (including from VIEs of $5,700 and $6,472, respectively)
59,257 57,207
Financing obligation 944,815 756,853
Accrued offering costs 178,982 184,017
Accrued interest (including from VIEs of $611 and $634, respectively)
6,642 2,374
Accrued real estate taxes (including from VIEs of $2,870 and $1,016, respectively)
25,216 12,413
Advisor fees payable 3,250 3,672
Acquired intangible liabilities, net (including from VIEs of $212 and $292, respectively)
36,659 41,415
TOTAL LIABILITIES 3,065,707 3,083,005
Redeemable noncontrolling interests 16,841 15,447
Equity:
Class A common stock: $0.01 par value; 200,000,000 shares authorized; 98,807,405 and 107,680,719 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
988 1,077
Class M common stock: $0.01 par value; 200,000,000 shares authorized; 26,023,937 and 26,599,396 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
260 266
Class A-I common stock: $0.01 par value; 200,000,000 shares authorized; 3,125,512 and 4,529,817 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
31 45
Class M-I common stock: $0.01 par value; 200,000,000 shares authorized; 90,235,467 and 92,951,608 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
902 930
Class D common stock: $0.01 par value; 200,000,000 shares authorized; 2,407,370 and 2,407,370 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
24 24
Additional paid-in capital (net of offering costs of $371,334 and $357,958 as of September 30, 2024 and December 31, 2023, respectively)
2,670,990 2,791,951
Distributions to stockholders (912,142) (817,439)
Accumulated deficit (159,334) (126,527)
Total JLL Income Property Trust, Inc. stockholders' equity 1,601,719 1,850,327
Noncontrolling interests 381,059 275,307
Total equity 1,982,778 2,125,634
TOTAL LIABILITIES AND EQUITY $ 5,065,326 $ 5,224,087
The abbreviation "VIEs" above means Variable Interest Entities.
See notes to consolidated financial statements.
3

JLL Income Property Trust, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
$ in thousands, except share and per share amounts
(Unaudited)
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Revenues:
Rental revenue $ 97,653 $ 96,295 $ 291,269 $ 283,100
Other revenue 2,194 3,255 10,163 10,923
Interest on mortgage notes receivable 2,246 593 6,668 809
Total revenues 102,093 100,143 308,100 294,832
Operating expenses:
Real estate taxes 13,709 14,181 42,187 41,536
Property operating 19,621 19,150 56,042 53,933
Property general and administrative 831 737 3,033 2,193
Advisor fees 9,977 11,245 30,506 33,413
Company level expenses 1,745 1,582 5,134 4,805
Provision for impairment of real estate 9,635 - 9,635 -
Depreciation and amortization 36,515 37,236 109,859 111,134
Total operating expenses 92,033 84,131 256,396 247,014
Other income (expenses):
Interest expense (30,586) (27,979) (73,311) (153,644)
Unrealized loss on financial obligation (1,278) - (4,434) -
(Loss) income from unconsolidated real estate affiliates and fund investments (4,276) 2,627 (10,156) (9,249)
Investment income on marketable securities - 575 989 1,617
Net realized loss upon sale of marketable securities - (250) (5,015) (780)
Net unrealized change in fair value of investment in marketable securities - (4,259) - (2,776)
Loss on disposition of property (37) - (37) -
Total other income and (expenses) (36,177) (29,286) (91,964) (164,832)
Net loss (26,117) (13,274) (40,260) (117,014)
Less: Net loss attributable to the noncontrolling interests 4,943 1,403 7,453 6,526
Net loss attributable to JLL Income Property Trust, Inc. $ (21,174) $ (11,871) $ (32,807) $ (110,488)
Net loss attributable to JLL Income Property Trust, Inc. per share-basic and diluted:
Class A (0.10) (0.05) (0.15) (0.46)
Class M (0.10) (0.05) (0.15) (0.46)
Class A-I (0.10) (0.05) (0.15) (0.46)
Class M-I (0.10) (0.05) (0.15) (0.46)
Class D (0.10) (0.05) (0.15) (0.46)
Weighted average common stock outstanding-basic and diluted 220,627,706 241,282,587 225,210,139 242,191,379

See notes to consolidated financial statements.
4

JLL Income Property Trust, Inc.
CONSOLIDATED STATEMENTS OF EQUITY
$ in thousands, except per share amounts
(Unaudited)
Common Stock Additional Paid-in Capital Distributions to
Stockholders 		Accumulated Deficit Noncontrolling
Interests 		Total
Equity
Shares Amount
Balance, July 1, 2023 242,146,765 $ 2,421 $ 2,845,473 $ (754,914) $ (113,405) $ 205,547 $ 2,185,122
Issuance and conversion of common stock 4,343,709 42 57,557 - - - 57,599
Repurchase of shares (6,230,691) (60) (82,644) - - - (82,704)
Offering costs - - (4,997) - - - (4,997)
Net loss ($2 loss allocated to redeemable noncontrolling interests) - - - - (11,871) (1,401) (13,272)
Issuance of OP units - - - - - 46,079 46,079
Repurchase of OP units - - - - - (2,362) (2,362)
Adjustment of noncontrolling interests - - 16,548 - - (16,548) -
Cash distributed to noncontrolling interests - - - - - (3,698) (3,698)
Allocation to redeemable noncontrolling interests - - (54) - - - (54)
Distributions declared per share ($0.145)
- - - (31,651) - - (31,651)
Balance, September 30, 2023
240,259,783 $ 2,403 $ 2,831,883 $ (786,565) $ (125,276) $ 227,617 $ 2,150,062
Balance, January 1, 2023 243,592,068 $ 2,436 $ 2,799,539 $ (691,090) $ (14,788) $ 86,663 $ 2,182,760
Issuance and conversion of common stock 14,815,677 148 203,212 - - - 203,360
Repurchase of shares (18,173,307) (181) (248,658) - - - (248,839)
Offering costs - - (16,533) - - - (16,533)
Stock based compensation 25,345 - 350 - - - 350
Net loss ($46 loss allocated to redeemable noncontrolling interests) - - - - (110,488) (6,480) (116,968)
Issuance of OP units - - - - - 253,600 253,600
Repurchase of OP units - - - - - (2,362) (2,362)
Adjustment of noncontrolling interests - - 94,921 - - (94,921) -
Cash distributed to noncontrolling interests - - - - - (8,883) (8,883)
Allocation to redeemable noncontrolling interests - - (948) - - - (948)
Distributions declared per share ($0.435)
- - - (95,475) - - (95,475)
Balance, September 30, 2023
240,259,783 $ 2,403 $ 2,831,883 $ (786,565) $ (125,276) $ 227,617 $ 2,150,062
Balance, July 1, 2024 222,174,166 $ 2,223 $ 2,685,293 $ (879,952) $ (138,160) $ 376,921 $ 2,046,325
Issuance and conversion of common stock 6,330,862 63 74,046 - - - 74,109
Repurchase of shares (7,905,337) (81) (92,541) - - - (92,622)
Offering costs - - (6,191) - - - (6,191)
Net loss ($1 gain allocated to redeemable noncontrolling interests)
- - - - (21,174) (4,944) (26,118)
Issuance of OP units - - - - - 28,335 28,335
Repurchase of OP units - - - - - (1,811) (1,811)
Adjustment of noncontrolling interests - - 9,851 - - (9,851) -
Cash distributed to noncontrolling interests - - - - - (7,591) (7,591)
Allocation to redeemable noncontrolling interests - - 532 - - - 532
Distributions declared per share ($0.158)
- - - (32,190) - - (32,190)
Balance, September 30, 2024
220,599,691 $ 2,205 $ 2,670,990 $ (912,142) $ (159,334) $ 381,059 $ 1,982,778
Balance, January 1, 2024 234,168,910 $ 2,342 $ 2,791,951 $ (817,439) $ (126,527) $ 275,307 $ 2,125,634
Issuance and conversion of common stock 13,983,021 141 166,154 - - - 166,295
Repurchase of shares (27,581,358) (278) (331,433) - - - (331,711)
Offering costs - - (13,376) - - - (13,376)
Stock based compensation 29,118 - 350 - - - 350
Net loss ($30 loss allocated to redeemable noncontrolling interests)
- - - - (32,807) (7,423) (40,230)
Issuance of OP units - - - - - 196,343 196,343
Repurchase of OP units - - - - - (3,291) (3,291)
Adjustment of noncontrolling interests - - 58,470 - - (58,470) -
Cash distributed to noncontrolling interests - - - - - (21,407) (21,407)
Allocation to redeemable noncontrolling interests - - (1,126) - - - (1,126)
Distributions declared per share ($0.460)
- - - (94,703) - - (94,703)
Balance, September 30, 2024
220,599,691 $ 2,205 $ 2,670,990 $ (912,142) $ (159,334) $ 381,059 $ 1,982,778
See notes to consolidated financial statements.
5

JLL Income Property Trust, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
$ in thousands, except per share amounts (Unaudited)
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (40,260) $ (117,014)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization 108,788 110,238
Loss on disposition of property and extinguishment of debt 37 -
Net realized loss upon sale of marketable securities 5,015 780
Net unrealized change in fair value of marketable securities - 2,776
Straight line rent (3,637) (3,987)
Provision for impairment of real estate 9,635 -
Loss from unconsolidated real estate affiliates and fund investments 10,156 9,249
Distributions received from unconsolidated real estate affiliates and fund investments 12,550 16,004
Non-cash interest (income) expense related to the DST Program (26,127) 73,077
Performance fee - (6,969)
Net changes in assets, liabilities and other 19,245 3,313
Net cash provided by operating activities 95,402 87,467
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of real estate investments (29,447) (110,002)
Proceeds from sales of real estate investments and fixed assets 75,558 -
Capital improvements and lease commissions (36,357) (26,519)
Investment in unconsolidated real estate affiliates and fund investments (376) (324)
Distributions from unconsolidated real estate affiliates 7,169 -
Investment in marketable securities (8,747) (19,892)
Proceeds from sale of marketable securities 53,932 18,505
Investment in mortgage notes receivable (8,202) (43,178)
Net cash provided by (used in) investing activities 53,530 (181,410)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 106,243 135,158
Proceeds from DST Program 397,579 270,581
Repurchase of shares (331,283) (248,839)
Offering costs (17,885) (17,576)
Distributions to stockholders (34,329) (34,557)
Distributions paid to noncontrolling interests and redeemable noncontrolling interests (28,863) (10,951)
Contributions received from noncontrolling interests 76 41
Draws on credit facility 68,000 250,000
Payment on credit facility (380,000) (155,000)
Proceeds from mortgage notes and other debt payable 198,435 23,900
Debt issuance costs (978) (563)
Principal payments on mortgage notes and other debt payable (121,014) (128,558)
Net cash (used in) provided by financing activities (144,019) 83,636
Net increase (decrease) in cash, cash equivalents and restricted cash 4,913 (10,307)
Cash, cash equivalents and restricted cash at the beginning of the period 114,806 103,568
Cash, cash equivalents and restricted cash at the end of the period $ 119,719 $ 93,261
Reconciliation of cash, cash equivalents and restricted cash shown per Consolidated Balance Sheets to Consolidated Statements of Cash Flows
Cash and cash equivalents
$ 88,596 $ 65,460
Restricted cash
31,009 27,729
Restricted cash included in assets held for sale
114 72
Cash, cash equivalents and restricted cash at the end of the period $ 119,719 $ 93,261
Supplemental disclosure of cash flow information:
Interest paid $ 94,274 $ 94,128
Non-cash activities:
Write-offs of receivables $ 332 $ 317
Write-offs of retired assets and liabilities 36,745 17,346
Change in liability for capital expenditures 2,350 1,819
Net liabilities transferred at sale of real estate investments (9) -
Net liabilities assumed at acquisition (534) 189
Change in issuance of common stock receivable and redemption of common stock payable 399 (546)
Change in accrued offering costs (4,509) (1,043)
Assumption of mortgage notes payable (26,191) -
Investments in real estate and settlement of financing obligations in exchange for OP Units 167,998 253,443
See notes to consolidated financial statements.
6

JLL Income Property Trust, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$ in thousands, except per share amounts
NOTE 1-ORGANIZATION
General
Except where the context suggests otherwise, the terms "we," "us," "our" and the "Company" refer to JLL Income Property Trust, Inc. The terms "Advisor" and "LaSalle" refer to LaSalle Investment Management, Inc.
JLL Income Property Trust, Inc., is an externally advised, daily valued perpetual-life real estate investment trust ("REIT") that owns and manages a diversified portfolio of healthcare, industrial, residential, retail and other properties located in the United States. Over time our real estate portfolio may be further diversified on a global basis through the acquisition of properties outside of the United States and complemented by investments in real estate-related debt and equity securities. We were incorporated on May 28, 2004 under the laws of the State of Maryland. We believe that we have operated in such a manner to qualify to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2004, when we first elected REIT status. As of September 30, 2024, we owned interests in a total of 132 properties and over 4,500 single-family rental houses located in 28 states.
We own substantially all of our assets through JLLIPT Holdings, LP, a Delaware limited partnership (our "operating partnership"), of which we are a limited partner and JLLIPT Holdings GP, LLC, our wholly owned subsidiary, is the sole general partner. The use of our operating partnership to hold substantially all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"). By using an UPREIT structure, a property owner who desires to defer taxable gain on the disposition of his or her property may transfer the property to our operating partnership in exchange for limited partnership interests in the operating partnership ("OP Units") and defer taxation of gain until the limited partnership interests are disposed of in a taxable transaction. As of September 30, 2024, we raised aggregate proceeds from the issuance of OP Units in our operating partnership of $385,919, and owned directly or indirectly 80.8% of the OP Units of our operating partnership. The remaining 19.2% of the OP Units are held by third parties.
From our inception to September 30, 2024, we have received approximately $6,081,600 in gross offering proceeds from various public and private offerings of shares of our common stock as well as issuance of OP Units. On October 1, 2012, we commenced our initial public offering of common stock and since that time we have offered shares of our common stock in various public offerings registered with the Securities and Exchange Commission (the "SEC").
On December 21, 2021, our most recent public offering (the "Current Public Offering") of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, was declared effective by the SEC. As of September 30, 2024, we have raised aggregate gross proceeds from the sale of shares of our common stock in our Current Public Offering of approximately $1,230,000. We intend to continue to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering.
In addition to our public offerings, on March 3, 2015, we commenced a private offering exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") and Regulation D promulgated thereunder of up to $350,000 in shares of our Class D common stock with an indefinite duration (the "Private Offering"). As of September 30, 2024, we have raised aggregate gross proceeds of $98,188 in the Private Offering. In addition, on October 16, 2019, we, through our operating partnership, initiated a program (the "DST Program"), and on August 6, 2024, our board of directors approved an increase to raise up to a total of $3,000,000 in private placements exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts ("DSTs") holding real properties ("DST Properties"), which may be sourced from our real properties or from third parties. As of September 30, 2024, we have raised approximately $1,526,000 of aggregate gross proceeds from our DST Program.
As of September 30, 2024, 98,807,405 shares of Class A common stock, 26,023,937 shares of Class M common stock, 3,125,512 shares of Class A-I common stock, 90,235,467 shares of Class M-I common stock, and 2,407,370 shares of Class D common stock were outstanding and held by a total of 22,354 stockholders.
LaSalle acts as our advisor pursuant to the advisory agreement among us, our operating partnership and LaSalle (the "Advisory Agreement"). The term of our Advisory Agreement expires June 5, 2025, subject to an unlimited number of successive one-year renewals. Our Advisor, a registered investment advisor with the SEC, has broad discretion with respect to our investment decisions and is responsible for selecting our investments and for managing our investment portfolio pursuant to the terms of the Advisory Agreement. Our executive officers are employees of and compensated by our Advisor. We have no employees, as all operations are managed by our Advisor.
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LaSalle is a wholly owned, but operationally independent subsidiary of Jones Lang LaSalle Incorporated ("JLL" or our "Sponsor"), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. As of September 30, 2024, JLL and its affiliates owned an aggregate of 2,521,801 Class M shares, which were issued for cash at a price equal to the most recently reported net asset value ("NAV") per share as of the purchase date and have a current value of approximately $29,202.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and include the accounts of our wholly owned subsidiaries, consolidated variable interest entities ("VIE") and the unconsolidated investments in real estate affiliates. We consider the authoritative guidance of accounting for investments in common stock, investments in real estate ventures, investors accounting for an investee when the investor has the majority of the voting interest but the minority partners have certain approval or veto rights, determining whether a general partner or general partners as a group controls a limited partnership or similar entity when the limited partners have certain rights and the consolidation of VIEs in which we own less than a 100% interest. All significant intercompany balances and transactions have been eliminated in consolidation.
Parenthetical disclosures are shown on our Consolidated Balance Sheets regarding the amounts of VIE assets and liabilities that are consolidated. As of September 30, 2024, our VIEs include The District at Howell Mill, Grand Lakes Marketplace, 237 Via Vera Cruz, 4211 Starboard Drive, 13500 Danielson Drive, 2840 Loker Ave, 15890 Bernardo Center Drive and Single-Family Rental Portfolio II due to the joint venture structures and our partners having limited participation rights and no kick-out rights. The creditors of our VIEs do not have general recourse to us.
Noncontrolling interests represent the minority members' proportionate share of the equity in our VIEs and our operating partnership. At acquisition, the assets, liabilities and noncontrolling interests were measured and recorded at the estimated fair value. Noncontrolling interests will increase for the minority members' share of net income of these entities and contributions and decrease for the minority members' share of net loss and distributions. As of September 30, 2024, noncontrolling interests represented the minority members' proportionate share of The District at Howell Mill, a consolidated joint venture and our operating partnership.
Redeemable noncontrolling interests represent noncontrolling interests that are redeemable at the option of the holder or in circumstances out of our control and therefore are accounted for as temporary equity. The carrying amount of the redeemable noncontrolling interests is adjusted over time on an accretive basis to reflect the fair value at the time the noncontrolling interest becomes redeemable by the holder. Changes in the redemption value of redeemable noncontrolling interests are recorded as an allocation of retained earnings on our Consolidated Statements of Equity. We have redeemable noncontrolling interests that relate to Grand Lakes Marketplace, 237 Via Vera Cruz, 4211 Starboard Drive, 13500 Danielson Drive, 2840 Loker Ave, 15890 Bernardo Center Drive and Single-Family Rental Portfolio II as of September 30, 2024. As of September 30, 2024, $16,841 related to these third party joint ventures were included in Redeemable noncontrolling interests on our Consolidated Balance Sheet of which $9,172 is immediately puttable by the holder of the noncontrolling interest.
Certain of our joint venture agreements include provisions whereby, at certain specified times, each party has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, we are not obligated to purchase the interest of its outside joint venture partners.
The carrying amount of our noncontrolling interests reflected in equity are as follows:
September 30, 2024 December 31, 2023
Interests in the partnership equity of the operating partnership $ 377,144 $ 271,650
Noncontrolling interest in consolidated joint ventures 3,915 3,657
Total noncontrolling interests reflected in equity $ 381,059 $ 275,307
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in our Annual Report on Form 10-K filed with the SEC on March 14, 2024 (our "2023 Form 10-K") and should be read in conjunction with such consolidated financial statements and related notes. The following notes to these interim consolidated financial statements highlight changes to the notes included in the December 31, 2023 audited consolidated financial statements included in our 2023 Form 10-K and present interim disclosures as required by the SEC.
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The interim financial data as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 is unaudited. In our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.
Restricted Cash
Restricted cash includes amounts established pursuant to various agreements for loan escrow accounts, loan commitments and property sale proceeds. At September 30, 2024, our restricted cash balance on our Consolidated Balance Sheet was primarily related to loan escrow amounts and subscriptions received in advance.
Deferred Expenses
Deferred expenses consist of lease commissions. Lease commissions are capitalized and amortized over the term of the related lease as a component of depreciation and amortization expense. Accumulated amortization of deferred expenses at September 30, 2024 and December 31, 2023 was $11,426 and $9,648, respectively.
Rental Revenue Recognition
We recognize rental revenue from tenants under operating leases on a straight-line basis over the non-cancelable term of the lease when collectibility of substantially all rents is reasonably assured. Recognition of rental revenue on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. For leases where collection of substantially all rents is not deemed to be probable, revenue is recorded equal to cash that has been received from the tenant. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent, we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes, we may adjust or record additional rental revenue in the period such conclusion is reached.
Acquisitions
We have allocated a portion of the purchase price of our acquisitions to acquired intangible assets, which include acquired in-place lease intangibles, acquired above-market in-place lease intangibles and acquired ground lease intangibles, which are reported net of accumulated amortization of $151,209 and $145,228 at September 30, 2024 and December 31, 2023, respectively, on the accompanying Consolidated Balance Sheets. The acquired intangible liabilities represent acquired below-market in-place leases, which are reported net of accumulated amortization of $21,564 and $20,811 at September 30, 2024 and December 31, 2023, respectively, on the accompanying Consolidated Balance Sheets.
Assets and Liabilities Measured at Fair Value
The Financial Accounting Standards Board's ("FASB") guidance for fair value measurement and disclosure states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
•Level 1-Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have access to at the measurement date.
•Level 2-Observable inputs, other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
•Level 3-Unobservable inputs for the asset or liability. Unobservable inputs are those inputs that reflect our own assumptions that market participants would use to price the asset or liability based on the best available information.
The authoritative guidance requires the disclosure of the fair value of our financial instruments for which it is practicable to estimate that value. The guidance does not apply to all balance sheet items. Market information as available or present value techniques have been utilized to estimate the amounts required to be disclosed. Since such amounts are estimates, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.
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Our investments in marketable securities were valued using Level 1 inputs as the securities are publicly traded on major stock exchanges.
Real estate fund investments accounted for under the fair value option are stated at the fair value of our ownership in the fund. The fair value is recorded based upon changes in the NAV of the limited partnership as determined from the financial statements of the real estate fund. During the nine months ending September 30, 2024, we recorded a net unrealized gain classified within the Level 3 category of $5,369 and during the nine months ended September 30, 2023 we recorded a net decrease in fair value classified within the Level 3 category of $4,841, which related to our investments in the NYC Retail Portfolio (as defined below) and the Single-Family Rental Portfolio I (as defined below) (see Note 4-Unconsolidated Real Estate Affiliates and Fund Investments). During the nine months ending September 30, 2024, we recorded an impairment charge in our unconsolidated investment in Pioneer Tower within the Level 3 category of $21,100 utilizing a capitalization rate of 7.50% and a discount rate of 10.0% to reflect our investment at its estimated fair value. During the nine months ended September 30, 2023, we recorded impairment charges in our unconsolidated investment in Pioneer Tower within the Level 3 category of $14,476. Additionally, as of September 30, 2024 we have $86,175 of financial obligations related to our DST Program that has been valued within the Level 3 category utilizing a range of capitalization rates of 5.5% to 6.0% and a range of discount rates of 7.0% to 7.75%.
We have estimated the fair value of our mortgage notes and other debt payable reflected in the accompanying Consolidated Balance Sheets at amounts that are based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analysis with regard to fixed rate debt) for similar loans made to borrowers with similar credit ratings and for the same maturities. The fair value of our mortgage notes and other debt payable using Level 2 inputs was approximately $78,246 and $153,000 lower than the aggregate carrying amounts at September 30, 2024 and December 31, 2023, respectively. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon extinguishment of our mortgage notes and other debt payable.
Derivative Financial Instruments
We record all derivatives on the Consolidated Balance Sheets at fair value in prepaid expenses and other assets or accounts payable and other accrued expenses. Changes in the fair value of our derivatives are recorded on our Consolidated Statements of Operations and Comprehensive Income, as a component of interest expense, as we have not designated our derivative instruments as hedges. Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we may use interest rate caps, swaps and collars.
As of September 30, 2024, we had the following outstanding interest rate derivatives related to managing our interest rate risk:
Interest Rate Derivative
Number of Instruments
Notional Amount
Interest Rate Swaps 5 $ 300,000
Interest Rate Collars 3 350,000
The fair value of our interest rate derivatives represent net liabilities of $2,608 and assets of $2,435 at September 30, 2024 and December 31, 2023, respectively.
Investment in Marketable Securities
In accordance with our investment guidelines, investments in marketable securities consist of stock of publicly traded REITs. The net unrealized change in the fair value of our investments in marketable securities is recorded in earnings as part of net income in accordance with Accounting Standard Update ("ASU") 2016-1, Financial Statements - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.
Mortgage Notes Receivable
Mortgage notes receivable, including related accrued interest receivable, consists of mortgage loans originated by us and the related accrued and unpaid interest income as of the balance sheet date. In accordance with ASU No. 2016-13, Financial Instruments - Credit Loses (Topic 326): Measurement of Credit Losses on Financial Instruments ("Topic 326"), we will measure for any expected credit loss at each reporting period and record an allowance on those mortgage note receivables when deemed necessary. While Topic 326 does not require any particular method for determining any reserves, it does specify that it should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, as well as reasonable forecasts for the term of each mortgage note receivable.

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Ground Lease
As of September 30, 2024, we have a single ground lease arrangement for which we are the lessee and recorded a right-of-use asset within prepaid expenses and other assets on our Consolidated Balance Sheets in the amount of $2,000 and a lease liability within accounts payable and other liabilities on our Consolidated Balance Sheets in the amount of $2,238.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.
Recent Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting, which provides improvements to reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The standard will be effective for us for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The adoption of this pronouncement will not have a material effect on our financial statements and related disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes, which provides improvements to income tax disclosures by enhancing transparency. The standard will be effective for us for the fiscal years beginning after December 15, 2024. We are currently evaluating the impact that the adoption of the new standard will have on our consolidated financial statements and footnotes.
NOTE 3-PROPERTY
The primary reason we make acquisitions of real estate investments in the healthcare, industrial, residential, retail and other property sectors is to invest capital contributed by stockholders in a diversified portfolio of real estate assets. The residential sector includes apartment properties and single-family rental homes. All references to square footage and units are unaudited.
Acquisitions
On February 29, 2024, we acquired Creekview Crossing, a 183-unit residential property located in Sherwood, Oregon for approximately $61,250. The acquisition was funded by the issuance of OP Units, cash on hand and the assumption of a $26,191 mortgage note payable that bears an interest rate of 3.09% and matures June 1, 2055.
During the nine months ended September 30, 2024, we acquired 40 single family homes in the Single-Family Rental Portfolio II for approximately $12,128. The acquisition was funded with cash on hand.
We allocated the purchase price for our 2024 acquisitions in accordance with authoritative guidance as follows:
2024 Acquisitions
Land $ 7,377
Building and equipment 58,015
In-place lease intangible (acquired intangible assets) 1,745
Assumed debt discount 7,620
$ 74,757
Amortization period for intangible assets and liabilities
6 Months - 31 Years

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Impairment of Investment in Real Estate
During the nine months ended September 30, 2024, in accordance with authoritative guidance for impairment of long-lived assets, we determined that 180 North Jefferson no longer fits our current investment objectives and strategy and reduced our expected hold period. We further determined that this asset was impaired as the carrying value of the investment was not deemed recoverable. Therefore, we recognized an impairment charge totaling $9,635, which represents the difference between the sale price less estimated costs to sell and the carrying value of the property.
Dispositions
On September 26, 2024, we sold 180 North Jefferson for $76,257 less closing costs. We recorded a loss on the sale of property in the amount of $37.
Held for Sale
On September 19, 2024, Stonemeadow Farms was classified as held for sale and was sold on October 8, 2024 (see Note 14-Subsequent Events). As of September 30, 2024, our investment in real estate and other assets and liabilities held for sale was comprised of:
September 30, 2024
Land $ 14,000
Building and equipment, net 59,606
Other assets, net 312
Total assets $ 73,918
Mortgage notes and other debt payable, net $ 42,112
Other liabilities 553
Total liabilities $ 42,665

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NOTE 4-UNCONSOLIDATED REAL ESTATE AFFILIATES AND FUND INVESTMENTS
In addition to investments in consolidated properties, we may make investments in real estate, which are classified as unconsolidated real estate affiliates under GAAP.
Unconsolidated Real Estate Affiliates
The following represent our unconsolidated real estate affiliates as of September 30, 2024 and December 31, 2023:
Carrying Amount of Investment
Property Property Type Location Acquisition Date September 30, 2024 December 31, 2023
Chicago Parking Garage Other Chicago, IL December 23, 2014 $ 12,485 $ 13,272
Pioneer Tower Office Portland, OR June 28, 2016 42,233 65,637
The Tremont Residential Burlington, MA July 19, 2018 21,304 21,192
The Huntington Residential Burlington, MA July 19, 2018 8,741 9,357
Siena Suwanee Town Center Residential Suwanee, GA December 15, 2020 30,726 30,685
Kingston at McLean Crossing Residential McLean, VA December 3, 2021 32,908 35,992
Total $ 148,397 $ 176,135
Summarized Combined Balance Sheets-Unconsolidated Real Estate Affiliates-Equity Method Investments
September 30, 2024 December 31, 2023
Net investments in real estate $ 385,119 $ 390,702
Acquired intangible assets, net 7,999 8,143
Other assets 9,754 12,634
Total assets $ 402,872 $ 411,479
Mortgage notes and other debt payable $ 176,521 $ 178,160
Acquired intangible liabilities, net 985 1,305
Other liabilities 4,525 3,603
Total liabilities 182,031 183,068
Members' equity 220,841 228,411
Total liabilities and members' equity $ 402,872 $ 411,479
Company Investments in Unconsolidated Real Estate Affiliates-Equity Method Investments
September 30, 2024 December 31, 2023
Members' equity $ 220,841 $ 228,411
Less: other members' equity (18,214) (19,149)
Basis differential (54,229) (33,127)
Investments in unconsolidated real estate affiliates $ 148,398 $ 176,135






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Summarized Combined Statements of Operations-Unconsolidated Real Estate Affiliates-Equity Method Investments
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Total revenues $ 9,295 $ 9,235 $ 27,968 $ 27,895
Total operating expenses 6,725 6,358 19,327 18,916
Operating income $ 2,570 $ 2,877 $ 8,641 $ 8,979
Total other expenses 2,864 1,620 6,457 4,538
Net (loss) income $ (294) $ 1,257 $ 2,184 $ 4,441
Company Equity in Income of Unconsolidated Real Estate Affiliates - Equity Method Investments
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Net income of unconsolidated real estate affiliates $ (294) $ 1,257 $ 2,184 $ 4,441
Other members' share of net income 4 (226) (437) (754)
Impairment of investments in unconsolidated real estate affiliates - (3,062) (21,100) (14,476)
Company equity in (loss) income of unconsolidated real estate affiliates $ (290) $ (2,031) $ (19,353) $ (10,789)
NYC Retail Portfolio
On December 8, 2015, a wholly owned subsidiary of ours acquired an approximate 28% interest in a newly formed limited partnership, Madison NYC Core Retail Partners, L.P., which acquired an approximate 49% interest in entities that initially owned 15 retail properties located in the greater New York City area (the "NYC Retail Portfolio"), the result of which is that we own an approximate 14% interest in the NYC Retail Portfolio. The purchase price for such portion was approximately $85,600 including closing costs. As of September 30, 2024, the NYC Retail Portfolio owned six retail properties totaling approximately 1,790,000 square feet across urban infill locations in Manhattan, Brooklyn, Queens and New Jersey. We have no unfunded commitments.
At acquisition we made the election to account for our interest in the NYC Retail Portfolio under the fair value option. As of September 30, 2024 and December 31, 2023, the carrying amount of our investment in the NYC Retail Portfolio was $63,432 and $71,866, respectively. During the three and nine months ended September 30, 2024, we recorded a decrease in fair value of our investment in the NYC Retail Portfolio of $3,510 and $8,434, respectively. During the three and nine months ended September 30, 2024, we made no capital contributions and received no distributions from Madison NYC Core Retail Partners, L.P. During the three and nine months ended September 30, 2023, we recorded an decrease in fair value of our investment in the NYC Retail Portfolio of $1,171 and $1,041, respectively. During the three and nine months ended September 30, 2023, we made no capital contributions and received no distributions from Madison NYC Core Retail Partners, L.P.
Single-Family Rental Portfolio I
On August 5, 2021, we acquired an approximate 47% interest in a portfolio of approximately 4,000 stabilized single-family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others (the "Single-Family Rental Portfolio I"). The portfolio is encumbered by securitized mortgages in a net amount of approximately $760,000 maturing in the fourth quarter of 2025 at a weighted average interest rate of 2.1%. The equity purchase price for our approximate 47% interest was approximately $205,000.
At acquisition we made the election to account for our interest in the Single-Family Rental Portfolio I under the fair value option. As of September 30, 2024 and December 31, 2023, the carrying amount of our investment in the Single-Family Rental Portfolio I was $277,828 and $271,155, respectively. During the nine months ended September 30, 2024 we sold 52 houses for approximately $16,375. During the three and nine months ended September 30, 2024, we recorded a decrease in the fair value of our investment in the Single-Family Rental Portfolio I of $2,920 and and an increase of $13,803, respectively. During the three and nine months ended September 30, 2024, we received distributions of income totaling $2,444 and $3,828, respectively. During the three and nine months ended September 30, 2024, we received return of capital distributions totaling $7,169 which reduced the carrying amount of our investment and we made capital contributions totaling $39. During the three and nine months ended September 30, 2023, we recorded a increase in the fair value of our investment in the Single-Family Rental Portfolio I of $3,500 and a decrease of $3,800, respectively. During the three and nine months ended September 30, 2023, we
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received distributions of income totaling $2,329 and $6,381, respectively. The cash distributions of income increased income from unconsolidated real estate affiliates.

Summarized Combined Balance Sheets-NYC Retail Portfolio and Single-Family Rental Portfolio I-Fair Value Option Investments
September 30, 2024 December 31, 2023
Investment in real estate ventures $ 1,599,877 $ 1,622,244
Cash 31,096 31,463
Other assets 63,465 55,537
Total assets $ 1,694,438 $ 1,709,244
Total liabilities 854,236 848,278
Partners' capital 840,202 860,966
Total liabilities and partners' capital $ 1,694,438 $ 1,709,244
Summarized Statement of Operations-NYC Retail Portfolio and Single-Family Rental Portfolio I-Fair Value Option Investments
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Total revenue $ 21,207 $ 23,090 $ 65,022 $ 67,919
Net investment income 8,927 9,254 27,809 27,248
Net change in unrealized loss on investment in real estate ventures (30,228) (72,987) (24,923) (37,288)
Net (loss) income $ (21,301) $ (63,733) $ 2,886 $ (10,040)
NOTE 5-MORTGAGE NOTES RECEIVABLE
Mortgage notes receivable, including related accrued interest receivable, consists of first mortgage loans originated by us and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes receivable are initially recorded at the amount advanced to the borrower less allowance for credit loss, if applicable. As of September 30, 2024, no allowance for credit loss has been recorded. Interest income is recognized monthly and includes the stated interest less the amortization of any financing costs. Mortgage notes receivables that we enter into may include commitments to fund incremental amounts to our borrowers after the initial closing. Our mortgage notes receivable consist of the following as of September 30, 2024:
Loan Secured By Location Origination Date
Maturity Date
Loan Type
Interest Rate (SOFR +) (1)
Loan Amount Unfunded Amount
Residential Austin, TX May 26, 2023 May 26, 2026 Interest Only 2.95 % $ 27,000 $ -
Residential Charlotte, NC September 22, 2023 September 15, 2026 Interest Only 3.25 27,000 -
Residential North Charleston, SC December 14, 2023 December 1, 2026 Interest Only 3.85 48,000 -
________
(1) One month term Secured Overnight Financing Rate ("SOFR").


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NOTE 6-MORTGAGE NOTES AND OTHER DEBT PAYABLE
Mortgage notes and other debt payable have various maturities through 2055 and consist of the following:
Maturity/Extinguishment Date
Fixed / Floating
Interest
Rate
Amount payable as of
September 30, 2024 December 31, 2023
Mortgage notes payable (1) (2) (3) (4) (5)
January 1, 2025 - June 1, 2055 Fixed / Floating
1.76% - 6.66%
$ 1,243,246 $ 1,181,750
Revolving line of credit April 28, 2025 Fixed / Floating 5.91 148,000 460,000
Term loan April 28, 2027 Fixed 5.08 400,000 400,000
Total $ 1,791,246 $ 2,041,750
Net debt discount on assumed debt and debt issuance costs (23,025) (16,696)
Mortgage notes and other debt payable, net $ 1,768,221 $ 2,025,054
Stonemeadow Farms (6)
$ 42,112 $ -
Mortgage notes and other debt payable held for sale $ 42,112 $ -

________
(1) On February 29, 2024, we assumed a $26,191 mortgage note payable related to Creekview Crossing. The mortgage note bears an interest rate of 3.09% and matures on June 1, 2055.
(2) On March 21, 2024, we entered into a $37,000 mortgage note payable. The mortgage note bears an interest rate of 5.71% and matures on April 1, 2034.
(3) On June 17, 2024, we entered into a $53,535 mortgage note payable on Jefferson Lake Howell. The mortgage note bears an interest rate of 6.16% and matures on July 1, 2029.
(4) On August 8, 2024, we entered into $5,000 and $37,500 mortgage notes payable on Woodside Trumbull and Villas at Legacy, respectively. The mortgage notes bear interest rates of 5.97% and 5.82%, respectively, and mature on January 1, 2031 and September 1, 2031, respectively.
(5) On September 10, 2024, we repaid the mortgage note payable related to Charlotte Distribution Center in the amount of $8,725.
(6) The property associated with this mortgage note payable was classified as held for sale as of September 30, 2024.


Aggregate future principal payments of mortgage notes payable and other debt payable as of September 30, 2024 are as follows, net of held for sale:
Year
Amount
2024 $ 2,125
2025 341,036
2026 308,783
2027 447,384
2028 149,951
Thereafter 541,967
Total $ 1,791,246
Credit Facility
On April 28, 2022, we entered into a credit agreement providing for a $1,000,000 revolving line of credit and unsecured term loan (collectively, the "Credit Facility") with a syndicate of nine lenders led by JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Capital Markets LLC, Wells Fargo Securities, LLC and Capital One, National Association. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $1,300,000, subject to receipt of lender commitments and other conditions. The $1,000,000 Credit Facility consists of a $600,000 revolving line of credit (the "Revolving Credit Facility") and a $400,000 term loan (the "Term Loan"). The primary interest rate for the Revolving Credit Facility is based on one-month term SOFR plus 0.10% ("Adjusted Term SOFR"), plus a margin ranging from 1.30% to 2.00%, depending on our total leverage ratio. The primary interest rate for the Term Loan is based on Adjusted Term SOFR, plus a margin ranging from 1.25% to 1.95%, depending on our total leverage ratio. The maturity date of the Revolving Credit Facility is April 28, 2025 and the Term Loan is April 28, 2027. The Credit Facility contains two, twelve-month extension options at our election. Based on our current total leverage ratio, we can elect to borrow at Adjusted Term SOFR plus 1.55% and Adjusted Term SOFR plus 1.50% for the Revolving Credit Facility and Term Loan, respectively, or alternatively, we can choose to borrow at a "base rate" equal to (i) the highest of (a) the Federal Funds Rate plus 0.50%, (b) the
16

prime rate announced by JPMorgan Chase Bank, N.A., and (c) Adjusted Term SOFR plus 1.00%, plus (ii) a margin ranging from 0.30% to 1.00% for base rate loans under the Revolving Credit Facility or a margin ranging from 0.25% to 0.95% for base rate loans under the Term Loan. If the "base rate" is less than 1.00%, it will be deemed to be 1.00% for purposes of the Credit Facility. We intend to use the Revolving Credit Facility to cover short-term capital needs, for new property acquisitions and working capital. We may not draw funds on our Credit Facility if we (i) experience a material adverse effect, which is defined to include, among other things, (a) a material adverse effect on the business, assets, operations or financial condition of the Company taken as a whole; (b) the inability of any loan party to perform any of its obligations under any loan document; or (c) a material adverse effect upon the validity or enforceability of any loan document or (ii) are in default, as that term is defined in the agreement, including a default under certain other loan agreements and/or guarantees entered into by us or our subsidiaries. As of September 30, 2024, we believe no material adverse effects had occurred. We expect to utilize our cash on hand and Credit Facility capacity to extinguish mortgage notes maturing in 2024, fund redemptions and other general corporate needs.
Borrowings under the Credit Facility are guaranteed by us and certain of our subsidiaries. The Credit Facility requires the maintenance of certain financial covenants, including: (i) unencumbered property pool leverage ratio; (ii) debt service coverage ratio; (iii) maximum total leverage ratio; (iv) fixed charges coverage ratio; (v) minimum NAV; (vi) maximum secured debt ratio; (vii) maximum secured recourse debt ratio; (viii) maximum permitted investments; and (ix) unencumbered property pool criteria. The Credit Facility provides the flexibility to move assets in and out of the unencumbered property pool during the term of the Credit Facility.
At September 30, 2024, we had $148,000 outstanding under the Revolving Credit Facility at Adjusted Term SOFR plus 1.55% and $400,000 outstanding under the Term Loan at Adjusted Term SOFR plus 1.50%. We entered into swap and collar agreements for $650,000 of the Credit Facility to fix the floating rate SOFR at an average of 3.87% (all in rate of 5.37% to 5.42% at September 30, 2024). The interest rate swap and collar agreements mature on April 28, 2027.
Covenants
At September 30, 2024, we were in compliance with all debt covenants.
Debt Issuance Costs
Debt issuance costs are capitalized and amortized over the terms of the respective agreements as a component of interest expense. Accumulated amortization of debt issuance costs at September 30, 2024 and December 31, 2023 were $16,316 and $13,993, respectively.
NOTE 7-COMMON STOCK AND OP UNITS
We have five classes of common stock: Class A, Class M, Class A-I, Class M-I, and Class D. The fees payable to LaSalle Investment Management Distributors, LLC, an affiliate of our Advisor and the dealer manager for our offerings (the "Dealer Manager"), with respect to each outstanding share of each class, as a percentage of NAV, are as follows:
Selling Commission (1)
Dealer Manager Fee (2)
Class A Shares up to 3.0% 0.85%
Class M Shares - 0.30%
Class A-I Shares up to 1.5% 0.30%
Class M-I Shares - None
Class D Shares (3)
up to 1.0% None
________
(1) Selling commissions are paid on the date of sale of our common stock.
(2) We accrue all future dealer manager fees up to the 10% regulatory limitation as Accrued offering costs on our Consolidated Balance Sheets on the date of sale of our common stock. For NAV calculation purposes, dealer manager fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Each Class A, Class M and Class A-I share sold in a public offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the termination of the primary portion of such public offering in which we, with the assistance of the Dealer Manager, determine that total underwriting compensation paid with respect to such public offering equals 10% of the gross proceeds from the primary portion of such public offering.
(3) Shares of Class D common stock are only being offered pursuant to a private offering.
The selling commissions and dealer manager fees are offering costs and are recorded as a reduction of additional paid in capital.
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Stock Transactions
The stock transactions for each of our classes of common stock for the nine months ended September 30, 2024 were as follows:
Shares of
Class A
Common Stock
Shares of
Class M
Common Stock
Shares of
Class A-I
Common Stock
Shares of
Class M-I
Common Stock
Shares of
Class D
Common Stock
Total
Balance, December 31, 2023
107,680,719 26,599,396 4,529,817 92,951,608 2,407,370 234,168,910
Issuance of common stock 5,597,826 1,276,920 82,995 7,054,852 - 14,012,593
Repurchase of common stock (14,190,738) (1,827,441) (1,487,300) (10,075,879) - (27,581,358)
Share conversions (280,402) (24,938) - 304,886 - (454)
Balance, September 30, 2024
98,807,405 26,023,937 3,125,512 90,235,467 2,407,370 220,599,691
Stock Issuances
The stock issuances for our classes of shares, including those issued through our distribution reinvestment plan and as stock compensation, for the nine months ended September 30, 2024 were as follows:
Nine Months Ended September 30, 2024
# of shares
Amount
Class A Shares 5,597,826 $ 63,383
Class M Shares 1,276,920 14,849
Class A-I Shares 82,995 980
Class M-I Shares 7,054,852 87,433
Total $ 166,645
Share Repurchase Plan
Our share repurchase plan allows stockholders, subject to a one-year holding period, with certain exceptions, to request that we repurchase all or a portion of their shares of common stock on a daily basis at that day's NAV per share, limited to 5% of aggregate Company NAV per quarter. For the nine months ended September 30, 2024, we honored 100% of repurchase requests we received and repurchased 27,581,358 shares of common stock in the amount of $331,711. During the nine months ended September 30, 2023, we honored 100% of repurchase requests we received and repurchased 18,173,307 shares of common stock in the amount of $248,839.
Distribution Reinvestment Plan
Pursuant to our distribution reinvestment plan, holders of shares of any class of our common stock and OP Units may elect to have their cash distributions reinvested in additional shares of our common stock at the NAV per share applicable to the class of shares or unit being purchased on the distribution date. For the nine months ended September 30, 2024, we issued 5,123,408 shares of common stock for $60,374 under the distribution reinvestment plan. For the nine months ended September 30, 2023, we issued 4,545,315 shares of common stock for $60,918 under the distribution reinvestment plan.
Operating Partnership Units
Our operating partnership may issue OP Units to DST investors upon exercising its fair market value purchase option in exchange for their beneficial interests in such DST Properties, which are recorded as financing obligations (see Note 8-DST Program). Our operating partnership may also issue OP Units in connection with certain acquisitions from third parties. After a one-year holding period, holders of OP Units generally have the right to cause our operating partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both. During the nine months ending September 30, 2024, we issued a total of 16,076,014 OP Units with a value of $196,343. During the nine months ending September 30, 2023, we issued a total of 18,748,709 OP Units with a value of $253,600. During the nine months ending September 30, 2024, we redeemed a total of 277,708 OP Units with a value of $3,291. During the nine months ended September 30, 2023, we redeemed a total of 178,065 OP Units with a value of $2,362.


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Earnings Per Share
Basic per share amounts are based on the weighted average of shares outstanding of 225,210,139, and 242,191,379 for the nine months ended September 30, 2024 and 2023, respectively. We have no dilutive or potentially dilutive securities.
We compute net income per share for Class A, Class M, Class A-I, Class M-I and Class D common stock using the two-class method. Our Advisor may earn a performance fee (see Note 10-Related Party Transactions), which may impact the net income of each class of common stock differently. The calculated performance component for the three and nine months ended September 30, 2024 and 2023, and the impact on each class of common stock, are shown below. In periods where no performance fee is recognized in our Consolidated Statements of Operations and Comprehensive Income, the net income per share will be the same for each class of common stock.
Basic and diluted net income per share for each class of common stock is computed using the weighted-average number of common shares outstanding during the period for each class of common stock. We have not issued any dilutive or potentially dilutive securities, and thus the basic and diluted net income per share for a given class of common stock is the same for each period presented.
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The following table sets forth the computation of basic and diluted net income per share for each of our Class A, Class M, Class A-I, Class M-I and Class D common stock:
Three Months Ended September 30, 2024
Class A
Class M
Class A-I
Class M-I
Class D
Basic and diluted net income per share:
Allocation of net loss before performance fee $ (9,497) $ (2,491) $ (304) $ (8,651) $ (231)
Allocation of performance fee - - - - -
Total $ (9,497) $ (2,491) $ (304) $ (8,651) $ (231)
Weighted average number of common shares outstanding 98,952,674 25,954,415 3,166,082 90,147,165 2,407,370
Basic and diluted net income per share: $ (0.10) $ (0.10) $ (0.10) $ (0.10) $ (0.10)
Nine Months Ended September 30, 2024
Class A
Class M
Class A-I
Class M-I
Class D
Basic and diluted net income per share:
Allocation of net loss per share before performance fee $ (14,853) $ (3,814) $ (517) $ (13,272) $ (351)
Allocation of performance fee - - - - -
Total $ (14,853) $ (3,814) $ (517) $ (13,272) $ (351)
Weighted average number of common shares outstanding 101,961,879 26,180,935 3,548,569 91,111,386 2,407,370
Basic and diluted net loss per share: $ (0.15) $ (0.15) $ (0.15) $ (0.15) $ (0.15)
Three Months Ended September 30, 2023
Class A
Class M
Class A-I
Class M-I
Class D
Basic and diluted net loss per share:
Allocation of net loss before performance fee $ (5,474) $ (1,308) $ (231) $ (4,710) $ (148)
Allocation of performance fee - - - - -
Total $ (5,474) $ (1,308) $ (231) $ (4,710) $ (148)
Weighted average number of common shares outstanding 111,250,306 26,587,227 4,695,051 95,741,890 3,008,113
Basic and diluted net income per share: $ (0.05) $ (0.05) $ (0.05) $ (0.05) $ (0.05)
Nine Months ended September 30, 2023
Class A
Class M
Class A-I
Class M-I
Class D
Basic and diluted net income per share:
Allocation of net income per share before performance fee $ (51,230) $ (12,083) $ (2,196) $ (43,602) $ (1,377)
Allocation of performance fee - - - - -
Total $ (51,230) $ (12,083) $ (2,196) $ (43,602) $ (1,377)
Weighted average number of common shares outstanding 112,295,684 26,485,862 4,814,579 95,577,254 3,018,000
Basic and diluted net income per share: $ (0.46) $ (0.46) $ (0.46) $ (0.46) $ (0.46)
Organization and Offering Costs
Organization and offering costs include, but are not limited to, legal, accounting, printing fees and personnel costs of our Advisor attributable to our organization, preparation of the registration statement, registration and qualification of our common stock for sale with the SEC, or in a private placement, and in the various states and filing fees incurred by our Advisor. LaSalle agreed to fund our organization and offering expenses for the Current Public Offering until December 21, 2021, the day the registration statement was declared effective by the SEC, following which time we commenced reimbursing LaSalle over 36 months. Following the Current Public Offering commencement date, we began paying directly or reimbursing LaSalle if it pays on our behalf any organization and offering costs incurred during the Current Public Offering period (other than selling commissions and dealer manager fees) as and when incurred. After the termination of the Current Public Offering, LaSalle has agreed to reimburse us to the extent that the organization and offering costs that we incur exceed 15% of our gross proceeds from the Current Public Offering. Organization costs are expensed, whereas offering costs are recorded as a reduction of capital
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in excess of par value. As of September 30, 2024 and December 31, 2023, LaSalle has paid $2,850 and $2,185, respectively, of organization and offering costs on our behalf which we had not yet reimbursed. These costs are included in Accrued offering costs on the Consolidated Balance Sheets.
NOTE 8-DST PROGRAM
On October 16, 2019, we, through our operating partnership, initiated the DST Program, and on August 6, 2024, our board of directors approved an increase to raise up to a total of $3,000,000 in private placements through the sale of beneficial interests in specific DSTs holding DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties. Each DST Property will be leased back by a wholly owned subsidiary of our operating partnership on a long-term basis for up to ten years pursuant to a master lease agreement. The master lease agreements are expected to be guaranteed by our operating partnership. As compensation for the master lease guarantee, our operating partnership will retain a fair market value purchase option giving it the right, but not the obligation, to acquire the beneficial interests in the DST from the investors at any time after two years from the closing of the applicable DST offering in exchange for OP Units or cash, at our discretion.
The sale of beneficial interests in the DST Property will be accounted for as a failed sale-leaseback transaction due to the fair market value purchase option retained by the operating partnership and as such, the property will remain on our books and records. The proceeds received from each DST offering will be accounted for as a financing obligation on the Consolidated Balance Sheets. Upfront costs for legal work and debt placement costs for the DST totaling $2,149 are accounted for as deferred loan costs and are netted against the financing obligation as of September 30, 2024.
Under the master lease, we are responsible for subleasing the DST Property to tenants, for covering all costs associated with operating the underlying DST Property, and for paying base rent to the DST that owns such property. For financial reporting purposes (and not for income tax purposes), the DST Properties are included in our consolidated financial statements, with the master lease rent payments accounted for as interest expense. During the three and nine months ended September 30, 2024, we recorded interest expense related to the master lease in the amounts of $6,701 and $22,225, respectively and unrealized losses on financial obligation of $1,278 and $4,434 during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, we recorded interest expense related to the master lease in the amounts of $8,962 and $27,761, respectively. We will record non-cash interest expense over the expected period until exercising of the fair market value purchase option for properties that have increased in fair value. We will recognize non-cash interest income (recorded as a reduction to interest expense) at exercise of the fair market value purchase option for properties that have decreased in fair value in addition to when properties have decreased in fair value following initial periods when the fair value has increased. We incurred non-cash interest expense of $1,588 and $4,100, respectively, for the three and nine months ended September 30, 2024, and non-cash interest income of $13,778 and $27,727, respectively, for the three and nine months ended September 30, 2024. We incurred non-cash interest expense of $6,501 and $100,456, respectively, for the three and nine months ended September 30, 2023, and non-cash interest income of $1,348 and $6,169, respectively, for the three and nine months ended September 30, 2023. Commencing on October 1, 2023, we have elected the fair value option for DSTs launching after that date.
For financial reporting purposes, the rental revenues and rental expenses associated with the underlying property of each master lease are included in the respective line items on our Consolidated Statements of Operations and Comprehensive Income. The net amount we receive from the underlying DST Properties may be more or less than the amount we pay to the investors in the specific DST and are considered operating cash flows and could fluctuate over time.
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As of September 30, 2024, we have sold approximately $1,526,000 of interests related to the DST Program. As of September 30, 2024, the following properties are included in our DST Program:
The Penfield 6500 Kaiser Drive Haven North Andover
Duke Medical Center 6300 Dumbarton Circle Elgin Distribution Center
South Reno Medical Center Louisville Logistics Center Grand Prairie Distribution Center
Sugar Land Medical Plaza 140 Park Ave Oak Street Lofts
Suwanee Distribution Center 47 National Way Woodlawn Point
Silverstone Marketplace Taunton Distribution Center Woodside Trumbull Apartments
West Phoenix Distribution Center Townlake of Coppell Chandler Distribution Center
NOTE 9-RENTALS UNDER OPERATING LEASES
We receive rental income from operating leases. The minimum future rentals from consolidated properties based on operating leases in place at September 30, 2024 are as follows:
Year Amount
2024 $ 88,872
2025 426,152
2026 354,163
2027 297,693
2028 253,361
Thereafter 919,825
Total $ 2,340,066
Minimum future rentals do not include amounts payable by certain tenants based upon a percentage of their gross sales or as reimbursement of property operating expenses. During the three and nine months ended September 30, 2024, no individual tenant accounted for greater than 10% of minimum base rents.
NOTE 10-RELATED PARTY TRANSACTIONS
Pursuant to the Advisory Agreement with LaSalle, we pay a fixed advisory fee of 1.25% of our NAV calculated daily. The Advisory Agreement allows for a performance fee to be earned for each share class based on the total return of that share class or OP Unit during the calendar year. The performance fee is calculated as 10% of the return in excess of 7% per annum. The term of our Advisory Agreement expires June 5, 2025, subject to an unlimited number of successive one-year renewals.
The fixed advisory fees for the three and nine months ended September 30, 2024 were $9,977 and $30,506, respectively. The fixed advisory fees for the three and nine months ended September 30, 2023 were $11,245 and $33,413, respectively. There were no performance fees for the three and nine months ended September 30, 2024 and 2023. Included in Advisor fees payable at September 30, 2024 and December 31, 2023 were $3,250 and $3,672 of fixed fee expense, respectively, and no performance fee expenses.
We pay Jones Lang LaSalle Americas, Inc. ("JLL Americas"), an affiliate of the Advisor, for property management, construction management, leasing, mortgage brokerage and sales brokerage services performed at various properties we own. For the three and nine months ended September 30, 2024, JLL Americas was paid $997 and $2,655, respectively. For the three and nine months ended September 30, 2023, JLL Americas was paid $819, and $1,636, respectively.
We pay the Dealer Manager selling commissions and dealer manager fees in connection with our offerings. For the three and nine months ended September 30, 2024, we paid the Dealer Manager selling commissions and dealer manager fees totaling $3,001 and $9,168, respectively. For the three and nine months ended September 30, 2023, we paid the Dealer Manager selling commissions and dealer manager fees totaling $3,519 and $10,540, respectively. A majority of the selling commissions and dealer manager fees are reallowed to participating broker-dealers. Included in Accrued offering costs at September 30, 2024 and December 31, 2023 were $176,132 and $181,832 of future dealer manager fees payable, respectively.
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As of September 30, 2024 and December 31, 2023, we owed $2,850 and $2,185, respectively, for organization and offering costs paid by LaSalle (see Note 7-Common Stock and OP Units). These costs are included in Accrued offering costs.
LaSalle Investment Management Distributors, LLC also serves as the dealer manager for the DST Program on a "best efforts" basis. Our taxable REIT subsidiary, which is a wholly owned subsidiary of our operating partnership, will pay the dealer manager upfront selling commissions, upfront dealer manager fees and placement fees of up to 5.0%, 1.0% and 1.0%, respectively, of the gross purchase price per unit of beneficial interest sold in the DST Program. A majority of upfront selling commissions, dealer manager fees and placement fees are reallowed to participating broker-dealers. For the three and nine months ended September 30, 2024, our taxable REIT subsidiary paid $3,754 and $8,418, respectively, to the Dealer Manager. For the three and nine months ended September 30, 2023, our taxable REIT subsidiary paid $2,154 and $7,200, respectively, to the Dealer Manager. In addition, the Dealer Manager receives an ongoing investor servicing fee that is calculated daily on a continuous basis from year to year equal to 1/365th of (a) 0.25% of the NAV of each outstanding unit of beneficial interest for such day, payable by the DSTs; (b) 0.85% of the NAV of each outstanding Class A OP Unit, 0.30% of the NAV of each outstanding Class M OP Unit and 0.30% of the NAV of each outstanding Class A-I OP Unit for such day issued in connection with the operating partnership's fair market value option (the "FMV Option"), payable by our operating partnership; and (c) 0.85% of the NAV of each outstanding Class A share, 0.30% of the NAV of each outstanding Class M share and 0.30% of the NAV of each outstanding Class A-I share for such day issued in connection with the investors' redemption right, payable by us. The investor servicing fee may continue for so long as the investor in the DST Program holds beneficial interests, Class A, Class M and Class A-I OP Units or Class A, Class M and Class A-I shares that were issued in connection with the DST Program. The majority of all investor servicing fees are reallowed to participating broker-dealers. No investor servicing fee will be paid on Class M-I OP Units or Class M-I shares. For the three and nine months ended September 30, 2024, the DSTs paid $588 and $1,589, respectively, in investor servicing fees to the Dealer Manager in connection with the DST Program. For the three and nine months ended September 30, 2023, the DSTs paid $511 and $1,545, respectively, in investor servicing fees to the Dealer Manager in connection with the DST Program.
LaSalle also serves as the manager for the DST Program. Each DST may pay the manager a management fee equal to a to-be-agreed upon percentage of the total equity of such DST. For the three and nine months ended September 30, 2024, the DSTs paid $353 and $964, respectively, in management fees to our Advisor in connection with the DST Program. For the three and nine months ended September 30, 2023, the DSTs paid $317 and $963, respectively, in management fees to our Advisor in connection with the DST Program.
NOTE 11-COMMITMENTS AND CONTINGENCIES
We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.
From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.
We are subject to fixed ground lease payments on South Beach Parking Garage of $112 per year until September 30, 2026, which will increase every five years thereafter by the lesser of 12% or the cumulative Consumer Price Index ("CPI") over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.
The operating agreement for Grand Lakes Marketplace allows the unrelated third party joint venture partner, owning a 10% interest, to immediately put its interest to us at a market determined value.
The operating agreement for 237 Via Vera Cruz, 4211 Starboard, 13500 Danielson Street, 2840 Loker Avenue and 15890 Bernardo Center Drive allows the unrelated third party joint venture partner, owning a 5% interest, to immediately put its interest to us at a market determined value.
The operating agreement for our investment in Single-Family Rental Portfolio II allows the unrelated third party joint venture, owning a 5% interest, to put its interest to us at a market determined value starting November 9, 2030.

23

NOTE 12-SEGMENT REPORTING
We have five operating segments: healthcare (previously referred to as office), industrial, residential, retail and other properties. Consistent with how we review and manage our properties, the financial information summarized below is presented by operating segment and reconciled to income from operations for the three and nine months ended September 30, 2024 and 2023.
Healthcare
Industrial
Residential
Retail
Other
Total
Assets as of September 30, 2024
$ 611,588 $ 1,665,686 $ 1,496,032 $ 584,752 $ 122,574 $ 4,480,632
Assets as of December 31, 2023
620,381 1,635,434 1,536,027 591,782 114,226 4,497,850
Three Months Ended September 30, 2024
Capital expenditures by segment $ 2,574 $ 2,112 $ 5,614 $ 716 $ - $ 11,016
Revenues:
Rental revenue $ 16,001 $ 32,524 $ 35,764 $ 13,304 $ 60 $ 97,653
Other revenue 617 227 666 208 476 2,194
Interest on mortgage notes receivable - - - - 2,246 2,246
Total revenues $ 16,618 $ 32,751 $ 36,430 $ 13,512 $ 2,782 $ 102,093
Operating expenses:
Real estate taxes $ 1,427 $ 5,593 $ 4,979 $ 1,600 $ 110 $ 13,709
Property operating 4,033 2,905 10,001 2,495 187 19,621
Total segment operating expenses $ 5,460 $ 8,498 $ 14,980 $ 4,095 $ 297 $ 33,330
Reconciliation to net income
Property general and administrative 831
Advisor fees 9,977
Company level expenses 1,745
Provision for impairment of real estate 9,635
Depreciation and amortization 36,515
Total operating expenses $ 92,033
Other income and (expenses):
Interest expense $ (30,586)
Unrealized loss on financial obligation (1,278)
Loss from unconsolidated real estate affiliates and fund investments (4,276)
Loss on disposition of property (37)
Total other income and (expenses) $ (36,177)
Net loss $ (26,117)
Reconciliation to total consolidated assets as of September 30, 2024
Assets per reportable segments $ 4,480,632
Investment in unconsolidated real estate affiliates, real estate fund investments and corporate level assets 584,694
Total consolidated assets $ 5,065,326
Reconciliation to total consolidated assets as of December 31, 2023
Assets per reportable segments $ 4,497,850
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets 726,237
Total consolidated assets $ 5,224,087
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Healthcare
Industrial
Residential
Retail
Other
Total
Three Months Ended September 30, 2023
Capital expenditures by segment $ 1,122 $ 2,595 $ 4,589 $ 1,528 $ - $ 9,834
Revenues:
Rental revenue
$ 15,722 $ 32,146 $ 34,874 $ 13,386 $ 167 $ 96,295
Other revenue
477 30 2,015 201 532 3,255
Interest on mortgage notes receivable - - - - 593 593
Total revenues $ 16,199 $ 32,176 $ 36,889 $ 13,587 $ 1,292 $ 100,143
Operating expenses:
Real estate taxes $ 1,438 $ 5,503 $ 5,458 $ 1,676 $ 106 $ 14,181
Property operating expenses 3,525 2,869 10,137 2,429 190 19,150
Total segment operating expenses $ 4,963 $ 8,372 $ 15,595 $ 4,105 $ 296 $ 33,331
Reconciliation to net income
Property general and administrative 737
Advisor fees 11,245
Company level expenses 1,582
Depreciation and amortization 37,236
Total operating expenses $ 84,131
Other income and (expenses):
Interest expense $ (27,979)
Income from unconsolidated real estate affiliates and fund investments 2,627
Investment income on marketable securities 575
Net realized loss upon sale of marketable securities (250)
Net unrealized change in fair value of investment in marketable securities (4,259)
Total other income and (expenses) $ (29,286)
Net loss $ (13,274)
25

Healthcare
Industrial
Residential
Retail
Other
Total
Nine Months Ended September 30, 2024
Capital expenditures by segment $ 7,560 $ 9,019 $ 13,588 $ 3,839 $ - $ 34,006
Revenues:
Rental revenue $ 47,674 $ 97,146 $ 105,847 $ 40,719 $ (117) $ 291,269
Other revenue 1,452 343 3,961 2,880 1,527 10,163
Interest on mortgage notes receivable - - - - 6,668 6,668
Total revenues $ 49,126 $ 97,489 $ 109,808 $ 43,599 $ 8,078 $ 308,100
Operating expenses:
Real estate taxes $ 4,459 $ 17,004 $ 15,281 $ 5,107 $ 336 $ 42,187
Property operating expenses 10,732 8,075 29,544 7,134 557 56,042
Total segment operating expenses $ 15,191 $ 25,079 $ 44,825 $ 12,241 $ 893 $ 98,229
Reconciliation to net income
Property general and administrative 3,033
Advisor fees 30,506
Company level expenses 5,134
Provision for impairment of real estate 9,635
Depreciation and amortization 109,859
Total operating expenses $ 256,396
Other income and (expenses):
Interest expense $ (73,311)
Unrealized loss on financial obligation (4,434)
Loss from unconsolidated real estate affiliates and fund investments (10,156)
Investment income on marketable securities 989
Net realized loss upon sale of marketable securities (5,015)
Loss on disposition of property (37)
Total other income and (expenses) $ (91,964)
Net loss $ (40,260)
26

Healthcare
Industrial
Residential
Retail
Other
Total
Nine Months Ended September 30, 2023
Capital expenditures by segment $ 2,446 $ 5,485 $ 11,432 $ 5,338 $ - $ 24,701
Revenues:
Rental revenue $ 47,320 $ 93,321 $ 102,934 $ 39,210 $ 315 $ 283,100
Other revenue 1,191 1,873 5,375 885 1,599 10,923
Interest on mortgage notes receivable - - - - 809 809
Total revenues $ 48,511 $ 95,194 $ 108,309 $ 40,095 $ 2,723 $ 294,832
Operating expenses:
Real estate taxes $ 4,494 $ 16,324 $ 15,441 $ 4,981 $ 296 $ 41,536
Property operating expenses 10,217 7,334 28,912 6,875 595 53,933
Total segment operating expenses $ 14,711 $ 23,658 $ 44,353 $ 11,856 $ 891 $ 95,469
Reconciliation to net income
Property general and administrative 2,193
Advisor fees 33,413
Company level expenses 4,805
Depreciation and amortization 111,134
Total operating expenses $ 247,014
Other income and (expenses):
Interest expense $ (153,644)
Loss from unconsolidated real estate affiliates and fund investments (9,249)
Investment income on marketable securities 1,617
Net realized loss upon sale of marketable securities (780)
Net unrealized change in fair value of investment in marketable securities (2,776)
Total other income and (expenses) $ (164,832)
Net loss $ (117,014)
NOTE 13-INVESTMENT IN MARKETABLE SECURITIES
During the nine months ended September 30, 2024, we liquidated our investment in marketable securities, which consisted entirely of stock of publicly traded REITs. The following is a summary of our investment in marketable securities held as of December 31, 2023.
December 31, 2023
Investment in marketable securities - cost $ 51,129
Unrealized gains 2,463
Unrealized losses (3,392)
Net unrealized loss (929)
Investment in marketable securities - fair value $ 50,200
Upon the sale of a particular security, the realized net gain or loss is computed assuming the shares purchased first are sold first. During the nine months ended September 30, 2024, marketable securities sold generated proceeds of $53,932, resulting in realized gains of $4,727, and realized losses of $9,742. During the nine months ended September 30, 2023, marketable securities sold generated proceeds of $18,505, resulting in realized gains of and $663, and realized losses of $1,443.
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NOTE 14-SUBSEQUENT EVENTS
On October 8, 2024, we sold Stonemeadow Farms, a 280-unit residential property located in Bothell, Washington for approximately $93,100 less closing costs. In connection with the disposition, the mortgage loan associated with the property of $42,300 was retired. We estimate a gain on the sale of the property in the amount of approximately $15,500 and a loss on early debt retirement of approximately $400.
On October 23, 2024, we sold Pinole Point Distribution Center, a three building property totaling 518,000 square feet located in Richmond, California for approximately $132,500 less closing costs. We estimate a gain on the sale of the property in the amount of approximately $58,000.
On October 31, 2024, our operating partnership exercised its fair market value purchase option to acquire The Penfield, a 254-unit residential property located in St. Paul, Minnesota, and issued 2,090,867 OP Units to the DST investors for approximately $24,000 in exchange for their beneficial interest in such DST property. We estimate interest income of approximately $8,000 will be recorded upon exercising the fair market value purchase option.
On November 5, 2024, our board of directors approved a gross dividend for the fourth quarter of 2024 of $0.1575 per share to stockholders and OP Unit holders of record as of December 23, 2024. The dividend will be paid on or around December 27, 2024. Stockholders and OP Unit holders will receive $0.1575 per share or OP Unit, less applicable class-specific fees, if any.

* * * * * *
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Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
$ in thousands, except per share amounts
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q ("Form 10-Q") may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments. Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, "may," "should," "expect," "anticipate," "estimate," "would be," "believe," or "continue" or the negative or other variations of comparable terminology. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Except as required by law, we do not undertake to update or revise any forward-looking statements contained in this Form 10-Q. Important factors that could cause actual results to differ materially from the forward-looking statements are disclosed in "Item 1A. Risk Factors," "Item 1. Business" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our 2023 Form 10-K and our periodic reports filed with the SEC.
Management Overview
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements appearing elsewhere in this Form 10-Q. All references to numbered Notes are to specific notes to our consolidated financial statements beginning on page 7 of this Form 10-Q, and the descriptions referred to are incorporated into the applicable portion of this section by reference. References to "base rent" in this Form 10-Q refer to cash payments made under the relevant lease(s), excluding real estate taxes and certain property operating expenses that are paid by us and are recoverable under the relevant lease(s) and exclude adjustments for straight-line rent revenue and above- and below-market lease amortization.
The discussions surrounding our portfolio of properties refer to our Consolidated Properties, including our DST Properties, and our Unconsolidated Properties, which can be found below (see - Properties).
Our primary business is the ownership and management of a diversified portfolio of healthcare, industrial, residential, retail and other properties primarily located in the United States. The healthcare segment includes a small allocation to traditional office properties. The residential segment includes apartment properties and single-family rental homes. It is expected that over time our real estate portfolio will be further diversified on a global basis and complemented further by additional investments in real estate-related assets.
We are managed by our Advisor, LaSalle Investment Management, Inc., a subsidiary of our Sponsor, Jones Lang LaSalle Incorporated (NYSE: JLL), a leading professional services firm that specializes in real estate and investment management. We hire property management and leasing companies to provide the on-site, day-to-day management and leasing services for our properties. When selecting a property management or leasing company for one of our properties, we look for service providers that have a strong local market or industry presence, create portfolio efficiencies, have the ability to develop new business for us and will provide a strong internal control environment that will comply with our Sarbanes-Oxley Act of 2002 internal control requirements. We currently use a mix of property management and leasing service providers that include large national real estate service firms, including an affiliate of our Advisor and smaller local firms.

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

Estimated Percent of Fair Value as of September 30, 2024:
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Our investments are not materially impacted by seasonality, despite certain of our retail tenants being impacted by seasonality. Percentage rents (rents computed as a percentage of tenant sales) that we earn from investments in retail properties may, in the future, be impacted by seasonality.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.
Critical Accounting Policies
This MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes during the nine months ended September 30, 2024 to the items that we disclosed as our critical accounting policies and estimates under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Form 10-K.




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Properties
Properties owned at September 30, 2024, including DST Properties, are as follows:
Percentage Leased as of September 30, 2024
Property Name
Location
Acquisition Date
Ownership
%
Net Rentable
Square Feet
Consolidated Properties:
Healthcare Segment:
Monument IV at Worldgate Herndon, VA August 27, 2004 100% 228,000 100%
140 Park Avenue Florham Park, NJ December 21, 2015 100 100,000 100
San Juan Medical Center San Juan Capistrano, CA April 1, 2016 100 40,000 93
Genesee Plaza
9333 Genesee Ave San Diego, CA July 2, 2019 100 80,000 92
9339 Genesee Ave San Diego, CA July 2, 2019 100 81,000 92
Fountainhead Corporate Park
Fountainhead Corporate Park I Tempe, AZ February 6, 2020 100 167,000 98
Fountainhead Corporate Park II Tempe, AZ February 6, 2020 100 128,000 90
170 Park Avenue Florham Park, NJ February 2, 2021 100 147,000 100
9101 Stony Point Drive Richmond, VA September 15, 2021 100 87,000 100
North Tampa Surgery Center Odessa, FL October 8, 2021 100 13,000 100
Duke Medical Center Durham, NC December 23, 2021 100 60,000 98
KC Medical Office Portfolio
8600 NE 82nd Street Kansas City, MO December 23, 2021 100 11,000 100
1203 SW 7 Highway Blue Springs, MO December 23, 2021 100 10,000 100
Roeland Park Medical Office Roeland Park, KS December 28, 2021 100 30,000 100
South Reno Medical Center Reno, NV December 28, 2021 100 32,000 100
Sugar Land Medical Plaza Sugar Land, TX December 30, 2021 100 37,000 100
Cedar Medical Center Flagstaff, AZ April 29, 2022 100 26,000 100
North Boston Medical Center Haverhill, MA June 28, 2022 100 30,000 100
North Charlotte Medical Center Stanley, NC June 28, 2022 100 25,000 100
Grand Rapids Medical Center Wyoming, MI July 21, 2022 100 25,000 100
Glendale Medical Center Los Angeles, CA July 29, 2022 100 20,000 100
6300 Dumbarton Circle Fremont, CA September 15, 2022 100 44,000 100
6500 Kaiser Drive Fremont, CA September 15, 2022 100 88,000 100
Greater Sacramento Medical Center Rancho Cordova, CA September 16, 2022 100 18,000 100
Industrial Segment:
Kendall Distribution Center Atlanta, GA June 30, 2005 100% 409,000 100%
Suwanee Distribution Center Suwanee, GA June 28, 2013 100 559,000 100
Grand Prairie Distribution Center
3325 West Trinity Boulevard Grand Prairie, TX January 22, 2014 100 277,000 100
3324 West Trinity Boulevard Grand Prairie, TX May 31, 2019 100 145,000 100
Charlotte Distribution Center Charlotte, NC June 27, 2014 100 347,000 100
DFW Distribution Center
4050 Corporate Drive Grapevine, TX April 15, 2015 100 441,000 100
4055 Corporate Drive Grapevine, TX April 15, 2015 100 202,000 100
O'Hare Industrial Portfolio
200 Lewis Wood Dale, IL September 30, 2015 100 31,000 100
1225 Michael Drive Wood Dale, IL September 30, 2015 100 109,000 100
1300 Michael Drive Wood Dale, IL September 30, 2015 100 71,000 100
1301 Mittel Drive Wood Dale, IL September 30, 2015 100 53,000 100
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Percentage Leased as of September 30, 2024
Property Name
Location
Acquisition Date
Ownership
%
Net Rentable
Square Feet
1350 Michael Drive Wood Dale, IL September 30, 2015 100 56,000 100
2501 Allan Drive Elk Grove, IL September 30, 2015 100 198,000 100
2601 Allan Drive Elk Grove, IL September 30, 2015 100 124,000 100
Tampa Distribution Center Tampa, FL April 11, 2016 100 386,000 100
Aurora Distribution Center Aurora, IL May 19, 2016 100 305,000 100
Valencia Industrial Portfolio
28150 West Harrison Parkway Valencia, CA June 29, 2016 100 87,000 100
28145 West Harrison Parkway Valencia, CA June 29, 2016 100 114,000 100
28904 Paine Avenue Valencia, CA June 29, 2016 100 117,000 75
25045 Tibbitts Avenue Santa Clarita, CA June 29, 2016 100 142,000 100
Pinole Point Distribution Center
6000 Giant Road Richmond, CA September 8, 2016 100 225,000 100
6015 Giant Road Richmond, CA September 8, 2016 100 252,000 -
6025 Giant Road Richmond, CA December 29, 2016 100 41,000 100
Mason Mill Distribution Center Buford, GA December 20, 2017 100 340,000 100
Fremont Distribution Center
45275 Northport Court Fremont, CA March 29, 2019 100 117,000 100
45630 Northport Loop East Fremont, CA March 29, 2019 100 120,000 100
Taunton Distribution Center Taunton, MA August 23, 2019 100 200,000 100
Chandler Distribution Center
1725 East Germann Road Chandler, AZ December 5, 2019 100 122,000 100
1825 East Germann Road Chandler, AZ December 5, 2019 100 89,000 100
Fort Worth Distribution Center Fort Worth, TX October 23, 2020 100 351,000 100
Whitestown Distribution Center
4993 Anson Boulevard Whitestown, IN December 11, 2020 100 280,000 100
5102 E 500 South Whitestown, IN December 11, 2020 100 440,000 100
Louisville Distribution Center Shepherdsville, KY January 21, 2021 100 1,040,000 100
Southeast Phoenix Distribution Center
6511 West Frye Road Chandler, AZ February 23, 2021 100 102,000 100
6565 West Frye Road Chandler, AZ February 23, 2021 100 118,000 100
6615 West Frey Road Chandler, AZ February 23, 2021 100 136,000 100
6677 West Frye Road Chandler, AZ February 23, 2021 100 118,000 100
6635 West Frye Road Chandler, AZ June 8, 2022 100 105,000 100
6575 West Frye Road Chandler, AZ June 8, 2022 100 140,000 100
Louisville Airport Distribution Center Louisville, KY June 24, 2021 100 284,000 100
237 Via Vera Cruz (1) San Marcos, CA July 2, 2021 95 66,000 -
13500 Danielson Street (1) Poway, CA July 2, 2021 95 73,000 100
4211 Starboard Drive (1) Fremont, CA July 9, 2021 95 130,000 100
5 National Way Durham, NC September 28, 2021 100 188,000 100
47 National Way Durham, NC September 28, 2021 100 187,000 100
Friendship Distribution Center
4627 Distribution Pkwy Buford, GA October 20, 2021 100 126,000 100
4630 Distribution Pkwy Buford, GA October 20, 2021 100 149,000 100
4646 Distribution Pkwy Buford, GA October 20, 2021 100 102,000 100
4651 Distribution Pkwy Buford, GA October 20, 2021 100 272,000 100
South San Diego Distribution Center
2001 Sanyo Avenue San Diego, CA October 28, 2021 100 320,000 100
2055 Sanyo Avenue San Diego, CA October 28, 2021 100 209,000 90
2065 Sanyo Avenue San Diego, CA October 28, 2021 100 136,000 100
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Percentage Leased as of September 30, 2024
Property Name
Location
Acquisition Date
Ownership
%
Net Rentable
Square Feet
1755 Britannia Drive Elgin, IL November 16, 2021 100 80,000 100
2451 Bath Road Elgin, IL November 16, 2021 100 327,000 100
687 Conestoga Parkway Shepardsville, KY November 17, 2021 100 327,000 100
2840 Loker Avenue (1) Carlsbad, CA November 30, 2021 95 104,000 100
15890 Bernardo Center Drive (1) San Diego, CA November 30, 2021 95 48,000 100
Northeast Atlanta Distribution Center Jefferson, GA April 8, 2022 100 459,000 100
West Phoenix Distribution Center Glendale, AZ September 30, 2022 100 1,200,000 100
Puget Sound Distribution Center Lacey, WA October 6, 2022 100 142,000 100
Louisville Logistics Center Shepherdsville, KY April 20, 2023 100 1,043,000 100
Residential Segment:
Townlake of Coppell Coppell, TX May 22, 2015 100% 351,000 92%
AQ Rittenhouse Philadelphia, PA July 30, 2015 100 92,000 91
Lane Parke Apartments Mountain Brook, AL May 26, 2016 100 263,000 96
Dylan Point Loma San Diego, CA August 9, 2016 100 204,000 95
The Penfield St. Paul, MN September 22, 2016 100 245,000 96
Jory Trail at the Grove Wilsonville, OR July 14, 2017 100 315,000 94
The Reserve at Johns Creek Johns Creek, GA July 28, 2017 100 244,000 92
Villas at Legacy Plano, TX June 6, 2018 100 340,000 95
Stonemeadow Farms Bothell, WA May 13, 2019 100 228,000 94
Summit at San Marcos Chandler, AZ July 31, 2019 100 257,000 93
Haven North Andover North Andover, MA May 3, 2021 100 204,000 97
The Preserve at the Meadows Fort Collins, CO August 23, 2021 100 208,000 95
The Rockwell Berlin, MA August 31, 2021 100 233,000 97
Miramont Apartments Fort Collins, CO September 29, 2021 100 212,000 98
Pinecone Apartments Fort Collins, CO September 29, 2021 100 176,000 98
Reserve at Venice North Venice, FL December 17, 2021 100 268,000 93
Woodside Trumbull Trumbull, CT December 21, 2021 100 207,000 95
Jefferson Lake Howell Casselberry, FL March 30, 2022 100 374,000 96
Oak Street Lofts Tigard, OR July 15, 2022 100 162,000 94
Molly Brook on Belmont North Haledon, NJ September 27, 2022 100 177,000 94
Creekview Crossing Sherwood, OR February 29, 2024 100 217,000 95
Single-Family Rental Portfolio II (1) Various Various 95 777,000 92
Retail Segment:
The District at Howell Mill (1) Atlanta, GA June 15, 2007 88% 306,000 49%
Grand Lakes Marketplace (1) Katy, TX September 17, 2013 90 131,000 96
Rancho Temecula Town Center Temecula, CA June 16, 2014 100 165,000 87
Skokie Commons Skokie, IL May 15, 2015 100 97,000 95
Whitestone Market Austin, TX September 30, 2015 100 145,000 99
Maui Mall Kahului, HI December 22, 2015 100 235,000 85
Silverstone Marketplace Scottsdale, AZ July 27, 2016 100 78,000 87
Kierland Village Center Scottsdale, AZ September 30, 2016 100 118,000 99
Timberland Town Center Beaverton, OR September 30, 2016 100 92,000 96
Montecito Marketplace Las Vegas, NV August 8, 2017 100 190,000 100
Milford Crossing Milford, MA January 29, 2020 100 159,000 100
Patterson Place Durham, NC May 31, 2022 100 25,000 89
Silverado Square Las Vegas, NV June 1, 2022 100 48,000 98
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Percentage Leased as of September 30, 2024
Property Name
Location
Acquisition Date
Ownership
%
Net Rentable
Square Feet
Woodlawn Point Marietta, GA June 30, 2022 100 98,000 100
Other Segment: (2)
South Beach Parking Garage (3) Miami Beach, FL January 28, 2014 100% 130,000 N/A
Unconsolidated Properties:
Chicago Parking Garage (4) Chicago, IL December 23, 2014 100% 167,000 N/A
NYC Retail Portfolio (5)(6) NY/NJ December 8, 2015 14 1,790,000 84
Pioneer Tower (7) Portland, OR June 28, 2016 100 308,000 61
The Tremont (1) Burlington, MA July 19, 2018 75 175,000 92
The Huntington (1) Burlington, MA July 19, 2018 75 115,000 93
Siena Suwanee Town Center (8) Suwanee, GA December 15, 2020 100 226,000 96
Single-Family Rental Portfolio I (6)(9) Various August 5, 2021 47 7,207,000 91
Kingston at McLean Crossing (1) McLean, VA December 3, 2021 80 279,000 95
________
(1)We own a majority interest in the joint venture that owns a fee simple interest in this property.
(2)Other segment also includes Mortgage Notes Receivable.
(3)The parking garage contains 343 stalls. This property is owned leasehold.
(4)We own a condominium interest in the building that contains a 366 stall parking garage.
(5)We own an approximate 14% interest in a portfolio of six urban infill retail properties located in the greater New York City area.
(6)We have elected the fair value option to account for this investment.
(7)We own a condominium interest in the building that contains a 17 story multi-tenant healthcare property.
(8)We own a condominium interest in the project that contains a 240-unit residential property.
(9)We own an approximate 47% interest in a portfolio of over 4,000 single-family rental homes located in various cities across the United States.

Operating Statistics
We generally hold investments in properties with high occupancy rates leased to quality tenants under long-term, non-cancelable leases, except that leases for residential properties are generally for one year. We believe these leases are beneficial to achieving our investment objectives. The following table shows our operating statistics by property type for our consolidated properties as of September 30, 2024:
Number of
Properties / Portfolios (1)
Total Area
(Sq Ft) 		% of Total
Area 		Stabilized Occupancy %
Average Minimum
Base Rent per
Occupied Sq Ft (2)
Healthcare 24 1,527,000 6 % 96 % $ 34.25
Industrial 61 14,481,000 61 97 6.80
Residential 22 5,754,000 24 94 23.16
Retail 14 1,887,000 8 87 23.35
Other 1 130,000 1 N/A N/A
Total 122 23,779,000 100 % 96 % $ 13.86
________
(1)Residential includes over 500 single-family rental homes in the Single-Family Rental Portfolio II.
(2)Amount calculated as in-place minimum base rent for all occupied space at September 30, 2024 and excludes any straight line rents, tenant recoveries and percentage rent revenues.
As of September 30, 2024, our average effective annual rent per square foot, calculated as average minimum base rent per occupied square foot less tenant concessions and allowances, was $13.80 for our consolidated properties.

35

Recent Events and Outlook
Property Valuations
Property valuations decreased slightly across our portfolio driven mainly by capital market assumptions related to increasing interest rates causing increasing capitalization and discount rates during the three months ending September 30, 2024.
Credit Facility
On April 28, 2022, we entered into our $1,000,000 Credit Facility, which consists of a $600,000 Revolving Credit Facility and a $400,000 Term Loan. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $1,300,000, subject to receipt of lender commitments and other conditions. We are in compliance with our debt covenants as of September 30, 2024. We expect to maintain compliance with our debt covenants.
Liquidity
At September 30, 2024, we had in excess of $88,000 in total cash on hand and $302,000 of capacity under our Credit Facility.
Share Repurchase Plan
During the third quarter of 2024, we repurchased 100% of requests totaling $92,622 of our common stock pursuant to our share repurchase plan, which had a quarterly limit of $130,129. The quarterly limit on repurchases is calculated as 5% of our NAV as of the last day of the previous quarter. The limit for the fourth quarter of 2024 is $127,659.
Fair Value of Assets and Liabilities
We account for our approximate 14% investment in the NYC Retail Portfolio and our approximate 47% investment in the Single-Family Rental Portfolio I using the fair value option. During the quarter ended September 30, 2024, we recorded an unrealized fair value loss of $3,510 and $2,920 related to our investments in the NYC Retail Portfolio and Single-Family Rental Portfolio I, respectively. Our interest rate swaps and collars resulted in an unrealized fair value loss of approximately $13,388 during the quarter. We utilize our interest rate swaps and collars to fix interest rates on variable rate debt we plan to hold to maturity.
Current Offerings
On December 21, 2021, the SEC declared our Current Public Offering effective registering up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering period, subject to regulatory approval. The per share purchase price varies from day to day and, on each day, equals our NAV per share for each class of common stock, plus, for Class A and Class A-I shares, applicable selling commissions. The Dealer Manager is distributing shares of our common stock in our Current Public Offering. We intend to primarily use the net proceeds from the offering, after we pay the fees and expenses attributable to the offerings and our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing instruments and (3) fund repurchases of our shares under our share repurchase plan.
On March 3, 2015, we commenced our Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds from our public offerings.
On October 16, 2019, we, through our operating partnership, initiated the DST Program, and on August 6, 2024, our board of directors approved an increase to raise up to a total of $3,000,000 in private placements exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder through the sale of beneficial interests to accredited investors in specific DSTs holding DST Properties, which may be sourced from our real properties or from third parties.
Capital Raised and Use of Proceeds
As of September 30, 2024, we have raised gross proceeds of approximately $5,579,000 from our public and private offerings since 2012. We used these proceeds along with proceeds from mortgage debt to acquire approximately $5,655,000
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of real estate investments, deleverage the Company by repaying mortgage loans of approximately $722,000 and repurchase shares of our common stock for approximately $1,866,000.
2024 Property Acquisitions
•Creekview Crossing, a 183-unit residential property located in Sherwood, Oregon; and
•40 single-family rental houses.
2024 Property Dispositions
•Disposed of 180 North Jefferson.
2024 Financing
•Assumed a $26,191 mortgage note payable which bears an interest rate of 3.09% and matures on June 1, 2055;
•entered into a $37,000 mortgage note payable. The mortgage note bears interest at a fixed rate of 5.71% and matures on April 1, 2034;
•entered into a $53,535 mortgage note payable. The mortgage note bears interest at a fixed rate of 6.16% and matures on July 1, 2029;
•entered into a $5,000 mortgage note payable. The mortgage note bears interest at a fixed rate of 5.97% and matures on January 1, 2031; and
•entered into a $37,500 mortgage note payable. The mortgage note bears interest at a fixed rate of 5.82% and matures on September 1, 2031.
Investment Objectives and Strategy
Our primary investment objectives are:
•to generate an attractive level of current income for distribution to our stockholders;
•to preserve and protect our stockholders' capital investments;
•to achieve appreciation of our NAV over time; and
•to enable stockholders to utilize real estate as an asset class in diversified, long-term investment portfolios.
We cannot ensure that we will achieve our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases, these limitations cannot be changed unless our charter is amended, which may require the approval of our stockholders.
The cornerstone of our investment strategy is to acquire and manage income-producing commercial real estate properties and real estate-related assets around the world. We believe this strategy enables us to provide our stockholders with a portfolio that is well-diversified across property type, geographic region and industry, both in the United States and internationally. It is our belief that adding international investments to our portfolio over time will serve as an effective tool to construct a well-diversified portfolio designed to provide our stockholders with stable distributions and attractive long-term risk-adjusted returns.
We believe that our broadly diversified portfolio benefits our stockholders by providing:
•diversification of sources of income;
•access to attractive real estate opportunities currently in the United States and, over time, around the world; and
•exposure to a return profile that should have lower correlations with other investments.
Since real estate markets are often cyclical in nature, our strategy allows us to more effectively deploy capital into property types and geographic regions where the underlying investment fundamentals are relatively strong or strengthening and away from those property types and geographic regions where such fundamentals are relatively weak or weakening. We intend to meet our investment objectives by selecting investments across multiple property types and geographic regions to achieve portfolio stability, diversification, current income and favorable risk-adjusted returns. To a lesser degree, we also intend to invest in debt and equity interests backed principally by real estate, which we refer to collectively as "real estate-related assets."
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We will leverage LaSalle's broad commercial real estate research and strategy platform and resources to employ a research-based investment philosophy focused on building a portfolio of commercial properties and real estate-related assets that we believe has the potential to provide stable income streams and outperform market averages over an extended holding period. Furthermore, we believe that having access to LaSalle and JLL's international organization and platform, with real estate professionals living and working full time throughout our global target markets, will be a valuable resource to us when considering and executing upon international investment opportunities.
Our board of directors has adopted investment guidelines for our Advisor to implement and actively monitor in order to allow us to achieve and maintain diversification in our overall investment portfolio. Our board of directors formally reviews our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Our board of directors reviews the investment guidelines to ensure that the guidelines are being followed and are in the best interests of our stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of our board of directors. Changes to our investment guidelines must be approved by our board of directors but do not require notice to or the vote of stockholders.
We seek to invest:
•up to 95% of our assets in properties;
•up to 25% of our assets in real estate-related assets; and
•up to 15% of our assets in cash, cash equivalents and other short-term investments.
Notwithstanding the above, the actual percentage of our portfolio that is invested in each investment type may from time to time be outside these target levels due to numerous factors including, but not limited to, large inflows of capital over a short period of time, lack of attractive investment opportunities or increases in anticipated cash requirements for repurchase requests.
We expect to maintain a targeted company leverage ratio (calculated as our share of total liabilities divided by our share of the fair value of total assets) of between 30% and 50%. We intend to use low leverage, or in some cases possibly no leverage, to finance new acquisitions in order to maintain our targeted company leverage ratio. Our company leverage ratio was 36% as of September 30, 2024.
2024 Key Initiatives
During 2024, we intend to use capital raised from our public and private offerings, the DST Program and dispositions to acquire new investment opportunities, repurchase stock under our share repurchase plan, increase overall liquidity and fund quarterly distributions. We look to make investments that fit with our investment objectives and guidelines. Likely acquisition candidates may include well-located, residential properties, industrial, healthcare, grocery-anchored retail properties and originating mortgage loan investments that align with our property investment strategy. We will also attempt to further our geographic diversification. We will use debt financing when attractive interest rates are available, while looking to keep the company leverage ratio in the 30% to 50% range. We also intend to use our Revolving Credit Facility to allow us to efficiently manage our cash flows.
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Results of Operations
General
Our revenues are primarily received from tenants in the form of fixed minimum base rents and recoveries of operating expenses. Our expenses primarily relate to the costs of operating and financing our properties. Our share of the net income, net loss or dividend income from our unconsolidated real estate affiliates is included in income from unconsolidated affiliates and fund investments. We believe the following analysis of reportable segments provides important information about the operating results of our real estate investments, such as trends in total revenues or operating expenses that may not be as apparent in a period-over-period comparison of our entire Company. We group our investments in real estate assets from continuing operations into five reportable operating segments based on the type of property, which are healthcare, industrial, residential, retail and other. Operations from corporate level items and real estate assets sold are excluded from reportable segments.
Results of Operations for the Three Months Ended September 30, 2024 and 2023:
Properties acquired or sold after January 1, 2023 are presented within the recent acquisitions and sold properties line for all periods presented. The properties currently presented within the recent acquisitions and sold properties line include the properties listed as either acquired in the current or prior year in the Properties section above in addition to Presley Uptown (sold in 2023) and 180 North Jefferson (sold in 2024). Properties owned for the nine months ended September 30, 2024 and 2023 are referred to as our comparable properties.
Revenues
The following chart sets forth revenues, by reportable segment, for the three months ended September 30, 2024 and 2023:
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 $
Change 		%
Change
Revenues:
Rental revenue
Healthcare $ 16,001 $ 15,722 $ 279 1.8 %
Industrial 30,946 30,272 674 2.2
Residential 31,725 31,189 536 1.7
Retail 13,304 13,386 (82) (0.6)
Other 60 167 (107) (64.1)
Comparable properties total $ 92,036 $ 90,736 $ 1,300 1.4 %
Recent acquisitions and sold properties 5,617 5,559 58 1.0
Total rental revenue $ 97,653 $ 96,295 $ 1,358 1.4 %
Other revenue
Healthcare $ 617 $ 477 $ 140 29.4 %
Industrial 227 40 187 467.5
Residential 1,306 1,370 (64) (4.7)
Retail 208 169 39 23.1
Other 476 532 (56) (10.5)
Comparable properties total $ 2,834 $ 2,588 $ 246 9.5 %
Recent acquisitions and sold properties (640) 667 (1,307) (196.0)
Total other revenue $ 2,194 $ 3,255 $ (1,061) (32.6) %
Interest on mortgage notes receivable $ 2,246 $ 593 $ 1,653 278.8 %
Total revenues $ 102,093 $ 100,143 $ 1,950 1.9 %
Rental revenue at comparable properties increased by $1,300 for the three months ended September 30, 2024 as compared to the same period in 2023. Increases within our industrial and residential segments were primarily related to an increase in rental rates and occupancy at various properties during the three months ended September 30, 2024 as compared to the same
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period in 2023 as well as due to an increase in recovery revenue related to increases in real estate taxes and property operating expenses.
Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties increased by $246 for the three months ended September 30, 2024 as compared to the same period in 2023. The increases within our industrial and healthcare segments primarily relate to an approximately $100 and $90, respectively, increase in termination fees collected during the three months ended September 30, 2024, as compared to the same period in 2023.
Interest on mortgage notes receivable relates to interest income earned on first mortgage notes originated by us. During the three months ended September 30, 2024, we held three mortgage notes receivable as compared to only one mortgage note receivable during the same period in 2023.
Operating Expenses
The following chart sets forth real estate taxes and property operating expenses by reportable segment, for the three months ended September 30, 2024 and 2023:
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 $
Change 		%
Change
Operating expenses:
Real estate taxes
Healthcare $ 1,427 $ 1,438 $ (11) (0.8) %
Industrial 5,359 5,166 193 3.7
Residential 4,575 5,061 (486) (9.6)
Retail 1,600 1,676 (76) (4.5)
Other 110 106 4 3.8
Comparable properties total $ 13,071 $ 13,447 $ (376) (2.8) %
Recent acquisitions and sold properties 638 735 (97) (13)
Total real estate taxes $ 13,709 $ 14,182 $ (473) (3.3) %
Property operating expenses
Healthcare $ 4,033 $ 3,525 $ 508 14.4 %
Industrial 2,846 2,617 229 8.8
Residential 8,496 8,580 (84) (1.0)
Retail 2,495 2,429 66 2.7
Other 187 190 (3) (1.6)
Comparable properties total $ 18,057 $ 17,341 $ 716 4.1 %
Recent acquisitions and sold properties 1,564 1,809 (245) (14)
Total property operating expenses $ 19,621 $ 19,150 $ 471 2.5 %
Total operating expenses $ 33,330 $ 33,332 $ (2) - %
Real estate taxes at comparable properties decreased by $376 for the three months ended September 30, 2024 as compared to the same period in 2023. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estate taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases.
Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased by $716 during the three months ended September 30, 2024 as compared to the same period in 2023. The increases in the three months ended September 30, 2024 as compared to the same period in 2023 generally relate to higher repairs and maintenance projects, increased insurance costs, increased property management fees due to higher revenues, higher salary costs and higher utility costs in some markets.
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The following chart sets forth revenues and expenses not directly related to the operations of the reportable segments for the three months ended September 30, 2024 and 2023:
Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 $
Change 		%
Change
Property general and administrative $ (831) $ (737) $ (94) 12.8 %
Advisor fees (9,977) (11,245) 1,268 (11.3)
Company level expenses (1,745) (1,582) (163) 10.3
Provision for impairment of real estate (9,635) - (9,635) 100.0
Depreciation and amortization (36,515) (37,236) 721 (1.9)
Interest expense (30,586) (27,979) (2,607) 9.3
Unrealized loss on financial obligation (1,278) - (1,278) 100.0
(Loss) income from unconsolidated real estate affiliates and fund investments (4,276) 2,627 (6,903) (263)
Investment income on marketable securities - 575 (575) (100.0)
Net realized loss upon sale of marketable securities - (250) 250 (100)
Net unrealized change in fair value of investment in marketable securities - (4,259) 4,259 (100)
Loss on disposition of property (37) - (37) 100.0
Total expenses $ (94,880) $ (80,086) $ (14,794) 18.5 %
Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses increased during the three months ended September 30, 2024 as compared to the same period in 2023 primarily due to an increase in various state level taxes.
Advisor fees relate to the fixed advisory and performance fees earned by our Advisor. Fixed fees increase or decrease based on changes in our NAV, which have been and will be primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, and our Advisor will receive 10% of the excess total return above the 7% threshold. The decrease in advisor fees of $1,268 for the three months ended September 30, 2024 as compared to the same period in 2023 is related to a decrease in fixed advisory fees due to a decrease in NAV.
Company level expenses relate mainly to our compliance and administration related costs. Company level expenses remained fairly flat for the three months ended September 30, 2024 when compared to the same period in 2023.
Provision for impairment of real estate relates to real estate investments where the estimated future undiscounted cash flows during our hold period have decreased below the carrying value of the property. A provision for impairment of real estate is recorded to write the property down from its carrying value to its fair value. We recorded a provision for impairment of $9,635 related to 180 North Jefferson during the three months ended September 30, 2024.
Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. Depreciation and amortization expense remained flat for the three months ended September 30, 2024 as compared to the same period in 2023.
Interest expense increased by $2,607 for the three months ended September 30, 2024 as compared to the same period in 2023 primarily as a result of an increase in interest expense from changes in fair value on our interest rate swaps and collars in the amount of approximately $19,700 during the three months ended September 30, 2024 when compared to the same period in 2023. Offsetting this increase was approximately $17,400 lower interest expense, including interest income, on the financial obligations related to the DST Program, which includes non-cash interest expense and interest income on properties deemed probable for repurchase. Further we incurred an increase in interest expense of approximately $530 in relation to new mortgage notes payable and higher overall interest rates including that on our Credit Facility.
Unrealized loss on financial obligation relates to changes in the fair value of our financial obligation for the various DST Programs that we have elected the fair value option for. We recorded an unrealized loss on financial obligation of $1,278 for the three months ended September 30, 2024.
Income from unconsolidated real estate affiliates and fund investments relates to the income from Chicago Parking Garage, Pioneer Tower, The Tremont, The Huntington, Siena Suwanee Town Center and Kingston at McLean Crossing as well
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as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio and Single-Family Rental Portfolio I. During the three months ended September 30, 2024, we recorded a $2,920 decrease in the fair value of our investment in Single-Family Rental Portfolio I as compared to a $3,500 increase in the fair value during the same period in 2023. During the three months ended September 30, 2024, we recorded a $3,510 decrease in the fair value of our investment in the NYC Retail Portfolio as compared to a $1,171 decrease in the fair value during the same period in 2023.
Investment income on marketable securities relates to dividends earned on our portfolio of publicly traded REIT securities. We recorded dividend income of $575 during the three months ended September 30, 2023. We liquidated our investments in marketable securities during the three months ended June 30, 2024.
Net realized loss upon the sale of marketable securities relates to sales of individual stocks within our portfolio of publicly traded REIT stocks. We recorded a realized loss of $250 during the three months ended September 30, 2023.
Net unrealized change in fair value of investment in marketable securities relate to changes in fair value of our portfolio of publicly traded REIT securities. We liquidated our investments in marketable securities during the three months ended June 30, 2024. During the three months ended September 30, 2023 we recorded a loss of $4,259.
Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Revenues
The following chart sets forth revenues by reportable segment, for the nine months ended September 30, 2024 and 2023:
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 $
Change 		%
Change
Revenues:
Rental revenue
Healthcare $ 47,674 $ 47,320 $ 354 0.7 %
Industrial
92,418 90,293 2,125 2.4
Residential 94,658 92,492 2,166 2.3
Retail
40,719 39,531 1,188 3.0
Other
(117) 315 (432) (137.1)
Comparable properties total
$ 275,352 $ 269,951 $ 5,401 2.0 %
Recent acquisitions and sold properties
15,917 13,149 2,768 21.1
Total rental revenue $ 291,269 $ 283,100 $ 8,169 2.9 %
Other revenue
Healthcare $ 1,452 $ 1,191 $ 261 21.9 %
Industrial
343 1,883 (1,540) (82)
Residential 3,795 3,950 (155) (3.9)
Retail
2,874 852 2,022 237.3
Other
1,527 1,599 (72) (4.5)
Comparable properties total
$ 9,991 $ 9,475 $ 516 5.4 %
Recent acquisitions and sold properties
172 1,448 (1,276) (88.1)
Total other revenue $ 10,163 $ 10,923 $ (760) (7.0) %
Interest on mortgage notes receivable $ 6,668 $ 809 $ 5,859 724 %
Total revenues $ 308,100 $ 294,832 $ 13,268 4.5 %
Rental revenue at comparable properties increased by $5,401 for the nine months ended September 30, 2024 as compared to the same period in 2023. The increases within our residential, industrial and retail segments was primarily related to an increase in rental rates and occupancy at various properties during the nine months ended September 30, 2024 as compared to the same period in 2023. Additionally, the increase within our retail segment is related to an increase in collections of rents during the nine months ended September 30, 2024 as compared to the same period in 2023 from tenants that experienced a
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decrease in operations in past years. The decrease in rental revenue within our other segment relates to a one time write off of uncollected rental charges from a retail tenant within our South Beach Parking Garage property.
Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties increased by $516 for the nine months ended September 30, 2024 as compared to the same period in 2023. The increase within our retail segment primarily relates to approximately $1,700 increase in termination fees collected during the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease within the industrial segment is primarily related to an $1,800 lease restoration payment received during the nine months ended September 30, 2023 from a former tenant.
Interest on mortgage notes receivable relates to interest income earned on mortgage notes originated by us. During the nine months ended September 30, 2024, we held three mortgage notes receivable as compared to only one mortgage note receivable during the same period in 2023.
Operating Expenses
The following chart sets forth real estate taxes, property operating expenses and provisions for doubtful accounts by reportable segment, for the nine months ended September 30, 2024 and 2023:
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 $
Change 		%
Change
Operating expenses:
Real estate taxes
Healthcare $ 4,553 $ 4,494 $ 59 1.3 %
Industrial 16,307 15,882 425 2.7
Residential 14,089 14,323 (234) (1.6)
Retail
5,107 4,981 126 2.5
Other
336 296 40 13.5
Comparable properties total
$ 40,392 $ 39,976 $ 416 1.0 %
Recent acquisitions and sold properties
1,795 1,560 235 15.1
Total real estate taxes $ 42,187 $ 41,536 $ 651 1.6 %
Property operating expenses
Healthcare $ 10,732 $ 10,217 $ 515 5.0 %
Industrial 7,899 6,934 965 13.9
Residential 25,465 24,740 725 2.9
Retail
7,134 6,860 274 4.0
Other
557 595 (38) (6.4)
Comparable properties total
$ 51,787 $ 49,346 $ 2,441 4.9 %
Recent acquisitions and sold properties
4,255 4,587 (332) (7.2)
Total property operating expenses $ 56,042 $ 53,933 $ 2,109 3.9 %
Total operating expenses $ 98,229 $ 95,469 $ 2,760 2.9 %
Real estate taxes at comparable properties increased by $416 for the nine months ended September 30, 2024 as compared to the same period in 2023. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estates taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases.
Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased by $2,441 during the nine months ended September 30, 2024 compared to the same period in 2023. The increases generally relate to higher repairs and maintenance projects, increased insurance costs, increased property management fees due to higher revenues, higher salary costs and higher utility costs in some markets.
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The following chart sets forth revenues and expenses not directly related to the operations of the reportable segments for the nine months ended September 30, 2024 and 2023:
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 $
Change 		%
Change
Property general and administrative $ (3,033) $ (2,193) $ (840) 38.3 %
Advisor fees (30,506) (33,413) 2,907 (8.7)
Company level expenses (5,134) (4,805) (329) 6.8
Provision for impairment of real estate (9,635) - (9,635) 100.0
Depreciation and amortization (109,859) (111,134) 1,275 (1.1)
Interest expense (73,311) (153,644) 80,333 (52.3)
Unrealized loss on financial obligation (4,434) - (4,434) 100.0
Loss from unconsolidated affiliates and fund investments (10,156) (9,249) (907) 9.8
Investment income on marketable securities 989 1,617 (628) (38.8)
Net realized loss upon sale of marketable securities (5,015) (780) (4,235) 543
Net unrealized change in fair value of investment in marketable securities - (2,776) 2,776 (100.0)
Loss on disposition of property (37) - (37) 100.0
Total revenue and expenses $ (250,131) $ (316,377) $ 66,246 (20.9) %
Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses increased during the nine months ended September 30, 2024 as compared to the same period in 2023 by $840 primarily due to an increase in state level taxes and property level legal expenses.
Advisor fees relate to the fixed advisory and performance fees earned by the Advisor. Fixed fees increase or decrease based on changes in our NAV, which will be primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, where in our Advisor will receive 10% of the excess total return above the 7% threshold. The decrease in advisor fees of $2,907 for the nine months ended September 30, 2024 as compared to the same period in 2023 is primarily related to a decrease in NAV.
Company level expenses relate mainly to our compliance and administration related costs. Company level expenses remained fairly flat for the nine months ended September 30, 2024 when compared to 2023.
Provision for impairment of real estate relates to real estate investments where the estimated future undiscounted cash flows during our hold period have decreased below the carrying value of the property. A provision for impairment of real estate is recorded to write the property down from its carrying value to its fair value. We recorded a provision for impairment of $9,635 related to 180 North Jefferson during the three months ended nine months ended September 30, 2024.
Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. Depreciation and amortization expense for the nine months ended September 30, 2024 remained flat as compared to the same period in 2023.
Interest expense decreased by $80,333 for the nine months ended September 30, 2024 as compared to the same period in 2023 as a result of approximately $102,000 lower interest expense, including interest income, on the financial obligations related to the DST Program, which includes non-cash interest expense and interest income on properties deemed probable for repurchase. The decrease in interest expense was offset by changes in fair value on our interest rate swaps and collars in the amount of approximately $15,600 during the nine months ended September 30, 2024 compared to the same period in 2023. Additionally offsetting the decrease was approximately $6,000 of increased interest expense from new mortgage notes payable, increased usage of our Credit Facility and higher overall interest rates in 2024.
Unrealized loss on financial obligation relates to changes in the fair value of our financial obligation for the various DST Programs that we have elected the fair value option for. We recorded an unrealized loss on financial obligation of $4,434 for the nine months ended September 30, 2024.

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Loss from unconsolidated affiliates and fund investments relates to the loss from Chicago Parking Garage, Pioneer Tower, The Tremont, The Huntington, Siena Suwanee Town Center and Kingston at McLean Crossing as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio and Single-Family Rental Portfolio I. During the nine months ended September 30, 2024, we recorded a $13,803 increase in the fair value of our investment in Single-Family Rental Portfolio I as compared to a $3,800 decrease in the fair value during the same period in 2023. During the nine months ended September 30, 2024, we recorded a $8,434 decrease in the fair value in the NYC Retail Portfolio as compared to a $1,041 decrease in the fair value during the same period in 2023. Additionally, during the nine months ended September 30, 2024, we recorded an impairment charge related to our investment in Pioneer Tower in the amount of $21,100 as compared to $11,414 during the same period in 2023 as the carrying value of the investment exceeded its estimated fair value.
Investment income on marketable securities relate to dividends earned on our portfolio of publicly traded REIT securities. We earned $989 on investment income during the nine months ended September 30, 2024 as compared to $1,617 during the same period in 2023. We liquidated our investments in marketable securities during the three months ended June 30, 2024.
Net realized loss upon the sale of marketable securities relate to sales of individual stocks within our portfolio of publicly traded REIT stocks. We recorded a realized loss of $5,015 during the nine months ended September 30, 2024 as compared to $780 during the same period in 2023.
Net unrealized change in fair value of investment in marketable securities relate to changes in fair value of our portfolio of publicly traded REIT securities. We liquidated our investments in marketable securities during the three months ended June 30, 2024. During the nine months ended September 30, 2023 we recorded a gain of $2,776.

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Funds From Operations
Consistent with real estate industry and investment community preferences, we consider funds from operations ("FFO") as a supplemental measure of the operating performance for a real estate investment trust and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income attributable to the Company (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items, impairment write-downs of depreciable real estate and sales of properties, plus real estate related depreciation and amortization and after adjustments for these items related to noncontrolling interests and unconsolidated affiliates.
FFO does not give effect to real estate depreciation and amortization because these amounts are computed to allocate the cost of a property over its useful life. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO provides stockholders with an additional view of our operating performance. We also use Adjusted FFO ("AFFO") as a supplemental measure of operating performance. We define AFFO as FFO adjusted for straight-line rental income, amortization of above- and below-market leases, amortization of net premium or discount on assumed debt, gains or losses on derivative instruments and the extinguishment or modification of debt, adjustments for investments accounted for under the fair value option, net unrealized change in fair value of investments in marketable securities, acquisition expenses and adjustments for DST Properties. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO and AFFO provide investors with an additional view of our operating performance.
In order to provide a better understanding of the relationship between FFO, AFFO and GAAP net income, the most directly comparable GAAP financial reporting measure, we have provided reconciliations of GAAP net income attributable to JLL Income Property Trust, Inc. to FFO and FFO to AFFO. FFO and AFFO do not represent cash flow from operating activities in accordance with GAAP, should not be considered as an alternative to GAAP net income and are not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to more comprehensively understand our operating performance, FFO and AFFO should be considered along with our reported net income attributable to JLL Income Property Trust, Inc. and our cash flows in accordance with GAAP, as presented in our consolidated financial statements. Our presentations of FFO and AFFO are not necessarily comparable to the similarly titled measures of other REITs due to the fact that not all REITs use the same definitions.
The following table presents a reconciliation of net income to NAREIT FFO for the periods presented:
Reconciliation of net income to NAREIT FFO Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
Net loss attributable to JLL Income Property Trust, Inc. $ (21,174) $ (11,871) $ (32,807) $ (110,488)
Real estate depreciation and amortization (1)
31,781 35,640 97,378 110,113
Loss (gain) on disposition of property and unrealized loss on investment in unconsolidated real estate affiliate (1)
5,243 (2,087) (4,805) 4,737
Impairment of depreciable real estate (1)
7,812 2,744 25,106 13,655
NAREIT FFO attributable to JLL Income Property Trust, Inc. Common Stockholders $ 23,662 $ 24,426 $ 84,872 $ 18,017
Weighted average shares outstanding, basic and diluted 220,627,706 241,282,587 225,210,139 242,191,379
NAREIT FFO per share, basic and diluted $ 0.11 $ 0.10 $ 0.38 $ 0.07
________
(1) Includes amounts attributable to our ownership share of both consolidated properties and unconsolidated real estate affiliates and our operating partnership for all periods.
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We believe AFFO is useful to investors because it provides supplemental information regarding the performance of our portfolio over time.
The following table presents a reconciliation of NAREIT FFO to AFFO for the periods presented:
Reconciliation of NAREIT FFO to AFFO Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
NAREIT FFO attributable to JLL Income Property Trust, Inc. $ 23,662 $ 24,426 $ 84,872 $ 18,017
Straight-line rental income (1)
(913) (1,385) (2,775) (3,506)
Amortization of above- and below-market leases (1)
(909) (1,066) (3,205) (3,219)
Amortization of net discount on assumed debt (1)
(96) (161) (327) (499)
Loss (gain) on derivative instruments and extinguishment or modification of debt (1)
11,809 (5,541) 4,786 (10,088)
Adjustment for investments accounted for under the fair value option (2)
346 1,712 6,940 6,598
Net change in fair value of investment in marketable securities (1)
- 3,817 4,260 2,405
Adjustment for DST Properties (3)
(13,202) 5,052 (22,517) 75,204
AFFO attributable to JLL Income Property Trust, Inc. Common Stockholders $ 20,697 $ 26,854 $ 72,034 $ 84,912
Weighted average shares outstanding, basic and diluted 220,627,706 241,282,587 225,210,139 242,191,379
AFFO per share, basic and diluted $ 0.09 $ 0.11 $ 0.32 $ 0.35
________
(1) Includes amounts attributable to our ownership share of both consolidated properties and unconsolidated real estate affiliates and our operating partnership.
(2) Represents the normal and recurring AFFO reconciling adjustments for the NYC Retail Portfolio and Single-Family Rental Portfolio I.
(3) Adjustments to reflect the AFFO attributable to the Company for DST Properties, including non-cash interest expense related to the FMV Purchase Option.
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NAV as of September 30, 2024
The following table provides a breakdown of the major components of our NAV as of September 30, 2024:
September 30, 2024
Component of NAV Class A Shares Class M Shares Class A-I Shares Class M-I Shares Class D Shares Total
Real estate investments (1)
$ 1,942,619 $ 512,344 $ 61,618 $ 1,775,804 $ 47,304 $ 4,339,689
Debt (824,279) (217,394) (26,145) (753,497) (20,072) (1,841,387)
Other assets and liabilities, net 24,568 6,479 779 22,459 599 54,884
Estimated enterprise value premium None assumed None assumed None assumed None assumed None assumed None assumed
NAV $ 1,142,908 $ 301,429 $ 36,252 $ 1,044,766 $ 27,831 $ 2,553,186
Number of outstanding shares 98,807,405 26,023,937 3,125,512 90,235,467 2,407,370
NAV per share $ 11.57 $ 11.58 $ 11.60 $ 11.58 $ 11.56
________
(1)The value of our real estate investments was less than the historical cost by 0.6% as of September 30, 2024.
The following table provides a breakdown of the major components of our NAV as of December 31, 2023:
December 31, 2023
Component of NAV Class A Shares Class M Shares Class A-I Shares Class M-I Shares Class D Shares Total
Real estate investments (1)
$ 2,252,352 $ 557,163 $ 94,988 $ 1,946,316 $ 50,335 $ 4,901,154
Debt (967,426) (239,312) (40,799) (835,978) (21,620) (2,105,135)
Other assets and liabilities, net 58,756 14,535 2,478 50,773 1,313 127,855
Estimated enterprise value premium None assumed None assumed None assumed None assumed None assumed None assumed
NAV $ 1,343,682 $ 332,386 $ 56,667 $ 1,161,111 $ 30,028 $ 2,923,874
Number of outstanding shares 107,680,719 26,599,396 4,529,817 92,951,608 2,407,370
NAV per share $ 12.48 $ 12.50 $ 12.51 $ 12.49 $ 12.47
________
(1)The value of our real estate investments was greater than the historical cost by 0.8% as of December 31, 2023.
The decrease in NAV per share from December 31, 2023 to September 30, 2024, was related to a net decrease of 3% in the value of our portfolio. Our NAV for the different share classes is reduced by normal and recurring class-specific fees and offering and organization costs.

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The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of September 30, 2024:
Healthcare Industrial Office Residential Retail
Other (1)
Total
Company
Exit capitalization rate 5.7 % 5.5 % 6.8 % 5.3 % 5.9 % 6.5 % 5.5 %
Discount rate/internal rate of return (IRR) 7.3 7.3 8.6 7.1 7.4 8.1 7.3
Annual market rent growth rate 3.0 3.1 2.6 3.1 2.9 3.0 3.0
Holding period (years) 10.0 10.1 10.0 10.0 10.0 18.6 10.1
________
(1) Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.
The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of December 31, 2023:
Healthcare Industrial Office Residential Retail
Other (1)
Total
Company
Exit capitalization rate 5.5 % 5.3 % 6.3 % 5.2 % 5.7 % 6.5 % 5.4 %
Discount rate/internal rate of return (IRR) 6.9 6.9 7.6 6.9 7.0 8.1 6.9
Annual market rent growth rate 3.0 3.1 2.7 3.2 2.9 3.0 3.1
Holding period (years) 10.0 10.1 10.0 10.0 10.0 19.0 10.1
________
(1) Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease, the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.
While we believe our assumptions are reasonable, a change in these assumptions would impact the calculation of the value of our real estate investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our real estate investment value:
Input September 30, 2024
December 31, 2023
Discount Rate - weighted average 0.25% increase (1.9) % (2.0) %
Exit Capitalization Rate - weighted average 0.25% increase (2.8) (2.9)
Annual market rent growth rate - weighted average 0.25% decrease (1.5) (1.5)
The fair value of our mortgage notes and other debt payable was estimated to be approximately $122,000 and $182,000 lower than the carrying values at September 30, 2024 and December 31, 2023, respectively. The NAV per share would have increased by $0.45 and by $0.67 per share at September 30, 2024 and December 31, 2023, respectively, if we were to have included the fair value of our mortgage notes and other debt payable in our methodology to determine NAV.
The selling commission and dealer manager fee are offering costs and are recorded as a reduction of capital in excess of par value. Selling commissions are paid on the date of sale of our common stock. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Dealer manager fees payable are included in Accrued offering costs on our Consolidated Balance Sheets. Dealer manager fees payable as of September 30, 2024 and December 31, 2023 were $176,132 and $181,832, respectively.
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The following table reconciles stockholders' equity per our Consolidated Balance Sheet to our NAV:
September 30, 2024
Stockholders' equity under GAAP $ 1,601,719
Adjustments:
Accrued dealer manager fees (1)
176,132
Organization and offering costs (2)
66
Unrealized real estate appreciation (3)
154,245
Accumulated depreciation, amortization and other (4)
621,024
NAV $ 2,553,186
________
(1) Accrued dealer manager fees represents the accrual for future dealer manager fees for Class A, Class M and Class A-I shares. We accrue all future dealer manager fees up to the 10% regulatory limit on the date of sale of our common stock as an offering cost. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee.
(2) The Advisor advanced organization and offering costs on our behalf through December 21, 2021. Such costs are reimbursed to the Advisor ratably over 36 months. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, such costs are recognized as a reduction to NAV ratably over 36 months.
(3) Our investments in real estate are presented under historical cost in our GAAP Consolidated Financial Statements. As such, any increases in the fair market value of our investments in real estate are not included in our GAAP results. For purposes of determining our NAV, our investments in real estate are recorded at fair value.
(4) We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of determining our NAV. Additionally, we make other fair value adjustments to our NAV to account for differences with historical cost GAAP; an example would be straight-line rent revenue.
Limitations and Risks
As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Our valuation methodology may not result in the determination of the fair value of our net assets as our mortgage notes and other debt payable are valued at cost. Different parties with different assumptions and estimates could derive a different NAV per share. Accordingly, with respect to our NAV per share, we can provide no assurance that:
•a stockholder would be able to realize this NAV per share upon attempting to resell his or her shares;
•we would be able to achieve for our stockholders the NAV per share upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio or merging with another company; or
•the NAV per share, or the methodologies relied upon to estimate the NAV per share, will be found by any regulatory authority to comply with any regulatory requirements.
Furthermore, the NAV per share was calculated as of a particular point in time. The NAV per share will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities and attributes specific to the properties and leases within our portfolio.
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Liquidity and Capital Resources
Our primary uses and sources of cash are as follows:
Uses Sources
Short-term liquidity and capital needs such as:
•
Operating cash flow, including the receipt of distributions of our share of cash flow produced by our unconsolidated real estate affiliates and fund investment
•
Interest payments on debt
•
Distributions to stockholders
•
Proceeds from secured loans collateralized by individual properties
•
Fees payable to our Advisor
•
Minor improvements made to individual properties that are not recoverable through expense recoveries or common area maintenance charges to tenants
•
Proceeds from our Credit Facility
•
Sales of our shares in our public and private offerings
•
General and administrative costs
•
Sales of real estate investments
•
Costs associated with capital raising in our continuous public offering, private offering and DST Program
•
Draws from lender escrow accounts
•
Other company level expenses
•
Sales of beneficial interests in the DST Program
•
Lender escrow accounts for real estate taxes, insurance, and capital expenditures
•
Fees payable to our Dealer Manager
Longer-term liquidity and capital needs such as:
•
Acquisitions of real estate investments
•
Expansion of existing properties
•
Tenant improvements and leasing commissions
•
Issuance of mortgage notes receivable
•
Debt repayment requirements, including both principal and interest
•
Repurchases of our shares pursuant to our share repurchase plan
•
Fees payable to our Advisor
•
Fees payable to our Dealer Manager
The sources and uses of cash for the nine months ended September 30, 2024 and 2023 were as follows:
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 $ Change
Net cash provided by operating activities $ 95,402 $ 87,467 $ 7,935
Net cash provided by (used in) investing activities 53,530 (181,410) 234,940
Net cash (used in) provided by financing activities (144,019) 83,636 (227,655)
Net cash provided by operating activities increased by $7,935 for the nine months ended September 30, 2024 as compared to the same period in 2023. The increase in cash from operating activities is primarily due to the decrease in payment of the performance fee in the amount of $6,969 during the nine months ended September 30, 2023 as well as the timing of working capital items such as collection of accounts receivables and payment of real estate taxes, accrued expenses and accounts payable during the nine months ended September 30, 2024 as compared to the same period in 2023.
Net cash provided by (used in) investing activities increased by $234,940 for the nine months ended September 30, 2024 as compared to the same period in 2023. The increase is primarily related to proceeds from sales of real estate investments, higher proceeds from the sale of marketable securities, and a decrease in the purchase of real estate investments during the nine months ended September 30, 2024 as compared to the same period in 2023.
Net cash (used in) provided by financing activities decreased by $227,655 for the nine months ended September 30, 2024 as compared to the same period in 2023. The change is primarily related to $224,921 of lower net proceeds from mortgage note
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payables and net draws on our Credit Facility, as well as an increase in distributions paid to noncontrolling interests of 17,912 during the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease is partially offset by an increase in net capital raised of $15,639.
Financing
We have relied primarily on fixed-rate financing, locking in what were favorable spreads between real estate income yields and mortgage interest rates and have tried to maintain a balanced schedule of debt maturities. We also use interest rate derivatives to manage our exposure to interest rate movements of our variable rate debt. The following consolidated debt table provides information on the outstanding principal balances and the weighted average interest rates at September 30, 2024 and December 31, 2023:
Consolidated Debt
September 30, 2024 December 31, 2023
Principal
Balance 		Weighted Average Interest Rate Principal
Balance 		Weighted Average Interest Rate
Fixed $ 1,724,746 4.23 % $ 1,685,350 3.89 %
Variable 66,500 6.66 356,400 6.48
Total $ 1,791,246 4.32 % $ 2,041,750 4.34 %
Covenants
At September 30, 2024, we were in compliance with all debt covenants.
Other Sources
On December 21, 2021, our Current Public Offering registration statement was declared effective with the SEC (Commission File No. 333-256823) to register up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each three-year offering period, subject to regulatory approval. We intend to use the net proceeds from the Current Public Offering, which are not used to pay the fees and other expenses attributable to our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan.
On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds of our public offerings. We will reserve the right to terminate the Private Offering at any time and to extend the Private Offering term to the extent permissible under applicable law.
On October 16, 2019, we, through our operating partnership, initiated the DST Program, and on August 6, 2024, our board of directors approved an increase to raise up to a total of $3,000,000 in private placements exempt from registration under the Securities Act, through the sale of beneficial interests to accredited investors in specific DSTs holding DST Properties, which may be sourced from our real properties or from third parties.
Commitments
We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.
From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence.
We are subject to fixed ground lease payments on South Beach Parking Garage of $112 per year until September 30, 2026, which will increase every five years by the lesser of 12% or the cumulative CPI over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.
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The operating agreement for Grand Lakes Marketplace allows the unrelated third party joint venture partner, owning a 10% interest, to put its interest in the venture to us at a market determined value.
The operating agreement for 237 Via Vera Cruz, 13500 Danielson Street, 4211 Starboard, 2840, Loaker Avenue and 15890 Bernardo Center Drive allows the unrelated third party joint venture partner, owning a 5% interest, to put its interest in the venture to us at a market determined value.
The operating agreement for our investment in Single-Family Rental Portfolio II allows the unrelated third party joint venture partner, owning a 5% interest, to put its interest to us at a market determined value starting November 9, 2030.
Distributions to Stockholders
To remain qualified as a REIT for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and distribute at least 90% of ordinary taxable income to stockholders.
The following factors, among others, will affect operating cash flow and, accordingly, influence the decisions of our board of directors regarding distributions:
•scheduled increases in base rents of existing leases;
•changes in minimum base rents and/or overage rents attributable to replacement of existing leases with new or renewal leases;
•changes in occupancy rates at existing properties and procurement of leases for newly acquired or developed properties;
•necessary capital improvement expenditures or debt repayments at existing properties;
•ability of our tenants to pay rent as a result of their financial condition; and
•our share of distributions of operating cash flow generated by the unconsolidated real estate affiliates, less management costs and debt service on additional loans that have been or will be incurred.
We anticipate that operating cash flow, cash on hand, proceeds from dispositions of real estate investments or refinancings will provide adequate liquidity to conduct our operations, fund general and administrative expenses, fund operating costs and interest payments and allow distributions to our stockholders in accordance with the REIT qualification requirements of the Internal Revenue Code of 1986, as amended.
Sources of Distributions
The following table summarizes our distributions paid over the nine months ended September 30, 2024 and 2023:
For the Nine Months ending September 30,
2024 2023
Distributions:
Paid in cash $ 34,329 $ 34,557
Reinvested in shares 60,374 60,918
Total distributions 94,703 95,475
Source of distributions:
Cash flow from operating activities 94,703 87,467
Cash flow from financing activities - 8,008
Total sources of distributions $ 94,703 $ 95,475






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Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
We are subject to market risk associated with changes in interest rates in terms of the price of our variable-rate debt and the price of new fixed-rate debt for refinancing of existing debt. We manage our interest rate risk exposure by obtaining fixed-rate loans where possible. As of September 30, 2024, we had consolidated debt of $1,791,246. Including the $23,025 net discount on the assumption of debt and debt issuance costs, we had consolidated debt of $1,768,221 at September 30, 2024. We also entered into interest rate derivative agreements on $650,000 of the variable rate debt that cap SOFR at between 2.6% and 4.5% that mature in 2027. A 0.25% movement in the interest rate on the $66,500 of variable-rate debt would have resulted in a $166 annualized increase or decrease in consolidated interest expense and cash flow from operating activities.
We are subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair market value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At September 30, 2024, the fair value of our mortgage notes and other debt payable was estimated to be approximately $78,246 lower than the carrying value of $1,791,246. If treasury rates were 0.25% higher at September 30, 2024, the fair value of our consolidated debt would have been approximately $94,814 lower than the carrying value.
Item 4.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on management's evaluation as of September 30, 2024, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II
OTHER INFORMATION
Item 1.
Legal Proceedings.
We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.





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Item 1A.
Risk Factors.
Except as disclosed in "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, there have been no material changes to the risk factors previously disclosed under "Item 1A. Risk Factors" of our 2023 Form 10-K.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
Our share repurchase plan limits repurchases during any calendar quarter to shares with an aggregate value (based on the repurchase price per share on the day the repurchase is effected) of 5% of the combined NAV of all classes of shares as of the last day of the previous calendar quarter, which means that in any 12-month period, we limit repurchases to approximately 20% of our total NAV. If the quarterly volume limitation is reached on or before the third business day of a calendar quarter, repurchase requests during the next quarter will be satisfied on a stockholder by stockholder basis, which we refer to as a "per stockholder allocation," instead of a first-come, first-served basis. Pursuant to the per stockholder allocation, each of our stockholders would be allowed to request repurchase at any time during such quarter of a total number of shares not to exceed 5% of the shares of common stock the stockholder held as of the end of the prior quarter. The per stockholder allocation requirement will remain in effect for each succeeding quarter for which the total repurchases for the immediately preceding quarter exceeded four percent of our NAV on the last business day of such preceding quarter. If total repurchases during a quarter for which the per stockholder allocation applies are equal to or less than four percent of our NAV on the last business day of such preceding quarter, then repurchases will again be first-come, first-served for the next succeeding quarter and each quarter thereafter.
During the three months ended September 30, 2024, we repurchased 7,905,337 shares of common stock under the share repurchase plan, which represented all of the share repurchase requests received for the same period.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Repurchases as a Percentage of NAV (1)
Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (2)
July 2024 2,499,261 $ 11.72 2,499,261 1.1 % -
August 2024 2,789,667 11.73 2,789,667 1.3 -
September 2024 2,616,409 11.69 2,616,409 1.2 -
Total
7,905,337 $ 11.71 7,905,337 3.6 % -
________
(1) Represents aggregate NAV of the shares repurchased under our share repurchase plan over aggregate NAV of all shares outstanding, in each case, based on the NAV as of the last calendar day of the prior quarter end.
(2) Repurchases are limited as described above.
Unregistered Sales of Equity Securities
On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. No Class D shares were issued during the three months ended September 30, 2024.
Item 3.
Defaults Upon Senior Securities.
Not applicable.
Item 4.
Mine Safety Disclosures.
Not applicable.
Item 5.
Other Information.
None.
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Item 6.
Exhibits.
Exhibit No. Description
0.0031 Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on September 28, 2012).
0.0032 First Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Appendix A to the Company's prospectus supplement filed with the SEC on May 9, 2013).
0.0033 First Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 8, 2014).
0.0034 Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 9, 2014).
0.0035 Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 9, 2014).
0.0036 Second Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 18, 2015).
0.0037 Certificate of Correction to the Company's Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on May 17, 2016).
0.0038 Third Articles of Amendment to the Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-11 filed with the SEC on October 16, 2019).
0.0039 Fourth Articles of Amendment to the Second Articles of Amendment and Restatements of Jones Lang LaSalle Income Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on October 3, 2022).
0.0031 Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.10 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 10, 2022).
0.0041 Second Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Appendix C to the Company's Registration Statement on Form S-11 filed with the SEC on April 12, 2024).
31.1* Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1** Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS* XBRL Instance Document
101.SCH* XBRL Schema Document
101.CAL* XBRL Calculation Linkbase Document
101.DEF* Definition Linkbase Document
101.LAB* XBRL Labels Linkbase Document
101.PRE* XBRL Presentation Linkbase Document
104* Cover Page Intereactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
__________
* Filed herewith.
** Furnished herewith.



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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, JLL Income Property Trust, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
JLL INCOME PROPERTY TRUST, INC.
Date: November 7, 2024 By: /s/ C. Allan Swaringen
C. Allan Swaringen
President, Chief Executive Officer and Director
JLL INCOME PROPERTY TRUST, INC.
Date: November 7, 2024 By: /s/ Gregory A. Falk
Gregory A. Falk
Chief Financial Officer and Treasurer

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