Executive Summary

Board set Estimated NAV at $19.17 per share as of December 31, 2023, implying total NAV of ~$693.3 million; chosen below CBRE Cap’s mid-point ($19.76) due to higher discount and terminal cap rates and uncertainty in non‑grocery big box exposure (31% of ABR) .
Year-end occupancy and pricing steady: physical/economic occupancy at 91.6%/92.0%, while ABR per square foot rose to $19.61 from $19.10 YoY, reflecting rent growth despite slight occupancy drift .
Quarterly cash dividend of $0.1356 per share authorized for Q4 (record date December 31, 2023; payable ~January 5, 2024), sustaining income to shareholders .
Share Repurchase Program amended (Nov 7, 2023) to remove DRP funding limit—expands flexibility to fund repurchases beyond DRP proceeds .
Company’s Q4 2023 8-K focused on NAV determination rather than EPS/revenue; Wall Street consensus estimates via S&P Global for this non-listed REIT were unavailable, so no beat/miss comparison is possible.*

What Went Well and What Went Wrong

What Went Well

ABR per square foot increased to $19.61 at year-end (vs. $19.10 prior year), supporting underlying rent growth despite macro headwinds .
Leasing spreads remained constructive: comparable renewals signed through Q3 carried a 4.0% increase over prior ABR with 5.7-year weighted average term, evidencing pricing power and tenure .
Management transparent on NAV drivers; Board selected value “below the mid-point of the range” due to higher rates and big box uncertainty—“We believe that the decrease in the value of the real estate assets was largely attributable to an increase in the discount rates and terminal capitalization rates primarily due to the effects of higher market interest rates.” .

What Went Wrong

Occupancy moderated YoY: physical occupancy fell to 91.6% (from 93.0%), and economic to 92.0% (from 93.5%), indicative of lingering retail normalization and bankruptcies .
Estimated NAV per share decreased to $19.17 from $19.86 as of Dec 31, 2022, reflecting rate-driven valuation compression and non‑cash derivative marks .
Interest expense pressure persisted: Q3 quarterly interest expense was $10.7 million (vs. $8.7 million YoY), driven by higher floating-rate costs despite swaps .

Financial Results

Quarterly financials are limited; the Q4 2023 8-K addresses NAV, not EPS/revenue. Below are operating trends for Q2 and Q3 2023 from 10-Qs.

Metric ($USD Thousands)	Q2 2023	Q3 2023
Rental income	$38,473	$36,324
Total income	$38,566	$36,417
Property Net Operating Income (NOI)	$24,824	$24,801
Interest expense	$10,806	$10,727
Net loss	$(2,313)	$(3,710)

Operating KPIs across the last two quarters and year-end:

KPI	Q2 2023	Q3 2023	Q4 2023 (Year-end)
Physical occupancy (%)	90.9%	91.3%	91.6%
Economic occupancy (%)	91.2%	91.9%	92.0%
Weighted avg remaining lease term (years)	4.7	4.7	4.6
Properties (count)	52	52	52
ABR per sq ft ($)	—	—	$19.61 (vs. $19.10 FY22)

Capital actions and distributions:

Capital/Dividend Metric	Q2 2023	Q3 2023	Q4 2023
Distributions declared per share ($)	$0.1356	$0.1356	$0.1356
Shares repurchased ($)	$2.641	$1.612	$6.0 for FY 2023

Segment breakdown: company reports a single segment (retail real estate), so no segment table is applicable .

Guidance Changes

Metric	Period	Previous Guidance/Level	Current Guidance/Level	Change
Estimated NAV per share ($)	As of 12/31/2023	$19.86 (as of 12/31/2022)	$19.17	Lowered
DRP purchase price ($/share)	2024 distributions	$19.86 (prior NAV basis)	$19.17 (new NAV basis)	Lowered
SRP funding framework	Effective 12/27/2023	Repurchases limited to % of DRP net proceeds	DRP funding limit removed; board discretion to fund from all sources	Expanded flexibility
Cash dividend per share ($)	Q4 2023	$0.1356 (recent quarters)	$0.1356 authorized; pay ~Jan 5, 2024	Maintained

Earnings Call Themes & Trends

No Q4 earnings-call transcript was furnished; the March 5, 2024 8-K focused on NAV. The thematic evolution below relies on Q2/Q3 10-Qs and Q4 (10-K/8-K).

Topic	Previous Mentions (Q2 2023)	Previous Mentions (Q3 2023)	Current Period (Q4 2023)	Trend
Interest rates & swaps	Higher floating-rate costs; swaps in place ($551m notional)	Continued rate pressure; interest expense up YoY	NAV lowered due to higher discount/terminal cap rates	Rates weighing on valuation/interest expense
Big box exposure	122 non‑grocery big box spaces; not actively marketing sales	Co‑tenancy risks from bankruptcies (e.g., BBBY, Rite Aid)	Board emphasized 31% ABR from non‑grocery big box; sector uncertainty	Heightened focus on anchor risk
Occupancy & ABR	90.9%/91.2% occ.; WALT 4.7 yrs	91.3%/91.9% occ.; WALT 4.7 yrs	91.6%/92.0% occ.; ABR/sq ft $19.61	ABR rising; occupancy modestly lower YoY
Strategic plan & liquidity	Grow grocery‑anchored portfolio; consider future listing/liquidity	Same; not actively pursuing new acquisitions	SRP flexibility improved; NAV updated; future listing timing uncertain	Incremental liquidity mechanics; cautious on timing
Credit facility availability	$62–64m revolver availability subject to covenants	~$66m availability; leverage 52–53% of purchase price	~$66m max availability; leverage ratio 56.4% at FY-end	Adequate, covenant‑sensitive access

Management Commentary

“We believe that the decrease in the value of the real estate assets was largely attributable to an increase in the discount rates and terminal capitalization rates primarily due to the effects of higher market interest rates.”
“Approximately 31% of our annualized base rent… was from non‑grocery big box retailers… [which] continues to be negatively impacted… due to shifting consumer preferences and Internet competition.”
“Stockholders should not rely on the Estimated Per Share NAV in making a decision to buy or sell shares of our common stock.”
Board engaged CBRE Cap to provide DCF‑based NAV range ($18.57–$20.95), selecting $19.17 (weighted average discount rate 8.15%, terminal cap 7.30%) .

Q&A Highlights

Derived from the Q4 NAV update FAQs (Exhibit 99.1):

New NAV and methodology: $19.17 per share based on unlevered DCF for each asset; discount rate 8.15%, terminal cap 7.30% .
DRP/SRP mechanics: DRP purchases at $19.17; SRP repurchases at $15.34 (80% of NAV) .
Portfolio profile: 52 shopping centers, ~7.2 million sq ft, 819 tenants; majority grocery/shadow‑anchored .
Management changes: New CEO (Mark E. Zalatoris) effective Feb 1, 2024; board chair transition after Mr. Goodwin’s passing .

Estimates Context

The company’s Q4 2023 8-K focused on NAV determination and did not furnish EPS or revenue figures for comparison .
Wall Street consensus estimates via S&P Global for Q4 2023 were unavailable for this non-listed REIT; therefore, no beat/miss assessment can be made.*

Key Takeaways for Investors

NAV reset to $19.17 reflects rate-driven valuation compression and prudent discounting for big box risk—plan for continued NAV sensitivity to rates and anchor retail health .
Rent fundamentals are resilient: ABR per square foot increased to $19.61 despite mild occupancy drift; leasing spreads on renewals remained positive .
Liquidity optionality improved: SRP funding now at board discretion rather than DRP proceeds only—enhanced potential to address liquidity requests .
Dividend continuity: Q4 cash distribution sustained at $0.1356 per share; ongoing payouts remain subject to covenant thresholds and operating cash flows .
Rate exposure persists: interest expense elevated; swaps mitigate but do not eliminate floating‑rate sensitivity—monitor SOFR path and swap maturities .
Anchor/tenant risk: elevated focus on non‑grocery big box re‑leasing costs and co‑tenancy clauses; watch bankruptcy/restructuring headlines (e.g., Rite Aid) for occupancy and rent impacts .
Strategic timeline: management reiterates intent to pursue future liquidity but timing is uncertain; near‑term focus remains on portfolio optimization and stable cash flows .

* Estimates unavailable: S&P Global consensus for INRE Q4 2023 was not available; no estimate comparisons can be provided.

Inland Real Estate Income Trust, Inc. (INRE)·Q4 2023 Earnings Summary