InvenTrust Properties Corp. (Form: 10-Q, Received: 05/14/2015 16:26:51)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2015


¨	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: 000-51609

INVENTRUST PROPERTIES CORP.

(Exact name of registrant as specified in its charter)



Maryland		34-2019608
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2809 Butterfield Road, Suite 360, Oak Brook, Illinois		60523
(Address of principal executive offices)		(Zip Code)

855-377-0510

(Registrant’s telephone number, including area code)

_______________________________________________________________

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 the filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). (Check one)



Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

As of May 8, 2015 there were 861,824,777 shares of the registrant’s common stock outstanding.

InvenTrust Properties Corp.

TABLE OF CONTENTS



	Part I - Financial Information	Page
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets at March 31, 2015 and December 31, 2014	1
	Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2015 and 2014	2
	Consolidated Statements of Changes in Equity for the three months ended March 31, 2015 and 2014	3
	Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014	5
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
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	55
	Signatures	56

- i -

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Balance Sheets

(unaudited)

(Dollar amounts in thousands, except share data)



	March 31, 2015			December 31, 2014
Assets
Investment properties:
Land	$	770,765		$	770,220
Building and other improvements	3,032,679			3,030,645
Construction in progress	298,415			265,303
Total	4,101,859			4,066,168
Less accumulated depreciation	(627,597		)	(598,440		)
Net investment properties	3,474,262			3,467,728
Cash and cash equivalents	197,783			598,904
Restricted cash and escrows	32,947			32,950
Investment in marketable securities	283,829			154,753
Investment in unconsolidated entities	118,503			122,203
Accounts and rents receivable (net of allowance of $5,782 and $5,658)	43,906			40,798
Intangible assets, net	81,768			89,705
Deferred costs and other assets	57,939			59,476
Assets of discontinued operations	13,175			2,930,799
Total assets	$	4,304,112		$	7,497,316
Liabilities
Debt	$	1,834,436		$	1,991,608
Accounts payable and accrued expenses	82,589			79,368
Distributions payable	9,336			35,909
Intangible liabilities, net	42,250			43,258
Other liabilities	31,089			24,595
Liabilities of discontinued operations	2,539			1,325,749
Total liabilities	2,002,239			3,500,487
Commitments and contingencies
Stockholders’ Equity
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding	—			—
Common stock, $.001 par value, 1,460,000,000 shares authorized, 861,824,777 and 861,824,777 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	861			861
Additional paid in capital	6,065,060			7,755,471
Accumulated distributions in excess of net loss	(3,869,642		)	(3,820,882		)
Accumulated other comprehensive income	105,469			57,599
Total Company stockholders’ equity	2,301,748			3,993,049
Noncontrolling interests	125			3,780
Total equity	2,301,873			3,996,829
Total liabilities and equity	$	4,304,112		$	7,497,316

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Operations and Comprehensive Income

(unaudited)

(Dollar amounts in thousands, except share data)



	Three Months Ended March 31,
	2015			2014
Income:
Rental income	$	89,855		$	97,997
Tenant recovery income	17,916			18,355
Other property income	1,898			2,137
Total income	109,669			118,489
Expenses:
General and administrative expenses	20,583			14,101
Property operating expenses	20,220			21,722
Real estate taxes	12,569			12,166
Depreciation and amortization	36,988			39,584
Business management fee	—			2,594
Provision for asset impairment	—			6,841
Total expenses	90,360			97,008
Operating income	19,309			21,481
Interest and dividend income	3,291			3,997
Gain on sale of investment properties	728			1,244
Loss on extinguishment of debt	(1,355		)	(1,153		)
Other income	911			2,156
Interest expense	(23,047		)	(31,719		)
Equity in earnings of unconsolidated entities	1,973			712
Realized gain on sale of marketable securities, net	2,711			33
Income (loss) before income taxes	4,521			(3,249		)
Income tax expense	(929		)	(302		)
Net income (loss) from continuing operations	3,592			(3,551		)
Net income from discontinued operations	2,241			134,032
Net income	5,833			130,481
Less: Net income attributable to noncontrolling interests	(8		)	—
Net income attributable to Company	$	5,825		$	130,481
Net income (loss) per common share, from continuing operations, basic and diluted	$	0.00		$	0.00
Net income per common share, from discontinued operations, basic and diluted	$	0.00		$	0.15
Net income per common share, basic and diluted	$	0.00		$	0.15
Weighted average number of common shares outstanding, basic and diluted	861,824,777			912,594,434
Comprehensive income:
Net income attributable to Company	$	5,825		$	130,481
Unrealized gain on investment securities	51,204			10,563
Unrealized loss on derivatives	(360		)	(750		)
Reclassification adjustment for amounts recognized in net income	(2,974		)	184
Comprehensive income attributable to the Company	$	53,695		$	140,478

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Changes in Equity

(unaudited)

(Dollar amounts in thousands)

For the three months ended March 31, 2015



	Number of Shares	Common Stock		Additional Paid-in Capital			Accumulated Distributions in excess of Net Loss			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total
Balance at January 1, 2015	861,824,777	$	861	$	7,755,471		$	(3,820,882	)	$	57,599		$	3,780		$	3,996,829
Net income	—	—		—			5,825			—			8			5,833
Unrealized gain on investment securities	—	—		—			—			51,204			—			51,204
Unrealized loss on derivatives	—	—		—			—			(360		)	—			(360		)
Reclassification adjustment for amounts recognized in net income	—	—		—			—			(2,974		)	—			(2,974		)
Distributions declared	—	—		—			(54,585		)	—			—			(54,585		)
Contributions from noncontrolling interests, net	—	—		—			—			—			160			160
Equity effect of Spin-Off of Xenia Hotels & Resorts, Inc.	—	—		(1,690,411		)	—			—			(3,823		)	(1,694,234		)
Balance at March 31, 2015	861,824,777	$	861	$	6,065,060		$	(3,869,642	)	$	105,469		$	125		$	2,301,873

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Changes in Equity

(unaudited)

(Dollar amounts in thousands)

For the three months ended March 31, 2014



	Number of Shares		Common Stock			Additional Paid-in Capital			Accumulated Distributions in excess of Net Loss			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests		Total
Balance at January 1, 2014	909,855,173		$	909		$	8,063,517		$	(3,870,649	)	$	71,128		$	1,736	$	4,266,641
Net income	—		—			—			130,481			—			—		130,481
Unrealized gain on investment securities	—		—			—			—			10,563			—		10,563
Unrealized loss on derivatives	—		—			—			—			(750		)	—		(750		)
Reclassification adjustment for amounts recognized in net income	—		—			—			—			184			—		184
Distributions declared	—		—			—			(114,155		)	—			—		(114,155		)
Contributions from noncontrolling interests	—		—			—			—			—			374		374
Proceeds from distribution reinvestment program	6,479,958		7			44,965			—			—			—		44,972
Share repurchase program	(1,077,829	)	(1		)	(7,480		)	—			—			—		(7,481		)
Balance at March 31, 2014	915,257,302		$	915		$	8,101,002		$	(3,854,323	)	$	81,125		$	2,110	$	4,330,829

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(unaudited)

(Dollar amounts in thousands)



	Three months ended March 31,
	2015			2014
Cash flows from operating activities:
Net income	$	5,833		$	130,481
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	48,936			86,124
Amortization of above and below market leases, net	(90		)	(277		)
Amortization of debt premiums, discounts and financing costs	2,207			3,521
Straight-line rental income	63			(1,878		)
Provision for asset impairment	—			9,839
Gain on sale of investment properties, net	(728		)	(126,943		)
Loss on extinguishment of debt	1,355			9,955
Equity in earnings of unconsolidated entities	(1,973		)	(479		)
Distributions from unconsolidated entities	2,125			1,798
(Gain), loss and impairment of investment in unconsolidated entities, net	—			(4,481		)
Realized gain on sale of marketable securities	(2,711		)	(33		)
Changes in assets and liabilities:
Accounts and rents receivable	(6,294		)	(11,004		)
Deferred costs and other assets	4,606			(13,113		)
Accounts payable and accrued expenses	(18,376		)	(12,765		)
Other liabilities	5,737			(6,602		)
Prepayment penalties and defeasance	—			(194		)
Net cash flows provided by operating activities	$	40,690		$	63,949
Cash flows from investing activities:
Purchase of investment properties	—			(194,899		)
Acquired in-place and market lease intangibles, net	—			(14,797		)
Capital expenditures and tenant improvements	(15,336		)	(11,625		)
Investment in development projects	(34,624		)	(15,654		)
Proceeds from sale of investment properties, net	1,454			462,178
Proceeds from sale of marketable securities	2,875			356
Consolidation of joint venture	—			(2,944		)
Contributions to unconsolidated entities	—			(27,275		)
Distributions from unconsolidated entities	3,549			15,629
Payment of leasing fees	(507		)	(930		)
Restricted escrows and other assets	808			(4,961		)
Other liabilities	1,064			12,400
Net cash flows (used in) provided by investing activities	$	(40,717	)	$	217,478

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(unaudited)

(Dollar amounts in thousands)



	Three months ended March 31,
	2015			2014
Cash flows from financing activities:
Proceeds from distribution reinvestment program	$	—		$	44,972
Shares repurchased	—			(7,481		)
Distributions paid	(81,155		)	(113,930		)
Proceeds from debt and notes payable	49,961			140,530
Payoffs of debt	(200,000		)	(93,719		)
Principal payments of mortgage debt	(6,683		)	(10,693		)
Payoff of margin securities debt, net	—			(3,937		)
Payment of loan fees and deposits	(1,659		)	283
Contributions from noncontrolling interests, net	160			374
Payments for contingent consideration	—			(4,500		)
Cash contribution to Xenia Hotels & Resorts, Inc.	(165,884		)	—
Property level cash contributed to Xenia Hotels & Resorts, Inc.	(130,080		)	—
Net cash flows used in financing activities	$	(535,340	)	$	(48,101	)
Net (decrease) increase in cash and cash equivalents	(535,367		)	233,326
Cash and cash equivalents, at beginning of period	733,150			319,237
Cash and cash equivalents, at end of period	$	197,783		$	552,563

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(unaudited)

(Dollar amounts in thousands)



	Three months ended March 31,
	2015		2014
Supplemental disclosure of cash flow information:
Cash paid for interest, net capitalized interest of $2,111 and $1,821	$	26,804	$	57,506

Supplemental schedule of non-cash investing and financing activities:
Net equity distributed to Xenia Hotels & Resorts, Inc. (net of cash contributed)	$	1,484,872	$	—
Property surrendered in extinguishment of debt	$	—	$	11,000
Mortgage assumed by buyer upon disposal of property	$	—	$	617,422
Consolidation of assets from joint venture	$	—	$	21,833
Assumption of mortgage debt at consolidation of joint venture	$	—	$	11,967
Liabilities assumed at consolidation of joint venture	$	—	$	446

See accompanying notes to the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Readers of this Quarterly Report should refer to the audited consolidated financial statements of InvenTrust Properties Corp. (the "Company", and formerly known as Inland American Real Estate Trust, Inc.) for the year ended December 31, 2014, which are included in the Company’s 2014 Annual Report on Form 10-K as certain note disclosures contained in such audited consolidated financial statements have been omitted from this Report. In the opinion of management, all adjustments (consisting of normal recurring accruals, except as otherwise noted) necessary for a fair presentation have been included in these financial statements.

1. Organization

Inland American Real Estate Trust, Inc., which on April 16, 2015, changed its name to InvenTrust Properties Corp. (the "Company"), was formed on October 4, 2004 (inception) to acquire and manage a diversified portfolio of commercial real estate, primarily retail, office, industrial, multi-family (both conventional apartments and student housing), and lodging properties, located in the United States. The Company was party to a business management agreement with Inland American Business Manager and Advisor, Inc. (the "Business Manager") pursuant to which it served as the Company's business manager, with responsibility for overseeing and managing its day-to-day operations, under the supervision of the Company's board of directors. The Company was also party to property management agreements with each of its property managers (the "Property Managers").

On March 12, 2014, the Company began the process of becoming fully self-managed by terminating its business management agreement, hiring all of the employees of the Business Manager and acquiring the assets of its Business Manager necessary to perform the functions previously performed by the Business Manager. Similarly, as of March 12, 2014, certain functions performed by the Property Managers, such as property-level accounting, lease administration, leasing, marketing and construction functions, were transitioned to the Company. The self-management transactions were completed on December 31, 2014 when the Company acquired the assets of its property managers and hired substantially all of its employees and the remaining property management functions were transitioned to the Company.

On February 3, 2015, the Company completed the previously announced spin-off (the "Spin-Off") of its lodging subsidiary, Xenia Hotels & Resorts, Inc. ("Xenia"), through a taxable pro-rata distribution by the Company of 95% of the outstanding common stock of Xenia to holders of record of the Company’s common stock as of the close of business on January 20, 2015 (the “Record Date”). Each holder of record of the Company’s common stock received one share of Xenia’s common stock for every eight shares of the Company’s common stock held at the close of business on the Record Date. In lieu of fractional shares, stockholders of the Company received cash. On February 4, 2015, Xenia’s common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “XHR.” In connection with the Spin-Off, the Company entered into certain agreements that, among other things, provide a framework for the Company’s relationship with Xenia after the Spin-Off, including a Transition Services Agreement, an Employee Matters Agreement and an Indemnity Agreement. Following the Spin-Off, the Company no longer has a lodging segment. Therefore, the 46 lodging assets included in the Spin-Off have been classified as discontinued operations as the Spin-Off represents a strategic shift that has had a major effect on the Company's operations and financial results. The assets and liabilities of these 46 lodging assets are classified as assets and liabilities of discontinued operations on the consolidated balance sheet at December 31, 2014 . The operations of these 46 lodging assets have been classified as income from discontinued operations on the consolidated statement of operations and comprehensive income for the three months ended March 31, 2015 and 2014 .

The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries and consolidated joint venture investments. Wholly owned subsidiaries generally consist of limited liability companies (LLCs) and limited partnerships (LPs). The effects of all significant intercompany transactions have been eliminated.

Each property is owned by a separate legal entity which maintains its own books and financial records and each entity's assets are not available to satisfy the liabilities of other affiliated entities, except as otherwise disclosed in "Note 8. Debt".

At March 31, 2015 , the Company owned 142 properties, in which the operating activity is reflected in continuing operations on the consolidated statements of operations and comprehensive income for the three months ended March 31, 2015 and 2014 . At December 31, 2014 , the Company owned 188 properties, of which 46 lodging assets were included in the Spin-Off and

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

classified as assets of discontinued operations. At March 31, 2014 , the Company owned 272 properties, and additionally classified ten properties as held for sale.

The breakdown, by segment, of the 142 owned properties at March 31, 2015 is as follows:



Segment	Property Count	Square Feet / Beds
Retail	108	15,477,279	Square feet
Student Housing	14	7,989	Beds
Non-core	20	6,409,697	Square feet

2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements have been prepared in accordance with GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 periods. Actual results could differ from those estimates.

Refer to the Company's audited financial statements for the year ended December 31, 2014, as certain note disclosures contained in such audited financial statements have been omitted from these interim consolidated financial statements.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective, although it will not affect the accounting for rental related revenues. ASU No. 2014-09 is currently effective for financial statements issued for fiscal years and interim period beginning after December 31, 2016. Early adoption is prohibited. In April 2015, the FASB voted to propose an amendment to the ASU, deferring the effective date one year to annual reporting periods beginning after December 15, 2017 for public entities. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In February 2015, the FASB issued ASU 2015-02, Consolidation . This update includes amendments that change the requirements for evaluating limited partnerships and similar entities for consolidation. Under the new guidance, limited partnerships and similar entities will be considered variable interest entities ("VIEs") unless a scope exception applies. As such, entities that consolidate limited partnerships and similar entities that are considered to be VIEs will be subject to VIE primary beneficiary disclosure requirements, and entities that do not consolidate a VIE will be subject to the disclosure requirements that apply to variable interest holders other than the primary beneficiary. The new guidance also eliminates three of the six criteria for determining if fees paid to a decision maker or service provider are considered to be variable interest in a VIE and changes the criteria used to determine if variable interests in a VIE held by related parties of a reporting entity require the reporting entity to consolidate the VIE. This standard will be effective for financial statements issued by public companies for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements; however, the Company will continue to evaluate the potential impact.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, the Company will apply the new guidance on a retrospective basis and adjust the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance is effective for the Company beginning January 1, 2016. The Company is continuing to evaluate this guidance; however, the Company does not expect its adoption to have a significant impact on the consolidated financial statements.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

3. Acquired Properties

The Company records identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination at fair value. The Company acquired no properties during the three months ended March 31, 2015 .

The Company acquired three properties, including two retail properties and one lodging property for the three months ended March 31, 2014 , for a gross acquisition price of $209,150 . The table below reflects acquisition activity during the three months ended March 31, 2014 .

Segment

Property

Date

Gross Acquisition Price

Square Feet / Rooms

Retail

Suncrest Village

2/13/2014

14,050

93,358

Square Feet

Retail

Plantation Grove

2/13/2014

12,100

73,655

Square Feet

Retail, subtotal

26,150

Lodging

Aston Waikiki Beach ^(a)

2/28/2014

183,000

645

Rooms

Total

209,150

^(a) Aston is the registered trademark of Aston Hotels & Resorts LLC and is the exclusive property of its owner.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed for the three months ended March 31, 2014 , as listed above.



	2014 Acquisitions
Land	$	10,446
Building	154,343
Furniture, fixtures, and equipment	27,087
Total fixed assets	$	191,876
Below market ground lease	9,516
Net other assets and liabilities	7,758
Total	$	209,150

For properties acquired during the three months ended March 31, 2014 , the Company recorded revenue of $3,894 . The Company recorded property net income of $1,683 , excluding related expensed acquisition costs for the three months ended March 31, 2014 . The Company incurred $37 and $1,272 of acquisition and transaction costs during the three months ended March 31, 2015 and 2014 , respectively, that were recorded in general and administrative expenses on the consolidated statements of operations and comprehensive income.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

4. Disposed Properties

The Company sold no operating properties and one land parcel during the three months ended March 31, 2015 for a gross disposition price of $1,410 . The Company sold 223 properties and surrendered one property to the lender for the three months ended March 31, 2014 for a gross disposition price of $1,112,300 . For the three months ended March 31, 2015 and 2014 , the Company had generated net proceeds from the sale of properties of $1,454 and $462,178 , respectively. During the three months ended March 31, 2015 and 2014 , the Company recorded a gain on sale of investment properties of $728 and $1,244 , respectively, in continuing operations.

In line with the Company's adoption of the new accounting standard governing discontinued operations during the year ended December 31, 2014, only disposals representing a strategic shift that have (or will have) a major effect on results and operations would qualify as discontinued operations. On February 3, 2015, the Company completed the previously announced spin-off of its lodging subsidiary, Xenia. The 46 assets included in the Spin-Off have been classified as discontinued operations as the Spin-Off represents a strategic shift that has had a major effect on the Company's operations and financial results. The assets and liabilities of these 46 assets are classified as assets and liabilities of discontinued operations on the consolidated balance sheet at December 31, 2014 . The operations of these 46 assets have been classified as income from discontinued operations on the consolidated statement of operations and comprehensive income for the three months ended March 31, 2015 and 2014 . The major classes of assets and liabilities of discontinued operations as of March 31, 2015 and December 31, 2014 were as follows:



	As of
	March 31, 2015		December 31, 2014
Assets
Investment properties:
Land	$	—	$	338,313
Building and other improvements	—		2,710,647
Construction in progress	—		39,736
Total	—		3,088,696
Less accumulated depreciation	—		(505,986		)
Net investment properties	—		2,582,710
Cash and cash equivalents	—		134,245
Restricted cash and escrows	20		87,296
Accounts and rents receivable (net of allowance of $0 and $251)	—		26,502
Intangible assets, net	—		64,541
Deferred costs and other assets ^(a)	13,155		35,505
Total assets	$	13,175	$	2,930,799
Liabilities
Debt	—		1,199,027
Accounts payable and accrued expenses	11		88,356
Intangible liabilities, net	—		4,212
Other liabilities ^(b)	2,528		34,154
Total liabilities	$	2,539	$	1,325,749

^(a) Deferred costs and other assets at March 31, 2015 include receivables from Xenia related to hotel reserve escrows and property insurance proceeds.

^(b) Other liabilities at March 31, 2015 include tax liabilities related to hotel properties payable by the Company.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

For the three months ended March 31, 2015 , the operations reflected in discontinued operations, shown in the table below, reflect the operations of the 46 lodging properties associated with the Spin-Off. For the three months ended March 31, 2014 , the operations reflected in discontinued operations, shown in the table below, reflect the operations of the 46 lodging properties associated with the Spin-Off, the 52 select service lodging properties sold on November 17, 2014, the 3 stand-alone lodging properties sold in 2014, and the portfolio of 223 net lease properties sold in 2014. All other property disposals are now included as a component of income from continuing operations, consistent with the Company's adoption of ASU No. 2014-08.



	Three Months Ended
	March 31, 2015		March 31, 2014
Revenues	$	68,682	$	291,114
Depreciation and amortization expense	11,934		46,530
Other expenses	55,460		197,853
Provision for asset impairment	—		2,998
Operating income from discontinued operations	$	1,288	$	43,733
Interest expense, income taxes, and other miscellaneous income	953		(26,598		)
Gain on sale of properties, net	—		125,699
Loss on extinguishment of debt	—		(8,802		)
Net income from discontinued operations	$	2,241	$	134,032

Net cash (used in) provided by operating activities from the properties classified as discontinued operations was $(4,010) and $45,670 for the three months ended March 31, 2015 and 2014 , respectively. Net cash (used in) provided by investing activities from the properties classified as discontinued operations was $(14,877) and $229,719 for the three months ended March 31, 2015 and 2014 , respectively.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

5. Investment in Partially Owned Entities

Consolidated Entities

During the fourth quarter 2013, the Company entered into two joint ventures to each develop a lodging property. The Company had ownership interests of 75% in each joint venture. These entities were considered VIEs as defined in FASB ASC 810 because the entities did not have enough equity to finance their activities without additional subordinated financial support. The Company determined it had the power to direct the activities of the VIEs that most significantly impacted the VIEs' economic performance, as well as the obligation to absorb losses of the VIEs that could have potentially been significant to the VIEs or the right to receive benefits from the VIEs that could have potentially been significant to the VIEs. As such, the Company had a controlling financial interest and was considered the primary beneficiary of each of these entities. Therefore, these entities were consolidated by the Company and are included as a part of assets and liabilities of discontinued operations on the consolidated balance sheet at December 31, 2014. These entities were included in the Spin-Off on February 3, 2015 and are no longer part of the Company.

For the VIEs where the Company was the primary beneficiary, the following are the liabilities of the consolidated VIEs which were not recourse to the Company, and the assets that could only have been used to settle those obligations.



	December 31, 2014
Net investment properties	$	39,736
Other assets	1,318
Total assets	41,054
Mortgages, notes and margins payable	(21,214		)
Other liabilities	(6,465		)
Total liabilities	(27,679		)
Net assets	$	13,375

Unconsolidated Entities

The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these properties are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for details of each unconsolidated entity.

These entities are not consolidated by the Company and the equity method of accounting is used to account for these investments. Under the equity method of accounting, the net equity investment of the Company and the Company’s share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive income.



Entity	Description	Ownership %	Investment at March 31, 2015		Investment at December 31, 2014
IAGM Retail Fund I, LLC	Retail shopping centers	55%	$	105,784	$	109,273
Cobalt Industrial REIT II ^(a)	Industrial portfolio	36%	7,486		7,486
15th & Walnut Owner, LLC ^(b)	Student housing	62%	4,653		4,740
Other Unconsolidated Entities	Various real estate investments	Various	580		704
			$	118,503	$	122,203


^(a)	On December 18, 2014, Cobalt sold all of its real estate assets, and the Company recognized its share of the gain on the sale of the assets in equity in earnings for the year ended December 31, 2014. The balance of this joint venture at March 31, 2015 reflects the Company's expected return of the joint venture's remaining cash assets.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

^(b)

On February 4, 2013, the Company entered into a joint venture agreement with Gerding Edlen Investors, LLC ("GE") in order to develop, construct and manage a student housing community on the campus of the University of Oregon in Eugene, Oregon, which was completed later in 2013 and is now fully operational. The joint venture is known as 15th & Walnut Owner, LLC ("Eugene"). The Company contributed $5,200 for an equity stake of 62% . The Company analyzed the joint venture and determined it is a VIE because the entity did not have enough equity to finance its activities without additional subordinated financial support. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also required the agreement of GE, which equates to shared decision making ability, and therefore the Company did not have the power to direct the activities of the VIE that most significantly impacted the VIE's economic performance. As such, the Company has significant influence but does not control Eugene. Therefore, the Company does not consolidate this entity and accounts for its investment in the entity under the equity method of accounting.

On February 21, 2014, the Company purchased its partners' interest in one joint venture, which resulted in the Company obtaining control of the venture. Therefore, as of March 31, 2014 , the Company consolidated this entity, recorded the assets and liabilities of the joint venture at fair value, and recorded a gain of $4,481 on the purchase of this investment during the three months ended March 31, 2014 . This gain is included as a discontinued operation on the consolidated statement of operations and comprehensive income for the three months ended March 31, 2014 .

For the three months ended March 31, 2015 and 2014, the Company recorded no impairment in its unconsolidated entities.

Combined Financial Information

The following tables present the combined condensed financial information for the Company’s investment in unconsolidated entities.



	March 31, 2015			December 31, 2014
Assets:
Real estate assets, net of accumulated depreciation	$	569,531		$	606,053
Other assets	165,718			186,220
Total Assets	$	735,249		$	792,273
Liabilities and Equity:
Mortgage debt	352,928			416,374
Other liabilities	62,380			72,994
Equity	319,941			302,905
Total Liabilities and Equity	$	735,249		$	792,273
Company’s share of Equity	$	132,913		$	136,743
Net excess of cost of investments over the net book value of underlying net assets (net of accumulated depreciation of $1,240 and $1,085, respectively)	(14,410		)	(14,540		)
Carrying value of investments in unconsolidated entities	$	118,503		$	122,203

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)



	Three Months Ended
	March 31, 2015		March 31, 2014
Revenues	$	19,644	$	47,376
Expenses:
Interest expense and loan cost amortization	4,147		12,335
Depreciation and amortization	5,634		17,380
Operating expenses, ground rent and general and administrative expenses	5,828		17,840
Total expenses	15,609		47,555
Net income (loss)	$	4,035	$	(179	)
Company’s share of:
Net income, net of excess basis depreciation of $130 and $128	$	1,973	$	712

The unconsolidated entities had total third party debt of $352,928 at March 31, 2015 that matures as follows:



Year	Amount
2015	$	—
2016	31,692
2017	—
2018	204,028
2019	16,250
Thereafter	100,958
	$	352,928

Of the total outstanding debt, approximately $24,000 is recourse to the Company. It is anticipated that the joint ventures will be able to repay or refinance all of their debt on a timely basis.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

6. Transactions with Related Parties

As of January 1, 2015, the Company is no longer a related party to The Inland Group, Inc. (the "Inland Group") as described below.

On March 12, 2014, the Company entered into a series of agreements and amendments to existing agreements with affiliates of the Inland Group pursuant to which the Company began the process of becoming entirely self-managed (collectively, the "Self-Management Transactions"). On March 12, 2014, as part of the Self-Management Transactions, the Company; the Business Manager; Inland American Lodging Advisor, Inc. a wholly owned subsidiary of the Business Manager ("ILodge"); the Company's property managers, Inland American Industrial Management LLC (“Inland Industrial”), Inland American Office Management LLC (“Inland Office”) and Inland American Retail Management LLC (“Inland Retail”); their parent, Inland American Holdco Management LLC (“Holdco” and collectively with Inland Industrial, Inland Office and Inland Retail, the “Property Managers”); and Eagle I Financial Corp. ("Eagle"), entered into a Master Modification Agreement (the “Master Modification Agreement”) pursuant to which the Company agreed with the Business Manager to terminate the management agreement with the Business Manager, hired all of the Business Manager’s employees and acquired the assets or rights necessary to conduct the functions previously performed for the Company by the Business Manager. The Company also hired certain Property Manager employees and assumed responsibility for performing significant property management activities. The Company assumed certain limited liabilities of the Business Manager and the Property Managers, including accrued liabilities for employee holiday, sick and vacation time for those Business Manager and Property Manager employees who became employees of the Company and liabilities arising after the closing of the Master Modification Agreement under leases and contracts assigned to the Company. The Company did not assume, and the Business Manager is obligated to indemnify the Company against, any liabilities related to the pre-closing operations of the Business Manager. Eagle, an indirect wholly owned subsidiary of the Inland Group, guaranteed the Business Manager’s indemnity and other obligations under the Master Modification Agreement. The Company did not pay an internalization fee or self-management fee in connection with the Master Modification Agreement but reimbursed the Business Manager and Property Managers for specified transaction related expenses and employee payroll costs. The Company entered into a consulting agreement with Inland Group affiliates for a term of three months at $200 per month, which the Company elected not to renew pursuant to its terms.

Concurrently, as part of the Self-Management Transactions, the Company entered into an Asset Acquisition Agreement (the "Asset Acquisition Agreement") with the Property Managers and Eagle, pursuant to which the Company agreed to terminate the management agreements with the Property Managers at the end of 2014, hire certain of the remaining Property Manager employees and acquire the assets or rights necessary to conduct the remaining functions performed for the Company by the Property Managers. The Company agreed to assume certain limited liabilities, including accrued liabilities for employee holiday, sick and vacation time for Property Manager employees that became Company employees and liabilities arising after the closing of the Asset Acquisition Agreement under leases and other contracts that the Company assumed in the transaction. The Company did not assume any liabilities related to the pre-closing operations of the Property Managers, and it did not pay an internalization fee or self-management fee in connection with the Asset Acquisition Agreement. The Company consummated the transactions contemplated thereby on December 31, 2014.

Also on March 12, 2014, as part of the Self-Management Transactions, the Company entered into separate Amended and Restated Master Management Agreements (collectively, the “Amended Property Management Agreements”) with each of the Property Managers (excluding Holdco), pursuant to which the Property Managers continued to provide property management services to the Company through December 31, 2014, other than the property-level accounting, lease administration, leasing, marketing and construction functions that the Company began performing pursuant to the Master Modification Agreement. The Company transitioned the remaining property management functions on December 31, 2014. Many of the employees of the Company's former Business Manager and former Property Managers are now directly employed by the Company. The Amended Property Management Agreements terminated on December 31, 2014 pursuant to their terms.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

The following table summarizes the Company’s related party transactions for the three months ended March 31, 2015 and 2014 .



	For the three months ended				Unpaid amounts as of
	March 31, 2015		March 31, 2014		March 31, 2015		December 31, 2014
General and administrative:
General and administrative reimbursement (a)	$	—	$	3,968	$	—	$	331
Investment advisor fee (b)	—		349		—		80
Total general and administrative to related parties	$	—	$	4,317	$	—	$	411
Property management fees (c)	$	—	$	3,618	$	—	$	75
Business management fee (d)	$	—	$	2,594	$	—	$	—
Loan placement fees (e)	$	—	$	208	$	—	$	—

(a)

In connection with the closing of the Master Modification Agreement and termination of the business management agreement on March 12, 2014 , the Company reimbursed the Business Manager for compensation and other ordinary course out-of-pocket expenses, which totaled approximately $3,401 . In addition, the Company reimbursed the Property Managers approximately $249 for compensation and out-of-pocket expenses incurred between January 1, 2014 and March 12, 2014 for the Property Manager employees the Company hired at closing to approximate the economics as though the Company had hired such employees on January 1, 2014. These costs are reflected in general and administrative reimbursements above.

In addition, the Company has directly retained affiliates of the Business Manager to provide back-office services that were provided to the Company through the Business Manager prior to the termination of the business management agreement. These service agreements are generally terminable without penalty by either party upon 60 days’ notice. These costs are reflected in general and administrative reimbursements above. During the year ended December 31, 2014, the Company sent termination notices for agreements with those affiliates of the Business Manager which provided information technology and investor services to the Company. During the three months ended March 31, 2015 , the Company sent a termination notice for the agreement with those affiliates of the Business Manager which provided human resource services to the Company. The Business Manager and its related parties are entitled to reimbursement for general and administrative expenses of the Business Manager and its related parties relating to the Company's administration.

Unpaid amounts of $411 as of December 31, 2014 are included in accounts payable and accrued expenses on the consolidated balance sheet.


(b)	The Company paid a related party of the Business Manager to purchase and monitor its investment in marketable securities. The Company terminated this agreement during the three months ended March 31, 2015 .

(c)

As part of the Self-Management Transactions, select Property Management fees charged to the Company were reduced effective January 1, 2014 to reflect, among other things, the hiring of the Property Manager employees and the services that were no longer being performed by the Property Managers. The Amended Property Management Agreements reduced the property management fees charged in respect of most of the Company’s multi-tenant retail properties to 3.50% of gross income generated by the applicable property for the first six months of 2014, and reduced fees charged in respect of the Company’s multi-tenant office properties to 3.50% of gross income generated by the applicable property for the first six months of 2014. The Company also agreed to assume responsibility for the compensation-related expenses of the Property Manager employees hired by the Company effective March 1, 2014 .

Unpaid amounts of $75 as of December 31, 2014 are included in other liabilities on the consolidated balance sheet.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

In addition to these fees, the Property Managers received reimbursements of payroll costs for property level employees. The Company reimbursed the Property Managers and other affiliates $2,391 for the three months ended March 31, 2014 .

(d)

In connection with the closing of the Master Modification Agreement and termination of the business management agreement, the Company paid a business management fee for January 2014, which totaled approximately $3,333 . The Company did not pay a business management fee subsequent to January 31, 2014. Pursuant to the letter agreement dated May 4, 2012, the business management fee was reduced for investigation costs exclusive of legal fees incurred in conjunction with the SEC matter. The Master Modification Agreement contained a ninety-day reconciliation of certain payments and reimbursements, including the January 2014 business management fee. The reconciliation was completed during the three months ended June 30, 2014, which resulted in $739 of SEC-related investigation costs and an adjusted January 2014 business management fee expense of $2,594 . Pursuant to the March 12, 2014 Self-Management Transactions, the May 4, 2012 letter agreement by the Business Manager has been terminated.


(e)	The Company pays a related party of the Business Manager 0.2% of the principal amount of each loan placed for the Company. Such costs are capitalized as loan fees and amortized over the respective loan term.

As of March 31, 2015 and December 31, 2014 , the Company had deposited $377 and $376 , respectively, in Inland Bank and Trust, a subsidiary of Inland Bancorp, Inc., an affiliate of The Inland Real Estate Group, Inc.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

7. Investment in Marketable Securities

Investment in marketable securities of $283,829 and $154,753 at March 31, 2015 and December 31, 2014 , respectively, consists primarily of preferred and common stock investments in other REITs and certain real estate related bonds which are classified as available-for-sale securities and recorded at fair value. The cost basis net of impairments of available-for-sale securities was $176,074 and $95,480 as of March 31, 2015 and December 31, 2014 , respectively. The Company's investment in marketable securities includes a 5% ownership of the outstanding common stock of Xenia. The Company held an investment in Xenia securities reported at its fair value of $128,990 as of March 31, 2015 . The cost basis of the Xenia securities held by the Company was $80,748 as of March 31, 2015 , which is equal to 5% of the the net equity, at historical cost basis, contributed to Xenia at the time of the Spin-Off.

Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of comprehensive income until realized. The Company has net accumulated other comprehensive income related to its marketable securities portfolio of $107,755 and $59,273 , which includes gross unrealized losses of $1,712 and $1,328 related to its marketable securities as of March 31, 2015 and December 31, 2014 , respectively. Securities with gross unrealized losses have a related fair value of $9,384 and $11,502 as of March 31, 2015 and December 31, 2014 , respectively. The unrealized gain on the Xenia securities held by the Company was $48,242 as of March 31, 2015 .

The Company’s policy for assessing recoverability of its available-for-sale securities is to record a charge against net earnings when the Company determines that a decline in the fair value of a security drops below the cost basis and believes that decline to be other-than-temporary. Factors in the assessment of other-than-temporary impairment include determining whether (1) the Company has the ability and intent to hold the security until it recovers, and (2) the length of time and degree to which the security’s price has declined. No impairment to available-for-sale securities was recorded for the three months ended March 31, 2015 and 2014.

Dividend income is recognized when earned. During the three months ended March 31, 2015 and 2014 , dividend income of $2,899 and $3,719 , respectively, was recognized and is included in interest and dividend income on the consolidated statements of operations and comprehensive income.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

8. Debt

Mortgages Payable

Mortgage loans outstanding as of March 31, 2015 and December 31, 2014 were $1,840,906 and $2,999,968 , respectively, and had a weighted average interest rate of 5.03% and 4.63% per annum, respectively. Of the mortgage loans outstanding at December 31, 2014 , approximately $1,200,688 related to liabilities of discontinued operations. Mortgage premium and discount, net, was a discount of $6,507 and $9,332 as of March 31, 2015 and December 31, 2014 , respectively. Of this net mortgage discount, $1,661 related to liabilities of discontinued operations at December 31, 2014 . As of March 31, 2015 , scheduled maturities for the Company’s outstanding mortgage indebtedness had various due dates through December 2041, as follows:



Maturity Date	As of March 31, 2015	Weighted average interest rate
2015	$25,800	6.22%
2016	240,652	5.13%
2017	782,604	5.46%
2018	185,296	2.86%
2019	—	—%
Thereafter	606,554	5.03%
Total	$1,840,906	5.03%

The Company is negotiating refinancing debt maturing in 2015. It is anticipated that the Company will be able to repay, refinance or extend the debt maturing in 2015, and the Company believes it has adequate sources of funds to meet short term cash needs related to these refinancings. Of the total outstanding debt for all years, approximately $31,859 is recourse to the Company at March 31, 2015 .

Some of the mortgage loans require compliance with certain covenants, such as debt coverage service ratios, investment restrictions and distribution limitations. As of March 31, 2015 , the Company was in compliance with all mortgage loan requirements except one loan with a carrying value of $2,608 . This loan is not cross collateralized with any other mortgage loans or recourse to the Company. The balance of $2,608 on this loan matures in 2016. As of December 31, 2014 , the Company was in compliance with all such covenants, with the exception of one hotel which was closed for business during the fourth quarter of 2014 due to earthquake damage.

Line of Credit

On February 3, 2015 , the Company entered into an amended and restated credit agreement for a $300,000 unsecured revolving line of credit with KeyBank National Association, JP Morgan Chase Bank National Association and other financial institutions. The accordion feature allows the Company to increase the size of its unsecured line of credit up to $600,000 , subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one twelve-month extension option that the Company may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears interest at a rate equal to LIBOR plus 1.40% and requires the maintenance of certain financial covenants. As of March 31, 2015 , the Company was in compliance with all of the covenants and default provisions under the credit agreement. The Company had $299,963 available under the revolving line of credit as of March 31, 2015 . As of March 31, 2015 , the interest rate of the revolving line of credit was 1.40% .

In 2013, the Company entered into a credit agreement with KeyBank National Association, JP Morgan Chase Bank National Association and other financial institutions to provide for a senior unsecured credit facility in the aggregate amount of $500,000 . The credit facility consisted of a $300,000 senior unsecured revolving line of credit and a total outstanding term loan of $200,000 . As of December 31, 2014, the interest rates of the revolving line of credit and unsecured term loan were 1.60% and 1.67% , respectively. Upon closing the credit agreement, the Company borrowed the full amount of the term loan which remained outstanding as of December 31, 2014 and was repaid during the three months ended March 31, 2015 . As of December 31, 2014, the Company had $300,000 available under the revolving line of credit. This credit agreement was refinanced on February 3, 2015, as described above.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

9. Fair Value Measurements

In accordance with ASC 820, Fair Value Measurement and Disclosures, the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:


•	Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.


•	Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.


•	Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

Recurring Measurements

For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:



	Fair Value Measurements at March 31, 2015
	Using Quoted Prices in Active Markets for Identical Assets		Using Significant Other Observable Inputs			Using Significant Other Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)
Available-for-sale real estate equity securities	$	280,108	$	—		$	—
Real estate related bonds	—		3,721			—
Total assets	$	280,108	$	3,721		$	—
Derivative interest rate instruments	—		(2,360		)	—
Total liabilities	$	—	$	(2,360	)	$	—



	Fair Value Measurements at December 31, 2014
	Using Quoted Prices in Active Markets for Identical Assets		Using Significant Other Observable Inputs			Using Significant Other Unobservable Inputs
	(Level 1)		(Level 2)			(Level 3)
Available-for-sale real estate equity securities	$	151,062	$	—		$	—
Real estate related bonds	—		3,691			—
Total assets	$	151,062	$	3,691		$	—
Derivative interest rate instruments	—		(1,744		)	—
Total liabilities	$	—	$	(1,744	)	$	—

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

Level 1

At March 31, 2015 and December 31, 2014 , the fair value of the available-for-sale real estate equity securities have been valued based upon quoted market prices for the same or similar issues when current quoted market prices were available. Unrealized gains or losses on investment are reflected in unrealized gain (loss) on investment securities in comprehensive income on the consolidated statements of operations and comprehensive income.

Level 2

To calculate the fair value of the real estate related bonds and the derivative interest rate instruments, the Company primarily uses quoted prices for similar securities and contracts. For the real estate related bonds, the Company reviews price histories for similar market transactions. For the derivative interest rate instruments, the Company uses inputs based on data that is observed in the forward yield curve which is widely observable in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements which utilizes Level 3 inputs, such as estimates of current credit spreads. However, as of March 31, 2015 and December 31, 2014 , the Company has assessed that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. As of March 31, 2015 and December 31, 2014 , the Company had outstanding interest rate swap agreements with a notional value of $47,000 and $51,283 , respectively.

Level 3

At March 31, 2015 and December 31, 2014 , the Company had no level three recurring fair value measurements.

Non-Recurring Measurements

The following table summarizes activity for the Company’s assets measured at fair value on a non-recurring basis. The Company recognized certain impairment charges to reflect the investments at their fair values for the three months ended March 31, 2014 . The asset groups that were reflected at fair value through this evaluation are:



	For the three months ended
	March 31, 2015				March 31, 2014
	Fair Value Measure-ments Using Significant Unobservable Inputs (Level 3)		Total Impairment Losses		Fair Value Measure-ments Using Significant Unobservable Inputs (Level 3)		Total Impairment Losses
Investment properties	$	—	$	—	$	22,280	$	6,841
Total	—		—		22,280		6,841

Investment Properties

During the three months ended March 31, 2015 , the Company recognized no impairment.

During the three months ended March 31, 2014 , the Company identified certain properties which may have a reduction in the expected holding period and reviewed the probability of these assets' dispositions. The Company's estimated fair value relating to the investment properties' impairment analysis was based on a comparison of letters of intent or purchase contracts, broker opinions of value and ten-year discounted cash flow models, which includes contractual inflows and outflows over a specific holding period. The cash flows consist of observable inputs such as contractual revenues and unobservable inputs such as forecasted revenues and expenses. These unobservable inputs are based on market conditions and the Company's expected growth rates. For those properties impaired during the three months ended March 31, 2014 , the Company estimated fair value using letters of intent and purchase contracts.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

For the three months ended March 31, 2014 , the Company recorded an impairment of investment properties of $6,841 . Certain properties were impaired prior to disposal. There were no related impairment charges for those properties included in discontinued operations for the three months ended March 31, 2015 . There were $2,998 related impairment charges for those properties included in discontinued operations for the three months ended March 31, 2014 .

Financial Instruments Not Measured at Fair Value

The table below represents the fair value of financial instruments presented at carrying values in the Company's consolidated financial statements as of March 31, 2015 and December 31, 2014 .



	March 31, 2015				December 31, 2014
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Mortgages payable	$	1,840,906	$	1,864,905	$	2,999,968	$	3,022,002
Line of credit	$	37	$	37	$	200,000	$	200,000

The Company estimates the fair value of its mortgages payable using a weighted average effective interest rate of 4.84% per annum. The fair value estimate of the line of credit approximates the carrying value. The assumptions reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar to the Company's. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

10. Income Taxes

The Company has elected and has operated so as to qualify to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with the tax year ended December 31, 2005. So long as it qualifies as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements including a requirement that it currently distribute at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders (the “ 90% Distribution Requirement”). If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income. In addition, the Company owns substantially all of the outstanding stock of a subsidiary REIT, MB REIT (Florida), Inc. (“MB REIT”), which the Company consolidates for financial reporting purposes but which is treated as a separate REIT for federal income tax purposes.

The Company has elected to treat certain of its consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as taxable REIT subsidiaries pursuant to the Internal Revenue Code. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates. The Company's hotels were leased to certain of the Company's taxable REIT subsidiaries. Lease revenue from these taxable REIT subsidiaries and the Company's wholly-owned subsidiaries is eliminated in consolidation. For the three months ended March 31, 2015 and 2014 , an income tax expense of $929 and $302 , respectively, was included on the consolidated statements of operations and comprehensive income.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

11. Segment Reporting

The Company's current portfolio strategy is to tailor and grow the retail and student housing segments and dispose of the remaining non-core assets. The Company's objective has been, and will continue to be, maximizing stockholder value over the long-term. The non-core segment includes multi-tenant office and triple-net properties. The Company evaluates segment performance primarily based on net operating income. Net operating income of the segments excludes interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest and other investment income from corporate investments. The non-segmented assets primarily include the Company’s cash and cash equivalents, investment in marketable securities, construction in progress, investment in unconsolidated entities and notes receivable.

For the three months ended March 31, 2015 , approximately 13% of the Company’s retail and non-core rental revenue from continuing operations was generated by three properties leased to AT&T, Inc. As a result of the concentration of revenue generated from these properties, if AT&T, Inc. were to cease paying rent or fulfilling its other monetary obligations, the Company could have significantly reduced rental revenues or higher expenses until the defaults were cured or the properties were leased to a new tenant or tenants. The student housing segment was not considered in this analysis as leases are on a per bed basis, for a year or less, and are immaterial when evaluated individually.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

The following table summarizes net property operations income by segment as of and for the three months ended March 31, 2015 .



	Total			Retail		Student Housing		Non-core
Rental income	$	89,839		$	49,839	$	17,778	$	22,222
Straight line adjustment	16			774		35		(793		)
Tenant recovery income	17,916			16,087		177		1,652
Other property income	1,898			739		1,082		77
Total income	109,669			67,439		19,072		23,158
Operating expenses	32,789			22,502		6,472		3,815
Net operating income	$	76,880		44,937		12,600		19,343
Non-allocated expenses ^(a)	(57,571		)
Other income and expenses ^(b)	(17,690		)
Equity in earnings of unconsolidated entities	1,973
Provision for asset impairment ^(c)	—
Net income from continuing operations	3,592
Net income from discontinued operations ^(d)	2,241
Less: net income attributable to noncontrolling interests	(8		)
Net income attributable to Company	$	5,825
Balance Sheet Data
Real estate assets, net ^(e)	$	3,257,615		2,021,963		629,464		606,188
Non-segmented assets ^(f)	1,046,497
Total assets	4,304,112
Capital expenditures	$	1,620		1,494		105		21


^(a)	Non-allocated expenses consists of general and administrative expenses and depreciation and amortization.


^(b)	Other income and expenses consists of gain on sale of investment properties, loss on extinguishment of debt, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


^(c)	There was no provision for asset impairment during the three months ended March 31, 2015 .


^(d)	Net income from discontinued operations primarily relates to the lodging properties included in the Spin-Off of Xenia.


^(e)	Real estate assets include intangible assets, net of amortization.


^(f)	Construction in progress is included as non-segmented assets.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

The following table summarizes net property operations income by segment as of and for the three months ended March 31, 2014 .



	Total			Retail		Student Housing		Non-core
Rental income	$	96,226		$	51,492	$	17,241	$	27,493
Straight line adjustment	1,771			1,240		113		418
Tenant recovery income	18,355			16,363		130		1,862
Other property income	2,137			1,101		940		96
Total income	118,489			70,196		18,424		29,869
Operating expenses	33,888			22,454		6,577		4,857
Net operating income	$	84,601		47,742		11,847		25,012
Non-allocated expenses ^(a)	(56,279		)
Other income and expenses ^(b)	(25,744		)
Equity in earnings of unconsolidated entities	712
Provision for asset impairment ^(c)	(6,841		)
Net loss from continuing operations	(3,551		)
Net income from discontinued operations ^(d)	134,032
Less: net income attributable to noncontrolling interests	—
Net income attributable to Company	$	130,481


^(a)	Non-allocated expenses consists of general and administrative expenses, business management fee and depreciation and amortization.


^(b)	Other income and expenses consists of gain on sale of investment properties, loss on extinguishment of debt, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


^(c)	Total provision for asset impairment included $6,841 related to two non-core properties.


^(d)	Net income from discontinued operations primarily relates to the gain on sale of net lease properties sold in 2014.

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

12. Earnings (loss) per Share and Equity Transactions

Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the "common shares"). Diluted EPS is computed by dividing net income (loss) by the common shares plus potential common shares issuable upon exercising options or other contracts. There is an immaterial amount of potentially dilutive common shares.

The basic and diluted weighted average number of common shares outstanding was 861,824,777 and 912,594,434 , for the three months ended March 31, 2015 and 2014 , respectively.

The Company completed a modified “Dutch Auction” tender offer for the purchase of up to $350,000 in value of shares of common stock (the “Offer”) on April 25, 2014. In accordance with rules promulgated by the SEC, the Company had the option to increase the number of shares accepted for payment in the Offer by up to 2% of the outstanding shares without amending or extending the Offer. To avoid any proration to the stockholders that tendered shares, the Company decided to increase the number of shares accepted for payment in the Offer. On May 1, 2014, the Company accepted for purchase 60,665,233 shares of common stock at a purchase price (without brokerage commissions) of $6.50 per share, for an aggregate purchase price of $394,300 , excluding fees and expenses relating to the Offer. The 60,665,233 shares accepted for purchase in the Offer represented approximately 6.61% of the issued and outstanding shares of common stock at the time of purchase. Subsequent to the purchase of approved Offer shares, the final number of shares purchased, allowing for corrections, was 60,761,166 for a final aggregate purchase price of $394,900 as of December 31, 2014, excluding fees and expenses related to the Offer.

13. Commitments and Contingencies

In May 2012, the Company disclosed that the SEC is conducting a non-public, formal, fact-finding investigation ("SEC Investigation") to determine whether there have been violations of certain provisions of the federal securities laws regarding the payment of fees to the Company's former Business Manager and Property Managers, transactions with the Company's former affiliates, timing and amount of distributions paid to the Company's investors, determination of property impairments, and any decision regarding whether it might become a self-administered REIT.

The Company subsequently received three related demands (“Derivative Demands”) by stockholders to conduct investigations regarding claims that the Company's officers, board of directors, former Business Manager, and affiliates of the Company's former Business Manager breached their fiduciary duties to the Company in connection with the matters that the Company disclosed were subject to the SEC Investigation.

Upon receiving the first of the Derivative Demands, on October 16, 2012, the full board of directors responded by authorizing the independent directors to investigate the claims contained in the first Derivative Demand, any subsequent stockholder demands, as well as any other matters the independent directors saw fit to investigate. Pursuant to this authority, the independent directors formed a special litigation committee comprised solely of independent directors to review and evaluate the alleged claims and to recommend to the full board of directors whether the maintenance of a derivative proceeding was in the best interests of the Company. The special litigation committee engaged independent legal counsel and experts to assist in the investigation.

On March 21, 2013, counsel for the stockholders who made the first Derivative Demand filed a derivative lawsuit in the Circuit Court of Cook County, Illinois, on behalf of the Company. The court stayed the case - Trumbo v. The Inland Group, Inc. -pending completion of the special litigation committee's investigation.

On December 8, 2014, the special litigation committee completed its investigation and issued its report and recommendation. The special litigation committee concluded that there is no evidence to support the allegations of wrongdoing in the Derivative Demands. Nonetheless, in the course of its investigation, the special litigation committee uncovered facts indicating that certain then-related parties breached their fiduciary duties to the Company by failing to disclose to the independent directors certain facts and circumstances associated with the payment of fees to its former Business Manager and Property Managers. The special litigation committee determined that it is advisable and in the best interests of the Company to maintain a derivative action against its former Business Manager, Property Managers, and Inland American Holdco Management LLC. The special

INVENTRUST PROPERTIES CORP.

(A Maryland Corporation)

Notes to Consolidated Financial Statements

(Dollar amounts in thousands, except data amounts)

March 31, 2015

(unaudited)

litigation committee found that it was not in the best interests of the Company to pursue claims against any other entities or against any individuals.

On January 20, 2015, the board of directors adopted the report and recommendation of the special litigation committee in full and authorized the Company to file a motion to realign the Company as the party plaintiff in Trumbo v. The Inland Group, Inc., and to take such further actions as are necessary to reject and dismiss claims related to allegations that the board of directors has determined lack merit and to pursue claims against its former Business Manager, Property Managers, and Inland American Holdco Management LLC for breach of fiduciary duties in connection with the failure to disclose facts and circumstances associated with the payment of fees to related parties.

On March 2, 2015, counsel for the stockholders who made the second Derivative Demand filed a derivative lawsuit in the Circuit Court of Cook County, Illinois, on behalf of the Company. The court entered an order consolidating the action with the Trumbo case on March 26, 2015.

On March 24, 2015, the Staff of the SEC informed the Company that it had concluded its investigation and that, based on the information received to date, it did not intend to recommend any enforcement action against the Company.

In connection with the Spin-Off of Xenia from the Company, the Company entered into an Indemnity Agreement with Xenia on August 8, 2014, as amended. Pursuant to the Indemnity Agreement, the Company agreed, to the fullest extent allowed by law or government regulation, to absolutely, irrevocably and unconditionally indemnify, defend and hold harmless Xenia and its subsidiaries, directors, officers, agents, representatives and employees (in each case, in such person’s respective capacity as such) and their respective heirs, executors, administrators, successors and assigns from and against all against losses, including but not limited to “actions” (as defined in the Indemnity Agreement), arising from: the SEC Investigation; the Derivative Demands; the Trumbo action; and the investigation by the special litigation committee of the board of directors of the Company, in each case, regardless of when or where the loss took place, or whether any such loss, claim, accident, occurrence, event or happening is known or unknown, and regardless of whether such loss, claim, accident, occurrence, event or happening giving rise to the loss existed prior to, on or after Xenia’s separation from the Company or relates to, arises out of or results from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, on or after Xenia’s separation from the Company.

While, to the best of its knowledge, the Company does not presently anticipate Xenia or Xenia’s subsidiaries, directors, officers, agents, representatives and employees to be made a party to any actions related to the above matters, in connection with the separation of Xenia from the Company, the Company determined that it was in the best interests of the Company to enter into the Indemnity Agreement.

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the financial statements of the Company.

14. Subsequent Events

Subsequent to March 31, 2015, the Company sold one non-core property for $27,500 and acquired two retail properties for a gross acquisition price of $90,500 . On April 16, 2015, the Company changed its name from Inland American Real Estate Trust, Inc. to InvenTrust Properties Corp.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (“SEC”). The public may read and copy any of the reports that are filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549-3628. The public may obtain information on the operation of the Public Reference room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically.

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about InvenTrust Properties Corp.’s (the “Company”) plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “illustrative” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors, include, among others, the risks, uncertainties and factors set forth under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item IA. Risk Factors,” and the risks and uncertainties related to the following: market and economic volatility experienced by the U.S. economy or real estate industry as a whole, and the local economic conditions in the markets in which the Company’s properties are located; the Company’s ability to identify, execute and complete strategic transactions; the Company’s ability to refinance maturing debt or to obtain new financing on attractive terms; the Company’s ability to identify disposition opportunities and to successfully execute on such dispositions; the Company’s ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any properties acquired in the future and the risks associated with such properties; the Company’s ability to access capital for renovations and acquisitions on terms and at times that are acceptable to us; the impact of leasing and capital expenditures to improve the Company’s properties in order to retain and attract tenants; the Company’s organizational and governance structure, including its recent transition to becoming a self-managed company; loss of members of the Company’s senior management team or key personnel; adverse litigation judgments or settlements; the Company’s ability to collect rent from tenants or to rent space on favorable terms or at all; the economic success and viability of the Company’s anchor retail tenants; forthcoming expirations of certain of the Company’s leases and the Company’s ability to re-lease such properties; changes in the competitive environment in the leasing market and any other market in which the Company operates; events beyond the Company’s control, such as war, terrorist attacks, natural disasters and severe weather incidents, and any uninsured or underinsured loss resulting therefrom; the availability of cash flow from operating activities to fund distributions; future increases in interest rates; actions or failures by the Company’s joint venture partners, including development partners; the Company’s investment in equity and debt securities and in companies that the Company does not control, including Xenia Hotels & Resorts, Inc.; the Company’s status as a real estate investment trust (“REIT”) for federal tax purposes; the cost of compliance with and liabilities under environmental, health and safety laws; changes in real estate and zoning laws and increases in real property tax rates; changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs; changes in governmental regulations and United States accounting standards or interpretations thereof; and the Company’s debt financing, including risk of default, loss and other restrictions placed on the Company.

The following discussion and analysis relates to the three months ended March 31, 2015 and 2014 and as of March 31, 2015 and December 31, 2014. You should read the following discussion and analysis along with our Consolidated Financial Statements and the related notes included in this report.

Overview

Over the past two years, we have been implementing our strategy of focusing our portfolio into three asset classes - retail, lodging and student housing. By tailoring, expanding and refining these three components of our portfolio, our goals have been to enhance long-term stockholder value and position the Company to explore various strategic transactions and liquidity events for our stockholders. Following the completion of the Spin-Off of our lodging segment as described below, as of March 31, 2015 , our portfolio is comprised of 142 properties, excluding development properties, representing 15.5 million square feet of retail space, 7,989 student housing beds, and 6.4 million square feet of non-core space. With our current portfolio, our strategy is to tailor and grow our retail and student housing segments and dispose of our remaining non-core segment. Our objective has been, and will continue to be, maximizing stockholder value over the long-term.

On April 16, 2015, we announced that we changed our name to InvenTrust Properties Corp. Following the completion of the self-management transactions in 2014 and the Spin-Off of our lodging segment in 2015, we determined it was an appropriate time to change our name and develop a brand that is consistent with our strategy. Our new name is consistent with our multi-tenant retail strategy to bring innovation and invention to the way we operate our retail properties. We also continue to develop and expand our student housing business segment, which operates under the University House Communities name.

On a consolidated basis, substantially all of our revenues and cash flows from operations for the three months ended March 31, 2015 were generated by collecting rental payments from our tenants, distributions from unconsolidated entities and dividend income earned from investments in marketable securities. Our largest cash expenses relate to the operation of our properties and the interest expense on our mortgages. Our property operating expenses include, but are not limited to: real estate taxes, regular repair and maintenance, management fees, utilities, and insurance (some of which are recoverable).

In evaluating our financial condition and operating performance, management focuses on the following financial and non-financial indicators, discussed in further detail herein:


•	Funds from Operations ("FFO"), a supplemental non-GAAP (U.S. generally accepted accounting principles, or "GAAP") measure to net income determined in accordance with GAAP;


•	Property net operating income ("NOI"), which excludes interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest, and other investment income from corporate investments;


•	Cash flow from operations as determined in accordance with GAAP;


•	Economic and physical occupancy and rental rates;


•	Leasing activity and lease rollover;


•	Managing operating expenses;


•	Managing general and administrative expenses;


•	Debt maturities and leverage ratios; and


•	Liquidity levels.

Company highlights for the three months ended March 31, 2015

Distributions, including the Spin-off of Lodging Subsidiary, Xenia Hotels & Resorts, Inc.

On February 3, 2015, we completed the spin-off ("Spin-Off") of our subsidiary, Xenia Hotels & Resorts, Inc. ("Xenia"), which at the time owned 46 premium full service, lifestyle and urban upscale hotels and two hotels in development, through the pro rata taxable distribution of 95% of the outstanding common stock of Xenia to holders of record of the Company’s common stock as of the close of business on January 20, 2015 (the "Record Date"). Each holder of record of the Company’s common stock received one share of Xenia’s common stock for every eight shares of the Company’s common stock held at the close of business on the Record Date (the "Distribution"). In lieu of fractional shares, stockholders of the Company received cash. On February 4, 2015, Xenia’s common stock began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "XHR." In connection with the Spin-Off, we entered into certain agreements that, among other things, provide a framework for our relationship with Xenia as two separate companies, including a Transition Services Agreement, an Employee Matters Agreement and an Indemnity Agreement.

Upon completing the Spin-Off, our Board analyzed and reviewed our distribution rate and announced a new distribution rate of $0.13 per share on an annualized basis beginning with the distribution paid in March 2015. A number of factors were considered in establishing the new distribution rate. Xenia generated a substantial portion of our cash flows from operations and as a result, our previous distribution rate was not sustainable after the Spin-Off. In addition, the board of directors determined that it is in the best interest of the Company to retain additional operating cash flow in order to accumulate an appropriate level of capital reserves to enable the Company to tailor and grow its retail and student housing segments, consistent with our strategy and objectives, as well as to address future lease maturities and disposition plans related to several properties in our non-core segment.

In an effort to become a more efficient organization, we will be moving to quarterly distributions in the third quarter of this year. Switching from monthly to quarterly distributions will provide cost savings of approximately $1 million in printing and mailing costs.

Financing Activities

On February 3, 2015, we entered into an amended and restated credit agreement for a $300 million unsecured revolving line of credit with KeyBank National Association, JP Morgan Chase Bank National Association and other financial institutions. The accordion feature allows us to increase the size of our unsecured line of credit up to $600 million, subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one 12-month extension option that we may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears interest at a rate equal to LIBOR plus 1.40% and requires the maintenance of certain financial covenants. As of March 31, 2015 , we had $0.04 million outstanding under the revolving credit facility.

As of March 31, 2015 , we had mortgage debt of approximately $1.8 billion , which has a weighted average interest rate of 5.03% per annum. Our debt maturities remaining for 2015 are $25.8 million . This debt bears interest at a weighted average interest rate of 6.22% per annum. Of the total mortgage debt of $1.8 billion , approximately $209.3 million of that amount is variable rate debt.

Same Store Segment Net Operating Income

The following table represents our same store net operating income for the three months ended March 31, 2015 and 2014 . Same store properties are properties we have owned and operated for the same period during each year. Net operating income is calculated and reconciled to U.S. generally accepted accounting principles ("GAAP") net income in "Part I, Item 1. Note 11 to the Consolidated Financial Statements."



	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014		Increase (decrease)			Increase (decrease)	Average Occupancy March 31, 2015 ^(a)	Average Occupancy March 31, 2014 ^(a)
Retail	$	43,077	$	44,145	$	(1,068	)	(2.4)%	93%	93%
Student Housing	10,585		10,098		487			4.8%	94%	91%
Non-core	19,414		19,476		(62		)	(0.3)%	91%	95%
	$	73,076	$	73,719	$	(643	)	(0.9)%


^(a)	Economic occupancy, shown for the retail and non-core segments, is defined as the percentage of total gross leasable area for which a tenant is obligated to pay rent under the terms of its lease agreement, regardless of the actual use or occupation by that tenant of the area being leased. Physical occupancy is shown for the student housing segment.

Same store net operating income for our retail segment decreased slightly for the three months ended March 31, 2015 compared to the same period in 2014 due to one time transactions, such as termination fee income and recovery income that occurred during the three months ended March 31, 2014. Same store net operating income for our student housing segment increased for the three months ended March 31, 2015 compared to the same period in 2014 due to higher occupancy and higher rental rates. Same store net operating income for our non-core segment remained unchanged with a slight decrease for the three months ended March 31, 2015 compared to the same period in 2014. The slight decrease was attributed to lower occupancy due to one large tenant moving out during the three months ended March 31, 2015.

Outlook

During 2015, we will seek to deliver value by continuing to refine and grow our retail and student housing segments and dispose of our remaining non-core assets.

Our retail portfolio is expected to maintain high occupancy and have manageable lease rollover in the next three years. A significant focus in our retail segment will be to continue to maximize the portfolio by accretive acquisitions in key markets and select dispositions of properties that are in markets that we do not believe offer the same opportunities for growth. Our leasing staff actively seeks to lease space at favorable rates, and our management team is focused on controlling expenses and maintaining strong tenant relationships. We believe the retail segment same store income will be consistent with 2014 results while improving the tenant mix and continuing to upgrade the quality of the tenancies.

We expect increases in operating results compared to 2014 in our student housing portfolio due to increasing rental rates driven by the quality of our property metrics and strong demand. In addition, we anticipate the estimated mid-year delivery of approximately 1,618 beds from three current development projects. We also anticipate the 2016 delivery of approximately 831 beds from two developments. Occasionally, we may recycle capital through strategic dispositions in order to maximize the financial performance of our student housing segment.

We expect to see similar or decreased operating performance in our non-core portfolio. We will look to sell these assets in individual and portfolio transactions or engage in other strategic transactions over time in an effort to maximize their value.

While we believe we will see overall operating performance increases in 2015, we expect to see disposition activity in 2015. This disposition activity could cause us to experience dilution in our operating performance during the period we dispose of properties and prior to reinvestment. We believe that our debt maturities over the next five years are manageable and although we believe interest rates will rise in the future, we anticipate low interest rates to continue this year. We believe we will be able to continue cash distributions at our new distribution rate of $0.13 per share on an annualized basis and anticipate distributions to be funded by cash flow from operations as well as distributions from unconsolidated entities and gains on sales of properties.

Results of Operations

General

Consolidated Results of Operations

This section describes and compares our results of operations for the three months ended March 31, 2015 and 2014 . We generate most of our net income from property operations. In order to evaluate our overall portfolio, management analyzes the operating performance of all properties from period to period and properties we have owned and operated for the same period during each year. Investment properties owned for the entire three months ended March 31, 2015 and 2014 are referred to herein as "same store" properties. Unless otherwise noted, all dollar amounts are stated in thousands (except per share amounts and per square foot amounts).



	For the three months ended
	March 31,
	2015		2014
Net income attributable to Company	$	5,825	$	130,481
Net income per common share, basic and diluted	$	0.00	$	0.15

Our net income decreased $124,648 for the three months ended March 31, 2015 compared to the three months ended March 31, 2014 primarily as a result of the disposition of 140 properties subsequent to March 31, 2014, including the Spin-Off of Xenia. At March 31, 2015 , the Company owned a portfolio of 142 properties, whereas comparatively, at March 31, 2014 , the Company owned 272 properties, and classified ten properties as held for sale. Of the 140 properties disposed subsequent to March 31, 2014, the operations, as well as any gains on sales recognized, for 110 properties are included in income from discontinued operations for the three months ended March 31, 2014 . Income from discontinued operations for the three months ended March 31, 2015 was $2,241 compared to $134,032 at March 31, 2014 , a decrease of $131,791 .

A detailed discussion of our financial performance is outlined below.

Operating Income and Expenses:



	Three Months Ended
	March 31, 2015		March 31, 2014		Increase (Decrease)
Income:
Rental income	$	89,855	$	97,997	$	(8,142	)
Tenant recovery income	17,916		18,355		(439		)
Other property income	1,898		2,137		(239		)
Operating Expenses:
Property operating expenses	$	20,220	$	21,722	$	(1,502	)
Real estate taxes	12,569		12,166		403
Depreciation and amortization	36,988		39,584		(2,596		)
Provision for asset impairment	—		6,841		(6,841		)
General and administrative expenses	20,583		14,101		6,482
Business management fee	—		2,594		(2,594		)

Property Income and Operating Expenses

Rental income consists of basic monthly rent, straight-line rent adjustments, amortization of acquired above and below market leases, other property income, and percentage rental income recorded pursuant to tenant leases. Tenant recovery income consists of reimbursements for real estate taxes, common area maintenance costs, management fees, and insurance costs. Other property income consists of lease termination fees and other miscellaneous property income. Property operating expenses consist of regular repair and maintenance, management fees, utilities, and insurance (some of which are recoverable from the tenant).

•

Total property income decreased $8,820 for the three months ended March 31, 2015 compared to the same period in 2014. Our student housing segment had a revenue increase of $648 due to an increased number of properties through acquisition. The increases were offset by a decrease in our retail segment of $2,757 and a decrease in our non-core segment of $6,711 . Decreases in retail and non-core segments were primarily the result of the sale of properties that did not qualify as discontinued operations.


•	Property operating expenses decreased $1,502 for the three months ended March 31, 2015 compared to 2014. The decrease in property operating expenses was primarily the result of the sale of properties that did not qualify as discontinued operations.

Provision for Asset Impairment

•

For the three months ended March 31, 2015 , we did not recognize any asset impairment. For the three months ended March 31, 2014 , we identified certain properties which may have a reduction in the expected holding period and reviewed the probability that we would dispose of these assets. As a result of our analysis, we identified two non-core properties that we determined were impaired and subsequently were written down to fair value. We recorded a provision for asset impairment of $6,841 for the three months ended March 31, 2014 .

General Administrative Expenses and Business Management Fee

•

The increase in general and administrative expenses of $6,482 to $20,583 for the three months ended March 31, 2015 from $14,101 for the three months ended March 31, 2014 was a result of the completion of the self-management transaction and costs associated with the internalization of functions previously performed by the Business Manager or its related parties. We began internalizing functions such as IT, human resources and property management, which have resulted in an increase in employee salaries and implementation costs, which are reflected in the three months end March 31, 2015. As part of the company reorganization, we eliminated certain roles and incurred severance costs of approximately $1,700 for the three months ended March 31, 2015.


•	We incurred a business management fee of $2,594 for the three months ended March 31, 2014 . As of March 31, 2014, the Company no longer pays a business manager fee.

•

On March 12, 2014 , we entered into a series of agreements and amendments to existing agreements with affiliates of the Inland Group pursuant to which the Company began the process of becoming entirely self-managed (collectively, the "Self-Management Transactions"). On March 12, 2014, as part of the Self-Management Transactions, the Company; the Business Manager; Inland American Lodging Advisor, Inc. a wholly owned subsidiary of the Business Manager ("ILodge"); the Company's property managers, Inland American Industrial Management LLC (“Inland Industrial”), Inland American Office Management LLC (“Inland Office”) and Inland American Retail Management LLC (“Inland Retail”); their parent, Inland American Holdco Management LLC (“Holdco” and collectively with Inland Industrial, Inland Office and Inland Retail, the “Property Managers”); and Eagle I Financial Corp. ("Eagle"), entered into a Master Modification Agreement (the “Master Modification Agreement”) pursuant to which the Company agreed with the Business Manager to terminate the management agreement with the Business Manager, hired all of the Business Manager’s employees and acquired the assets or rights necessary to conduct the functions previously performed for the Company by the Business Manager. The Company also hired certain Property Manager employees and assumed responsibility for performing significant property management activities. The Company assumed certain limited liabilities of the Business Manager and the Property Managers, including accrued liabilities for employee holiday, sick and vacation time for those Business Manager, and Property Manager employees who became employees of the Company and liabilities arising after the closing of the Master Modification Agreement under leases and contracts assigned to the Company. The Company did not assume, and the Business Manager is obligated to indemnify the Company against, any liabilities related to the pre-closing operations of the Business Manager. Eagle, an indirect wholly owned subsidiary of the Inland Group, guaranteed the Business Manager’s indemnity and other obligations under the Master Modification Agreement. The Company did not pay an internalization fee or self-management fee in connection with the Master Modification Agreement but reimbursed the Business Manager and Property Managers for specified transaction related expenses and employee payroll costs. The Company entered into a consulting agreement with Inland Group affiliates for a term of three months at $200 per month, which the Company elected not to renew pursuant to its terms. The Master Modification Agreement contained a ninety-day reconciliation of certain payments and reimbursements, including the January 2014 business management fee. The reconciliation was completed during the three months ended June 30, 2014, which resulted in $728 of SEC-related investigation costs and an adjusted January 2014 business management fee expense of $2,605.

Also on March 12, 2014 , as part of the Self-Management Transactions, the Company entered into separate Amended and Restated Master Management Agreements (collectively, the “Amended Property Management Agreements”) with each of the Property Managers (excluding Holdco), pursuant to which the Property Managers continued to provide property management services to the Company through December 31, 2014, other than the property-level accounting, lease administration, leasing, marketing and construction functions that the Company began performing pursuant to the Master Modification Agreement. The Company transitioned the remaining property management functions on December 31, 2014. Many of the employees of the Company's former Business Manager and former Property Managers are now directly employed by the Company. The Amended Property Management Agreements terminated on December 31, 2014 pursuant to their terms.

Non-Operating Income and Expenses:



	Three Months Ended
Non-operating income and expenses:	March 31, 2015			March 31, 2014			Increase (Decrease)
Interest and dividend income	$	3,291		$	3,997		$	(706	)
Gain on sale of investment properties	728			1,244			(516		)
Loss on extinguishment of debt	(1,355		)	(1,153		)	(202		)
Other income	911			2,156			(1,245		)
Interest expense	(23,047		)	(31,719		)	(8,672		)
Equity in earnings of unconsolidated entities	1,973			712			1,261
Realized gain on sale of marketable securities, net	2,711			33			2,678
Net income from discontinued operations	2,241			134,032			(131,791		)

Interest Expense


•	Interest expense decreased to $23,047 from $31,719 for the three months ended March 31, 2015 and 2014 due to property sales and mortgage pay-downs during the year ended December 31, 2014.

Realized Gain on Sale of Marketable Securities, net


•	Realized gain on securities, net, increased to $2,711 from $33 for the three months ended March 31, 2015 and 2014 , respectively, due to additional securities sold during the three months ended March 31, 2015 compared to the same period in 2014.

Discontinued Operations

In line with our adoption of the new accounting standard governing discontinued operations during the year ended December 31, 2014, only disposals representing a strategic shift that has (or will have) a major effect on our results and operations would qualify as discontinued operations. For the three months ended March 31, 2015 , the Xenia hotels that we spun off are included in discontinued operations. For the three months ended March 31, 2014 , the net lease assets previously classified as held for sale on the consolidated balance sheet as of December 31, 2013 and the entire lodging segment, including the hotels sold during the year-ended December 31, 2014 and the Xenia hotels that we spun off are included in discontinued operations.


•	The decrease in net income from discontinued operations of $131,791 to $2,241 for the three months ended March 31, 2015 from $134,032 for the three months ended March 31, 2014 was primarily due to a decrease in the gain on sale of properties. Gain on sale of properties was $0 for the three months ended March 31, 2015 compared to $125,699 for the three months ended March 31, 2014 .

Segment Reporting

Over the past two years, we have been implementing our strategy of focusing our diverse portfolio of real estate into three asset classes - retail, lodging and student housing. By tailoring, expanding and refining these three components of our portfolio, our goals are to enhance stockholder value and position the Company to explore various strategic transactions and liquidity events for our stockholders. On February 3, 2015, we successfully completed the Spin-Off. As a result of the Spin-Off and other dispositions of our lodging properties, going forward we no longer have a lodging segment. Moving forward, we will seek to deliver value by continuing to tailor and grow our retail and student housing segments, consistent with our strategy and objectives, as well as to address future lease maturities and disposition plans related to several properties in our non-core segment.

We evaluate segment performance primarily based on net operating income. Net operating income of the segments excludes interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest and other investment income from corporate investments.

In order to evaluate our overall portfolio, management analyzes the operating performance of all properties from period to period and properties we have owned and operated for the same period during each year. A total of 136 of our investment properties satisfied the criteria of being owned for the three months ended March 31, 2015 and 2014 , respectively. This same store analysis allows management to monitor the operations of our existing properties for comparable periods to determine the effects of our acquisitions and dispositions on net income.

An analysis of results of operations by segment is below. The tables contained throughout summarize certain key operating performance measures for the three months ended March 31, 2015 and 2014 . The rental rates reflected in retail and non-core are inclusive of rent abatements, lease inducements and straight-line rent GAAP adjustments, and exclusive of tenant improvements and lease commissions. The rental rates reflected for student housing are inclusive of rent concessions. Economic occupancy, shown for our retail and non-core segments, is defined as the percentage of total gross leasable area for which a tenant is obligated to pay rent under the terms of its lease agreement, regardless of the actual use or occupation by that tenant of the area being leased. Physical occupancy, shown for our student housing segment, is defined as the percentage of occupied beds compared to the total number of leasable beds.

Retail Segment

During the three months ended March 31, 2015 , we owned 108 retail assets consisting of 15,477,279 square feet. There were 104 retail same store assets for the three months ended March 31, 2015 and 2014. Our retail segment consists solely of multi-tenant retail properties, primarily community and neighborhood centers and power centers.

We believe that fundamentals in the retail segment are improving. As our community and neighborhood centers and power centers are typically grocery-anchored and necessity-based retail centers, we believe that there continues to be strong demand due to their relative resiliency to e-commerce as compared with other retail asset classes. With limited new development and construction, we believe rental rates will grow, and we have a positive view of this segment. Our strategy includes focusing on key markets across the country and growing our presence in those markets. These key markets share fundamental characteristics such as job growth, increasing wages and population growth. We also may opportunistically dispose of retail properties to take advantage of market conditions or in situations where the properties no longer fit within our strategic objectives.

For current properties in the portfolio, we continue to maintain our expense controls and believe our property marketing programs enhance current tenant relationships. We will support our key market approach by expanding our regional offices and further embed leasing and operations staff in our respective markets. We see this continuing in 2015 and beyond as we continue to source acquisitions in key markets. We also continue to focus on new consumer trends and re-evaluate tenant synergies and complimentary uses as leases mature in an effort to maximize tenant performance at our properties.



	Retail
	As of March 31
	2015	2014
Economic occupancy ^(a)	93%	93%
Rent per square foot ^(b)	$13.87	$13.74
Investment in properties, undepreciated	$2,541,017	$2,628,490

^(a) Economic occupancy is defined as the percentage of total gross leasable area for which a tenant is obligated to pay rent under the terms of its lease agreement, regardless of the actual use or occupation by that tenant of the area being leased. Actual use may be less than economic square footage. Prior year economic occupancy does not include properties sold or classified as discontinued operations.

^(b)

Rent per square foot is computed as annualized rent divided by the total occupied square footage at the end of the period. Annualized rent is computed as revenue for the last month of the period multiplied by twelve months. Annualized rent includes the effect of rent abatements, lease inducements and straight-line rent GAAP adjustments. Prior year rent per square foot does not include properties sold or classified as discontinued operations.

The following table represents lease expirations for the retail segment as of March 31, 2015 :



Lease Expiration Year	Number of Expiring Leases	GLA of Expiring Leases (Sq. Ft.)	Annualized Rent of Expiring Leases	Percent of Total GLA	Percent of Total Annualized Rent	Expiring Rent/Square Foot
2015	191	987,396	$12,098	6.9%	6.0%	$12.25
2016	298	1,566,908	22,929	10.9%	11.4%	14.63
2017	364	1,863,246	31,152	12.9%	15.5%	16.72
2018	295	1,774,501	27,621	12.3%	13.7%	15.57
2019	289	2,419,792	32,926	16.8%	16.3%	13.61
2020	228	1,555,095	21,600	10.8%	10.7%	13.89
2021	67	713,216	9,351	5.0%	4.6%	13.11
2022	43	755,221	8,933	5.2%	4.4%	11.83
2023	50	653,234	9,715	4.5%	4.8%	14.87
2024	59	836,209	10,046	5.8%	5.0%	12.01
Thereafter	81	1,151,946	12,847	8.1%	6.5%	11.15
	2,011	14,389,043	$201,499	100%	100%	$14.00

We believe the percentage of leases expiring annually over the next five years will allow us to capture an appropriate portion of future market rent increases while allowing us to manage any potential re-leasing risk. For purposes of preparing the table, we have not assumed that contractual lease options contained in certain of our leases and which have not yet been exercised as of March 31, 2015 will in fact be exercised.

The following table represents lease spread metrics for leases that commenced in 2015 compared to expiring leases for the prior tenant in the same unit:



	Number of Leases Commenced as of March 31, 2015	GLA SF	New Contractual Rent ($PSF) ^(a)	Prior Contractual Rent ($PSF) ^(a)	Change over prior year ^(a)	Weighted Average Lease Term (Years)	Tenant Improvement Allowance ($PSF)	Lease Commissions ($PSF)
Comparable ^(b) Renewal Leases	71	730,971	$12.70	$12.47	1.83%	5.65	$0.53	$0.06
Comparable ^(b) New Leases	2	7,853	19.92	17.69	12.61%	9.03	38.98	8.19
Non-Comparable Renewal and New Leases	9	39,769	16.20	n/a	n/a	9.15	3.45	7.23
Total	82	778,593	$12.77	$12.52	1.99%	5.86	$1.07	$0.50

^(a) Non-comparable leases are not included in totals.

^(b) Comparable lease is defined as a lease that meets all of the following criteria: same unit, leased within one year of prior tenant, square footage of unit stayed the same or within 10% of prior unit square footage, and rent structure is consistent.

During the three months ended March 31, 2015 , 11 new leases and 71 renewals commenced with gross leasable area totaling 778,593 square feet, of which 73 were comparable. For our comparable new leases, base rent increased by 12.61% from prior base rent, from $17.69 to $19.92 per square foot. The weighted average term for comparable new leases was 9.03 years, with tenant improvement allowances and commissions at $38.98 and $8.19 per square foot, respectively.

Our comparable renewal leases saw rent growth of 1.83% , increasing from $12.47 to $12.70 per square foot. The weighted average term was 5.65 years, with tenant improvement allowances and lease commissions at $0.53 and $0.06 per square foot, respectively. The 9 non-comparable leases commenced with rents starting at $16.20 in year 1 and had a weighted average term of 9.15 years. Tenant improvement allowances and lease commissions were $3.45 and $7.23 per square foot, respectively.

Tenant improvement allowances were primarily given for our new leases. Lease commissions were consistent across the new lease activity. As of December 31, 2014, we had 93 leases set to expire in the first three months of 2015, of which gross leasable area totaled 719,000 square feet. During the three months ended March 31, 2015, we achieved a retention rate of 72% by number of leases.

Comparison of the three months ended March 31, 2015 and 2014

The table below represents operating information for the retail segment and for the same store retail segment consisting of properties acquired prior to January 1, 2014 . The properties in the same store portfolio were owned for the entire three months ended March 31, 2015 and 2014. Activity in the non-same store column for the three months ended March 31, 2015 and 2014 includes properties acquired after March 31, 2014 . Activity in the non-same store column for the three months ended March 31, 2014 also includes properties sold in 2014 that did not qualify as discontinued operations.

For the three months ended March 31, 2015 compared to the same period in 2014, on a same store basis, our retail segment net operating income decreased by $1,068 , or 2.4% , down to $43,077 from $44,145 . This was a result of one time transactions occurring for the three months ended March 31, 2014 , such as four termination fees that totaled $500 and a one time real estate tax recovery of $468. Stable same store occupancy and lease rates have contributed to an increase of rental income for the three months ended March 31, 2015 compared to the three months ended March 31, 2014 . During the same three month period, the total segment net operating income decreased by $2,805 , or 5.9% , to $44,937 for the three months ended March 31, 2015 from $47,742 for the three months ended March 31, 2014 . This decrease was primarily the result of the sold properties that did not qualify as discontinued operations.



Retail	For the three months ended March 31, 2015						For the three months ended March 31, 2014						Same Store Change Favorable/ (Unfavorable)					Total Segment Change Favorable/ (Unfavorable)
	Same Store		Non-Same Store		Total		Same Store		Non-Same Store		Total		Amount			%		Amount			%
Income:
Rental income	$	47,702	$	2,137	$	49,839	$	46,972	$	4,520	$	51,492	$	730		1.6	%	$	(1,653	)	(3.2	)%
Straight line adjustment	625		149		774		974		266		1,240		(349		)	(35.8	)%	(466		)	(37.6	)%
Tenant recovery income	15,050		1,037		16,087		15,298		1,065		16,363		(248		)	(1.6	)%	(276		)	(1.7	)%
Other property income	404		335		739		1,042		59		1,101		(638		)	(61.2	)%	(362		)	(32.9	)%
Total income	63,781		3,658		67,439		64,286		5,910		70,196		(505		)	(0.8	)%	(2,757		)	(3.9	)%
Expenses:
Property operating expenses	11,440		1,198		12,638		11,196		1,707		12,903		(244		)	(2.2	)%	265			2.1	%
Real estate taxes	9,264		600		9,864		8,945		606		9,551		(319		)	(3.6	)%	(313		)	(3.3	)%
Total operating expenses	20,704		1,798		22,502		20,141		2,313		22,454		(563		)	(2.8	)%	(48		)	(0.2	)%
Net operating income	$	43,077	$	1,860	$	44,937	$	44,145	$	3,597	$	47,742	$	(1,068	)	(2.4	)%	$	(2,805	)	(5.9	)%

Economic occupancy as of March 31, 2015	93%		N/A		93%		93%		N/A		93%
Number of properties owned as of March 31, 2015	104		4		108		104		3		107

Student Housing Segment

During the three months ended March 31, 2015 , we owned 14 student housing assets consisting of 7,989 beds. There were 12 student housing same store assets for the three months ended March 31, 2015 and 2014. We are increasing the size of our student housing portfolio through acquisitions and developments. In 2015, we continued construction on five properties. Our rental rates in student housing rose in 2015 compared to 2014 due to favorable market conditions as well as the addition of one property in December 2014.

Student housing industry fundamentals continue to improve. We anticipate new deliveries will be down in 2015 and expect enrollment to continue to grow, especially at our target universities. Furthermore, new deliveries are being absorbed quickly and pre-leasing percentages are higher than recent years. Rent-per-bed and occupancy are predicted to increase in 2015, largely driven by the positive supply-and-demand environment in most markets. Particularly as the demand for modern housing with luxury amenities supersedes that for existing housing, we continue targeting newer core assets consistent with our investment strategy that will be best positioned to succeed in this positive student housing environment. Our student housing team continues to seek and evaluate opportunities for segment growth that are in line with our key community characteristics while minimizing transaction costs by completing acquisitions off-market. We are committed to developing strategic business partnerships and relationships with universities that meet our target criteria in order to capitalize on potential segment growth.



	Student Housing
	For the three months ended March 31
	2015	2014
Physical occupancy ^(a)	95%	92%
End of month scheduled rent per bed per month ^(b)	$761	$746
Investment in properties, undepreciated	$725,021	$711,560

^(a) Physical occupancy is defined as a percentage of the number of beds, excluding models, for which a bed is being physically occupied. The percentage is based on a weighted daily average for the period. Prior year physical occupancy does not include properties sold or classified as discontinued operations.

^(b) End of month scheduled rent per student housing bed per month is defined as average net rental income for the period divided by the average occupied units for the same period. Average net rental income is defined as actual rent charged less concessions. Average occupied units are defined as physical occupancy multiplied by total number of beds (excluding models). Prior year rent per bed per month does not include properties classified as sold or discontinued operations.

Comparison of the three months ended March 31, 2015 and 2014

The table below represents operating information for the total student housing segment and for the same store student housing segment, consisting of properties acquired prior to January 1, 2014 . The properties in the same store portfolio were owned for the entire three months ended March 31, 2015 and 2014. Activity in the non-same store column for the three months ended March 31, 2015 includes a property acquired after March 31, 2014 . Activity in the non-same store column for the three months ended March 31, 2014 also includes a property sold in 2014 that did not qualify for discontinued operations.

For the three months ended March 31, 2015 , on a same store basis, net operating income increased by $487 , or 4.8% , compared to the same period in 2014, due to an increase in occupancy and an increase in rates at the majority of our properties. This includes an increase in occupancy for one of our larger properties to 90% from 82% for the three months ended March 31, 2015 and 2014, respectively. On a total segment basis, our student housing segment saw an increase in net operating income of $753 , or 6.4% , for the three months ended March 31, 2015 compared to the same period in 2014. The increase was driven by an increase in rental rates to $761 from $746 for the three months ended March 31, 2015 and 2014 , respectively, and an increase in occupancy to 95% from 92% for the three months ended March 31, 2015 and 2014 , respectively. This increase was supported by a property that was purchased in the fourth quarter of 2014 and offset by a property sold in 2014 that did not qualify for discontinued operations.



Student Housing	For the three months ended March 31, 2015						For the three months ended March 31, 2014						Same Store Change Favorable/ (Unfavorable)					Total Segment Change Favorable/ (Unfavorable)
	Same Store		Non-Same Store		Total		Same Store		Non-Same Store		Total		Amount			%		Amount			%
Income:
Rental income	$	15,299	$	2,479	$	17,778	$	14,802	$	2,439	$	17,241	$	497		3.4	%	$	537		3.1	%
Straight line adjustment	25		10		35		89		24		113		(64		)	(71.9	)%	(78		)	(69.0	)%
Tenant recovery income	169		8		177		121		9		130		48			39.7	%	47			36.2	%
Other property income	886		196		1,082		796		144		940		90			11.3	%	142			15.1	%
Total income	16,379		2,693		19,072		15,808		2,616		18,424		571			3.6	%	648			3.5	%
Expenses:
Property operating expenses	4,681		625		5,306		4,726		727		5,453		45			1.0	%	147			2.7	%
Real estate taxes	1,113		53		1,166		984		140		1,124		(129		)	(13.1	)%	(42		)	(3.7	)%
Total operating expenses	5,794		678		6,472		5,710		867		6,577		(84		)	(1.5	)%	105			1.6	%
Net operating income	$	10,585	$	2,015	$	12,600	$	10,098	$	1,749	$	11,847	$	487		4.8	%	$	753		6.4	%

Physical occupancy for the period	94%		N/A		95%		91%		N/A		92%
Number of properties owned as of March 31, 2015	12		2		14		12		1		13

Non-core Segment

During the three months ended March 31, 2015 , we owned 20 non-core assets consisting of 6,409,697 square feet. There were 20 non-core same store assets for the three months ended March 31, 2015 and 2014.

Our non-core segment is comprised of multi-tenant office and triple net properties, such as distribution centers, correctional facilities and single-tenant office prope rties. Our strategy includes the disposition of non-core assets in individual and portfolio transactions over time or engage in other strategic transactions in an effort to maximize their value.



	Total Non-core Properties
	As of March 31
	2015	2014
Economic occupancy ^(a)	91%	95%
Base rent per square foot ^(b)	$14.65	$14.47
Investment in properties, undepreciated	$805,761	$940,147

^(b)

The following table represents lease expirations for the non-core segment as of March 31, 2015 :



Lease Expiration Year	Number of Expiring Leases	GLA of Expiring Leases (Sq. Ft.)	Annualized Rent of Expiring Leases ($)	Percent of Total GLA		Percent of Total Annualized Rent		Expiring Rent/ Square Foot ($)
2015	5	80,923	$903	1.4	%	1.1	%	$11.16
2016	9	2,421,297	36,325	41.7	%	42.8	%	15.00
2017	7	1,685,750	20,305	29.0	%	23.9	%	12.04
2018	4	231,315	6,054	4.0	%	7.1	%	26.17
2019	5	538,775	8,182	9.3	%	9.6	%	15.19
2020	1	301,029	9,850	5.2	%	11.6	%	32.72
2021	1	16,675	85	0.3	%	0.1	%	5.10
2022	1	41,690	1,145	0.7	%	1.3	%	27.46
2023	—	—	—	—	%	—	%	—
2024	—	—	—	—	%	—	%	—
Thereafter	2	489,649	2,113	8.4	%	2.5	%	4.32
	35	5,807,103	$84,962	100	%	100	%	$14.63

Leases expiring in 2016 and 2017 represent approximately 42.8% and 23.9% , respectively, of our total annualized rental income of our non-core segment. In 2016 and 2017, the leases on two properties occupied by AT&T, Inc. expire. One property with approximately 1.7 million square feet is in Hoffman Estates, Illinois, which is in the greater metro Chicago market. The second property with approximately 1.5 million square feet is in St. Louis, Missouri. AT&T, Inc. may not renew such leases. If AT&T, Inc. does not renew such leases, based on current market conditions, we may be unable to re-lease some or all of these properties at a comparable rate in a timely manner. To the extent we are able to re-lease any or all of such properties, the tenant improvement and leasing costs associated with any new tenants would likely be significant.

Comparison of the three months ended March 31, 2015 and 2014

The table below represents operating information for the total non-core segment and for the same store non-core segment, consisting of properties acquired prior to January 1, 2014 . The properties in the same store portfolio were owned for the entire three months ended March 31, 2015 and 2014. Activity in the non-same store column for the three months ended March 31, 2014 includes properties sold in 2014 that did not qualify as discontinued operations.

For the three months ended March 31, 2015 , on a same store basis, net operating income decreased slightly by $62 , or 0.3% , compared to the same period in 2014. The slight decrease was attributed to lower occupancy due to one large tenant moving out during the three months ended March 31, 2015. For the three months ended March 31, 2015 , our total segment net operating income decreased by $5,669 , or 22.7% , compared to the same period in 2014. The decrease was a result of the disposition of 20 properties after the first quarter 2014 that did not qualify as discontinued operations.



Non-core	For the three months ended March 31, 2015									For the three months ended March 31, 2014							Same Store Change Favorable/ (Unfavorable)					Total Segment Change Favorable/ (Unfavorable)
	Same Store			Non-Same Store			Total			Same Store			Non-Same Store		Total		Amount			%		Amount			%
Income:
Rental income	$	22,217		$	5		$	22,222		$	22,543		$	4,950	$	27,493	$	(326	)	(1.4	)%	$	(5,271	)	(19.2	)%
Straight line adjustment	(793		)	—			(793		)	(747		)	1,165		418		(46		)	6	%	(1,211		)	(290	)%
Tenant recovery income	1,651			1			1,652			1,570			292		1,862		81			5.2	%	(210		)	(11.3	)%
Other property income	69			8			77			54			42		96		15			27.8	%	(19		)	(19.8	)%
Total income	23,144			14			23,158			23,420			6,449		29,869		(276		)	(1.2	)%	(6,711		)	(22.5	)%
Expenses:
Property operating expenses	2,267			9			2,276			2,619			747		3,366		352			13.4	%	1,090			32.4	%
Real estate taxes	1,463			76			1,539			1,325			166		1,491		(138		)	(10.4	)%	(48		)	(3.2	)%
Total operating expenses	3,730			85			3,815			3,944			913		4,857		214			5.4	%	1,042			21.5	%
Net operating income	$	19,414		$	(71	)	$	19,343		$	19,476		$	5,536	$	25,012	$	(62	)	(0.3	)%	$	(5,669	)	(22.7	)%

Economic occupancy as of March 31, 2015	91%			N/A			91%			95%			N/A		95%
Number of properties owned as of March 31, 2015	20			—			20			20			—		20

Developments

We have student housing development projects that are in various stages of pre-development and development which are funded by borrowings secured by the properties and our equity investments or contributions. Specifically identifiable direct development and construction costs are capitalized, including, where applicable, salaries and related costs, real estate taxes and interest incurred in developing the property.

The properties under development and all amounts set forth below are as of March 31, 2015 .



Name	Location (City, State)	Beds	Total Costs Incurred to Date ($) (a)		Total Estimated Costs ($) (b)		Remaining Costs to be Funded (c)		Note Payable as of March 31, 2015		Estimated Placed in Service Date (d) (e)
UH at Charlotte	Charlotte, NC	671 Beds	$	40,186	$	49,533	$	—	$	19,539	Q2 2015
UH Tempe Phase II Development	Tempe, AZ	242 Beds	20,488		25,237		—		12,603		Q3 2015
UH Georgia Tech	Atlanta, GA	706 Beds	57,054		75,470		—		23,361		Q3 2015
Cityville Venue at the Ballpark	Birmingham, AL	327 Beds	13,466		39,356		290		—		Q1 2016
UH 2100 San Antonio	Austin, TX	504 Beds	5,853		53,542		12,886		1		Q3 2016


(a)	The Total Costs Incurred to Date represent total costs incurred for the development, including any costs allocated to parcels placed in service, but excluding capitalized interest.


(b)	The Total Estimated Costs represent 100% of the development’s estimated costs, including the acquisition cost of the land and building, if any, and excluding capitalized interest. The Total Estimated Costs are subject to change upon, or prior to, the completion of the development and include amounts required to lease the property.


(c)	We anticipate funding remaining development, to the extent any remains, through construction financing secured by the properties and equity contributions.


(d)	The Estimated Placed in Service Date represents the date the certificate of occupancy is currently anticipated to be obtained. Subsequent to obtaining the certificate of occupancy, each property will go through a lease-up period.


(e)	Leasing activities related to student housing properties do not begin until six to nine months prior to the placed in service date.

As part of our restructure and foreclosure of a note receivable, we began overseeing as the secured lender certain roadway and utility infrastructure projects that will provide access to the 240 acre Sacramento Railyards ("Railyards") property. The Railyards property is located immediately adjacent to, and to the north of, Sacramento’s central business district. The infrastructure projects were planned, approved, and funded prior to the foreclosure of the Stan Thomas note. The Railyards property is the subject of a collaborative planning and infrastructure funding effort of various federal, state, and local municipalities and its development is scheduled to be completed in phases during the years 2014-2030. We are currently engaged in efforts to either sell parcels within the Railyards or to sell the entire property to a master developer. We sold a parcel of land to the City of Sacramento for $10,000 on October 2, 2014. The current book value of the Railyards property is $143,104 as of March 31, 2015 .

Liquidity and Capital Resources

As of March 31, 2015 , we had $197.8 million of cash and cash equivalents. We continually evaluate the economic and credit environment and its impact on our business. We believe we are appropriately positioned to have significant liquidity to utilize in executing our strategy.

Short-Term Liquidity and Capital Resources

On a short-term basis, our principal demands for funds are to pay our corporate and operating expenses, as well as property capital expenditures, make distributions to our stockholders, and pay interest and principal payments on our current indebtedness. We expect to meet our short term liquidity requirements from cash flow from operations and distributions from our joint venture investments.

Long-Term Liquidity and Capital Resources

On a long-term basis, our objectives are to maximize revenue generated by our existing properties, to further enhance the value of our retail and student housing segments that produce attractive current yield and long-term risk-adjusted returns to our stockholders and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders. We believe the repositioning of our retail properties and growth of our student housing segment will increase our operating cash flows. Our non-core properties have lease maturities within the next three years that may reduce our cash flows from operations. There is no assurance that we will be able to re-lease these properties at comparable rates or on comparable terms.

Our principal demands for funds have been and will continue to be:


•	to pay our expenses and the operating expenses of our properties;


•	to make distributions to our stockholders;


•	to service or pay-down our debt;


•	to fund capital expenditures and leasing related costs;


•	to invest in properties and portfolios of properties; and


•	to fund development investments.

Generally, our cash needs have been and will be funded from:


•	cash flows from our investment properties;


•	income earned on our investment in marketable securities;


•	distributions from our joint venture investments;


•	proceeds from sales of properties and marketable securities;


•	proceeds from borrowings on properties; and


•	proceeds from our line of credit.

We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases for other securities. Such repurchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

Acquisitions and Dispositions of Real Estate Investments

We acquired no properties during the three months ended March 31, 2015 . Comparatively, for the three months ended March 31, 2014 , we acquired three properties, which were funded with available cash, disposition proceeds, mortgage indebtedness and the proceeds from the distribution reinvestment plan. We invested net cash of approximately $194.9 million for these acquisitions.

On February 3, 2015, we completed the Spin-Off of Xenia, which at the time owned 46 premium full service, lifestyle and urban upscale hotels and two hotels in development.

We sold one parcel of land for a gross disposition price of $1.4 million during the three months ended March 31, 2015 . Comparatively, for the three months ended March 31, 2014 we sold 223 properties, including 182 bank branches, 30 non-core properties, and 11 multi-tenant retail properties, generating net sales proceeds of $462.2 million .

Distributions

We declared cash distributions to our stockholders per weighted average number of shares outstanding during the period from January 1, 2015 to March 31, 2015 totaling $ 54.6 million . For the three months ended March 31, 2015 , we paid cash distributions of $81.2 million . These cash distributions were paid with $40.7 million from our cash flow from operations, $3.5 million provided by distributions from unconsolidated entities, as well as $0.7 million from the gain on sale of a parcel of land. The difference between the cash distributions declared and the cash distributions paid is a timing difference due to our payment of distributions one month in arrears and a reduction of our dividend from $0.50 to $0.13 per share on an annualized basis beginning with the distribution paid in March 2015, which is discussed below.

The following chart summarizes the sources of our cash used to pay distributions. Our primary source of cash is cash flow provided by operating activities from our investments as presented in our cash flow statement. We also include distributions from unconsolidated entities to the extent that the underlying real estate operations in these entities generate these cash flows. Gain on sales of properties relate to net profits from the sale of certain properties. Our presentation is not intended to be an alternative to our consolidated statements of cash flow and does not present all the sources and uses of our cash.

The following table presents a historical view of our distribution coverage.



	Three Months Ended			Twelve months ended December 31,
	March 31, 2015			2014			2013			2012		2011		2010
Cash flow provided by operations	$	40,690		$	340,335		$	422,813		456,221		397,949		356,660
Distributions from unconsolidated entities	3,549			33,891			20,121			31,710		33,954		31,737
Gain on sales of properties ^(a)	728			360,934			456,563			40,691		6,141		55,412
Distributions declared	(54,585		)	(436,875		)	(450,106		)	(440,031	)	(429,599	)	(417,885	)
(Deficiency) Excess	$	(9,618	)	$	298,285		$	449,391		88,591		8,445		25,924



	Three Months Ended			Three Months Ended
	March 31, 2015			March 31, 2014
Cash flow provided by operations	$	40,690		$	63,949
Distributions from unconsolidated entities	3,549			15,629
Gain on sales of properties ^(a)	728			126,943
Distributions declared ^(b)	(54,585		)	(114,155		)
(Deficiency) Excess ^(c)	$	(9,618	)	$	92,366

^(a) Excludes gains reflected on impaired values and excludes gain/loss on transfer of assets.

^(b) Distributions declared for the three months ended March 31, 2015 was calculated based upon one month at the $0.50 per share annualized distribution rate and two months at the $0.13 per share annualized distribution rate.

^(c) Our cash flow from operations in the first quarter were impacted by the Xenia Spin-Off, as well as annual real estate taxes paid in January.



	Three Months Ended March 31,			Twelve months ended December 31,
	2015		2014	2014		2013		2012	2011	2010
Distributions declared	$	54,585	114,155	$	436,875	$	450,106	440,031	429,599	417,885
Distributions paid	81,155		113,930	438,875		449,253		439,188	428,650	416,935
Distributions reinvested	—		44,972	95,832		181,630		191,785	199,591	207,296

On February 3, 2015, we completed the Spin-Off through the pro rata taxable distribution of 95% of the outstanding common stock of Xenia to holders of record of the Company’s common stock as of the close of business on January 20, 2015. Each holder of record of the Company’s common stock received one share of Xenia’s common stock for every eight shares of the Company’s common stock held at the close of business on the Record Date. In lieu of fractional shares, stockholders of the Company received cash. On February 4, 2015, Xenia’s common stock began trading on the NYSE under the ticker symbol “XHR.”

Upon completing the Spin-Off, our Board analyzed and reviewed our distribution rate, and on February 24, 2015, announced a new distribution rate of $0.13 per share on an annualized basis beginning with the distribution paid in March 2015. We expect to fund our distributions from cash generated from operations, distributions from unconsolidated entities, and gain on sales of properties.

A number of factors were considered in establishing the new distribution rate. Xenia generated a substantial portion of our cash flows from operations and as a result, our previous distribution rate was not sustainable after the Spin-Off. In addition, the board of directors determined that it is in the best interest of the Company to retain additional operating cash flow in order to accumulate an appropriate level of capital reserves to enable the Company to tailor and grow its retail and student housing segments, consistent with our strategy and objectives, as well as address future lease maturities and disposition plans related to several properties in our non-core segment.

Stock Offering

We have completed two public offerings of our common stock on a best efforts basis as well as offerings of common stock under our distribution reinvestment plan, or “DRP.” Under the DRP, as amended, the purchase price per share is equal to 100% of the “market price” of a share of the Company’s common stock until the shares become listed for trading. After December 27, 2013 and until August 12, 2014, the DRP purchase price was $6.94 per share. On August 12, 2014, in connection with the contemplated Xenia Spin-Off, we announced that our board of directors voted to suspend the distribution reinvestment plan and have no immediate plans to reinstate the DRP.

During the three months ended March 31, 2014 , we sold a total of 6.5 million shares and generated $ 45.0 million in gross offering proceeds under the distribution reinvestment plan. Our average distribution reinvestment plan participation was 39% for the three months ended March 31, 2014 .

Share Repurchase Program

Our board adopted a Share Repurchase Program ("SRP"), which became effective February 1, 2012 and was suspended as of February 28, 2014. In connection with our SRP, in January 2014, we repurchased 1,077,829 shares requested in fourth quarter 2013. There are no additional requests outstanding. The price per share for all shares repurchased was $6.94 and all repurchases were funded from proceeds from our distribution reinvestment plan. The Board of Directors voted to suspend the SRP on January 29, 2014 in order to comply with the securities laws while we executed a series of strategic transactions. The SRP will remain suspended indefinitely until further notice.

On April 25, 2014, we completed a modified Dutch tender offer, and accepted for purchase 60,761,166 shares for a final aggregate purchase price of $394.9 million as of December 31, 2014, excluding fees and expenses relating to the tender offer and paid by us.

Borrowings

The table below presents, on a consolidated basis, the principal amount, weighted average interest rates and maturity date (by year) on our mortgage debt as of March 31, 2015 .



	2015			2016			2017			2018			2019			Thereafter			Total
Maturing mortgage debt:
Fixed rate	$	25,800		$	197,753		$	782,604		$	65,909		$	—		$	559,554		$	1,631,620
Variable rate	—			42,899			—			119,387			—			47,000			209,286
Total debt	25,800			240,652			782,604			185,296			—			606,554			1,840,906

Weighted average interest rate on mortgage debt:
Fixed rate	6.22		%	5.75		%	5.46		%	4.37		%	—		%	5.31		%	5.41		%
Variable rate	—		%	2.26		%	1.95		%	2.03		%	—		%	1.73		%	2.01		%

For consolidated borrowings, the debt maturity excludes mortgage discounts associated with debt assumed at acquisition of which a discount of $6.5 million , net of accumulated amortization, is outstanding as of March 31, 2015 . Of the total outstanding debt for all years at March 31, 2015 , approximately $31.9 million is recourse to the Company.

As of March 31, 2015 , we had approximately $25.8 million and $240.7 million in mortgage debt maturing in 2015 and 2016, respectively. In 2015, we will continue to negotiate refinancing the remaining 2015 and 2016 debt maturities as well the 2017 maturities of $782.6 million . We currently anticipate that we will be able to repay or refinance all of our debt on a timely basis, and believe we have adequate sources of funds to meet our short term cash needs. However, there can be no assurance that we can obtain such refinancing on satisfactory terms. Volatility in the capital markets could expose us to the risk of not being able to borrow on terms and conditions acceptable to us for future acquisitions or refinancings.

Mortgage loans outstanding as of March 31, 2015 and December 31, 2014 were $1.8 billion and $3.0 billion , respectively, and had weighted average interest rates of 5.03% and 4.63% per annum, respectively. Of these mortgage loans outstanding at December 31, 2014, approximately $1.2 billion related to properties in discontinued operations. As of March 31, 2015 , we had no margin securities payable balance. For the three months ended March 31, 2014, we had a net pay down of $ 3.9 million against our portfolio of marketable securities. For the three months ended March 31, 2015 and 2014, we borrowed approximately $50.0 million and $ 140.5 million , respectively, secured by mortgages on our properties.

On January 30, 2015, we paid off our $200 million unsecured term loan, and on February 3, 2015, we entered into an amended and restated credit agreement for a $300 million unsecured revolving line of credit with KeyBank National Association, JP Morgan Chase Bank National Association and other financial institutions. The accordion feature allows us to increase the size of our unsecured line of credit up to $600 million, subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one 12-month extension option that we may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears interest at a rate equal to LIBOR plus 1.40% and requires the maintenance of certain financial covenants. As of March 31, 2015 , we believe we were in compliance with all of the covenants and default provisions under the credit agreement. As of March 31, 2015 , the interest rate of the revolving line of credit was 1.40% . As of March 31, 2015 , we had $0.04 million outstanding under the revolving credit facility.

Summary of Cash Flows



	Three Months Ended March 31,
	2015			2014
Cash provided by operating activities	$	40,690		$	63,949
Cash (used in) provided by investing activities	(40,717		)	217,478
Cash used in financing activities	(535,340		)	(48,101		)
(Decrease) Increase in cash and cash equivalents	$	(535,367	)	$	233,326
Cash and cash equivalents, at beginning of period	733,150			319,237
Cash and cash equivalents, at end of period	$	197,783		$	552,563

Cash provided by operating activities was $ 40.7 million and $63.9 million for the three months ended March 31, 2015 and 2014 , respectively, and was generated primarily from operating income from property operations, interest, and dividends. Cash provided by operating activities decreased for the three months ended March 31, 2015 and 2014 due to the disposition of 140 properties subsequent to March 31, 2014, including the Spin-Off of Xenia.

Cash used in investing activities was $ 40.7 million for the three months ended March 31, 2015 . Cash provided by investing activities was $217.5 million for the three months ended March 31, 2014 . The cash used in investing activities for the three months ended March 31, 2015 was primarily due to the development of our five student housing properties as well as capital expenditures. The cash provided by investing activities for the three months ended March 31, 2014 was primarily due to the proceeds from the sale of properties associated with the net lease asset sale offset by the acquisition of one lodging property and two retail properties.

Cash used in financing activities was $ 535.3 million and $48.1 million for the three months ended March 31, 2015 and 2014 , respectively. Cash used in financing activities increased mainly because for the three months ended March 31, 2015 , we contributed $165.9 million to Xenia as well as contributed $130.1 million held by the lodging properties to Xenia. Additionally, we paid off debt of $200.0 million and $93.7 million , for the three months ended March 31, 2015 and 2014 , respectively.

We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

Off Balance Sheet Arrangements

Unconsolidated Real Estate Joint Ventures

Unconsolidated joint ventures are those where we have substantial influence over but do not control the entity. We account for our interest in these ventures using the equity method of accounting. For additional discussion of our investments in joint ventures, see "Part I, Item 1. Note 5 to the Consolidated Financial Statements." Our ownership percentage and related investment in each joint venture is summarized in the following table.



Joint Venture	Ownership %	Investment at March 31, 2015
Cobalt Industrial REIT II	36%	$	7,486
IAGM Retail Fund I, LLC	55%	105,784
15th & Walnut Owner, LLC	62%	4,653
Other Unconsolidated Entities	Various	580
		$	118,503

Selected Financial Data

The following table shows our consolidated selected financial data relating to our consolidated historical financial condition and results of operations. Such selected data should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this report (dollar amounts are stated in thousands, except per share amounts).



	As of
	March 31, 2015		December 31, 2014
Balance Sheet Data:
Total assets	$	4,304,112	$	7,497,316
Debt	$	1,834,436	$	1,991,608



	For the three months ended
	March 31, 2015			March 31, 2014
Operating Data:
Total income	$	109,669		$	118,489
Total interest and dividend income	$	3,291		$	3,997
Net income attributable to Company	$	5,825		$	130,481
Net income per common share, basic and diluted	$	0.00		$	0.15
Common Stock Distributions:
Distributions declared to common stockholders	$	54,585		$	114,155
Distributions paid to common stockholders	$	81,155		$	113,930
Distributions declared per weighted average common share	$	0.06		$	0.13
Distributions paid per weighted average common share	$	0.09		$	0.12
Funds from Operations:
Funds from operations (a)	$	57,125		$	112,053
Cash Flow Data:
Net cash flows provided by operating activities	$	40,690		$	63,949
Net cash flows (used in) provided by investing activities	$	(40,717	)	$	217,478
Cash flow used in financing activities	$	(535,340	)	$	(48,101	)
Other Information:
Weighted average number of common shares outstanding, basic and diluted	861,824,777			912,594,434

(a)

We consider Funds from Operations, or "FFO" a widely accepted and appropriate measure of performance for a REIT. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a standard known as FFO, which it believes reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization and impairment charges on depreciable property and after adjustments for unconsolidated partnerships and joint ventures in which we hold an interest. In calculating FFO, impairment charges of depreciable real estate assets are added back even though the impairment charge may represent a permanent decline in value due to decreased operating performance of the applicable property. Further, because gains and losses from sales of property are excluded from FFO, it is consistent and appropriate that impairments, which are often early recognition of losses on prospective sales of property, also be excluded. If evidence exists that a loss reflected in the investment of an unconsolidated entity is due to the write-down of depreciable real estate assets, these impairment charges are added back to FFO. The methodology is consistent with the concept of excluding impairment charges of depreciable assets or early recognition of losses on sale of depreciable real estate assets held by the Company.

FFO is neither intended to be an alternative to "net income" nor to "cash flows from operating activities" as determined by GAAP as a measure of our capacity to pay distributions. We believe that FFO is a better measure of our properties’ operating performance because FFO excludes non-cash items from GAAP net income. FFO is calculated as follows:



		For the three months ended
		March 31,
Funds from Operations:		2015		2014
	Net income attributable to Company	$	5,825	$	130,481
Add:	Depreciation and amortization related to investment properties	48,936		86,124
	Depreciation and amortization related to investment in unconsolidated entities	3,092		17,033
	Provision for asset impairment	—		6,841
	Provision for asset impairment included in discontinued operations	—		2,998

Less:	Gain from property sales and transfer of assets	728		126,943
	Gain (loss) from sales of investment in unconsolidated entities	—		4,481
	Funds from operations	$	57,125	$	112,053

Below is additional information related to certain items that significantly impact the comparability of our FFO and Net Income (Loss) or significant non-cash items from the periods presented:



	For the three months ended
	March 31,
	2015			2014
Straight-line rental income	$	63		$	(1,878	)
Amortization of above/below market leases	(90		)	(277		)
Amortization of mark to market debt discounts	1,256			1,517
(Gain) loss on extinguishment of debt	1,355			9,955
Acquisition costs	37			1,272

Subsequent Events

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. We are also subject to market risk associated with our marketable securities investments.

Interest Rate Risk

Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. If market rates of interest on all of the floating rate debt as of March 31, 2015 permanently increased by 1%, the increase in interest expense on the floating rate debt would decrease future earnings and cash flows by approximately $2.1 million . If market rates of interest on all of the floating rate debt as of March 31, 2015 permanently decreased by 1%, the decrease in interest expense on the floating rate debt would increase future earnings and cash flows by approximately $2.1 million .

With regard to our variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

We monitor interest rate risk using a variety of techniques, including periodically evaluating fixed interest rate quotes on all variable rate debt and the costs associated with converting the debt to fixed rate debt. Also, existing fixed and variable rate loans that are scheduled to mature in the next year or two are evaluated for possible early refinancing and or extension due to consideration given to current interest rates.

We may use financial instruments to hedge exposures to changes in interest rates on loans secured by our properties. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk. In the alternative, we seek to minimize the credit risk in derivative instruments by entering into transactions with what we believe are high-quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

As of March 31, 2015 and December 31, 2014 , the Company had entered into interest rate swap agreements with a notional value of $47,000 and $51,283 , respectively. The fair value liabilities of our interest rate swap contracts outstanding as of March 31, 2015 and December 31, 2014 were $2,360 and $1,744 , respectively.

We have, and may in the future enter into, derivative positions that do not qualify for hedge accounting treatment. The gains or losses resulting from marking-to-market these derivatives at the end of each reporting period are recognized as an increase or decrease in interest expense on our consolidated statements of operations and comprehensive income. In addition, we are, and may in the future be, subject to additional expense based on the notional amount of the derivative positions and a specified spread over LIBOR.

Equity Price Risk

We are exposed to equity price risk as a result of our investments in marketable equity securities. Equity price risk is based on volatility of equity prices and the values of corresponding equity indices.

We incurred no impairments on our investment in marketable securities for the three months ended March 31, 2015 and 2014. We believe that our investments will continue to generate dividend income and we could continue to recognize gains on sale. However, due to general economic and credit market uncertainties it is difficult to project where the REIT market and our portfolio will perform in 2015.

Although it is difficult to project what factors may affect the prices of equity sectors and how much the effect might be, the table below illustrates the impact of a 10% increase and a 10% decrease in the price of the equities held by us would have on the value of the total assets and the book value of the Company as of March 31, 2015 .



					Hypothetical 10% Decrease in		Hypothetical 10% Increase in
	Cost		Fair Value		Market Value		Market Value
Equity securities	$	173,242	$	280,108	$	252,097	$	308,119

Item 4. Controls and Procedures

Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our principal executive officer and our principal financial officer evaluated as of March 31, 2015 , the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures, as of March 31, 2015 , were effective for the purpose of ensuring that information required to be disclosed by us in this report is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the principal executive officer and our principal financial officer as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the three months ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

In May 2012, we disclosed that the SEC was conducting a non-public, formal, fact-finding investigation to determine whether there had been violations of certain provisions of the federal securities laws regarding the payment of fees to our former Business Manager and Property Managers, transactions with our former affiliates, timing and amount of distributions paid to our investors, determination of property impairments, and any decision regarding whether we would become a self-administered REIT (the "SEC Investigation").

We subsequently received three related demands (“Derivative Demands”) by stockholders to conduct investigations regarding claims that our officers, our board of directors, our former Business Manager, and affiliates of our former Business Manager breached their fiduciary duties to us in connection with the matters that we disclosed were subject to the SEC Investigation.

On March 21, 2013, counsel for the stockholders who made the first Derivative Demand filed a derivative lawsuit in the Circuit Court of Cook County, Illinois, on behalf of the Company. The court stayed the case - Trumbo v. The Inland Group, Inc. - pending completion of the special litigation committee's investigation.

On December 8, 2014, the special litigation committee completed its investigation and issued its report and recommendation. The special litigation committee concluded that there is no evidence to support the allegations of wrongdoing in the Derivative Demands. Nonetheless, in the course of its investigation, the special litigation committee uncovered facts indicating that certain then-related parties breached their fiduciary duties to the Company by failing to disclose to the independent directors certain facts and circumstances associated with the payment of fees to our former Business Manager and Property Managers. The special litigation committee determined that it is advisable and in the best interests of the Company to maintain a derivative action against our former Business Manager, Property Managers, and Inland American Holdco Management LLC. The special litigation committee found that it was not in the best interests of the Company to pursue claims against any other entities or against any individuals.

On January 20, 2015, the board of directors adopted the report and recommendation of the special litigation committee in full and authorized the Company to file a motion to realign the Company as the party plaintiff in Trumbo v. The Inland Group, Inc. , and to take such further actions as are necessary to reject and dismiss claims related to allegations that the board of directors has determined lack merit and to pursue claims against our former Business Manager, Property Managers, and Inland American Holdco Management LLC for breach of fiduciary duties in connection with the failure to disclose facts and circumstances associated with the payment of fees to related parties.

In connection with Xenia's filing of the Registration Statement on Form 10 and its separation from the Company, we entered into an Indemnity Agreement with Xenia on August 8, 2014, as amended. Pursuant to the Indemnity Agreement, we agreed, to the fullest extent allowed by law or government regulation, to absolutely, irrevocably and unconditionally indemnify, defend and hold harmless Xenia and its subsidiaries, directors, officers, agents, representatives and employees (in each case, in such person’s respective capacity as such) and their respective heirs, executors, administrators, successors and assigns from and against all against losses, including but not limited to “actions” (as defined in the Indemnity Agreement), arising from: the SEC Investigation; the Derivative Demands; the Trumbo action; and the investigation by the special litigation committee of our board of directors, in each case, regardless of when or where the loss took place, or whether any such loss, claim, accident, occurrence, event or happening is known or unknown, and regardless of whether such loss, claim, accident, occurrence, event or happening giving rise to the loss existed prior to, on or after Xenia’s separation from the Company or relates to, arises out of or results from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, on or after Xenia’s separation from the Company.

While, to the best of its knowledge, we do not presently anticipate Xenia or Xenia’s subsidiaries, directors, officers, agents, representatives and employees to be made a party to any actions related to the above matters, in connection with the separation, we have determined that it is in the Company's best interests to enter into the Indemnity Agreement.

Item 1A. Risk Factors

There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended

December 31, 2014 .

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Not Applicable.

Item 6. Exhibits

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

SIGNATURES

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

InvenTrust Properties Corp.



	/s/ Thomas P. McGuinness

By:	Thomas P. McGuinness
	Director, President and Chief Executive Officer (Principal Executive Officer)
Date:	May 14, 2015


	/s/ Jack Potts

By:	Jack Potts
	Executive Vice President, Chief Financial Officer, Treasurer (Principal Financial Officer)
Date:	May 14, 2015



EXHIBIT NO.	DESCRIPTION
2.1	Separation and Distribution Agreement by and between Inland American Real Estate Trust, Inc. (now known as InvenTrust Properties Corp.) and Xenia Hotels & Resorts, Inc., dated as of January 20, 2015 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 23, 2015).
3.1 *	Seventh Articles of Amendment and Restatement of the Company, as amended.
3.2	Amended and Restated Bylaws of InvenTrust Properties Corp., effective as of June 6, 2014 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on June 6, 2014).
10.1	Transition Services Agreement by and between Inland American Real Estate Trust, Inc. (now known as InvenTrust Properties Corp.) and Xenia Hotels & Resorts, Inc., dated as of February 3, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 9, 2015).
10.2	Employee Matters Agreement by and between Inland American Real Estate Trust, Inc. (now known as InvenTrust Properties Corp.) and Xenia Hotels & Resorts, Inc., dated as of February 3, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 9, 2015).
10.3	First Amendment to Indemnity Agreement by and among Inland American Real Estate Trust, Inc. (now known as InvenTrust Properties Corp.) and Xenia Hotels & Resorts, Inc., dated as of February 3, 2015 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on February 9, 2015).
31.1*	Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)
32.2*	Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)
101	The following financial information from our Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 14, 2015, is formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements (tagged as blocks of text).


*	Filed as part of this Quarterly Report on Form 10-Q.

(1)

In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

Exhibit 3.1

SEVENTH ARTICLES OF AMENDMENT AND RESTATEMENT

INLAND AMERICAN REAL ESTATE TRUST, INC.

Pursuant to the provisions of Section 2-609 of the Maryland General Corporation Law, Inland American Real Estate Trust, Inc., a Maryland corporation (the “Company”), hereby certifies that:

FIRST : The Company desires to amend and restate its charter as currently in effect and hereinafter amended.

SECOND : The following provisions set forth in these Seventh Articles of Amendment and Restatement are all the provisions of the charter of the Company as currently in effect and as hereinafter amended:

Article I
NAME

The name of the corporation is Inland American Real Estate Trust, Inc. So far as may be practicable, the business of the Company shall be conducted and transacted under that name. Under circumstances in which the Board of Directors (as defined below in Article IV ) shall determine that the use of the name “Inland American Real Estate Trust, Inc.” is not practicable, the Board of Directors may permit the use of any other designation or name for the Company.

ARTICLE II
PURPOSES AND POWERS

The purposes for which the Company is formed are to engage in any lawful business or other activity (including, without limitation or obligation, qualifying as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or any successor statute) for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force.

ARTICLE III
PRINCIPAL OFFICE AND RESIDENT AGENT

The address of the principal office of the Company in the State of Maryland is c/o The Corporation Trust Incorporated, 351 West Camden Street, Baltimore, Maryland 21201. The Company may have such other offices (including its principal executive offices) and places of business within or without the State of Maryland as the Board of Directors may from time to time determine. The resident agent of the Company is The Corporation Trust Incorporated, whose address is 351 West Camden Street, Baltimore, Maryland 21201. The Company reserves the right to change its principal office and resident agent at any time.

Exhibit 3.1

ARTICLE IV
DEFINITIONS

For the purposes of these Articles (as defined below) the following terms shall have the following meanings:

“ Affiliate ” means, with respect to any other Person: (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent (10.0%) or more of the outstanding voting securities of such other Person; (ii) any Person ten percent (10.0%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee, general partner or manager of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee, general partner or manager.

“ Articles ” means the charter of the Company.

“ Board of Directors ” means the Board of Directors of the Company or any duly authorized committee thereof.

“ Bylaws ” means the bylaws of the Company, as the same are in effect and may be amended from time to time.

“ Code ” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder or corresponding provisions of subsequent revenue laws.

“ Director(s) ” means the members of the Board of Directors (including Independent Directors).

“ Distributions ” means any distribution of cash, other assets or securities by the Company to its Stockholders.

“ Equity Stock ” means all classes or series of stock of the Company, including, without limit, Common Stock (as defined below in Article V ) and Preferred Stock (as defined below in Article V ).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.

“ Independent Director(s) ” means the Directors who qualify as “independent directors” pursuant to the provisions of the New York Stock Exchange Listed Company Manual in effect from time to time.

“ MGCL ” means the Maryland General Corporation Law, as amended from time to time, or any successor statute.

Exhibit 3.1

“ Person ” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, two or more persons having a joint or common interest or any other legal or commercial entity.

“ Property ” or “ Properties ” means interests in (i) Real Property or (ii) any buildings, structures, improvements, furnishings, fixtures and equipment, whether or not located on the Real Property, in each case owned or to be owned by the Company either directly or indirectly through one or more Affiliates, joint ventures, partnerships or other legal entities.

“ Real Property ” means land, rights or interests in land (including but not limited to leasehold interests), and any buildings, structures, improvements, furnishings, fixtures and equipment located on, or used in connection with, land and rights or interests in land.

“ REIT ” means a “real estate investment trust” as defined by the Code.

“ Stockholders ” means holders of shares of Equity Stock.

ARTICLE V
STOCK

Section 5.1 Authorized Stock . The total number of shares of stock that the Company has authority to issue is 1,500,000,000 shares, of which 1,460,000,000 are shares of common stock, $.001 par value per share (“Common Stock”), and 40,000,000 are shares of preferred stock, $.001 par value per share (“Preferred Stock”). The aggregate par value of all authorized shares of stock having par value is $1,500,000. If shares of one class of stock are classified or reclassified into shares of another class of stock pursuant to this Article V , the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes that the Company has authority to issue shall not be more than the total number of shares of stock set forth in the first sentence of this Section 5.1 . The Board of Directors, with the approval of a majority of the entire Board of Directors and without any action by the Stockholders, may amend the Articles from time to time to increase or decrease the aggregate number of shares of Equity Stock or the number of shares of Equity Stock of any class or series that the Company has authority to issue.

Section 5.2 Common Stock . Subject to the provisions of Article VII and except as otherwise provided in these Articles, each issued and outstanding share of Common Stock shall entitle the holder thereof to one vote on all matters presented for a vote of the holders of Common Stock. Shares of Common Stock do not have cumulative voting rights. The Board of Directors may classify or reclassify any unissued shares of Common Stock from time to time into one or more classes or series of Equity Stock.

Section 5.3 Preferred Stock . The Board of Directors may classify or reclassify any unissued shares of Preferred Stock from time to time, into one or more classes or series of Equity Stock.

Exhibit 3.1

Section 5.4 Classified or Reclassified Shares of Preferred Stock . Prior to issuing classified or reclassified shares of any class or series of Preferred Stock, the Board of Directors by resolution shall: (i) designate that class or series to distinguish it from all other series and classes of Preferred Stock; (ii) specify the number of shares to be included in the class or series of Preferred Stock; (iii) subject to the provisions of Article VII , and as to any class or series of Preferred Stock of the Company outstanding at the time, subject to the express terms of that class or series of Preferred Stock, set or change the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, or terms or conditions of redemption for each class or series of Preferred Stock; and (iv) cause the Company to file articles supplementary with the State Department of Assessments and Taxation of Maryland (“SDAT”). Any of the terms of any class or series of Preferred Stock set or changed pursuant to clause (iii) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the Articles (including determinations by the Board of Directors or other facts or events within the control of the Company) and may vary among holders thereof, provided that the manner in which the facts, events or variations shall operate upon the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, or terms or conditions of redemption of class or series of Preferred Stock is clearly and expressly set forth in the articles supplementary filed with the SDAT.

Section 5.5 No Issuance of Share Certificates . Except to the extent expressly authorized by the Board of Directors, the Company shall not issue share certificates. A Stockholder’s investment shall be recorded on the books and records of the Company. To transfer shares of Equity Stock, a Stockholder shall submit an executed assignment form to the Company, which form shall be provided by the Company or transfer agent upon request. Upon issuance or transfer of shares of Equity Stock, the Company will provide the Stockholder with a statement containing information substantially similar to that which would appear in the legend pursuant to Section 7.2(h) hereof concerning his or her rights with regard to such shares of Equity Stock and any other information required by the Bylaws, the MGCL or other applicable law.

Section 5.6 Fractional Shares of Equity Stock . The Company may, without the consent or approval of any Stockholder, issue fractional shares of Equity Stock, eliminate a fractional interest by rounding up to a full share of Equity Stock, arrange for the disposition of a fractional interest by the Person entitled to it, or pay cash for the fair value of a fractional share of Equity Stock determined as of the time when the Person entitled to receive it is determined.

Section 5.7 Preemptive Rights . Except as may be provided by the Board of Directors in setting the terms of classified or reclassified shares of stock pursuant to Section 5.4 hereof or as may otherwise be provided by contract approved by the Board of Directors, no Stockholder of the Company shall, solely in the capacity of a Stockholder, have any preemptive right to purchase or subscribe for any additional shares of Equity Stock or any other security of the Company that it may issue or sell.

Section 5.8 Articles and Bylaws . The rights of Stockholders and the terms of all shares of Equity Stock shall be subject to the provisions of these Articles and the Bylaws, each as may be supplemented, amended or restated from time to time.

Exhibit 3.1

Section 5.9 Rights of Objecting Stockholders . Holders of shares of Equity Stock are not entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL.

ARTICLE VI
BOARD OF DIRECTORS

Section 6.1 Number and Classification . The number of Directors shall be set by or determined pursuant to the Bylaws but shall never be less than the minimum required by the MGCL. A majority of the Board of Directors shall be comprised of Independent Directors. The Directors may establish any committees as they deem appropriate.

The names of the Directors who shall serve until the next annual meeting of the Stockholders and until their successors are duly elected and qualify are:

J. Michael Borden

Thomas F. Glavin

Brenda G. Gujral

Thomas F. Meagher

Robert D. Parks

Paula Saban

William J. Wierzbicki

Section 6.2 Resignation, Removal or Death . A Director may resign by written notice to the Board of Directors, signed by the Director and effective upon delivery to the Company or any later date specified in the notice. Subject to the rights of holders of one or more classes or series of Preferred Stock to elect or remove one or more Directors, a Director may be removed at any time, with or without cause and without the necessity for concurrence by the Directors, by the affirmative vote of the holders of not less than a majority of the shares of Equity Stock then outstanding and entitled to vote generally in the election of Directors.

Section 6.3 Duties and Powers .

(a) General . The business and affairs of the Company shall be managed under the direction of the Board of Directors. All powers of the Company may be exercised by or under authority of the Board of Directors except as conferred on or reserved to the Stockholders by law or by these Articles or the Bylaws. These Articles and the Bylaws shall be construed with a presumption in favor of the grant of power and authority to the Board of Directors. Any construction of these Articles or the Bylaws or any determination made in good faith by the Board of Directors concerning its powers and authority hereunder or thereunder shall be conclusive. The enumeration and definition of particular powers of the Board of Directors included in these Articles or in the Bylaws shall in no way be construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board of Directors under the MGCL, the general laws of the State of Maryland or any other applicable laws as now or hereafter in force.

Exhibit 3.1

(b) REIT Qualification . The Board of Directors shall use its reasonable best efforts to cause the Company to qualify as a REIT under the Code. In furtherance of the foregoing, the Board of Directors shall use its reasonable best efforts to take such actions as are necessary or appropriate, and may take such actions as in its sole judgment and discretion are advisable, to preserve the status of the Company as a REIT; provided , however , that if a majority of the Board of Directors determines that it is no longer in the best interest of the Company to qualify as a REIT, the Board of Directors may revoke or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code or any successor section. The Board of Directors also may determine that compliance with any restriction or limitation on stock ownership and transfers set forth in Article VII is no longer required for REIT qualification.

(c) Authorization by Board of Directors of Stock Issuance . The Board of Directors may authorize the issuance from time to time of shares of Equity Stock of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of its Equity Stock of any class or series, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to any restrictions or limits set forth in these Articles or the Bylaws.

(d) Distributions . The Company may pay Distributions to its Stockholders, including in shares of Equity Stock of one class payable to holders of shares of Equity Stock of another class, as authorized from time to time by the Board of Directors and declared by the Company. The receipt by any Person in whose name any shares of Equity Stock are registered on the records of the Company or by his, her or its duly authorized agent shall be a sufficient discharge for all Distributions payable or deliverable in respect of such shares of Equity Stock and from all liability related to the application thereof.

(e) Reserved Powers of Board of Directors . The Board of Directors, without any action by any Stockholder of the Company, shall have and may exercise, on behalf of the Company, without limitation, the exclusive power to adopt, alter, amend and repeal any provision of the Bylaws and to make new Bylaws.

Section 6.4 Performance of Duties . A Director shall perform his or her duties as a Director, including his or her duties as a member of a committee of the Board of Directors on which he or she serves, in accordance with Maryland law.

Section 6.5 Determinations By Board of Directors . The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors, shall be final and conclusive and shall be binding upon the Company and every holder of shares of its stock: (i) the amount of the net income of the Company for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its stock or the payment of other distributions on its stock; (ii) the amount of paid-in surplus, net assets, other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; (iii) the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether

Exhibit 3.1

or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); (iv) any interpretation or resolution of any ambiguity with respect to any provision of these Articles (including the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any class or series of Equity Stock) or the Bylaws; (v) the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Company or of any Equity Stock; (vi) the number of shares of any class; (vii) any matter relating to the acquisition, holding and disposition of any assets by the Company; (viii) any matter relating to the qualification of the Company as a REIT or election of a different tax status for the Company; (ix) any interpretation of the terms and conditions of one or more agreements with any Person; or (x) any other matter relating to the business and affairs of the Company or required or permitted by applicable law, these Articles, the Bylaws or otherwise to be determined by the Board of Directors; provided, however, that any determination by the Board of Directors as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination.

ARTICLE VII
RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

Section 7.1 Definitions . For the purpose of this Article VII only, the following terms shall have the following meanings:

“ Aggregate Stock Ownership Limit ” means not more than 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of Equity Stock, or such other percentage determined by the Board of Directors in accordance with Section 7.2(g) hereof. The value of the outstanding shares of Equity Stock shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

“ Beneficial Ownership ” means ownership of shares of Equity Stock by a Person, whether the interest in the shares of Equity Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code; provided, however, that in determining the number of shares Beneficially Owned by a Person, no share shall be counted more than once. Whenever a Person Beneficially Owns shares of Equity Stock that are not actually outstanding (e.g., shares issuable upon the exercise of an option or the conversion of a convertible security) (“ Option Shares ”), then, whenever this Article VII requires a determination of the percentage of outstanding shares of a class of Equity Stock Beneficially Owned by such Person, the Option Shares Beneficially Owned by such Person shall also be deemed to be outstanding, but Option Shares Beneficially Owned by other Persons shall not be deemed to be outstanding. The terms “ Beneficial Owner ”, “ Beneficially Owns ” and “ Beneficially Owned ” shall have correlative meanings.

“ Beneficiary ” means one or more beneficiaries of the Trust as determined pursuant to Section 7.3(e) hereof; provided that each organization must be described in Section 501(c)(3) of the Code and contributions to each organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

Exhibit 3.1

“ Business Day ” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in the State of New York are authorized or required by law, regulation or executive order to close.

“ Common Stock Ownership Limit ” means not more than 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of Common Stock, or such other percentage determined by the Board of Directors in accordance with Section 7.2(g) hereof. The number and value of outstanding shares of Common Stock shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

“ Constructive Ownership ” means ownership of shares of Equity Stock by a Person, whether the interest in the shares of Equity Stock is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code provided, however, that in determining the number of shares Constructively Owned by a Person, no share shall be counted more than once. Whenever a Person Constructively Owns Option Shares, then, whenever this Article VII requires a determination of the percentage of outstanding shares of a class of Equity Stock Constructively Owned by such Person, the Option Shares Constructively Owned by such Person shall also be deemed to be outstanding, but Option Shares Constructively Owned by other Persons shall not be deemed to be outstanding. The terms “ Constructive Owner ,” “ Constructively Owns ” and “ Constructively Owned ” shall have correlative meanings.

“ Excepted Holder ” means a holder of shares of Equity Stock for whom an Excepted Holder Limit is created by the Board of Directors pursuant to Section 7.2(f) hereof.

“ Excepted Holder Limit ” means, provided that the affected holder of Equity Stock agrees to comply with the requirements established by the Board of Directors pursuant to Section 7.2(f) hereof, the percentage limit established by the Board of Directors pursuant to Section 7.2(f) hereof, subject to adjustment pursuant to Section 7.2(g) hereof.

“ Market Price ” means on any date the average of the Closing Price (as defined below) per share for the applicable type of Equity Stock for the five consecutive Trading Days (as defined below) ending on such date. The “Closing Price” on any date means the last sale price, regular way, or, if no sale takes place on that day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the applicable shares of Equity Stock are listed or admitted to trading or, if the shares of Equity Stock are not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by The Nasdaq Stock Market, Inc. (“Nasdaq”), or, if Nasdaq is no longer in use, the principal automated quotation system that may then be in use or, if the shares of Equity Stock are not quoted by any such system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares of Equity Stock selected by the Board of Directors, or, in the absence of a professional market maker, the price at which the Company is then offering shares of Equity Stock to the public if the Company is then engaged in a public offering, or, if the Company is not then offering Equity Stock to the public, the average of the last ten (10) sales

Exhibit 3.1

pursuant to an offering of such shares of Equity Stock if such offering has not concluded, or if such offering has concluded, the average of the last ten (10) purchases by the Company pursuant to its Share Repurchase Program (the “SRP”), and if there are fewer than ten (10) purchases under the SRP, then the average of the actual purchases, or, if the SRP is not then in existence, the price at which a Stockholder may purchase shares of Equity Stock pursuant to the Company’s Distribution Reinvestment Plan (the “DRP”) if the DRP is then in existence, or, if not, the fair market value of such shares of Equity Stock shall be determined by the Company, in its sole discretion. “Trading Day” shall mean a day on which the principal national securities exchange or national automated quotation system on which the applicable shares of Equity Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Equity Stock are not listed or admitted to trading on any national securities exchange or national automated quotation system, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. The term “regular way” means a trade that is effected in a recognized securities market for clearance and settlement pursuant to the rules and procedures of the National Securities Clearing Corporation, as opposed to a trade effected “ex-clearing” for same-day or next-day settlement.

“ Non-Transfer Event ” means any event or other changes in circumstances other than a purported Transfer, including, without limitation, any change in the value of any shares of Equity Stock and any redemption of any shares of Equity Stock.

“ NYSE ” means the New York Stock Exchange.

“ Ownership Limit ” means the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, subject to adjustment pursuant to Section 7.2(g) hereof.

“ Person ” means any individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company, limited liability company, any other legal or commercial entity, a group as that term is used for purposes of Section 13(d)(3) of the Exchange Act or a group to which an Excepted Holder Limit applies.

“ Purported Beneficial Transferee ” shall mean, with respect to any purported Transfer or Non-Transfer Event that results in Excess Stock as defined in Section 7.2(a)(ii) hereof, the purported beneficial transferee (determined under the principles of Section 856(a)(5) of the Code) for whom the Purported Record Transferee would have acquired shares of Equity Stock, if such Transfer had been valid under Section 7.2(a)(i) hereof.

“ Purported Record Transferee ” shall mean, with respect to any purported Transfer or Non-Transfer Event that results in Excess Stock as defined below in Section 7.2(a)(ii) hereof, the purported record transferee of the Equity Stock who would have acquired such record ownership of shares of Equity Stock if such Transfer had been valid under Section 7.2(a)(i) hereof.

Exhibit 3.1

“ Restriction Termination Date ” means the first day on which the Board of Directors determines, pursuant to Section 6.3(b) hereof, that it is no longer in the best interests of the Company to attempt to, or continue to, qualify as a REIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Equity Stock set forth in this Article VII are no longer required for the Company to qualify as a REIT.

“ Transfer ” means any issuance, sale, transfer, gift, assignment, devise or other disposition of, as well as any other event that causes any Person to acquire, Beneficial Ownership, Constructive Ownership or beneficial ownership (determined under the principles of Section 856(a)(5) of the Code) of, or any agreement to acquire Equity Stock or the right to vote or receive dividends or other Distributions on, Equity Stock, including, without limitation, (i) the issuance and transfer to holders of shares or interests of another entity that is merged with the Company of shares of Equity Stock as a result of such merger, (ii) a change in the capital structure of the Company, (iii) a change in the relationship between two or more Persons which causes a change in ownership of shares of Equity Stock by application of either Section 544 of the Code, as modified by Section 856(h) of the Code, or Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code, (iv) the grant or exercise of any option or warrant (or any disposition of any option or warrant, or any event that causes any option or warrant not theretofore exercisable to become exercisable), pledge, security interest or similar right to acquire shares of Equity Stock, (v) any disposition of any securities or rights convertible into or exchangeable for shares of Equity Stock or any interest in shares of Equity Stock or any exercise of any such conversion or exchange right, (vi) Transfers of interests in other entities that result in changes in Beneficial Ownership, Constructive Ownership or beneficial ownership (determined under the principles of Section 856(a)(5) of the Code) of Equity Stock, and (vii) any change in the value of one class or series of shares of Equity Stock relative to the value of any other class or series of shares of Equity Stock; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned, Beneficially Owned or beneficially owned (determined under the principles of Section 856(a)(5) of the Code) and whether by operation of law or otherwise. The terms “ Transferring ” and “ Transferred ” shall have correlative meanings.

“ Trust ” means any separate trust created and administered in accordance with the terms of Section 7.3 hereof for the exclusive benefit of any Beneficiary.

“ Trustee ” means the Person unaffiliated with both the Company and any Prohibited Owner that is a “United States person” within the meaning of Section 7701(a)(30) of the Code and is appointed by the Company to serve as trustee of the Trust.

Section 7.2 Equity Stock .

(f) Ownership Limitations . Prior to the Restriction Termination Date:

(i) Basic Restrictions . (A) (1) No Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Equity Stock in excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Common Stock in excess of the Common Stock Ownership Limit and (3) no Excepted Holder shall Beneficially Own or Constructively Own shares of Equity Stock in excess of the

Exhibit 3.1

Excepted Holder Limit for such Excepted Holder; (B) no Person shall Beneficially Own or Constructively Own shares of Equity Stock to the extent that such Beneficial Ownership or Constructive Ownership of Equity Stock would result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year); (C) no Person shall Beneficially Own or Constructively Own shares of Equity Stock to the extent that such Beneficial Ownership or Constructive Ownership would result in the Company failing to qualify as a REIT; (D) no Person shall Beneficially Own or Constructively Own shares of Equity Stock to the extent that such Beneficial Ownership or Constructive Ownership would cause any income of the Company that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Company actually owning or Constructively Owning an interest in a tenant that is described in Section 856(d)(2)(B) of the Code); and (E) any Transfer of shares of Equity Stock that, if effective, would result in the Equity Stock being beneficially owned by fewer than one hundred (100) persons (determined under principles applicable to Section 856(a)(5) of the Code) shall be void ab initio , and the intended transferee shall acquire no rights in such shares of Equity Stock.

(ii) Transfer in Trust . If any Transfer of shares of Equity Stock or Non-Transfer Event occurs that, if effective or otherwise, would result in any Person Beneficially Owning or Constructively Owning shares of Equity Stock in violation of Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof, then (A) that number of shares of Equity Stock the Beneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof (rounded up to the next whole share) (such shares the “Excess Stock”) shall be automatically transferred to a Trust for the benefit of a Beneficiary, as described in Section 7.3 hereof, effective as of the close of business on the Business Day immediately preceding the date of such Transfer or Non-Transfer Event, and such Person (or, if different, the direct or Beneficial Owner of such shares) shall acquire no rights in such shares (or shall be divested of its rights in such shares); (B) if the transfer to the Trust described in subclause (A) of this sentence would not be effective for any reason to prevent the violation of Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof, then the Transfer of that number of shares of Equity Stock that otherwise would cause any Person to violate Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof shall be void ab initio , and the intended transferee shall acquire no rights in such shares of Equity Stock; or (C) if the transfer to the Trust described in subclause (A) of this sentence as a result of a Non-Transfer Event would not be effective for any reason to prevent the violation of Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof, then the Non-Transfer Event that otherwise would cause any Person to violate Section 7.2(a)(i)(A) , (B) , (C) or (D) hereof shall be void ab initio to the extent that the Company has the legal ability to void the Non-Transfer Event, and the intended transferee shall acquire no rights in such shares of Equity Stock. To the extent that, upon a transfer of shares pursuant to this Section 7.2(a)(ii) , a violation of any provision of this Article VII

Exhibit 3.1

would nonetheless be continuing (for example where the ownership of shares by a single Trust would violate the 100 stockholder requirement applicable to REITs), then shares shall be transferred to that number of Trusts, each having a distinct Trustee and a Beneficiary or Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of this Article VII.

(g) Remedies for Breach . If the Board of Directors or its designee (including any duly authorized committee of the Board of Directors) shall at any time determine in good faith that a Transfer or Non-Transfer Event has taken place that results in a violation of Section 7.2(a) hereof or that a Person intends to acquire or has attempted to acquire Beneficial Ownership, Constructive Ownership or beneficial ownership (determined under the principles of Section 856(a)(5) of the Code) of any shares of Equity Stock in violation of Section 7.2(a) hereof (whether or not such violation is intended), the Board of Directors or its designee may take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or Non-Transfer Event, including, without limitation, causing the Company to redeem shares of Equity Stock, refusing to give effect to such Transfer on the books and records of the Company or instituting proceedings to enjoin such Transfer or Non-Transfer Event; provided, however, that any Transfer or attempted Transfer or Non-Transfer Event that results in violation of Section 7.2(a) hereof shall automatically result in the transfer to the Trust described therein, and, where applicable, such Transfer (or Non-Transfer Event) shall be void ab initio as provided in Section 7.2(a) hereof irrespective of any action (or non-action) by the Board of Directors or its designee.

(h) Owners Required to Provide Information . Prior to the Restriction Termination Date:

(i) every owner of more than five percent (5.0%) (or such lower percentage as required by the Code) of the outstanding shares of Equity Stock shall, within thirty days after the end of each taxable year, give written notice to the Company stating the name and address of such owner, the number of shares of each class and series of Equity Stock Beneficially Owned and a description of the manner in which the shares are held and any additional information as the Company may request in order to determine the effect, if any, of such Beneficial Ownership on the Company’s status or qualification as a REIT and to ensure compliance with the Ownership Limits and the other restrictions set forth herein;

(ii) each Person who is a Beneficial Owner or Constructive Owner of Equity Stock and each Person (including the stockholder of record) who is holding Equity Stock for a Beneficial Owner or Constructive Owner shall provide to the Company any information as the Company may request, in good faith, in order to determine the Company’s status or qualification as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance; and

(iii) any Person who acquires or attempts or intends to acquire Beneficial Ownership, Constructive Ownership or beneficial ownership (determined under the

Exhibit 3.1

principles of Section 856(a)(5) of the Code) of shares of Equity Stock that will or may violate Section 7.2(a)(i) , or any Person who held or would have owned shares of Equity Stock that resulted in a Transfer to the Trust pursuant to the provisions of Section 7.2(a)(ii) , shall (A) immediately give written notice to the Company of such event or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice to the Company and (B) shall provide to the Company any other information as the Company may request in order to determine the effect, if any, of such Transfer on the Company’s status or qualification as a REIT.

(i) Remedies Not Limited . Nothing contained in this Section 7.2 shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Company and the interests of its Stockholders in preserving the Company’s status or qualification as a REIT.

(j) Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Article VII, or any definition contained in this Article VII, the Board of Directors shall have the power to determine the application of the provisions of this Article VII or any such definition with respect to any situation based on the facts known to the Board of Directors. In the event any section of this Article VII requires an action by the Board of Directors and these Articles fail to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of these Articles or the MGCL.

(k) Exceptions .

(i) Subject to Section 7.2(a)(i)(B) , (C) and (D) hereof, the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from one or both of the Ownership Limits, and may establish or increase an Excepted Holder Limit for such Person if: (i) the Board of Directors obtains such representations and undertakings from the Person as are reasonably necessary to ascertain that its Beneficial Ownership or Constructive Ownership of Equity Stock will not violate Section 7.2(a)(i)(B) , (C) and (D) hereof; (ii) such Person does not, and represents that it will not, actually own or Constructively Own, an interest in a tenant of the Company (or a tenant of any entity owned or controlled by the Company) that would cause the Company to actually own, or Constructively Own, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant, and the Board of Directors obtains such representations and undertakings from the Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Company (or an entity owned or controlled by the Company) derives (and is expected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the Board of Directors, rent from such tenant would not adversely affect the Company’s ability to qualify as a REIT shall not be treated as a tenant of the Company); and (iii) such Person agrees that any violation or attempted violation of such covenants (or other action that is contrary to the restrictions contained in

Exhibit 3.1

this Article VII) will result in such shares of Equity Stock being automatically transferred to a Trust in accordance with Section 7.2(a)(ii) and Section 7.3 hereof.

(ii) Prior to granting any exception pursuant to Section 7.2(f)(i) hereof, the Board of Directors may require a ruling from the Internal Revenue Service or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Company’s status or qualification as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception or waiver establishing or increasing an Excepted Holder Limit.

(iii) Subject to Section 7.2(a)(i)(B) , (C) and (D) hereof, any person acting as an underwriter who participates in a public offering or a private placement of Equity Stock (or securities convertible into or exchangeable for Equity Stock) may Beneficially Own or Constructively Own shares of Equity Stock (or securities convertible into or exchangeable for Equity Stock) in excess of the Aggregate Stock Ownership Limit, the Common Stock Ownership Limit, or both such limits, but only to the extent necessary to enable the person to act as an underwriter in connection with the public offering or private placement.

(iv) The Board of Directors may only reduce the Excepted Holder Limit for an Excepted Holder: (1) with the written consent of such Excepted Holder at any time; or (2) pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a percentage that is less than the Aggregate Stock Ownership Limit and/or Common Stock Ownership Limit, as applicable.

(l) Increase or Decrease in Aggregate Stock Ownership and Common Stock Ownership Limits . Subject to Section 7.2(a)(i)(B) , (C) and (D) hereof, the Board of Directors may from time to time increase one or both of the Ownership Limits for one or more Persons and decrease one or both of the Ownership Limits for all other Persons (or all Persons); provided, however, that any decreased Ownership Limit will not be effective for any Person whose percentage ownership in shares of Equity Stock is in excess of such decreased Ownership Limit until such time as such Person’s percentage of shares of Equity Stock equals or falls below the decreased Ownership Limit, but any further acquisition of shares of Equity Stock in excess of such percentage ownership of shares of Equity Stock will be in violation of the Ownership Limit and, provided further, that the new Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49.9% in value of the outstanding shares of Equity Stock or otherwise result in the Company being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year).

Exhibit 3.1

(m) Legend . Except as otherwise provided in these Articles or the Bylaws, nothing in this Section 7.2(h) shall be interpreted to limit the authority of the Board of Directors to issue some or all of the shares of any or all of the classes or series of Equity Stock of the Company without certificates. Each certificate for shares of Equity Stock, if certificated, shall bear a legend that substantially describes the foregoing restrictions on transfer and ownership, or, instead of such legend, the certificate, if any, may state that the Company will furnish a full statement about certain restrictions on transferability to a holder of Equity Stock on request and without charge.

Section 7.3 Transfer of Equity Stock in Trust .

(a) Trust for Excess Stock . Upon any purported Transfer or Non-Transfer Event that results in Excess Stock pursuant to Section 7.2(a) hereof, such Excess Stock shall be deemed to have been transferred to the Trustee, as trustee of a Trust for the benefit of one or more Beneficiaries. Such Transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or Non-Transfer Event that results in the Transfer to the Trust pursuant to Section 7.2(a) hereof. Shares of Excess Stock so held in trust shall be issued and outstanding stock of the Company. The Purported Record Transferee shall have no rights in such Excess Stock except as provided in Section 7.3(c) or (d) hereof. The Purported Beneficial Transferee shall have no rights in such Excess Stock except as provided in Section 7.3(c) or (d) hereof. Each Beneficiary shall be designated by the Company as provided in Section 7.3(e) hereof.

(b) Dividend and Voting Rights . The Trustee shall have all voting rights and rights to dividends or other distributions with respect to Excess Stock, which rights shall be exercised for the exclusive benefit of the Beneficiary. Any dividend or other distribution paid prior to the discovery by the Company that shares of Equity Stock have been Transferred to the Trustee shall be paid by the recipient of such dividend or other distribution to the Trustee upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the Trustee. Any dividends or other distributions so paid over to the Trustee shall be held in trust for the Beneficiary. The Purported Record Transferee shall have no voting rights with respect to Excess Stock and, subject to Maryland law, effective as of the date that shares of Equity Stock have been Transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee prior to the discovery by the Company that shares of Equity Stock have been Transferred to the Trustee and (ii) to resubmit a proxy or recast such vote in accordance with the desires of the Trustee acting for the benefit of the Beneficiary; provided, however, that if the Company has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VII, until the Company has received notification that shares of Equity Stock have been Transferred into a Trust, the Company shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

Exhibit 3.1

(c) Sale of Excess Stock by Trustee . Within 20 days of receiving notice from the Company that shares of Equity Stock have been Transferred to the Trust, the Trustee shall sell the shares held in the Trust to a Person, designated by the Trustee, whose ownership of the shares will not violate the ownership limitations set forth in Section 7.2(a) hereof. Upon such sale, the interest of the Beneficiary in the shares sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee or Purported Beneficial Transferee, as applicable, and to the Beneficiary as provided in this Section 7.3(c) . The Purported Beneficial Transferee or Purported Record Transferee, as applicable, shall receive the lesser of (i) the price paid by the Purported Beneficial Transferee or Purported Record Transferee, as applicable, for the shares or, if the Purported Beneficial Transferee or Purported Record Transferee, as applicable, did not give value for the shares in connection with the event causing the shares to be held in the Trust ( e.g. , in the case of a gift, devise or other such transaction), the Market Price of the shares on the day of the event causing the shares to be held in the Trust and (ii) the sale proceeds received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares held in the Trust. The Trustee may reduce the amount payable to the Purported Beneficial Transferee or Purported Record Transferee, as applicable, by the amount of dividends and other distributions which have been paid to the Purported Beneficial Transferee or Purported Record Transferee, as applicable, and are owed by the Purported Beneficial Transferee or Purported Record Transferee, as applicable, to the Trustee pursuant to Section 7.3(b) hereof. Any net sales proceeds in excess of the amount payable to the Purported Beneficial Transferee or Purported Record Transferee, as applicable, shall be immediately paid to the Beneficiary. If, prior to the discovery by the Company that shares of Equity Stock have been Transferred to the Trustee, such shares are sold by a Purported Beneficial Transferee or Purported Record Transferee, as applicable, then (x) such shares shall be deemed to have been sold on behalf of the Trust and (y) to the extent that the Purported Beneficial Transferee or Purported Record Transferee, as applicable, received an amount for such shares that exceeds the amount that such Purported Beneficial Transferee or Purported Record Transferee, as applicable, was entitled to receive pursuant to this Section 7.3(c) , such excess shall be paid to the Trustee upon demand.

(d) Call by Company on Excess Stock . Shares of Excess Stock shall be deemed to have been offered for sale to the Company, or its designee, at a price per share equal to the lesser of: (i) the price per share in the transaction that resulted in such Excess Stock (or, in the case of a devise or gift, the Market Price at the time of such devise or gift); and (ii) the Market Price on the date the Company, or its designee, accepts such offer. The Company shall have the right to accept such offer until the Trustee has sold the Excess Stock pursuant to Section 7.3(c) hereof. Upon such a sale to the Company, the interest of the Beneficiary in the Excess Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Beneficial Transferee or Purported Record Transferee, as applicable. The Company may reduce the amount payable to the Purported Beneficial Transferee or Purported Record Transferee, as applicable, by the amount of dividends and other distributions which have been paid to the Purported Beneficial Transferee or Purported Record Transferee, as applicable, and are owed by the Purported Beneficial Transferee or Purported Record Transferee, as applicable, to the Trustee pursuant to Section 7.3(b) hereof.

Exhibit 3.1

The Company shall pay the amount of such reduction to the Trustee for the benefit of the Beneficiary.

(e) Designation of Charitable Beneficiaries . The Company shall designate one or more nonprofit organizations to be the Beneficiary of the interest in the Trust such that (i) Excess Stock held in the Trust would not violate the restrictions set forth in Section 7.2(a) hereof in the hands of such Beneficiary and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A) (other than (vii) or (viii) thereof), 2055 and 2522 of the Code. Neither the failure of the Company to make such designation nor the failure of the Company to appoint the Trustee before the automatic transfer provided for in Section 7.3(a) hereof shall make such transfer ineffective, provided that the Company thereafter makes such designation and appointment. The designation of a nonprofit organization as a Beneficiary shall not entitle such nonprofit organization to serve in such capacity and the Company may, in its sole discretion, designate a different nonprofit organization as the Beneficiary at any time and for any or no reason. Any determination by the Company with respect to the application of this Article VII shall be binding on each Beneficiary.

Section 7.4 Settlement . Nothing in this Article VII shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction occurs shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII.

Section 7.5 Enforcement . The Company is specifically authorized to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VII.

Section 7.6 Non-Waiver . No delay or failure on the part of the Company or the Board of Directors in exercising any right under this Article VII shall operate as a waiver of any right of the Company or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

Section 7.7 Severability . If any provision of this Article VII or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provisions shall be affected only to the extent necessary to comply with the determination of such court.

ARTICLE VIII
TENDER OFFERS

Section 8.1 Tender Offers . If any Person makes a tender offer, including, without limitation, a “mini-tender” offer, such Person must comply with all of the provisions set forth in Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, that would be applicable if the tender offer was for more than five percent (5.0%) of

Exhibit 3.1

the outstanding shares of a class of Equity Stock (the “Target Class”); provided , however , that, unless otherwise required by the Exchange Act or the rules and regulations promulgated under the Exchange Act, such documents are not required to be filed with the Securities and Exchange Commission. In addition, any such Person must provide notice to the Company at least ten business days prior to initiating any such tender offer. If any Person initiates a tender offer without complying with the provisions set forth above (a “Non-Compliant Tender Offer”), the Company, in its sole discretion, shall have the right to redeem such non-compliant Person’s shares of the Target Class and any shares of the Target Class acquired in such tender offer (collectively, the “Offeror’s Shares”) at the lesser of (i) the price then being paid per share of Common Stock purchased in the Company’s latest offering at full purchase price (not discounted for commission reductions or for reductions in sale price permitted pursuant to the distribution reinvestment plan), (ii) the fair market value of the shares of Equity Stock as determined by an independent valuation obtained by the Company or (iii) the lowest tender offer price offered in such Non-Compliant Tender Offer. The Company may purchase such Offeror’s Shares upon delivery of the purchase price to the Person initiating such Non-Compliant Tender Offer and, upon such delivery, the Company may instruct any transfer agent to transfer such purchased shares of Equity Stock to the Company. In addition, any Person who makes a Non-Compliant Tender Offer shall be responsible for all expenses incurred by the Company in connection with the enforcement of the provisions of this Article VIII , including, without limitation, expenses incurred in connection with the review of all documents related to such tender offer and expenses incurred in connection with any purchase of the Offeror’s Shares by the Company. The Company maintains the right to offset any such expenses against the dollar amount to be paid by the Company for the purchase of the Offeror’s Shares pursuant to this Article VIII . In addition to the remedies provided herein, the Company may seek injunctive relief, including, without limitation, a temporary or permanent restraining order, in connection with any Non-Compliant Tender Offer. This Article VIII shall be of no force or effect with respect to any shares of Equity Stock that are then listed on a national securities exchange

ARTICLE IX
AMENDMENTS AND EXTRAORDINARY ACTIONS

Section 9.1 General . The Company reserves the right, from time to time, to supplement, amend or restate these Articles, now or hereafter authorized by law, including any supplement, amendment or restatement altering the terms or contract rights, as expressly set forth in these Articles, of any unissued shares of Equity Stock. All rights and powers conferred by these Articles on Stockholders, Directors and officers are granted subject to this reservation. All references to these Articles shall include all supplements, amendments or restatements thereto.

Section 9.2 Stockholders’ Approval . Subject to the limitations described in Article VII hereof and notwithstanding any other provision of law permitting or requiring any action to be taken or approved by the affirmative vote of Stockholders entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Board of Directors and taken or approved by the affirmative vote of Stockholders entitled to cast a majority of all the votes entitled to be cast on the matter.

Exhibit 3.1

ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 10.1 Limitation of Stockholder Liability . No Stockholder shall be personally liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Company by reason of its being a Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the assets or the affairs of the Company.

Section 10.2 Limitation of Director and Officer Liability . No Director or officer of the Company shall be liable to the Company or to any Stockholder for money damages to the maximum extent that Maryland law, in effect from time to time, permits the limitation of the liability of directors and officers of a corporation. Neither the amendment nor repeal of this Article X, nor the adoption or amendment of any other provision of these Articles or of the Bylaws inconsistent with this Article X, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Section 10.3 Indemnification .

(a) To the maximum extent permitted by Maryland law in effect from time to time, the Company shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former Director or officer of the Company and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (ii) any individual who, while a Director or officer of the Company and at the request of the Company, serves or has served as a Director, officer, partner, trustee, member or manager of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity (each an “Indemnified Party”). The rights to indemnification and advance of expenses provided by these Articles shall vest immediately upon election of a Director or officer. The Company may, with the approval of the Board of Directors, provide such indemnification and advance for expenses to an individual who served a predecessor of the Company in any of the capacities described in (a) or (b) above and to any employee or agent of the Company or a predecessor of the Company. The indemnification and payment or reimbursement of expenses provided in these Articles shall not be deemed exclusive of or limit in any way other rights to which any Indemnified Party may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise.

(b) The Company shall have the power to purchase and maintain insurance or provide similar protection on behalf of an Indemnified Party against any liability or loss asserted that was incurred in any such capacity with the Company or arising out of such status. Nothing contained herein shall constitute a waiver by any Indemnified Party of any right which he, she or it may have against any party under federal or state securities laws. The Company shall also have power to enter into any contract for indemnity and

Exhibit 3.1

advancement of expenses with a Director, officer, employee or agent to such further extent consistent with law.

THIRD : The amendment to and restatement of the charter of the Company as herein above set forth has been duly advised by the board of directors and approved by the Stockholders as required by law.

FOURTH : The current address of the principal office of the Company in the State of Maryland is set forth in Article III of the foregoing amendment and restatement of the charter.

FIFTH : The name and address of the Company’s current resident agent are set forth in Article III of the foregoing amendment and restatement of the charter.

SIXTH : The number of directors of the Company and the names of those currently in office are as set forth in Article VI of the foregoing amendment and restatement of the charter.

SEVENTH : The undersigned President of Inland American Real Estate Trust, Inc. acknowledges these Seventh Articles of Amendment and Restatement to be the corporate act of the Company and as to all matters or facts required to be verified under oath, the undersigned President acknowledges that, to the best of her knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.

[The remainder of this page is intentionally blank.]

Exhibit 3.1

IN WITNESS WHEREOF, the Company has caused these Seventh Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 13 ^th day of March, 2014.

INLAND AMERICAN REAL ESTATE TRUST, INC.



By:	/s/ Thomas P. McGuinness
Name:	Thomas P. McGuinness
Title:	President

ATTEST: INLAND AMERICAN REAL ESTATE TRUST, INC.



By:	/s/ Scott W. Wilton
Name:	Scott W. Wilton
Title:	Secretary

Exhibit 3.1

INLAND AMERICAN REAL ESTATE TRUST, INC.

ARTICLES OF AMENDMENT

THIS IS TO CERTIFY THAT:

FIRST : The charter of Inland American Real Estate Trust, Inc., a Maryland corporation (the “Company”), is hereby amended by deleting existing Article I in its entirety and substituting in lieu thereof a new article to read as follows:

ARTICLE I

NAME

The name of the corporation is InvenTrust Properties Corp. So far as may be practicable, the business of the Company shall be conducted and transacted under that name. Under circumstances in which the Board of Directors (as defined below in Article IV ) shall determine that the use of the name “InvenTrust Properties Corp.” is not practicable, the Board of Directors may permit the use of any other designation or name for the Company.

SECOND : The foregoing amendment to the charter of the Company was approved by the Board of Directors of the Company and was limited to a change expressly authorized by Section 2-605(a)(1) of the Maryland General Company Law without action by the stockholders.

THIRD : The undersigned acknowledges these Articles of Amendment to be the corporate act of the Company and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

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Exhibit 3.1

IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to be signed in its name and on its behalf by its President and attested to by its Secretary on this 16th day of April, 2015.

ATTEST: INLAND AMERICAN REAL ESTATE

TRUST, INC.

By: /s/ Scott W. Wilton _____________ By: /s/ Thomas P. McGuinness ______ (SEAL)

NAME: Scott W. Wilton NAME: Thomas P. McGuinness

TITLE: Secretary TITLE: President

Exhibit 3.1

Exhibit 31.1

Certification of Principal Executive Officer

I, Thomas P. McGuiness, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of InvenTrust Properties Corp.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Thomas P. McGuinness

Name:	Thomas P. McGuinness
Title:	Director, President and Chief Executive Officer (Principal Executive Officer)
Date:	May 14, 2015

Exhibit 31.2

Certification of Principal Financial Officer

I, Jack Potts, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of InvenTrust Properties Corp.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Jack Potts

Name:	Jack Potts
Title:	Executive Vice President, Chief Financial Officer, Treasurer (Principal Financial Officer)
Date:	May 14, 2015

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of InvenTrust Properties Corp. (the “Company”) for the fiscal quarter ended March 31, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Thomas P. McGuinness, president and chief executive officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	May 14, 2015	By:	/s/ Thomas P. McGuinness

		Name:	Thomas P. McGuinness
		Title:	Director, President and Chief Executive Officer (Principal Executive Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of InvenTrust Properties Corp. (the “Company”) for the fiscal quarter ended March 31, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jack Potts, executive vice president, chief financial officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	May 14, 2015	By:	/s/ Jack Potts

		Name:	Jack Potts
		Title:	Executive Vice President, Chief Financial Officer, Treasurer (Principal Financial Officer)