Jones Lang LaSalle Income Property Trust, Inc. (Form: 10-Q, Received: 11/10/2021 17:28:06)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________


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

For the quarterly period ended September 30, 2021


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

For the transition period from to

Commission file number: 000-51948

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Jones Lang LaSalle Income Property Trust, Inc.

(Exact name of registrant as specified in its charter)

_________________________________


Maryland						20-1432284
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

333 West Wacker Drive, Chicago IL, 60606

(Address of principal executive offices, including Zip Code)

(312) 897-4000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

_________________________________

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☑

The number of shares of the registrant’s Common Stock, $.01 par value, outstanding on November 10, 2021 were 97,924,180 shares of Class A Common Stock, 35,846,503 shares of Class M Common Stock, 9,307,567 shares of Class A-I Common Stock, 49,183,334 shares of Class M-I Common Stock and 7,513,281 shares of Class D Common Stock.

Jones Lang LaSalle Income Property Trust, Inc.

INDEX


			PAGE NUMBER
Part I - FINANCIAL INFORMATION

Item 1. Financial Statements			3

Consolidated Balance Sheets as of Septem ber 30, 2021 (unaudited) and December 31, 2020			3

Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited)			4

Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020 (unaudited)			5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)			6

Notes to Consolidated Financial Statements (unaudited)			7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28

Item 3. Quantitative and Qualitative Disclosures About Market Risk			55

Item 4. Controls and Procedures			56

Part II - OTHER INFORMATION

Item 1. Legal Proceedings			56

Item 1A. Risk Factors			56

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			56

Item 3. Defaults Upon Senior Securities			57

Item 4. Mine Safety Disclosures			57

Item 5. Other Information			57

Item 6. Exhibits			58

SIGNATURES			59

Item 1. Financial Statements.

Jones Lang LaSalle Income Property Trust, Inc.

CONSOLIDATED BALANCE SHEETS

$ in thousands, except per share amounts


	September 30, 2021		December 31, 2020
ASSETS	(Unaudited)
Investments in real estate:
Land (including from VIEs of $49,059 and $22,605, respectively)	$	540,691	$	428,313
Buildings and equipment (including from VIEs of $177,431 and $142,946, respectively)	2,507,486		1,892,023
Less accumulated depreciation (including from VIEs of $(25,835) and $(23,083), respectively)	(258,011)		(219,833)
Net property and equipment	2,790,166		2,100,503
Investment in unconsolidated real estate affiliates	179,631		187,890
Real estate fund investments	283,176		79,192
Investments in real estate and other assets held for sale	—		34,148
Net investments in real estate	3,252,973		2,401,733
Investment in marketable securities	28,177		—
Cash and cash equivalents (including from VIEs of $6,668 and $3,159, respectively)	188,380		84,805
Restricted cash (including from VIEs of $671 and $800, respectively)	40,687		16,629
Tenant accounts receivable, net (including from VIEs of $2,019 and $2,679, respectively)	8,338		8,680
Deferred expenses, net (including from VIEs of $509 and $516, respectively)	14,275		10,982
Acquired intangible assets, net (including from VIEs of $9,737 and $2,638, respectively)	161,396		105,206
Deferred rent receivable, net (including from VIEs of $1,122 and $1,087, respectively)	24,427		21,274
Prepaid expenses and other assets (including from VIEs of $543 and $164, respectively)	21,078		9,290
TOTAL ASSETS	$	3,739,731	$	2,658,599
LIABILITIES AND EQUITY
Mortgage notes and other debt payable, net (including from VIEs of $113,554 and $82,033, respectively)	$	1,584,926	$	868,102
Liabilities held for sale	—		18,242
Accounts payable and other liabilities (including from VIEs of $1,626 and $1,335, respectively)	52,273		36,137
Financing obligation	298,584		155,882
Accrued offering costs	126,674		106,908

Accrued interest (including from VIEs of $322 and $296, respectively)	2,714		2,153
Accrued real estate taxes (including from VIEs of $1,497 and $738, respectively)	14,779		6,640
Advisor fees payable	16,654		2,122
Acquired intangible liabilities, net (including from VIEs of $218 and $—, respectively)	28,468		14,990
TOTAL LIABILITIES	2,125,072		1,211,176
Commitments and contingencies	—		—
Equity:
Class A common stock: $0.01 par value; 200,000,000 shares authorized; 96,013,268 and 89,671,096 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	960		897
Class M common stock: $0.01 par value; 200,000,000 shares authorized; 35,541,455 and 35,612,156 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	355		356
Class A-I common stock: $0.01 par value; 200,000,000 shares authorized; 9,074,648 and 9,616,299 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	91		96
Class M-I common stock: $0.01 par value; 200,000,000 shares authorized; 46,244,259 and 33,247,001 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	462		332
Class D common stock: $0.01 par value; 200,000,000 shares authorized; 7,513,281 and 4,957,915 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	75		50
Additional paid-in capital (net of offering costs of $248,424 and $216,405 as of September 30, 2021 and December 31, 2020, respectively)	2,148,205		1,922,136

Distributions to stockholders	(549,120)		(481,760)
Accumulated deficit	(7,647)		(14,723)
Total Jones Lang LaSalle Income Property Trust, Inc. stockholders’ equity	1,593,381		1,427,384
Noncontrolling interests	21,278		20,039
Total equity	1,614,659		1,447,423
TOTAL LIABILITIES AND EQUITY	$	3,739,731	$	2,658,599

The abbreviation “VIEs” above means consolidated Variable Interest Entities.

See notes to consolidated financial statements.

Jones Lang LaSalle Income Property Trust, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

$ in thousands, except share and per share amounts

(Unaudited)


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Revenues:
Rental revenue	$	58,100	$	46,970	$	161,369	$	139,370
Other revenue	2,827		2,067		8,185		5,243
Total revenues	60,927		49,037		169,554		144,613
Operating expenses:
Real estate taxes	8,282		7,572		24,573		22,419
Property operating expenses	10,947		9,975		31,052		27,554

Property general and administrative	470		728		946		3,609
Advisor fees	21,546		6,192		34,620		19,049
Company level expenses	940		693		3,123		2,241


Depreciation and amortization	23,519		18,830		64,682		56,450
Total operating expenses	65,704		43,990		158,996		131,322

Other income (expenses):
Interest expense	(11,714)		(8,391)		(31,264)		(32,191)


Loss from unconsolidated real estate affiliates and fund investments	(1,270)		(3,289)		(4,021)		(16,186)

Investment income on marketable securities	88		—		88		—
Net realized gain upon sale of marketable securities	38		—		38		—
Net unrealized change in fair value of investment in marketable securities	(1,711)		—		(1,711)		—
(Loss) gain on disposition of property and extinguishment of debt, net	—		(3,480)		33,422		(1,772)


Total other income and (expenses)	(14,569)		(15,160)		(3,448)		(50,149)




Net (loss) income	(19,346)		(10,113)		7,110		(36,858)
Less: Net loss (income) attributable to the noncontrolling interests	94		(9)		(34)		(17)
Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc.	$	(19,252)	$	(10,122)	$	7,076	$	(36,875)


Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc. per share-basic and diluted:
Class A	(0.25)		(0.06)		0.04		(0.22)
Class M	(0.25)		(0.06)		0.04		(0.22)
Class A-I	(0.25)		(0.06)		0.04		(0.22)
Class M-I	(0.26)		(0.06)		0.03		(0.22)
Class D	(0.25)		(0.06)		0.03		(0.22)
Weighted average common stock outstanding-basic and diluted	189,887,181		169,289,415		181,981,691		170,707,171

See notes to consolidated financial statements.

Jones Lang LaSalle Income Property Trust, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

$ in thousands, except share and per share amounts (Unaudited)


	Common Stock			Additional Paid In Capital		Distributions to Stockholders		Retained Earnings / (Accumulated Deficit)		Noncontrolling Interests		Total Equity
	Shares	Amount
Balance, July 1, 2020	169,930,376	$	1,700	$	1,894,870	$	(440,306)	$	2,530	$	5,974	$	1,464,768
Issuance of common stock	3,343,225	33		38,996		—		—		—		39,029
Repurchase of shares	(3,882,050)	(39)		(45,153)		—		—		—		(45,192)
Conversion of shares	(149)	—		—		—		—		—		—
Offering costs	—	—		(3,315)		—		—		—		(3,315)

Net loss	—	—		—		—		(10,122)		9		(10,113)
Cash contributions from noncontrolling interests	—	—		—		—		—		2		2

Distributions declared per share ($0.135)	—	—		—		(20,402)		—		—		(20,402)
Balance, September 30, 2020	169,391,402	$	1,694	$	1,885,398	$	(460,708)	$	(7,592)	$	5,941	$	1,424,733

Balance, January 1, 2020	165,745,572	$	1,658	$	1,860,734	$	(398,939)	$	29,283	$	6,021	$	1,498,757
Issuance of common stock	22,227,749	222		269,868		—		—		—		270,090
Repurchase of shares	(18,597,052)	(186)		(222,915)		—		—		—		(223,101)
Conversion of shares	(867)	—		—		—		—		—		—
Offering costs	—	—		(22,481)		—		—		—		(22,481)
Stock based compensation	16,000	—		192		—		—		—		192
Net loss	—	—		—		—		(36,875)		17		(36,858)

Cash contributions from noncontrolling interests	—	—		—		—		—		3		3
Cash distributed to noncontrolling interests	—	—		—		—		—		(100)		(100)
Distributions declared per share ($0.405)	—	—		—		(61,769)		—		—		(61,769)
Balance, September 30, 2020	169,391,402	$	1,694	$	1,885,398	$	(460,708)	$	(7,592)	$	5,941	$	1,424,733

Balance, July 1, 2021	184,454,753	$	1,845	$	2,040,114	$	(525,732)	$	11,605	$	19,768	$	1,547,600
Issuance of common stock	12,288,669	122		152,178		—		—		—		152,300
Repurchase of shares	(2,358,010)	(24)		(29,340)		—		—		—		(29,364)
Conversion of shares	(2,501)	—		—		—		—		—		—
Offering costs	—	—		(14,796)		—		—		—		(14,796)
Stock based compensation	4,000	—		49		—		—		—		49
Net loss	—	—		—		—		(19,252)		(94)		(19,346)
Cash contributions from noncontrolling interests	—	—		—		—		—		3,423		3,423
Cash distributed to noncontrolling interests	—	—		—		—		—		(1,819)		(1,819)
Distributions declared per share ($0.135)	—	—		—		(23,388)		—		—		(23,388)
Balance, September 30, 2021	194,386,911	$	1,943	$	2,148,205	$	(549,120)	$	(7,647)	$	21,278	$	1,614,659

Balance, January 1, 2021	173,104,467	$	1,731	$	1,922,136	$	(481,760)	$	(14,723)	$	20,039	$	1,447,423
Issuance of common stock	30,588,256	305		369,256		—		—		—		369,561
Repurchase of shares	(9,322,654)	(93)		(111,406)		—		—		—		(111,499)
Conversion of shares	(3,158)	—		—		—		—		—		—
Offering costs	—	—		(32,019)		—		—		—		(32,019)
Stock based compensation	20,000	—		238		—		—		—		238
Net income	—	—		—		—		7,076		34		7,110

Cash contributions from noncontrolling interests	—	—		—		—		—		3,423		3,423
Cash distributed to noncontrolling interests	—	—		—		—		—		(2,218)		(2,218)
Distributions declared per share ($0.405)	—	—		—		(67,360)		—		—		(67,360)
Balance, September 30, 2021	194,386,911	$	1,943	$	2,148,205	$	(549,120)	$	(7,647)	$	21,278	$	1,614,659

See notes to consolidated financial statements.

Jones Lang LaSalle Income Property Trust, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

$ in thousands (Unaudited)


	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	7,110	$	(36,858)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	63,948		55,852
Gain on disposition of property and extinguishment of debt	(33,422)		1,772

Net realized gain upon sale of marketable securities	(38)		—
Net unrealized loss in fair value of marketable securities	1,711		—
Straight line rent	(2,707)		(740)

Loss from unconsolidated real estate affiliates and fund investments	4,021		16,186
Distributions from unconsolidated real estate affiliates and fund investments	8,121		3,443
Net changes in assets, liabilities and other	15,748		11,903
Net cash provided by operating activities	64,492		51,558
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of real estate investments	(718,890)		(101,220)
Proceeds from sale of real estate investments and fixed assets	66,992		5,372
Capital improvements and lease commissions	(21,254)		(8,056)

Investment in unconsolidated real estate affiliates	(207,866)		(3,788)
Deposits for investments under contract	(4,159)		—



Investment in marketable securities	(31,170)		—
Proceeds from sale of marketable securities	1,320		—
Net cash used in investing activities	(915,027)		(107,692)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock	484,169		247,601
Repurchase of shares	(111,499)		(221,662)

Offering costs	(12,252)		(13,660)
Distributions to stockholders	(24,296)		(27,988)
Distributions paid to noncontrolling interests	(2,218)		(100)
Contributions received from noncontrolling interests	3,423		3
Deposits for loan commitments	—		(405)
Draws on credit facility	550,000		200,000
Payment on credit facility	(140,000)		(100,000)
Proceeds from mortgage notes and other debt payable	322,382		35,900
Debt issuance costs	(6,959)		(52)
Payment on early extinguishment of debt	—		(1,457)
Principal payments on mortgage notes and other debt payable	(84,582)		(88,023)
Net cash provided by financing activities	978,168		30,157
Net increase in cash, cash equivalents and restricted cash	127,633		(25,977)

Cash, cash equivalents and restricted cash at the beginning of the period	101,434		114,022
Cash, cash equivalents and restricted cash at the end of the period	$	229,067	$	88,045

Reconciliation of cash, cash equivalents and restricted cash shown per Consolidated Balance Sheets to cash, cash equivalents and restricted cash per Consolidated Statements of Cash Flows
Cash and cash equivalents	$	188,380	$	74,132
Restricted cash	40,687		13,913

Cash, cash equivalents and restricted cash at the end of the period	$	229,067	$	88,045

Supplemental disclosure of cash flow information:
Interest paid	$	26,541	$	26,994
Non-cash activities:
Write-offs of receivables	$	38	$	53
Write-offs of retired assets and liabilities	4,312		9,341
Change in liability for capital expenditures	(29)		525

Net liabilities transferred at disposition of real estate investment	230		63
Net liabilities assumed at acquisition	1,369		538

Change in issuance of common stock receivable and redemption of common stock payable	(6,371)		2,938
Change in accrued offering costs	19,767		8,821
Assumption of mortgage notes payables	(53,219)		—

See notes to consolidated financial statements.

Jones Lang LaSalle Income Property Trust, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ in thousands, except per share amounts

NOTE 1—ORGANIZATION

General

Except where the context suggests otherwise, the terms “we,” “us,” “our” and the “Company” refer to Jones Lang LaSalle Income Property Trust, Inc. The terms “Advisor” and “LaSalle” refer to LaSalle Investment Management, Inc.

Jones Lang LaSalle Income Property Trust, Inc. is an externally advised, daily valued perpetual-life real estate investment trust ("REIT") that owns and manages a diversified portfolio of residential, industrial, office, retail and other properties located in the United States. Over time, our real estate portfolio may be further diversified on a global basis through the acquisition of properties outside of the United States and may be complemented by investments in real estate-related debt and equity securities. We were incorporated on May 28, 2004 under the laws of the State of Maryland. We believe that we have operated in such a manner to qualify to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2004, when we first elected REIT status. As of September 30, 2021, we owned interests in a total of 98 properties and over 4,000 single-family rental houses located in 26 states.

We own all or substantially all of our assets through JLLIPT Holdings, LP, a Delaware limited partnership (our “operating partnership”), of which we are limited partner and JLLIPT Holdings GP, LLC, our wholly owned subsidiary, is the sole general partner. The use of our operating partnership to hold all or substantially all of our assets is referred to as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"). By using an UPREIT structure, a property owner who desires to defer taxable gain on the disposition of his property may transfer the property to our operating partnership in exchange for limited partnership interests in the operating partnership ("OP Units") and defer taxation of gain until the limited partnership interests are disposed of in a taxable transaction. As of September 30, 2021, we raised aggregate proceeds from the issuance of OP Units in our operating partnership of $14,242, and owned directly or indirectly 99.4% of the OP Units of our operating partnership. The remaining 0.6% of the OP Units are held by third parties.

From our inception to September 30, 2021, we have received approximately $3,661,870 in gross offering proceeds from various public and private offerings of shares of our common stock. On October 1, 2012, we commenced our initial public offering of common stock and since that time we have offered shares of our common stock in various public offerings registered with the Securities and Exchange Commission (the "SEC").

On July 6, 2018, our most recent public offering (the "Current Public Offering") of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock was declared effective by the SEC. As of September 30, 2021, we have raised aggregate gross proceeds from the sale of shares of our common stock in our Current Public Offering of $1,227,818. We intend to continue to offer shares on a continuous basis for an indefinite period of tie by filing anew registration statement before the end of each offering, and on June 4, 2021, we filed a new registration statement to register a follow-on public offering (the Follow-on Public Offering" of up to $3,000,000 in any combination of shares or our Class A, Class M, Class A-I and Class M-I common stock. As of November 10, 2021, our Follow-on Public Offering has not been declared effective.

In addition to our public offerings, on March 3, 2015, we commenced a private offering (the "Private Offering") of up to $350,000 in shares of our Class D common stock with an indefinite duration. As of September 30, 2021, we have raised aggregate gross proceeds of $98,188. In addition, on October 16, 2019, we, through our operating partnership, initiated a program (the “DST Program”) to raise up to $500,000, which our board of directors increased to $1,000,000 on August 10, 2021, in private placements exempt from registration under the Securities Act of 1933, as amended, through the sale of beneficial interests to accredited investors in specific Delaware statutory trusts holding real properties ("DST Properties"), which may be sourced from our real properties or from third parties. As of September 30, 2021, we have raised $300,427 from our DST Program.

As of September 30, 2021, 96,013,268 shares of Class A common stock, 35,541,455 shares of Class M common stock, 9,074,648 shares of Class A-I common stock, 46,244,259 shares of Class M-I common stock, and 7,513,281 shares of Class D common stock were outstanding and held by a total of 19,118 stockholders.

LaSalle acts as our advisor pursuant to the advisory agreement among us, our operating partnership and LaSalle (the "Advisory Agreement"). The term of our Advisory Agreement expires June 5, 2022, subject to an unlimited number of successive one-year renewals. Our Advisor, a registered investment advisor with the SEC, has broad discretion with respect to our investment decisions and is responsible for selecting our investments and for managing our investment portfolio pursuant to

the terms of the Advisory Agreement. Our executive officers are employees of and compensated by our Advisor. We have no employees, as all operations are managed by our Advisor.

LaSalle is a wholly owned, but operationally independent subsidiary of Jones Lang LaSalle Incorporated ("JLL" or our "Sponsor"), a New York Stock Exchange-listed leading professional services firm that specializes in real estate and investment management. As of September 30, 2021, JLL and its affiliates owned an aggregate of 2,521,801 Class M shares, which were issued for cash at a price equal to the most recently reported net asset value ("NAV") per share as of the purchase date and have a current value of $32,103.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and include the accounts of our wholly owned subsidiaries, consolidated variable interest entities ("VIE") and the unconsolidated investment in real estate affiliates accounted for under the equity method of accounting. We consider the authoritative guidance of accounting for investments in common stock, investments in real estate ventures, investors accounting for an investee when the investor has the majority of the voting interest but the minority partners have certain approval or veto rights, determining whether a general partner or general partners as a group controls a limited partnership or similar entity when the limited partners have certain rights and the consolidation of VIEs in which we own less than a 100% interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Parenthetical disclosures are shown on our Consolidated Balance Sheets regarding the amounts of VIE assets and liabilities that are consolidated. As of September 30, 2021, our VIEs included The District at Howell Mill, Grand Lakes Marketplace, Presley Uptown, 237 Via Vera Cruz, 4211 Starboard Drive and 13500 Danielson Drive due to the joint venture structures and our partners having limited participation rights and no kick-out rights. The creditors of our VIEs do not have general recourse to us.

Noncontrolling interests represent the minority members’ proportionate share of the equity in our VIEs. At acquisition, the assets, liabilities and noncontrolling interests were measured and recorded at the estimated fair value. Noncontrolling interests will increase for the minority members’ share of net income of these entities and contributions and decrease for the minority members’ share of net loss and distributions. As of September 30, 2021, noncontrolling interests represented the minority members’ proportionate share of the equity of the entities listed above as VIEs.

Certain of our joint venture agreements include provisions whereby, at certain specified times, each party has the right to initiate a purchase or sale of its interest in the joint ventures at an agreed upon fair value. Under these provisions, we are not obligated to purchase the interest of our outside joint venture partners.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in our Annual Report on Form 10-K filed with the SEC on March 12, 2021 (our “2020 Form 10-K”) and should be read in conjunction with such consolidated financial statements and related notes. The following notes to these interim consolidated financial statements highlight changes to the notes included in the December 31, 2020 audited consolidated financial statements included in our 2020 Form 10-K and present interim disclosures as required by the SEC.

The interim financial data as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 is unaudited. In our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

Restricted Cash

Restricted cash includes amounts established pursuant to various agreements for loan escrow accounts, loan commitments and property sale proceeds. When we sell a property, we can elect to enter into a like-kind exchange pursuant to the applicable Internal Revenue Service guidance whereby the proceeds from the sale are placed in escrow with a qualified intermediary until a replacement property can be purchased. At September 30, 2021, our restricted cash balance on our Consolidated Balance Sheets was primarily related to common stock subscriptions received in advance of the issuance of the common stock and loan escrow amounts.

Deferred Expenses

Deferred expenses consist of lease commissions. Lease commissions are capitalized and amortized over the term of the related lease as a component of depreciation and amortization expense. Accumulated amortization of deferred expenses at September 30, 2021 and December 31, 2020 was $7,892 and $6,495, respectively.

Rental Revenue Recognition

We recognize rental revenue from tenants under operating leases on a straight-line basis over the non-cancelable term of the lease when collectibility of substantially all rents is reasonably assured. Recognition of rental revenue on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. For leases where collection of substantially all rents is not deemed to be probable, revenue is recorded equal to cash that has been received from the tenant. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.

The COVID-19 pandemic has had a negative impact on some of our tenants' businesses. The duration and extent of the negative effects caused by the COVID-19 pandemic to the economy is uncertain, and as such, collectibility of certain tenants' rent receivable balances in the future is also uncertain. We have taken into account current tenant conditions, which include consideration of COVID-19 in our estimation of the tenants' uncollectible accounts and deferred rents receivable at September 30, 2021. We are closely monitoring the collectibility of such rents and will adjust future estimations as further information becomes known. During the three months ended September 30, 2021 we recorded an increase in rental revenue due to collections of balances previously thought to be uncollectable of $583, and we recorded a reduction in rental revenue of $480 for nine months ended September 30, 2021 due to concern of collectibility. During the three and nine months ended September 30, 2021, we recorded a decrease in straight line revenue of $14 and an increase of $135, respectively, as a result of collections from certain tenants. During the three and nine months ended September 30, 2020, we recorded a reduction in rental revenue of $710 and $2,701, respectively, and a reduction in straight line revenue of $30 and $2,141 due to concern of collectibility, respectively. During the three and nine months ended September 30, 2021, we deferred $699 and $937, respectively, and abated $299 and $553, respectively, of rental revenue. During the three and nine months ended September 30, 2020, we deferred $679 and $1,851, respectively, and abated $113 and $970 of rental revenue, respectively.

Acquisitions

We have allocated a portion of the purchase price of our acquisitions to acquired intangible assets, which include acquired in-place lease intangibles, acquired above-market in-place lease intangibles and acquired ground lease intangibles, which are reported net of accumulated amortization of $100,585 and $82,699 at September 30, 2021 and December 31, 2020, respectively, on the accompanying Consolidated Balance Sheets. The acquired intangible liabilities represent acquired below-market in-place leases, which are reported net of accumulated amortization of $14,471 and $12,724 at September 30, 2021 and December 31, 2020, respectively, on the accompanying Consolidated Balance Sheets.

Assets and Liabilities Measured at Fair Value

The Financial Accounting Standards Board’s (“FASB”) guidance for fair value measurement and disclosure states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

•Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have access to at the measurement date.

•Level 2—Observable inputs, other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

•Level 3—Unobservable inputs for the asset or liability. Unobservable inputs are those inputs that reflect our own assumptions that market participants would use to price the asset or liability based on the best available information.

The authoritative guidance requires the disclosure of the fair value of our financial instruments for which it is practicable to estimate that value. The guidance does not apply to all balance sheet items. Market information as available or present value techniques have been utilized to estimate the amounts required to be disclosed. Since such amounts are estimates, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.

Real estate fund investments accounted for under the fair value option fall within Level 3 of the hierarchy. The fair value is recorded based upon changes in the NAV of the limited partnership as determined from the financial statements of the real estate fund. During the nine months ended September 30, 2021 and 2020, we recorded a decrease in fair value classified within the Level 3 category of $2,849 and $14,737, respectively, in our investment in the NYC Retail Portfolio (see Note 4-Unconsolidated Real Estate Affiliates and Fund Investments).

We have estimated the fair value of our mortgage notes and other debt payable reflected on the Consolidated Balance Sheets at amounts that are based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analysis with regard to fixed rate debt) for similar loans made to borrowers with similar credit ratings and for the same maturities. The fair value of our mortgage notes and other debt payable using Level 2 inputs was $27,738 and $30,923 higher than the aggregate carrying amounts at September 30, 2021 and December 31, 2020, respectively. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition of our mortgage notes payable.

Derivative Financial Instruments

We record all derivatives on the Consolidated Balance Sheets at fair value in prepaid expenses and other assets or accounts payable and other accrued expenses. Changes in the fair value of our derivatives are recorded as a component of interest expense on our Consolidated Statements of Operations as we have not designated our derivative instruments as hedges. Our objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we use interest rate swaps.

As of September 30, 2021, we had the following outstanding interest rate derivatives related to managing our interest rate risk:


Interest Rate Derivative	Number of Instruments	Notional Amount

Interest Rate Swaps	5	$	190,000

The fair value of our interest rate swaps represent liabilities of $3,897 and $6,500 at September 30, 2021 and December 31, 2020, respectively.

Investment in Marketable Securities

In accordance with our investment guidelines, investments in marketable securities consist of stock of publicly traded REITs. The net unrealized change in the fair value of our investments in marketable securities is recorded in earnings as part of net income in accordance with Accounting Standard Update ("ASU") 2016-1, Financial Statements - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities.

Ground Lease

As of September 30, 2021, we have a single ground lease arrangement for which we are the lessee and recorded a right-of-use asset within prepaid expenses and other assets on our Consolidated Balance Sheets in the amount of $2,114 and a lease liability within accounts payable and other liabilities on our Consolidated Balance Sheets in the amount of $2,249.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In April 2020, the FASB issued a question and answer document that focused on the application of lease guidance applicable on concessions related to the effects of the COVID-19 pandemic. Per the guidance, we made an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, Leases, as though enforceable rights and obligations for those concessions existed.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides guidance containing practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We are evaluating the impact of this guidance.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326), which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in more timely recognition of such losses. In November 2018, the FASB released ASU 2018-19, Codification Improvements to Topic 326, Financial Instrument - Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. The guidance was effective for us as of January 1, 2020 and did not have a material impact on our consolidated financial statements.

Effective January 1, 2019, we adopted ASU 2016-02 Leases and 2018-11 Leases: Targeted Improvements (Topic 842) ("ASU 842"). The new guidance sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). We elected a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components and, instead, to account for those components as a single lease component, when certain criteria are met. Upon adoption, we reclassified these components for prior periods to conform with the current period presentation. We also elected permitted practical expedients to not reassess lease classification and use of the standard’s effective date as the date of initial application and therefore financial information under ASU 842 is not provided for periods prior to January 1, 2019. The accounting for lessors remained largely unchanged from previous GAAP; however, the standard required that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under previous standards, certain of these costs were capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. Additionally, the standard requires lessors to evaluate whether the collectability of all rents is probable before recognizing rental revenues on a straight-line basis over the applicable lease term. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. As of September 30, 2021, we have a ground lease arrangement for which we are the lessee and recorded a right-of-use asset within prepaid expenses and other assets on our Consolidated Balance Sheets in the amount of $2,114 and a lease liability within accounts payable and other liabilities on our Consolidated Balance Sheets in the amount of 2,249.

NOTE 3—PROPERTY

The primary reason we make acquisitions of real estate investments in the industrial, office, residential, retail and other property sectors is to invest capital contributed by stockholders in a diversified portfolio of real estate assets. All references to square footage and units are unaudited.

Acquisitions

On January 21, 2021, we acquired Louisville Distribution Center, a 1,040,000 square foot industrial property located in Shepherdsville, Kentucky for approximately $95,000. The acquisition was funded with cash on hand.

On February 2, 2021, we acquired 170 Park Ave, a 147,000 square foot life sciences property located in Florham Park, New Jersey for approximately $46,600. The acquisition was funded with cash on hand.

On February 23, 2021, we acquired Southeast Phoenix Distribution Center, a four property industrial distribution center totaling 474,000 square feet located in Chandler, Arizona for approximately $91,000. The acquisition was funded with cash on hand.

On May 3, 2021, we acquired Princeton North Andover, a newly constructed, 192-unit residential property located in North Andover, Massachusetts, for approximately $72,500. The acquisition was funded with cash on hand.

On June 24, 2021, we acquired Louisville Airport Distribution Center, a nearly 284,000 square-foot, newly constructed Class A industrial property located in the Southside/Airport industrial submarket of Louisville, Kentucky for approximately $32,100. The acquisition was funded with cash on hand.

On July 2, 2021, we acquired a 95% interest in two industrial buildings, 237 Via Vera Cruz and 13500 Danielson Street, totaling 153,000 square feet located in San Marcos and Poway, California, respectively, for approximately $36,640. The acquisitions were funded with cash on hand.

On July 9, 2021, we acquired a 95% interest in 4211 Starboard, a 130,000 square foot industrial property located in Fremont, California for approximately $32,000 using cash on hand.

On August 23, 2021, we acquired The Preserve at the Meadows, a 220-unit garden-style residential property in Fort Collins, Colorado, for approximately $61,000. The acquisition was funded with cash on hand.

On August 31, 2021, we acquired The Rockwell, a 204-unit residential property in Berlin, Massachusetts, for approximately $84,000. The acquisition was funded with cash on hand.

On September 15, 2021, we acquired 9101 Stony Point Drive, an 87,000 square foot, medical office building in Richmond, Virginia, for approximately $52,000. The acquisition was funded with cash on hand.

On September 28, 2021, we acquired 5 National Way and 47 National Way, a two-building life sciences center totaling 375,000 square feet, located in Durham, North Carolina for approximately $66,750. The acquisitions were funded with cash on hand.

On September 29, 2021, we acquired Miramont Apartments, a 210-unit residential property located in Fort Collins, Colorado, for approximately $57,400. The acquisition was funded with cash on hand and a draw on our line of credit.

On September 29, 2021, we acquired Pinecone Apartments, a 195-unit residential property located in Fort Collins, Colorado, for approximately $51,600. The acquisition was funded with cash on hand and a draw on our line of credit.

We allocated the purchase price for our 2021 acquisitions in accordance with authoritative guidance as follows:


	2021 Acquisitions
Land	$	112,378
Building and equipment	599,830

In-place lease intangible (acquired intangible assets)	74,979
Above-market lease intangible (acquired intangible assets)	3,250
Below-market lease intangible (acquired intangible liabilities)	(16,328)




	$	774,109
Amortization period for intangible assets and liabilities	6 - 180 months

Disposition

On January 8, 2021, we sold South Seattle Distribution Center, a three property industrial center totaling 323,000 square feet located in Seattle, Washington for approximately $72,600 less closing costs. In connection with the disposition, the mortgage loan associated with the property of $17,841 was retired. We recorded a gain on the sale of the property in the amount of $33,580.

NOTE 4—UNCONSOLIDATED REAL ESTATE AFFILIATES AND FUND INVESTMENTS

In addition to investments in consolidated properties, we may make investments in real estate which are classified as unconsolidated real estate affiliates under GAAP. The residential sector includes apartment properties and single family rental homes.

Unconsolidated Real Estate Affiliates

The following represent our unconsolidated real estate affiliates as of September 30, 2021 and December 31, 2020.

Carrying Amount of Investment

Property

Property Type

Location

Acquisition Date

September 30, 2021

December 31, 2020

Chicago Parking Garage

Other

Chicago, IL

December 23, 2014

13,853

14,000

Pioneer Tower

Office

Portland, OR

June 28, 2016

102,748

108,715

The Tremont

Residential

Burlington, MA

July 19, 2018

21,417

21,430

The Huntington

Residential

Burlington, MA

July 19, 2018

10,938

11,549

Siena Suwanee Town Center

Residential

Suwanee, GA

December 15, 2020

30,675

32,196

Total

179,631

187,890

Summarized Combined Statements of Operations—Unconsolidated Real Estate Affiliates—Equity Method Investments


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Total revenues	$	5,564	$	3,920	$	15,964	$	12,188
Total operating expenses	4,958		4,030		16,394		12,038
Operating income	$	606	$	(110)	$	(430)	$	150
Interest expense	834		531		2,513		1,599
Net loss	$	(228)	$	(641)	$	(2,943)	$	(1,449)

Real Estate Fund Investments

NYC Retail Portfolio

On December 8, 2015, a wholly owned subsidiary of ours acquired an approximate 28% interest in a newly formed limited partnership, Madison NYC Core Retail Partners, L.P., which acquired an approximate 49% interest in entities that initially owned 15 retail properties located in the greater New York City area (the “NYC Retail Portfolio”), the result of which is that we own an approximate 14% interest in the NYC Retail Portfolio. The purchase price for such portion was approximately $85,600 including closing costs. As of September 30, 2021, the NYC Retail Portfolio owned eight retail properties totaling approximately 1,940,000 square feet across urban infill locations in Manhattan, Brooklyn, Queens and New Jersey.

At acquisition we made the election to account for our interest in the NYC Retail Portfolio under the fair value option. This fair value election was made as the investment is in the form of a commingled fund with institutional partners where fair value accounting provides the most relevant information about the financial condition of the investment. We record increases and decreases in our investment each reporting period based on the change in the fair value of the investment as estimated by the general partner. Critical inputs to NAV estimates include valuations of the underlying real estate assets, which incorporate investment-specific assumptions such as discount rates, capitalization rates and rental growth rates. We did not consider adjustments to NAV estimates provided by the general partner, including adjustments for any restrictions to the transferability of ownership interests embedded within the investment agreement to which we are a party, to be necessary based upon (1) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investment level, (2) consideration of market demand for the retail assets held by the venture, and (3) contemplation of real estate and capital markets conditions in

the localities in which the venture operates. We have no unfunded commitments. Our investment in the NYC Retail Portfolio is presented on our Consolidated Balance Sheets within real estate fund investment. Changes in the fair value of our investment as well as cash distributions received are recorded on our Consolidated Statements of Operations within income from unconsolidated real estate affiliates and fund investments. As of September 30, 2021 and December 31, 2020, the carrying amount of our investment in the NYC Retail Portfolio was $78,004 and $79,192, respectively. During the three and nine months ended September 30, 2021, we recorded a decrease in fair value of our investment in the NYC Retail Portfolio of $2,813 and $2,849, respectively and received no cash distributions. During the three and nine months ended September 30, 2021, we made a $1,661 capital contribution to Madison NYC Core Retail Partners, L.P. During the three and nine months ended September 30, 2020, we recorded a decrease in fair value of our investment in the NYC Retail Portfolio of $2,648 and $14,737, respectively and received no cash distributions. On March 4, 2020, a retail property in the NYC Retail Portfolio with a square footage of 74,000 was sold and the mortgage loan was extinguished.

Single-Family Rental Portfolio

On August 5, 2021, we acquired a 47% interest in a portfolio of approximately 4,000 stabilized single family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others (the "Single-Family Rental Portfolio"). The portfolio is encumbered by securitized mortgages in a net amount of approximately $760,000 maturing in the fourth quarter of 2025 at a weighted average interest rate of 2.1%. The equity purchase price our 47% interest was approximately $205,000. We funded the transaction using cash on hand and a draw on our revolving line of credit.

As of September 30, 2021, the carrying amount of our investment in the Single-Family Rental Portfolio was $205,172. During the three months ended September 30, 2021, we recorded no change in the fair value of our investment in the Single-Family Rental Portfolio. During the three months ended September 30, 2021, we received distributions of income totaling $1,771. This cash distribution of income increased income from unconsolidated real estate affiliates and fund investments.

Summarized Statement of Operations—NYC Retail Portfolio Investment and Single-Family Rental Portfolio—Fair Value Option Investment


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Total revenue	$	12,747	$	313	$	11,671	$	2,247

Net investment income (loss)	4,372		(174)		4,390		736
Net change in unrealized loss on investment in real estate venture	(10,295)		(9,570)		(10,163)		(53,243)
Net loss	$	(5,923)	$	(9,744)	$	(5,773)	$	(52,507)

NOTE 5—MORTGAGE NOTES AND OTHER DEBT PAYABLE

Mortgage notes and other debt payable have various maturities through 2031 and consist of the following:


Mortgage notes and other debt payable	Maturity Date	Interest Rate	Amount payable as of
			September 30, 2021		December 31, 2020
Mortgage notes payable (1)(2)(3)	June 1, 2023 - March 1, 2038	1.48% - 5.30%	$	1,079,935	$	771,043

Credit facility
Revolving line of credit	May 25, 2024	1.73%	275,000		—
Term loans	May 24, 2024	3.10%	235,000		100,000
TOTAL			$	1,589,935	$	871,043
Net debt discount on assumed debt and debt issuance costs			(5,009)		(2,941)
Mortgage notes and other debt payable, net			$	1,584,926	$	868,102

South Seattle Distribution Center (4)			$	—	$	17,873

________

(1) During the nine months ending September 30, 2021, we entered into the following new mortgage notes payable:

•On February 10, 2021, we entered into a $34,000 mortgage payable on Whitestown Distribution Center. The mortgage note bears an interest of 2.95% and matures on February 10, 2028.

•On March 11, 2021, we entered into a $36,030 mortgage payable on Townlake of Coppell. The mortgage note bears an interest rate of 2.41% and matures on April 10, 2028.

•On April 26, 2021, we entered into a $52,250 mortgage payable on Louisville Distribution Center. The mortgage bears an interest rate of 1.76% and matures on May 1, 2026.

•On May 18, 2021, we entered into a $49,000 mortgage payable on Southeast Phoenix Distribution Center. The mortgage bears an interest rate of 2.70% and matures on June 1, 2028.

•On June 30, 2021, we entered into a $39,900 mortgage payable on Princeton North Andover. The mortgage bears an interest rate of LIBOR + 1.55% (1.63% at September 30, 2021) and matures on June 1, 2028.

•On September 10, 2021, we entered into a $32,492 mortgage payable on two industrial buildings. $11,880 is allocated towards the San Marcos property and $20,612 is allocated towards the Fremont property. The mortgage bears an interest rate of LIBOR + 1.40% (1.48% at September 30, 2021) and matures on September 8, 2026.

•On September 23, 2021, we entered into a $32,400 mortgage payable on The Preserve at the Meadows. The mortgage bears an interest rate of 2.57% and matures on October 1, 2031.

•On September 30, 2021, we entered into a $46,310 mortgage payable on The Rockwell. The mortgage bears an interest rate of 2.62% and matures on October 1, 2031.

(2) During the nine months ending September 30, 2021, we repaid the following mortgage notes payable:

•On March 8, 2021, we repaid the mortgage note payable related to 140 Park Avenue in the amount of $22,800.

•On March 17, 2021, we repaid the mortgage note payable related to Monument IV in the amount of $40,000.

(3) During the nine months ending September 30, 2021, we assumed the following mortgage notes payable:

•On September 29, 2021, we assumed a mortgage payable that was originated on May 1, 2016 on Miramont Apartments. The mortgage bears an interest rate of 3.87% for the remaining five- year term. As of September 30, 2021, the balance of the loan was $27,752.

•On September 29, 2021, we assumed a mortgage payable that was originated on May 1, 2016 on Pinecone Apartments. The mortgage bears an interest rate of 3.87% for the remaining five-year term. As of September 30, 2021, the balance of the loan was $25,467.

(4) The property associated with this loan was designated as held for sale as of December 31, 2020. The property associated with this loan was sold on January 8, 2021 and the loan was repaid.

Aggregate future principal payments of mortgage notes and other debt payable as of September 30, 2021 are as follows:


Year	Amount
2021	$	1,908
2022	7,812
2023	89,890
2024	534,917
2025	192,296
Thereafter	763,112
Total	$	1,589,935

Credit Facility

On May 24, 2021, we entered into a credit agreement providing for a $650,000 revolving line of credit and unsecured term loan (collectively, the “Credit Facility”) with a syndicate of eight lenders led by JPMorgan Chase Bank, N.A., Bank of America, N.A., PNC Capital Markets LLC and Wells Fargo Bank, N.A. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $800 million, subject to receipt of lender commitments and other conditions. The $650,000 Credit Facility consists of a $415,000 revolving credit facility (the “Revolving Credit Facility”) and a $235,000 term loan (the “Term Loan”). The Revolving Credit Facility contains a sublimit of $25,000 for letters of credit. The primary interest rate for the Revolving Credit Facility is based on LIBOR, plus a margin ranging from 1.40% to 2.10%, depending on our total leverage ratio. The primary interest rate for the Term Loan is based on LIBOR, plus a margin ranging from 1.35% to 2.05%, depending on our total leverage ratio. The maturity date of the Revolving Credit Facility and the Term Loan is May 24, 2025. Based on our current total leverage ratio, we can elect to borrow at LIBOR plus 1.45% and LIBOR plus 1.40% for the Revolving Credit Facility and Term Loan, respectively, or alternatively, we can choose to borrow at a “base rate” equal to (i) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the prime rate announced by JPMorgan Chase Bank, N.A., and (c) LIBOR plus 1.0%, plus (ii) a margin ranging from 0.40% to 1.10% for base rate loans under the Revolving Credit Facility or a margin ranging from 0.35% to 1.05% for base rate loans under the Term Loan. If the “base rate” is less than 1.0%, it will be deemed to be 1.0% for purposes of the Credit Facility. We intend to use the Revolving Credit Facility to cover short-term capital needs, for new property acquisitions and working capital. We may not draw funds on our Credit Facility if we (i) experience a material adverse effect, which is defined to include, among other things, (a) a material adverse effect on the business, assets, operations or financial condition of the Company taken as a whole; (b) the inability of any loan party to perform any of its obligations under any loan document; or (c) a material adverse effect upon the validity or enforceability of any loan document or (ii) are in default, as that term is defined in the agreement, including a default under certain other loan agreements and/or guarantees entered into by us or our subsidiaries. As of September 30, 2021, we believe no material adverse effects had occurred. The Credit Facility provides for alternative rate benchmarks in the event that LIBOR is no longer appropriate or available.

At September 30, 2021, we had $275,000 outstanding under the Revolving Credit Facility at LIBOR + 1.65% and $235,000 outstanding under the Term Loan at LIBOR + 1.60%. We swapped the LIBOR portion on $190,000 of our Term Loan to a blended fixed rate of 1.93% (all in rate of 3.53% at September 30, 2021) and swapped $90,000 of the Revolving Credit Facility to a fixed rate of 2.64% (all in rate of 4.04%) at September 30, 2021. The interest rate swap agreements have maturity dates ranging from May 26, 2022 through February 17, 2023.

Covenants

At September 30, 2021, we were in compliance with all debt covenants.

Debt Issuance Costs

Debt issuance costs are capitalized, and presented net of mortgage notes and other debt payable, and amortized over the terms of the respective agreements as a component of interest expense. Accumulated amortization of debt issuance costs at September 30, 2021 and December 31, 2020 was $7,308 and $6,749, respectively.

NOTE 6—COMMON STOCK

We have five classes of common stock: Class A, Class M, Class A-I, Class M-I, and Class D. The fees payable to LaSalle Investment Management Distributors, LLC, an affiliate of our Advisor and the dealer manager for our offerings (the "Dealer Manager"), with respect to each outstanding share of each class, as a percentage of NAV, are as follows:

Selling Commission (1)

Dealer Manager Fee (2)

Class A Shares

up to 3.0%

0.85%

Class M Shares

—

0.30%

Class A-I Shares

up to 1.5%

0.30%

Class M-I Shares

—

None

Class D Shares (3)

up to 1.0%

None

________

(1) Selling commissions are paid on the date of sale of our common stock.

(2) We accrue all future dealer manager fees up to the ten percent regulatory limitation as accrued offering costs on our Consolidated Balance Sheets on the date of sale of our common stock. For NAV calculation purposes, dealer manager fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Each Class A, Class M and Class A-I share sold in a public offering will automatically convert into the number of Class M-I shares based on the then-current applicable NAV of each class on the date following the termination of the primary portion of such public offering in which we, with the assistance of the Dealer Manager, determine that total underwriting compensation paid with respect to such public offering equals 10% of the gross proceeds from the primary portion of such public offering.

(3) Shares of Class D common stock are only being offered pursuant to a private offering.

The selling commissions and dealer manager fees are offering costs and are recorded as a reduction of additional paid in capital.

Stock Transactions

The stock transactions for each of our classes of common stock for the nine months ended September 30, 2021 were as follows:


	Shares of Class A Common Stock	Shares of Class M Common Stock	Shares of Class A-I Common Stock	Shares of Class M-I Common Stock	Shares of Class D Common Stock
Balance, December 31, 2020	89,671,096	35,612,156	9,616,299	33,247,001	4,957,915
Issuance of common stock	11,621,561	2,231,314	196,799	14,003,216	2,555,366
Repurchase of common stock	(5,124,503)	(1,566,243)	(738,450)	(1,893,458)	—
Share conversions	(154,886)	(735,772)	—	887,500	—
Balance, September 30, 2021	96,013,268	35,541,455	9,074,648	46,244,259	7,513,281

Stock Issuances

The stock issuances for our classes of common stock, including those issued through our distribution reinvestment plan, for the nine months ended September 30, 2021 were as follows:


	Nine Months Ended September 30, 2021
	# of shares	Amount
Class A Shares	11,621,561	$	141,017
Class M Shares	2,231,314	27,058
Class A-I Shares	196,799	2,385
Class M-I Shares	14,003,216	169,339
Class D Shares	2,555,366	30,000
Total		$	369,799

Share Repurchase Plan

Our share repurchase plan allows stockholders, subject to a one-year holding period, with certain exceptions, to request that we repurchase all or a portion of their shares of common stock on a daily basis at that day's NAV per share, limited to 5% of aggregate Company NAV per quarter. For the nine months ended September 30, 2021, we repurchased 9,322,654 shares of common stock in the amount of $111,499. During the nine months ended September 30, 2020, we repurchased 18,597,052 shares of common stock in the amount of $223,101.

Distribution Reinvestment Plan

Pursuant to our distribution reinvestment plan, holders of shares of any class of our common stock may elect to have their cash distributions reinvested in additional shares of our common stock at the NAV per share applicable to the class of shares being purchased on the distribution date. For the nine months ended September 30, 2021, we issued 3,540,535 shares of common stock for $43,064 under the distribution reinvestment plan. For the nine months ended September 30, 2020, we issued 4,505,845 shares of common stock for $53,669 under the distribution reinvestment plan.

Operating Partnership Units

In connection with the acquisition of Siena Suwanee Town Center, we issued 1,217,092 OP Units to third parties for a total of $14,252. After a one-year holding period, holders of OP Units generally have the right to cause the operating partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.

Earnings Per Share

We compute net income per share for Class A, Class M, Class A-I, Class M-I and Class D common stock using the two-class method. Our Advisor may earn a performance fee (see Note 9-Related Party Transactions), which may impact the net income of each class of common stock differently. In periods where no performance fee is recognized in our Consolidated Statements of Operations and Comprehensive Income, the net income per share will be the same for each class of common stock.

Basic and diluted net income per share for each class of common stock is computed using the weighted-average number of common shares outstanding during the period for each class of common stock. We have not issued any dilutive or potentially dilutive securities, and thus the basic and diluted net income per share for a given class of common stock is the same for each period presented.

The following table sets forth the computation of basic and diluted net income per share for each of our Class A, Class M, Class A-I, Class M-I and Class D common stock:


	Three Months Ended September 30, 2021
	Class A		Class M		Class A-I		Class M-I		Class D
Basic and diluted net loss per share:
Allocation of net loss per share before performance fee	$	(16,540)	$	(6,140)	$	(1,651)	$	(7,537)	$	(1,313)
Allocation of performance fee	6,662		2,635		710		3,463		582
Total	$	(23,202)	$	(8,775)	$	(2,361)	$	(11,000)	$	(1,895)
Weighted average number of common shares outstanding	94,656,530		35,138,533		9,447,086		43,131,751		7,513,281
Basic and diluted net loss per share:	$	(0.25)	$	(0.25)	$	(0.25)	$	(0.26)	$	(0.25)

	Nine Months Ended September 30, 2021
	Class A		Class M		Class A-I		Class M-I		Class D
Basic and diluted net income per share:
Allocation of net income per share before performance fee	$	10,649	$	4,063	$	1,108	$	4,450	$	806
Allocation of performance fee	6,662		2,635		710		3,463		582
Total	$	3,987	$	1,428	$	398	$	987	$	224
Weighted average number of common shares outstanding	91,944,466		35,082,628		9,569,529		38,424,069		6,961,022
Basic and diluted net income per share:	$	0.04	$	0.04	$	0.04	$	0.03	$	0.03

	Three Months Ended September 30, 2020
	Class A		Class M		Class A-I		Class M-I		Class D
Basic and diluted net loss per share:
Allocation of net loss per share before performance fee	$	(5,346)	$	(2,147)	$	(579)	$	(1,753)	$	(297)


Weighted average number of common shares outstanding	89,432,854		35,897,894		9,686,983		29,313,769		4,927,915
Basic and diluted net loss per share:	$	(0.06)	$	(0.06)	$	(0.06)	$	(0.06)	$	(0.06)

	Nine Months ended September 30, 2020
	Class A		Class M		Class A-I		Class M-I		Class D
Basic and diluted net loss per share:
Allocation of net loss per share before performance fee	$	(19,529)	$	(8,009)	$	(2,213)	$	(6,055)	$	(1,069)


Weighted average number of common shares outstanding	90,409,712		37,074,115		10,240,781		28,024,648		4,927,915
Basic and diluted net loss per share:	$	(0.22)	$	(0.22)	$	(0.22)	$	(0.22)	$	(0.22)

Organization and Offering Costs

Organization and offering costs include, but are not limited to, legal, accounting, printing fees and personnel costs of our Advisor attributable to our organization, preparation of the registration statement, registration and qualification of our common stock for sale with the SEC, or in a private placement, and in the various states and filing fees incurred by our Advisor. LaSalle agreed to fund our organization and offering expenses for the Current Public Offering until July 6, 2018, the day the registration statement was declared effective by the SEC, following which time we commenced reimbursing LaSalle over 36 months. Following the Current Public Offering commencement date, we began paying directly or reimbursing LaSalle if it pays on our behalf any organization and offering costs incurred during the Current Public Offering period (other than selling commissions and dealer manager fees) as and when incurred. After the termination of the Current Public Offering, LaSalle has agreed to reimburse us to the extent that the organization and offering costs that we incur exceed 15% of our gross proceeds from the Current Public Offering. LaSalle agreed to fund our organization and offering expenses for the Third Extended Public Offering which has not yet been declared effective by the SEC. We will begin reimbursing LaSalle over 36 months once the Third Extended Public Offering is declared effective. Organization costs are expensed, whereas offering costs are recorded as a reduction of capital in excess of par value. As of September 30, 2021 and December 31, 2020, LaSalle had paid $1,551 and $1,138, respectively, of organization and offering costs on our behalf which we had not yet reimbursed. These costs are included in accrued offering costs on the Consolidated Balance Sheets.

NOTE 7—DST PROGRAM

On October 16, 2019, we, through our operating partnership, initiated the DST Program and on August 10, 2021, our board of directors approved an increase to raise up to a total of $1,000,000 in private placements through the sale of beneficial interests in specific Delaware statutory trusts (“DST”) holding DST Properties, which may be sourced from our existing portfolio or from newly acquired properties sourced from third parties. Each DST Property will be leased back by a wholly owned subsidiary of our operating partnership on a long-term basis of up to ten years pursuant to a master lease agreement. The master lease agreements are expected to be guaranteed by our operating partnership. As compensation for the master lease guarantee, our operating partnership will retain a fair market value purchase option giving it the right, but not the obligation, to acquire the beneficial interests in the DST from the investors at any time after two years from the closing of the applicable DST offering in exchange for OP Units or cash, at our discretion.

The sale of beneficial interests in the DST Property will be accounted for as a failed sale-leaseback transaction due to the fair market value purchase option retained by the operating partnership and as such, the property will remain on our books and records. The proceeds received from each DST offering will be accounted for as a financing obligation on the Consolidated Balance Sheets. Upfront costs for legal work and debt placement costs for the DST totaling $1,857 are accounted for as deferred loan costs and are netted against the financing obligation.

Under the master lease, we are responsible for subleasing the DST Property to tenants, for covering all costs associated with operating the underlying DST Property, and for paying base rent to the DST that owns such property. For financial reporting purposes (and not for income tax purposes), the DST Properties are included in our consolidated financial statements, with the master lease rent payments accounted for using the interest method whereby a portion is accounted for as interest expense and a portion is accounted for as a reduction of the outstanding principal balance of the financing obligation. Upon the determination that it is probable that we will exercise the fair market value purchase option, we will recognize additional interest expense or interest income to the financing obligation to account for the difference between the fair value of the property and the outstanding liabilities. For financial reporting purposes, the rental revenues and rental expenses associated with the underlying property of each master lease are included in the respective line items on our Consolidated Statements of Operations and Comprehensive Income. The net amount we receive from the underlying DST Properties may be more or less than the amount we pay to the investors in the specific DST and could fluctuate over time.

As of September 30, 2021, we have sold $300,427 in interests related to the DST Program. As of September 30, 2021, the following properties are included in our DST Program:

•The Reserve at Johns Creek,

•Summit at San Marcos,

•Mason Mill Distribution Center,

•San Juan Medical Center,

•The Penfield,

•Milford Crossing,

•Villas at Legacy,

•Montecito Marketplace,

•Whitestown Distribution Center,

•Louisville Airport Distribution Center,

•The Preserve at the Meadows,

•The Rockwell and

•9101 Stony Point Drive.

NOTE 8—RENTALS UNDER OPERATING LEASES

We receive rental income from operating leases. The minimum future rentals from consolidated properties based on operating leases in place at September 30, 2021 are as follows:


Year	Amount
2021	$	50,750
2022	156,142
2023	123,646
2024	103,705
2025	91,797
Thereafter	337,651
Total	$	863,691

Minimum future rentals do not include amounts payable by certain tenants based upon a percentage of their gross sales or as reimbursement of property operating expenses. During the three and nine months ended September 30, 2021, no individual tenant accounted for greater than 10% of minimum base rents.

NOTE 9—RELATED PARTY TRANSACTIONS

Pursuant to our Advisory Agreement with LaSalle, we pay a fixed advisory fee of 1.25% of our NAV calculated daily. The Advisory Agreement allows for a performance fee to be earned for each share class based on the total return of that share class or OP Unit during the calendar year. The performance fee is calculated as 10% of the return in excess of 7% per annum. The term of our Advisory Agreement expires June 5, 2022, subject to an unlimited number of successive one year renewals.

Fixed advisory fees for the three and nine months ended September 30, 2021 were $7,404 and $20,477, respectively. The fixed advisory fees for the three and nine months ended September 30, 2020 were $6,192 and $19,049, respectively. Performance fees for the three and nine months ended September 30, 2021 were $14,142. There were no performance fees for the three and nine months ended September 30, 2020. Included in Advisor fees payable at September 30, 2021 was $2,512 of fixed advisory fee expense and $14,142 of performance fee expense. Included in Advisor fees payable for the year ended December 31, 2020 was $2,122 of fixed advisory fee expense.

We pay Jones Lang LaSalle Americas, Inc. (“JLL Americas”), an affiliate of our Advisor, for property management, construction management, leasing, mortgage brokerage and sales brokerage services performed at various properties we own. For the three and nine months ended September 30, 2021, we paid JLL Americas $305 and $784, respectively, for property management and leasing services. For the three and nine months ended September 30, 2020, we paid JLL Americas $163 and $565, respectively, for property management and leasing services During the three and nine months ended September 30, 2021, we paid JLL Americas $0 and $371, respectively, in mortgage brokerage fees related to the mortgage notes payable for Louisville Airport Distribution Center and Townlake of Coppell. During the three and nine months ended September 30, 2020, we paid JLL Americas $0 and $75, respectively, in sales brokerage fees.

We pay the Dealer Manager selling commissions and dealer manager fees in connection with our offerings. For the three and nine months ended September 30, 2021, we paid the Dealer Manager selling commissions and dealer manager fees totaling $3,167 and $8,718, respectively. For the three and nine months ended September 30, 2020, we paid the Dealer Manager selling commissions and dealer manager fees totaling $2,530 and $8,708, respectively. A majority of the selling commissions and dealer manager fees are reallowed to participating broker-dealers. Included in accrued offering costs, at September 30, 2021 and December 31, 2020, were $125,123 and $105,770 of future dealer manager fees payable, respectively.

As of September 30, 2021 and December 31, 2020, we owed $1,551 and $1,138, respectively, for organization and offering costs paid by LaSalle (see Note 6-Common Stock). These costs are included in accrued offering costs.

LaSalle Investment Management Distributors, LLC also serves as the dealer manager for the DST Program on a “best efforts” basis. Our taxable REIT subsidiary, which is a wholly owned subsidiary of our operating partnership, will pay the Dealer Manager upfront selling commissions, upfront dealer manager fees and placement fees of up to 5.0%, 1.0% and 1.0%, respectively, of the gross purchase price per unit of beneficial interest sold in the DST Program. All upfront selling commissions and upfront dealer manager fees are reallowed to participating broker-dealers. For the three and nine months ended September 30, 2021, the taxable REIT subsidiary paid $535 and $3,278, respectively, to the Dealer Manager. For the three and nine months ended September 30, 2020, the taxable REIT subsidiary paid $662 and $1,574, respectively, to the Dealer Manager. In addition, the Dealer Manager may receive an ongoing investor servicing fee that is calculated daily on a

continuous basis from year to year equal to 1/365th of (a) 0.25% of the total equity of each outstanding unit of beneficial interest for such day, payable by the DSTs; (b) 0.85% of the NAV of each outstanding Class A OP Unit, 0.30% of the NAV of each outstanding Class M OP Unit or 0.30% of the NAV of each outstanding Class A-I OP Unit for such day issued in connection with our operating partnership's fair market value purchase option, payable by our operating partnership; and (c) 0.85% of the NAV of each outstanding Class A share, 0.30% of the NAV of each outstanding Class M share or 0.30% of the NAV of each outstanding Class A-I share for such day issued in connection with the investors' redemption right, payable by us. The investor servicing fee may continue for so long as the investor in the DST Program holds beneficial interests, Class A, Class M and Class A-I OP Units or Class A, Class M and Class A-I shares that were issued in connection with the DST Program. No investor servicing fee will be paid on Class M-I OP Units or Class M-I shares. For the three and nine months ended September 30, 2021, the DSTs paid $206 and $510 in investor servicing fees to the Dealer Manager in connection with the DST Program. For the three and nine months ended September 30, 2020, the DSTs paid $28 and $46, respectively, in investor servicing fees to the Dealer Manager in connection with the DST Program.

LaSalle also serves as the manager for the DST Program. Each DST pays the manager a management fee equal to a to-be-agreed upon percentage of the total equity of such DST. For the three and nine months ended September 30, 2021, the DSTs paid $123 and $306, respectively, in management fees to our Advisor in connection with the DST Program. For the three and nine months ended September 30, 2020, the DSTs paid $20 and $30, respectively, in management fees to our Advisor in connection with the DST Program.

NOTE 10—COMMITMENTS AND CONTINGENCIES

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

From time to time, we have entered into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.

We are subject to fixed ground lease payments on South Beach Parking Garage of $100 per year until September 30, 2021, which will increase every five years thereafter by the lesser of 12% or the cumulative CPI over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.

The operating agreement for Presley Uptown allows the unrelated third party joint venture partner, owning a 2.5% interest, to put its interest to us at a market determined value starting September 30, 2022 until September 30, 2024.

The operating agreement for 237 Via Vera Cruz, 13500 Danielson Street and 4211 Starboard allows the unrelated third party joint venture partner, owning a 5% interest, to put its interest to us at a market determined value starting July 31, 2024.

NOTE 11—SEGMENT REPORTING

We have five reportable operating segments: residential, industrial, office, retail and other properties. Consistent with how our chief operating decision makers evaluate performance and manage our properties, the financial information summarized below is presented by operating segment and reconciled to net income for the three and nine months ended September 30, 2021 and 2020.


	Industrial		Office		Residential		Retail		Other		Total
Assets as of September 30, 2021	$	972,035	$	381,716	$	1,119,197	$	569,193	$	23,177	$	3,065,318
Assets as of December 31, 2020	659,870		277,556		788,060		577,588		22,134		2,325,208

Three Months Ended September 30, 2021

Capital expenditures by segment	$	4,118	$	718	$	1,487	$	634	$	—	$	6,957

Revenues:
Rental revenue	$	18,126	$	8,791	$	18,668	$	12,332	$	183	$	58,100
Other revenue	66		397		1,546		207		611		2,827
Total revenues	$	18,192	$	9,188	$	20,214	$	12,539	$	794	$	60,927
Operating expenses:
Real estate taxes	$	2,629	$	823	$	3,266	$	1,451	$	113	$	8,282
Property operating expenses	1,398		1,823		5,834		1,709		183		10,947

Total segment operating expenses	$	4,027	$	2,646	$	9,100	$	3,160	$	296	$	19,229


Reconciliation to net income

Property general and administrative											$	(470)
Advisor fees											(21,546)
Company level expenses											(940)


Depreciation and amortization											(23,519)

Other income and (expenses):
Interest expense											(11,714)
Loss from unconsolidated real estate affiliates and fund investment											(1,270)

Investment income on marketable securities											88
Net realized gain upon sale of marketable securities											38
Net unrealized change in fair value of investment in marketable securities											(1,711)

Total other income and (expenses)											$	(14,569)
Net loss											$	(19,258)

Reconciliation to total consolidated assets as of September 30, 2021
Assets per reportable segments											$	3,065,318
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets											674,413
Total consolidated assets											$	3,739,731

Reconciliation to total consolidated assets as of December 31, 2020
Assets per reportable segments											2,325,208
Investment in unconsolidated real estate affiliates, real estate fund investment and corporate level assets											333,391
Total consolidated assets											$	2,658,599


	Industrial		Office		Residential		Retail		Other		Total
Three Months Ended September 30, 2020

Capital expenditures by segment	$	837	$	651	$	1,067	$	123	$	—	$	2,678

Revenues:
Rental revenue	$	12,934	$	6,931	$	15,594	$	11,436	$	75	$	46,970
Other revenue	134		326		1,030		278		299		2,067
Total revenues	$	13,068	$	7,257	$	16,624	$	11,714	$	374	$	49,037
Operating expenses:
Real estate taxes	$	2,067	$	875	$	3,012	$	1,525	$	93	$	7,572
Property operating expenses	1,062		1,635		5,225		1,879		174		9,975

Total segment operating expenses	$	3,129	$	2,510	$	8,237	$	3,404	$	267	$	17,547


Reconciliation to net income
Property general and administrative											$	(728)
Advisor fees											(6,192)
Company level expenses											(693)


Depreciation and amortization											(18,830)

Other income and (expenses):
Interest expense											(8,391)

Loss from unconsolidated real estate affiliates and fund investment											(3,289)


Total other income and (expenses)											$	(15,160)
Net loss											$	(10,113)


	Industrial		Office		Residential		Retail		Other		Total
Nine Months Ended September 30, 2021

Capital expenditures by segment	$	12,999	$	2,055	$	4,103	$	2,110	$	16	$	21,283

Revenues:
Rental revenue	$	49,331	$	23,788	$	51,451	$	36,523	$	276	$	161,369
Other revenue	128		1,212		4,424		383		2,038		8,185
Total revenues	$	49,459	$	25,000	$	55,875	$	36,906	$	2,314	$	169,554
Operating expenses:
Real estate taxes	$	7,606	$	2,451	$	9,443	$	4,723	$	350	$	24,573
Property operating expenses	3,894		4,878		15,768		5,952		560		31,052

Total segment operating expenses	$	11,500	$	7,329	$	25,211	$	10,675	$	910	$	55,625


Reconciliation to net income

Property general and administrative											$	(946)
Advisor fees											(34,620)
Company level expenses											(3,123)

Depreciation and amortization											(64,682)

Other income and (expenses):
Interest expense											(31,264)
Loss from unconsolidated real estate affiliates and fund investments											(4,021)

Investment income on marketable securities											88
Net realized gain upon sale of marketable securities											38
Net unrealized change in fair value of investment in marketable securities											(1,711)
Gain on disposition of property and extinguishment of debt, net											33,422
Total other income and (expenses)											$	(3,448)
Net income											$	7,198


	Industrial		Office		Residential		Retail		Other		Total
Nine Months Ended September 30, 2020

Capital expenditures by segment	$	1,652	$	2,112	$	2,796	$	972	$	—	$	7,532

Revenues:
Rental revenue	$	36,816	$	20,244	$	47,874	$	34,218	$	218	$	139,370
Other revenue	323		983		2,543		490		904		5,243
Total revenues	$	37,139	$	21,227	$	50,417	$	34,708	$	1,122	$	144,613
Operating expenses:
Real estate taxes	$	6,193	$	2,581	$	8,845	$	4,535	$	265	$	22,419
Property operating expenses	3,045		4,289		14,278		5,408		534		27,554

Total segment operating expenses	$	9,238	$	6,870	$	23,123	$	9,943	$	799	$	49,973


Reconciliation to net income
Property general and administrative											$	(3,609)
Advisor fees											(19,049)
Company level expenses											(2,241)


Depreciation and amortization											(56,450)

Other income and (expenses):
Interest expense											(32,191)

Loss from unconsolidated real estate affiliates and fund investments											(16,186)

Gain on disposition of property and extinguishment of debt, net											(1,772)
Total other income and (expenses)											$	(50,149)
Net loss											$	(36,858)

NOTE 12—INVESTMENT IN MARKETABLE SECURITIES

The following is a summary of our investment in marketable securities held as of September 30, 2021, which consisted entirely of stock of publicly traded REITs.


	September 30, 2021
Investment in marketable securities - cost	$	29,888
Unrealized gains	83
Unrealized losses	(1,794)
Net unrealized loss	(1,711)
Investment in marketable securities - fair value	$	28,177

Upon the sale of a particular security, the realized net gain or loss is computed assuming the shares purchased first are sold first. During the three months ended September 30, 2021, marketable securities sold generated proceeds of $1,320, resulting in realized gains of $38, and no realized losses.

NOTE 13—SUBSEQUENT EVENTS

On October 7, 2021, we acquired North Tampa Surgery Center, a 13,000 square foot life sciences property located in Odessa, Florida for approximately $8,500. The acquisition was funded with cash on hand.

On October 20, 2021, we acquired Friendship Distribution Center, a 650,000 square foot industrial property located in Buford, Georgia for approximately $95,000. The acquisition was funded with cash on hand.

On October 28, 2021, we acquired South San Diego Distribution Center, a 655,000 square foot industrial property located in San Diego, California for approximately $158,500. We assumed a $72,500 mortgage note payable that bears an interest rate of 3.18% and matures on January 31, 2031. The acquisition was funded as an UPREIT transaction in which we issued OP Units and funded with cash on hand.

On November 9, 2021, our board of directors approved a gross dividend for the third quarter of 2021 of $0.135 per share to stockholders of record as of December 23, 2021. The dividend will be paid on or around December 30, 2021. Class A, Class M, Class A-I, Class M-I and Class D stockholders will receive $0.135 per share, less applicable class-specific fees, if any.

* * * * * *


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

$ in thousands, except per share amounts

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q ("Form 10-Q") may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments. Forward-looking statements can be identified by the use of forward-looking terminology such as, but not limited to, “may,” “should,” “expect,” “anticipate,” “estimate,” “would be,” “believe,” or “continue” or the negative or other variations of comparable terminology. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Except as required by law, we do not undertake to update or revise any forward-looking statements contained in this Form 10-Q. Important factors that could cause actual results to differ materially from the forward-looking statements are disclosed in “Item 1A. Risk Factors,” “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our 2020 Form 10-K and our periodic reports filed with the SEC.

Management Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements appearing elsewhere in this Form 10-Q. All references to numbered Notes are to specific notes to our consolidated financial statements beginning on page 7 of this Form 10-Q, and the descriptions referred to are incorporated into the applicable portion of this section by reference. References to “base rent” in this Form 10-Q refer to cash payments made under the relevant lease(s), excluding real estate taxes and certain property operating expenses that are paid by us and are recoverable under the relevant lease(s) and exclude adjustments for straight-line rent revenue and above- and below-market lease amortization.

The discussions surrounding our Consolidated Properties refer to our wholly or majority owned and controlled properties, including our DST Properties, which as of September 30, 2021, were comprised of:

Industrial

•Kendall Distribution Center,

•Norfleet Distribution Center,

•Suwanee Distribution Center,

•3325 Trinity Boulevard,

•Charlotte Distribution Center,

•DFW Distribution Center,

•O'Hare Industrial Portfolio,

•Tampa Distribution Center,

•Aurora Distribution Center,

•Valencia Industrial Portfolio,

•Pinole Point Distribution Center,

•Mason Mill Distribution Center,

•Fremont Distribution Center,

•3324 Trinity Boulevard,

•Taunton Distribution Center,

•Chandler Distribution Center,

•Fort Worth Distribution Center (acquired in 2020),

•Whitestown Distribution Center (acquired in 2020),

•Louisville Distribution Center (acquired in 2021),

•Southeast Phoenix Distribution Center (acquired in 2021),

•Louisville Airport Distribution Center (acquired in 2021),

•237 Via Vera Cruz (acquired in 2021),

•4211 Starboard Drive (acquired in 2021),

•5 National Way (acquired 2021) and

•47 National Way (acquired in 2021).

Office

•Monument IV at Worldgate,

•140 Park Avenue,

•San Juan Medical Center,

•Genesee Plaza,

•Fountainhead Corporate Park (acquired in 2020),

•170 Park Avenue (acquired in 2021), and

•9101 Stony Point Drive (acquired in 2021).

Residential

•The Edge at Lafayette,

•Townlake of Coppell,

•AQ Rittenhouse,

•Lane Parke Apartments,

•Dylan Point Loma,

•The Penfield,

•180 North Jefferson,

•Jory Trail at the Grove,

•The Reserve at Johns Creek,

•Villas at Legacy,

•Stonemeadow Farms,

•Summit at San Marcos,

•Presley Uptown,

•Princeton North Andover (acquired in 2021),

•The Preserve at the Meadows (acquired in 2021),

•The Rockwell (acquired 2021),

•Miramont Apartments (acquired 2021), and

•Pinecone Apartments (acquired 2021).

Retail

•The District at Howell Mill,

•Grand Lakes Marketplace,

•Oak Grove Plaza,

•Rancho Temecula Town Center,

•Skokie Commons,

•Whitestone Market,

•Maui Mall,

•Silverstone Marketplace,

•Kierland Village Center,

•Timberland Town Center,

•Montecito Marketplace, and

•Milford Crossing (acquired in 2020).

Other

•South Beach Parking Garage.

Sold Properties

•24823 Anza Drive (sold in 2020), and

•South Seattle Distribution Center (sold in 2021).

Discussions surrounding our Unconsolidated Properties refer to the following properties as of September 30, 2021:


Property						Property Type
Chicago Parking Garage						Parking
NYC Retail Portfolio (1)						Retail
Pioneer Tower						Office
The Tremont						Residential
The Huntington						Residential
Siena Suwanee Town Center (2)						Residential
Single-Family Rental Portfolio (1) (3)						Residential

________

(1) We have elected the fair value option to account for this investment.

(2) Investment was acquired on December 15, 2020.

(3) Investment was acquired on August 5, 2021.

Our primary business is the ownership and management of a diversified portfolio of industrial, office, residential, retail and other properties primarily located in the United States. The residential sector includes apartment properties and single family rental homes. It is expected that over time our real estate portfolio will be further diversified on a global basis and will be further complemented by investments in real estate-related assets.

We are managed by our Advisor, LaSalle Investment Management, Inc., a subsidiary of our Sponsor, Jones Lang LaSalle Incorporated (NYSE: JLL), a leading global financial and professional services firm that specializes in commercial real estate and investment management. We hire property management and leasing companies to provide the on-site, day-to-day management and leasing services for our properties. When selecting a property management or leasing company for one of our properties, we look for service providers that have a strong local market or industry presence, create portfolio efficiencies, have the ability to develop new business for us and will provide a strong internal control environment that will comply with our Sarbanes-Oxley Act of 2002 internal control requirements. We currently use a mix of property management and leasing service providers that include large national real estate service firms, including an affiliate of our Advisor and smaller local firms.

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

The following charts summarize our portfolio diversification by property sector and geographic region based upon the fair value of our properties. These tables provide examples of how our Advisor evaluates our real estate portfolio when making investment decisions.

Estimated Percent of Fair Value as of September 30, 2021:

Our investments are not materially impacted by seasonality, despite certain of our retail tenants being impacted by seasonality. Percentage rents (rents computed as a percentage of tenant sales) that we earn from investments in retail properties may, in the future, be impacted by seasonality.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, fair value of derivatives and real estate assets, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions. Actual results could differ from those estimates.

Critical Accounting Policies

This MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes during the nine months ended September 30, 2021 to the items that we disclosed as our critical accounting policies and estimates under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K.

Initial Valuations and Estimated Useful Lives or Amortization Periods for Real Estate Investments and Intangibles

These estimates are particularly important as they are used for the allocation of purchase price between building, land and other identifiable intangibles, including above, below and at-market leases. As a result, the impact of these estimates on our operations could be substantial. Significant differences in annual depreciation or amortization expense may result from the differing useful life or amortization periods related to such purchased assets and liabilities.

Impairment of Long-Lived Assets

Our estimate of the expected future cash flows used in testing for impairment is subjective and based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period, discount rates and the length of our anticipated holding period. These assumptions could differ materially from actual results. If changes in our strategy or the market conditions result in a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. No such strategy changes or market conditions have been identified as of September 30, 2021.

Collectibility of Rental Revenue

Individual leases are evaluated for collectibility at each reporting period. We evaluate the collectibility of rents and other receivables at each reporting period based on factors including, among others, tenants' payment history, the financial condition of the tenant, business conditions and trends in the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached.

Properties

Properties owned at September 30, 2021, including DST Properties, are as follows:


					Percentage Leased as of September 30, 2021
Property Name	Location	Acquisition Date	Ownership %	Net Rentable Square Feet
Consolidated Properties:
Industrial Segment:
Kendall Distribution Center	Atlanta, GA	June 30, 2005	100%	409,000	100%
Norfleet Distribution Center	Kansas City, MO	February 27, 2007	100	702,000	100
Suwanee Distribution Center	Suwanee, GA	June 28, 2013	100	559,000	100
Grand Prairie Distribution Center
3325 West Trinity Boulevard	Grand Prairie, TX	January 22, 2014	100	277,000	100
3324 West Trinity Boulevard	Grand Prairie, TX	May 31, 2019	100	145,000	100
Charlotte Distribution Center	Charlotte, NC	June 27, 2014	100	347,000	100
DFW Distribution Center
4050 Corporate Drive	Grapevine, TX	April 15, 2015	100	441,000	100
4055 Corporate Drive	Grapevine, TX	April 15, 2015	100	202,000	100
O'Hare Industrial Portfolio
200 Lewis	Wood Dale, IL	September 30, 2015	100	31,000	100
1225 Michael Drive	Wood Dale, IL	September 30, 2015	100	109,000	100
1300 Michael Drive	Wood Dale, IL	September 30, 2015	100	71,000	100
1301 Mittel Drive	Wood Dale, IL	September 30, 2015	100	53,000	100
1350 Michael Drive	Wood Dale, IL	September 30, 2015	100	56,000	100
2501 Allan Drive	Elk Grove, IL	September 30, 2015	100	198,000	100
2601 Allan Drive	Elk Grove, IL	September 30, 2015	100	124,000	100
Tampa Distribution Center	Tampa, FL	April 11, 2016	100	386,000	100
Aurora Distribution Center	Aurora, IL	May 19, 2016	100	305,000	100
Valencia Industrial Portfolio:
28150 West Harrison Parkway	Valencia, CA	June 29, 2016	100	87,000	100
28145 West Harrison Parkway	Valencia, CA	June 29, 2016	100	114,000	100
28904 Paine Avenue	Valencia, CA	June 29, 2016	100	117,000	61
25045 Tibbitts Avenue	Santa Clarita, CA	June 29, 2016	100	142,000	100
Pinole Point Distribution Center:
6000 Giant Road	Richmond, CA	September 8, 2016	100	225,000	100
6015 Giant Road	Richmond, CA	September 8, 2016	100	252,000	100
6025 Giant Road	Richmond, CA	December 29, 2016	100	41,000	100
Mason Mill Distribution Center	Buford, GA	December 20, 2017	100	340,000	100
Fremont Distribution Center
45275 Northport Court	Fremont, CA	March 29, 2019	100	117,000	100
45630 Northport Loop East	Fremont, CA	March 29, 2019	100	120,000	100
Taunton Distribution Center	Taunton, MA	August 23, 2019	100	200,000	100
Chandler Distribution Center
1725 East Germann Road	Chandler, AZ	December 5, 2019	100	122,000	100
1825 East Germann Road	Chandler, AZ	December 5, 2019	100	89,000	92
Fort Worth Distribution Center	Fort Worth, TX	October 23, 2020	100	351,000	100
Whitestown Distribution Center
4993 Anson Boulevard	Whitestown, IN	December 11, 2020	100	280,000	100
5102 E 500 South	Whitestown, IN	December 11, 2020	100	440,000	100
Louisville Distribution Center	Shepherdsville, KY	January 21, 2021	100	1,040,000	100
Southeast Phoenix Distribution Center


					Percentage Leased as of September 30, 2021
Property Name	Location	Acquisition Date	Ownership %	Net Rentable Square Feet
6511 West Frye Road	Chandler, AZ	February 23, 2021	100	102,000	100
6565 West Frye Road	Chandler, AZ	February 23, 2021	100	118,000	100
6615 West Frey Road	Chandler, AZ	February 23, 2021	100	136,000	100
6677 West Frye Road	Chandler, AZ	February 23, 2021	100	118,000	100
Louisville Airport Distribution Center	Louisville, KY	June 24, 2021	100	284,000	100
237 Via Vera Cruz (1)	San Marcos, CA	July 2, 2021	95	66,000	100
13500 Danielson Street (1)	Poway, CA	July 2, 2021	95	73,000	100
4211 Starboard Drive (1)	Fremont, CA	July 9, 2021	95	130,000	100
5 National Way	Durham, NC	September 28, 2021	100	188,000	100
47 National Way	Durham, NC	September 28, 2021	100	187,000	100
Office Segment:
Monument IV at Worldgate	Herndon, VA	August 27, 2004	100%	228,000	100%
140 Park Avenue	Florham Park, NJ	December 21, 2015	100	100,000	100
San Juan Medical Center	San Juan Capistrano, CA	April 1, 2016	100	40,000	97
Genesee Plaza
9333 Genesee Ave	San Diego, CA	July 2, 2019	100	80,000	89
9339 Genesee Ave	San Diego, CA	July 2, 2019	100	81,000	88
Fountainhead Corporate Park
Fountainhead Corporate Park I	Tempe, AZ	February 6, 2020	100	167,000	99
Fountainhead Corporate Park II	Tempe, AZ	February 6, 2020	100	128,000	97
170 Park Avenue	Florham Park, NJ	February 2, 2021	100	147,000	100
9101 Stony Point Drive	Richmond, VA	September 15, 2021	100	87,000	100

Residential Segment:
The Edge at Lafayette	Lafayette, LA	January 15, 2008	100%	207,000	83%
Townlake of Coppell	Coppell, TX	May 22, 2015	100	351,000	94
AQ Rittenhouse	Philadelphia, PA	July 30, 2015	100	92,000	95
Lane Parke Apartments	Mountain Brook, AL	May 26, 2016	100	263,000	95
Dylan Point Loma	San Diego, CA	August 9, 2016	100	204,000	99
The Penfield	St. Paul, MN	September 22, 2016	100	245,000	95
180 North Jefferson	Chicago, IL	December 1, 2016	100	217,000	96
Jory Trail at the Grove	Wilsonville, OR	July 14, 2017	100	315,000	95
The Reserve at Johns Creek	Johns Creek, GA	July 28, 2017	100	244,000	92
Villas at Legacy	Plano, TX	June 6, 2018	100	340,000	94
Stonemeadow Farms	Bothell, WA	May 13, 2019	100	228,000	96
Summit at San Marcos	Chandler, AZ	July 31, 2019	100	257,000	97
Presley Uptown (1)	Charlotte, NC	September 30, 2019	98	190,000	97
Princeton North Andover	North Andover, MA	May 3, 2021	100	204,000	97
The Preserve at the Meadows	Fort Collins, CO	August 23, 2021	100	208,000	95
The Rockwell	Berlin, MA	August 31, 2021	100	233,000	96
Miramont Apartments	Fort Collins, CO	September 29, 2021	100	212,000	98
Pinecone Apartments	Fort Collins, CO	September 29, 2021	100	176,000	99
Retail Segment:
The District at Howell Mill (1)	Atlanta, GA	June 15, 2007	88%	306,000	96%
Grand Lakes Marketplace (1)	Katy, TX	September 17, 2013	90	131,000	75
Oak Grove Plaza	Sachse, TX	January 17, 2014	100	120,000	94
Rancho Temecula Town Center	Temecula, CA	June 16, 2014	100	165,000	97
Skokie Commons	Skokie, IL	May 15, 2015	100	97,000	98


					Percentage Leased as of September 30, 2021
Property Name	Location	Acquisition Date	Ownership %	Net Rentable Square Feet
Whitestone Market	Austin, TX	September 30, 2015	100	145,000	99
Maui Mall	Kahului, HI	December 22, 2015	100	235,000	82
Silverstone Marketplace	Scottsdale, AZ	July 27, 2016	100	78,000	93
Kierland Village Center	Scottsdale, AZ	September 30, 2016	100	118,000	95
Timberland Town Center	Beaverton, OR	September 30, 2016	100	92,000	97
Montecito Marketplace	Las Vegas, NV	August 8, 2017	100	190,000	94
Milford Crossing	Milford, MA	January 29, 2020	100	159,000	100

Other Segment:
South Beach Parking Garage (2)	Miami Beach, FL	January 28, 2014	100%	130,000	N/A

Unconsolidated Properties:
Chicago Parking Garage (3)	Chicago, IL	December 23, 2014	100%	167,000	N/A
NYC Retail Portfolio (4)	NY/NJ	December 8, 2015	14	1,938,000	89%
Pioneer Tower (5)	Portland, OR	June 28, 2016	100	296,000	71
The Tremont (1)	Burlington, MA	July 19, 2018	75	175,000	97
The Huntington (1)	Burlington, MA	July 19, 2018	75	115,000	97
Siena Suwanee Town Center	Suwanee, GA	December 15, 2020	100	226,000	94
Single-Family Rental Portfolio	Various	August 5, 2021	47	7,207,000	97

________

(1)We own a majority interest in the joint venture that owns a fee simple interest in this property.

(2)The parking garage contains 343 stalls. This property is owned leasehold.

(3)We own a condominium interest in the building that contains a 366 stall parking garage.

(4)We own an approximate 14% interest in a portfolio of eight urban infill retail properties located in the greater New York City area.

(5)We own a condominium interest in the building that contains a 17 story multi-tenant office property.

Operating Statistics

We generally hold investments in properties with high occupancy rates leased to quality tenants under long-term, non-cancelable leases. We believe these leases are beneficial to achieving our investment objectives. The following table shows our operating statistics by property type for our consolidated properties as of September 30, 2021:


	Number of Properties	Total Area (Sq Ft)	% of Total Area		Occupancy %		Average Minimum Base Rent per Occupied Sq Ft (1)
Industrial	42	9,894,000	58	%	99	%	5.93
Office	11	1,058,000	6		95		31.44
Residential	18	4,186,000	24		95		22.16
Retail	12	1,836,000	11		97		21.09
Other	1	130,000	1		N/A		N/A
Total	84	17,104,000	100	%	98	%	$	13.31

________

(1)Amount calculated as in-place minimum base rent for all occupied space at September 30, 2021 and excludes any straight line rents, tenant recoveries and percentage rent revenues.

As of September 30, 2021, our average effective annual rent per square foot, calculated as average minimum base rent per occupied square foot less tenant concessions and allowances, was $12.16 for our consolidated properties.

Recent Events and Outlook

COVID-19 Business Outlook

The outbreak of COVID-19 was declared by the World Health Organization as a global health emergency in January 2020 and then as a pandemic in March 2020. COVID-19 has impacted global financial markets, severely restricted international trade and travel, disrupted business operations (in part or in their entirety) and negatively impacted many investment asset classes including real estate. The ongoing outbreak and corollary response could have a material adverse impact on our financial condition and results of operations. The severity of the impact brought on by these disruptions will be different across property types and markets but could have serious negative impacts on all real estate depending on the longer-term economic effects of COVID-19.

Rent Collections

Rent collections across our portfolio have continued to improve as most tenants have been able to reopen their businesses and return to normal payment patterns. Collections have been in the upper 90 percent range, and we have received very few new requests for rent relief over the last three quarters. Our retail tenants continue to be a slight laggard in collection of outstanding receivables as compared to the other property sectors.

Property Valuations

Property valuations across our portfolio have stabilized, and we are seeing positive valuation increases across our residential, industrial and healthcare properties driven by good underlying property fundamentals and strong capital markets.

Credit Facility

On May 24, 2021, we entered into our Credit Facility providing for a $650,000 revolving line of credit and unsecured term loan made up of a $415,000 Revolving Credit Facility and a $235,000 Term Loan. The Credit Facility provides us with the ability, from time to time, to increase the size of the Credit Facility up to a total of $800,000, subject to receipt of lender commitments and other conditions. We are in compliance with our debt covenants as of September 30, 2021. We expect to maintain compliance with our debt covenants.

Liquidity

At September 30, 2021, we had in excess of $179,000 in total cash on hand and $140,000 of capacity under our Credit Facility. Looking at the remainder of 2021 and into 2022, we expect to utilize our cash on hand and Credit Facility capacity to acquire new properties, fund repurchases of our shares and fund quarterly distributions.

Share Repurchase Plan

During the third quarter of 2021, we repurchased $29,364 of our common stock pursuant to our share repurchase plan, which had a quarterly limit of $111,435. The quarterly limit on repurchases is calculated as 5% of our NAV as of the last day of the previous quarter. The limit for the fourth quarter of 2021 is $123,680.

General Company and Market Commentary

On July 6, 2018, the SEC declared our Current Public Offering effective registering up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each offering period, subject to regulatory approval. The per share purchase price varies from day to day and, on each day, equals our NAV per share for each class of common stock, plus, for Class A and Class A-I shares, applicable selling commissions. The Dealer Manager is distributing shares of our common stock in our Current Public Offering. We intend to primarily use the net proceeds from the offering, after we pay the fees and expenses attributable to the offerings and our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing instruments and (3) fund repurchases of our shares under our share repurchase plan.

On March 3, 2015, we commenced our Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds from our public offerings.

On October 16, 2019, we through our operating partnership, initiated the DST Program to raise up to $500,000, which our board of directors increased to $1,000,000 on August 10, 2021, in private placements exempt from registration under the Securities Act through the sale of beneficial interests to accredited investors in specific DSTs holding DST Properties, which may be sourced from our real properties or from third parties.

On June 4, 2021, we filed a Registration Statement on Form S-11 with the SEC for our Third Extended Public Offering to register a public offering of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. As of November 10, 2021, the Third Extended Public Offering has not been declared effective.

Over the past nine years we have acquired 102 properties, excluding our investment in Single-Family Residential Portfolio (all of these consistent with our investment strategy), sold 38 non-strategic properties, reduced our Company leverage ratio, decreased our average interest rate on debt, and increased cash reserves and Company-wide liquidity, while also providing cash flow to our stockholders through our regular quarterly dividend payments.

Capital Raised and Use of Proceeds

As of September 30, 2021, we have raised gross proceeds of over $2,837,000 from our public and private offerings and private share sales since 2012. We used these proceeds along with proceeds from mortgage debt to acquire approximately $3,776,000 of real estate investments, deleverage the Company by repaying mortgage loans of approximately $647,000 and repurchase shares of our common stock for approximately $880,000.

Property Acquisitions

On July 9, 2021, we acquired a 95% interest in 4211 Starboard, a 130,000 square foot industrial property located in Fremont, California for approximately $32,000 using cash on hand.

On August 5, 2021, we acquired a 47% interest in a portfolio of approximately 4,000 stabilized single family rental homes located in various markets across the United States, including Atlanta, Dallas, Phoenix, Nashville and Charlotte, among others. The Single-Family Rental Portfolio is encumbered by securitized mortgages in a net amount of $760,000 maturing in the fourth quarter of 2025 at a weighted average interest rate of 2.1%. The equity purchase price is approximately $205,000. We funded the transaction using cash on hand and a draw on our revolving line of credit.

On August 23, 2021, we acquired The Preserve at the Meadows, a garden-style residential community in Fort Collins, Colorado. The purchase price was approximately $61,000. The acquisition was funded with cash on hand.

On August 31, 2021, we acquired The Rockwell, a garden-style residential community in Berlin, Massachusetts. The purchase price was approximately $84,000. The acquisition was funded with cash on hand.

On September 15, 2021, we acquired 9101 Stony Point Drive, an 87,000 square foot, medical office building in Richmond, Virginia. The purchase price was approximately $52,000. The acquisition was funded with cash on hand.

On September 28, 2021, we acquired 5 National Way and 47 National Way, a two building life sciences center totaling 375,000 square feet, located in Durham, North Carolina for approximately $66,750. The acquisitions were funded with cash on hand.

On September 29, 2021, we acquired Miramont Apartments, a 210-unit residential property located in Fort Collins, Colorado, for approximately $57,400.

On September 29, 2021, we acquired Pinecone Apartments, a 195-unit residential property located in Fort Collins, Colorado, for approximately $51,600.

Property Dispositions

On January 8, 2021, we sold South Seattle Distribution Center, a 323,000 square foot industrial property located in Seattle, Washington for approximately $72,600 less closing costs and the loan of $17,841 was retired. We recorded a gain on the sale of the property in the amount of $33,580.

Financing

On February 10, 2021, we entered into a $34,000 mortgage payable on Whitestown Distribution Center. The mortgage note bears an interest of 2.95% and matures on February 10, 2028.

On March 8, 2021, we repaid the mortgage note payable related to 140 Park Avenue in the amount of $22,800.

On March 11, 2021, we entered into a $36,030 mortgage payable on Townlake of Coppell. The mortgage note bears an interest rate of 2.41% and matures on April 10, 2028.

On March 17, 2021, we repaid the mortgage note payable related to Monument IV in the amount of $40,000.

On April 26, 2021, we entered into a $52,250 mortgage payable on Louisville Distribution Center. The mortgage bears an interest rate of 1.76% and matures on May 1, 2026.

On May 18, 2021, we entered into a $49,000 mortgage payable on Southeast Phoenix Distribution Center. The mortgage bears an interest rate of 2.70% and matures on June 1, 2028.

On June 30, 2021, we entered into a $39,900 mortgage payable on Princeton North Andover. The mortgage bears an interest rate of libor + 1.55% (1.63% at June 30, 2021) and matures on June 1, 2028.

On September 10, 2021, we entered into a $32,492 mortgage payable on five industrial buildings. $11,880 is allocated towards the San Marcos property and $20,612 is allocated towards the Fremont property. The mortgage bears an interest rate of LIBOR + 1.40% (1.48% at September 30, 2021) and matures on September 8, 2026.

On September 23, 2021, we entered into a $32,400 mortgage payable on The Preserve at the Meadows. The mortgage bears an interest rate of 2.57% and matures on October 1, 2031.

On September 29, 2021, we assumed a mortgage payable that was originated on May 1, 2016 on Miramont Apartments. The mortgage bears an interest rate of 3.87% for the remaining five-year term. As of September 30, 2021, the balance of the loan was $27,752.

On September 29, 2021, we assumed a mortgage payable that was originated on May 1, 2016 on Pinecone Apartments. The mortgage bears an interest rate of 3.87% for the remaining five- year term. As of September 30, 2021, the balance of the loan was $25,467.

On September 30, 2021, we entered into a $46,310 mortgage payable on The Rockwell. The mortgage bears an interest rate of 2.62% and matures on October 1, 2031.

Subsequent Events

On October 7, 2021, we acquired North Tampa Surgury Center, a 13,000 square foot life sciences property located in Odessa, Florida for approximately $8,500. The acquisition was funded with cash on hand.

On November 9, 2021, our board of directors approved a gross dividend for the third quarter of 2021 of $0.135 per share

to stockholders of record as of December 23, 2021. The dividend will be paid on or around December 30, 2021. Class A, Class M, Class A-I, Class M-I and Class D stockholders will receive $0.135 per share, less applicable class-specific fees, if any.

Investment Objectives and Strategy

Our primary investment objectives are:

•to generate an attractive level of current income for distribution to our stockholders;

•to preserve and protect our stockholders' capital investments;

•to achieve appreciation of our NAV over time; and

•to enable stockholders to utilize real estate as an asset class in diversified, long-term investment portfolios.

We cannot ensure that we will achieve our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases, these limitations cannot be changed unless our charter is amended, which may require the approval of our stockholders.

The cornerstone of our investment strategy is to acquire and manage income-producing commercial real estate properties and real estate-related assets around the world. We believe this strategy enables us to provide our stockholders with a portfolio that is well-diversified across property type, geographic region and industry, both in the United States and internationally. It is our belief that adding international investments to our portfolio over time will serve as an effective tool to construct a well-diversified portfolio designed to provide our stockholders with stable distributions and attractive long-term risk-adjusted returns.

We believe that our broadly diversified portfolio benefits our stockholders by providing:

•diversification of sources of income;

•access to attractive real estate opportunities currently in the United States and, over time, around the world; and

•exposure to a return profile that should have lower correlations with other investments.

Since real estate markets are often cyclical in nature, our strategy allows us to more effectively deploy capital into property types and geographic regions where the underlying investment fundamentals are relatively strong or strengthening and away from those property types and geographic regions where such fundamentals are relatively weak or weakening. We intend to meet our investment objectives by selecting investments across multiple property types and geographic regions to achieve portfolio stability, diversification, current income and favorable risk-adjusted returns. To a lesser degree, we also intend to invest in debt and equity interests backed principally by real estate, which we refer to collectively as “real estate-related assets.”

We will leverage LaSalle's broad commercial real estate research and strategy platform and resources to employ a research-based investment philosophy focused on building a portfolio of commercial properties and real estate-related assets that we believe has the potential to provide stable income streams and outperform market averages over an extended holding period. Furthermore, we believe that having access to LaSalle and JLL's international organization and platform, with real estate professionals living and working full time throughout our global target markets, will be a valuable resource to us when considering and executing upon international investment opportunities.

Our board of directors has adopted investment guidelines for our Advisor to implement and actively monitor in order to allow us to achieve and maintain diversification in our overall investment portfolio. Our board of directors formally reviews our investment guidelines on an annual basis and our investment portfolio on a quarterly basis or, in each case, more often as they deem appropriate. Our board of directors reviews the investment guidelines to ensure that the guidelines are being followed and are in the best interests of our stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of our board of directors. Changes to our investment guidelines must be approved by our board of directors but do not require notice to or the vote of stockholders.

We seek to invest:

•up to 95% of our assets in properties;

•up to 25% of our assets in real estate-related assets; and

•up to 15% of our assets in cash, cash equivalents and other short-term investments.

Notwithstanding the above, the actual percentage of our portfolio that is invested in each investment type may from time to time be outside these target levels due to numerous factors including, but not limited to, large inflows of capital over a short period of time, lack of attractive investment opportunities or increases in anticipated cash requirements for repurchase requests.

We expect to maintain a targeted Company leverage ratio (calculated as our share of total liabilities divided by our share of the fair value of total assets) of between 30% and 50%. We intend to use low leverage, or in some cases possibly no leverage, to finance new acquisitions in order to maintain our targeted Company leverage ratio. Our Company leverage ratio was 43% as of September 30, 2021.

2021 Key Initiatives

A short-term initiative is to continue monitoring the status of COVID-19 guidance and its impact on our properties. During the remainder of 2021, we intend to use capital raised from our public and private offerings and the DST Program to acquire new investment opportunities, repurchasing stock under our share repurchase plan and fund quarterly distributions. We look to make investments that fit with our investment objectives and guidelines. Likely investment candidates may include well-located, well-leased residential properties, industrial properties, medical office properties, single family rentals and public REIT securities. We will also attempt to further our geographic diversification. We will use debt financing to take advantage of the current favorable interest rate environment, while looking to keep the Company leverage ratio in the 30% to 50% range in the near term consistent with traditional core real estate. We also intend to use our Revolving Credit Facility to allow us to efficiently manage our cash flows.

Results of Operations

General

Our revenues are primarily received from tenants in the form of fixed minimum base rents and recoveries of operating expenses. Our expenses primarily relate to the costs of operating and financing the properties. Our share of the net income or net loss from our unconsolidated real estate affiliates is included in income from unconsolidated affiliates and fund investments. We believe the following analysis of reportable segments provides important information about the operating results of our real estate investments, such as trends in total revenues or operating expenses that may not be as apparent in a period-over-period comparison of the entire Company. We group our investments in real estate assets from continuing operations into five reportable operating segments based on the type of property, which are residential, industrial, office, retail and other. Operations from corporate level items and real estate assets sold are excluded from reportable segments.

Properties acquired or sold during any of the periods presented are presented within the recent acquisitions and sold properties line. The properties currently presented within the recent acquisitions and sold properties line include the properties listed as either acquired or sold in the Management Overview section above. Properties owned for the nine months ended September 30, 2021 and 2020 are referred to as our comparable properties.

Results of Operations for the Three Months Ended September 30, 2021 and 2020

Revenues

The following chart sets forth revenues by reportable segment for the three months ended September 30, 2021 and 2020:


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		$ Change		% Change
Revenues:
Rental revenue
Residential	$	16,409	$	15,730	$	679	4.3	%
Industrial	12,307		12,177		130		1.1
Office	5,026		5,113		(87)		(1.7)
Retail	11,428		10,614		814		7.7
Other	183		75		108		144.0
Comparable properties total	$	45,353	$	43,709	$	1,644	3.8	%
Recent acquisitions and sold properties	12,747		3,261		9,486		290.9
Total rental revenue	$	58,100	$	46,970	$	11,130	23.7	%

Other revenue
Residential	$	837	$	1,029	$	(192)	(18.7)	%
Industrial	26		134		(108)		(80.6)
Office	240		237		3		1.3
Retail	207		278		(71)		(25.5)
Other	611		299		312		104.3
Comparable properties total	$	1,921	$	1,977	$	(56)	(2.8)	%
Recent acquisitions and sold properties	906		90		816		907
Total other revenue	$	2,827	$	2,067	$	760	36.8	%

Total revenues	$	60,927	$	49,037	$	11,890	24.2	%

Rental revenues at comparable properties increased $1,644 for the three months ended September 30, 2021 as compared to the same period in 2020. The increase of $814 within our retail segment was primarily related to an increase in collections from tenants that experienced a decrease in operations from COVID-19 in 2020. The increase in rental revenue from our residential segment of $679 is primarily related to higher rental rates and higher occupancy at several of the properties during the three months ended September 30, 2021 as compared to the same period of 2020.

Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties decreased by $56 for the three months ended September 30, 2021 as compared to the same period in 2020. The decrease is primarily related to lease termination fees collected in 2020 at Whitestone Market and several of our residential properties and miscellaneous revenues collected at Grand Prairie Distribution Center. The decrease was offset by an increase in parking revenue of $312 at our parking garage in South Beach due to the travel and shelter in place orders placed on the city of South Beach during the three months ended September 30, 2020, which greatly reduced our revenue during that period as compared to the same period of 2021.

Operating Expenses

The following chart sets forth real estate taxes and property operating expenses by reportable segment, for the three months ended September 30, 2021 and 2020:


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		$ Change		% Change
Operating expenses:
Real estate taxes
Residential	$	3,046	$	3,013	$	33	1.1	%
Industrial	1,999		1,935		64		3.3
Office	580		642		(62)		(9.7)
Retail	1,348		1,427		(79)		(5.5)
Other	113		93		20		21.5
Comparable properties total	$	7,086	$	7,110	$	(24)	(0.3)	%
Recent acquisitions and sold properties	1,196		462		734		159
Total real estate taxes	$	8,282	$	7,572	$	710	9.4	%

Property operating expenses
Residential	$	5,332	$	5,254	$	78	1.5	%
Industrial	1,076		1,025		51		5.0
Office	1,091		1,057		34		3.2
Retail	1,639		1,800		(161)		(8.9)
Other	183		174		9		5.2
Comparable properties total	$	9,321	$	9,310	$	11	0.1	%
Recent acquisitions and sold properties	1,626		665		961		144.5
Total property operating expenses	$	10,947	$	9,975	$	972	9.7	%










Total operating expenses	$	19,229	$	17,547	$	1,682	9.6	%

Real estate taxes at comparable properties decreased by $24 for the three months ended September 30, 2021 as compared to the same period in 2020. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estates taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases. The decrease in our retail segment is primarily related to a refund of $141 received at Grand Lakes Marketplace during the three months ended September 30, 2021.

Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties increased $11 for the three months ended September 30, 2021 as compared to the same period in 2020. The primary decrease within our retail segment was a $181 credit received during the three months ended September 30, 2021 at the District at Howell Mill related to water leaks in past years.

The following chart sets forth revenues and expenses not directly related to the operations of the reportable segments for the three months ended September 30, 2021 and 2020:


	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		$ Change		% Change
Property general and administrative	$	470	$	728	$	(258)	(35.4)	%
Advisor fees	21,546		6,192		15,354		248.0
Company level expenses	940		693		247		35.6

Depreciation and amortization	23,519		18,830		4,689		24.9
Interest expense	11,714		8,391		3,323		39.6

Loss from unconsolidated affiliates and fund investments	1,270		3,289		(2,019)		(61.4)

Investment income on marketable securities	88		—		88		100.0
Net realized gain upon sale of marketable securities	(38)		—		(38)		100.0
Net unrealized change in fair value of investment in marketable securities	1,711		—		1,711		100.0
Loss on disposition of property and extinguishment of debt, net	—		3,480		(3,480)		(100.0)

Total revenues and expenses	$	61,220	$	41,603	$	19,617	47.2	%

Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses decreased during the three months ended September 30, 2021 as compared to the same period in 2020 primarily due to lower professional fees and certain state and local taxes.

Advisor fees relate to the fixed advisory and performance fees earned by the Advisor. Fixed fees increase or decrease based on changes in our NAV, which is primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, and in such years our Advisor will receive 10% of the excess total return above the 7% threshold. The increase in advisor fees of $15,354 for the three months ended September 30, 2021 as compared to the same period in 2020 is primarily related to the accrual of a performance fee in the amount of $14,142.

Company level expenses relate mainly to our compliance and administration related costs. The increase of $247 in company level expenses for the three months ended September 30, 2021 is primarily related to an increase in professional fees as well as the increase in size of our portfolio.

Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. The increase of $4,689 in depreciation and amortization expense for the three months ended September 30, 2021 as compared to the same period in 2020 was primarily related to the acquisition of new properties.

Interest expense increased by $3,323 for the three months ended September 30, 2021 as compared to the same period in 2020 primarily as a result of a $1,414 of increased interest expense from new mortgage notes payable placed on several properties and increased usage of our Credit Facility in 2020 and 2021 as well as $1,790 increased interest expense on the financial obligations related to the DST Program.

Loss from unconsolidated affiliates and fund investments relates to the income from Chicago Parking Garage, Pioneer Tower, The Tremont, The Huntington and Siena Suwanee Town Center as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio and Single-Family Rental Portfolio. During the three months ended September 30, 2021, we recorded a $2,813 decrease in the fair value of our investment in the NYC Retail Portfolio as compared to an $2,648 decrease in the fair value during the same period of 2020.

Investment income on marketable securities relate to dividends earned on our portfolio of publicly traded REIT securities. We made our initial purchase of marketable securities during the three months ended September 30, 2021.

Net realized gain upon the sale of marketable securities relate to sales of individual stocks within our portfolio of public REIT stocks. We made our initial purchase of marketable securities during the three months ended September 30, 2021.

Net unrealized change in fair value of investment in marketable securities relate to changes in fair value of our portfolio of public REIT securities. We made our initial purchase of marketable securities during the three months ended September 30, 2021.

Loss on disposition of property and extinguishment of debt, net decreased due to a $3,480 loss on early payoff of the mortgage notes payable related to The Penfield, of which $2,022 related to the write-off of assumed debt discount value, which occurred during the three months ended September 30, 2020.

Results of Operations for the Nine Months Ended September 30, 2021 and 2020

Revenues

The following chart sets forth revenues by reportable segment, for the nine months ended September 30, 2021 and 2020:


	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020		$ Change		% Change
Revenues:
Rental revenue
Residential	$	48,342	$	48,212	$	130	0.3	%
Industrial	37,114		34,336		2,778		8.1
Office	14,992		15,394		(402)		(2.6)
Retail	33,719		31,965		1,754		5.5
Other	276		218		58		26.6
Comparable properties total	$	134,443	$	130,125	$	4,318	3.3	%
Recent acquisitions and sold properties	26,926		9,245		17,681		191.2
Total rental revenue	$	161,369	$	139,370	$	21,999	15.8	%

Other revenue
Residential	$	2,559	$	2,543	$	16	0.6	%
Industrial	61		268		(207)		(77.2)
Office	714		647		67		10.4
Retail	383		449		(66)		(14.7)
Other	2,038		904		1,134		125.4
Comparable properties total	$	5,755	$	4,811	$	944	19.6	%
Recent acquisitions and sold properties	2,430		432		1,998		462.5
Total other revenue	$	8,185	$	5,243	$	2,942	56.1	%

Total revenues	$	169,554	$	144,613	$	24,941	17.2	%

Rental revenue at comparable properties increased by $4,318 for the nine months ended September 30, 2021 as compared to the same period in 2020. The increase in rental revenue from our industrial properties is primarily related to $1,652 of increased rent collections at Norfleet Distribution Center and $693 at Taunton Distribution Center due to higher occupancy during the nine months ended September 30, 2021 as compared to the same period of 2020. The increase of $1,754 within our retail segment was primarily related to an increase in collections from tenants that experienced a decrease in operations from COVID-19 in 2020.

Other revenues relate mainly to parking and nonrecurring revenue such as lease termination fees. Other revenue at comparable properties increased by $944 for the nine months ended September 30, 2021 as compared to the same period in 2020. The increase is primarily related to $1,134 of higher parking revenue at our parking garage in South Beach primarily due to the travel and shelter in place orders placed on the city of South Beach during the six months ended June 30, 2020, which greatly reduced our revenue during that period.

Operating Expenses

The following chart sets forth real estate taxes, property operating expenses and provisions for doubtful accounts by reportable segment, for the nine months ended September 30, 2021 and 2020:


	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020		$ Change		% Change
Operating expenses:
Real estate taxes
Residential	$	9,127	$	8,846	$	281	3.2	%
Industrial	6,094		5,799		295		5.1
Office	1,781		1,962		(181)		(9.2)
Retail	4,405		4,272		133		3.1
Other	350		265		85		32.1
Comparable properties total	$	21,757	$	21,144	$	613	2.9	%
Recent acquisitions and sold properties	2,816		1,277		1,539		120.5
Total real estate taxes	$	24,573	$	22,421	$	2,152	9.6	%

Property operating expenses
Residential	$	15,119	$	14,614	$	505	3.5	%
Industrial	3,191		2,937		254		8.6
Office	3,046		2,909		137		4.7
Retail	5,682		5,210		472		9.1
Other	560		534		26		4.9
Comparable properties total	$	27,598	$	26,204	$	1,394	5.3	%
Recent acquisitions and sold properties	3,454		1,350		2,104		155.9
Total property operating expenses	$	31,052	$	27,554	$	3,498	12.7	%
Total operating expenses	$	55,625	$	49,975	$	5,650	11.3	%

Real estate taxes at comparable properties increased by $613 for the nine months ended September 30, 2021 as compared to the same period in 2020. Our properties are reassessed periodically by the taxing authorities, which may result in increases or decreases in the real estates taxes that we owe. Overall, we expect real estate taxes to increase over time; however, we utilize real estate tax consultants to attempt to control assessment increases.

Property operating expenses consist of the costs of ownership and operation of the real estate investments, many of which are recoverable under net leases. Examples of property operating expenses include insurance, utilities and repair and maintenance expenses. Property operating expenses at comparable properties were in line with the prior year. The primary increase that occurred within our retail segment was related to increases in utilities and repairs and maintenance during the nine months ended September 30, 2021 as compared to the same period in 2020. The increases occurring within our residential segment during the nine months ended September 30, 2021 as compared to the same period in 2020 were related to turnover costs, repairs and maintenance and utilities.

The following chart sets forth revenues and expenses not directly related to the operations of the reportable segments for the nine months ended September 30, 2021 and 2020:


	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020		$ Change		% Change
Property general and administrative	$	946	$	3,609	$	(2,663)	(73.8)	%
Advisor fees	34,620		19,049		15,571		81.7
Company level expenses	3,123		2,241		882		39.4


Depreciation and amortization	64,682		56,450		8,232		14.6
Interest expense	31,264		32,191		(927)		(2.9)

Loss from unconsolidated affiliates and fund investments	4,021		16,186		(12,165)		(75.2)

Investment income on marketable securities	88		—		88		100.0
Net realized gain upon sale of marketable securities	(38)		—		(38)		100.0
Net unrealized change in fair value of investment in marketable securities	1,711		—		1,711		100.0
Gain on disposition of property and extinguishment of debt, net	(33,422)		1,772		(35,194)		(1,986)

Total expenses (income)	$	106,995	$	131,498	$	(24,503)	(18.6)	%

Property general and administrative expenses relate mainly to property expenses unrelated to the operations of the property. Property general and administrative expenses decreased for the nine months ended September 30, 2021 as compared to the same period in 2020 due to expenses incurred for unsuccessful acquisitions in 2020 and a partial recovery of a deposit for an unsuccessful acquisition received in 2021.

Advisor fees relate to the fixed advisory and performance fees earned by the Advisor. Fixed fees increase or decrease based on changes in our NAV, which will be primarily impacted by changes in capital raised and the value of our properties. The performance fee is accrued when the total return per share for a share class exceeds 7% for that calendar year, where in our Advisor will receive 10% of the excess total return above the 7% threshold. The increase in advisor fees of $15,571 for the nine months ended September 30, 2021 as compared to the same period of 2020 is primarily related to the accrual of a performance fee in the amount of $14,142.

Company level expenses relate mainly to our compliance and administration related costs. Company level expenses increased $882 for the nine months ended September 30, 2021 as compared to the same period in 2020 primarily related to increase in professional service fees as well as the increase in size of our portfolio.

Depreciation and amortization expense is impacted by the values assigned to buildings, personal property and in-place lease assets as part of the initial purchase price allocation. Depreciation and amortization expense for the nine months ended September 30, 2021 as compared to the same period in 2020 increased as additional expense from acquisitions offset lower expenses from property dispositions.

Interest expense decreased by $927 for the nine months ended September 30, 2021 as compared to the same period in 2020 as a result of unrealized gains on our interest rate swaps in 2021 as opposed to unrealized losses in 2020. This decrease is offset by an increase in interest expense from new mortgage notes payable placed on several assets and increased usage on our Credit Facility in 2020 and 2021 and increased interest expense of $4,846 on the financial obligations related to the DST Program.

Loss from unconsolidated affiliates and fund investments relates to the income from Chicago Parking Garage, Pioneer Tower, The Tremont and The Huntington as well as changes in fair value and operating distributions received from our investment in the NYC Retail Portfolio. During the nine months ended September 30, 2021, we recorded a $2,849 decrease in the fair value in the NYC Retail Portfolio as compared to a $14,737 decrease in the fair value during the same period of 2020.

Investment income on marketable securities relate to dividends earned on our portfolio of public REIT securities. We made our initial purchase of marketable securities during the nine months ended September 30, 2021.

30, 2021.

Gain on disposition of property and extinguishment of debt, net increased due to a $33,580 gain on the sale of South Seattle Distribution Center, which occurred during the nine months ended September 30, 2021.

Funds From Operations

Consistent with real estate industry and investment community preferences, we consider funds from operations ("FFO") as a supplemental measure of the operating performance for a real estate investment trust and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) attributable to the Company (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items, impairment write-downs of depreciable real estate and sales of properties, plus real estate related depreciation and amortization and after adjustments for these items related to noncontrolling interests and unconsolidated affiliates.

FFO does not give effect to real estate depreciation and amortization because these amounts are computed to allocate the cost of a property over its useful life. We also use Adjusted FFO ("AFFO") as a supplemental measure of operating performance. We define AFFO as FFO adjusted for straight-line rental income, amortization of above- and below-market leases, amortization of net discount on assumed debt, gains or losses on the extinguishment and modification of debt, performance fees based on the investment returns on shares of our common stock and acquisition expenses. Because values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO and AFFO provide investors with an additional view of our operating performance.

In order to provide a better understanding of the relationship between FFO, AFFO and GAAP net income, the most directly comparable GAAP financial reporting measure, we have provided reconciliations of GAAP net income attributable to Jones Lang LaSalle Income Property Trust, Inc. to FFO, and FFO to AFFO. FFO and AFFO do not represent cash flow from operating activities in accordance with GAAP, should not be considered alternatives to GAAP net income and are not measures of liquidity or indicators of the Company's ability to make cash distributions. We believe that to more comprehensively understand our operating performance, FFO and AFFO should be considered along with the reported net income attributable to Jones Lang LaSalle Income Property Trust, Inc. and our cash flows in accordance with GAAP, as presented in our consolidated financial statements. Our presentations of FFO and AFFO are not necessarily comparable to the similarly titled measures of other REITs due to the fact that not all REITs use the same definitions.

The following table presents a reconciliation of the most comparable GAAP amount of net income attributable to Jones Lang LaSalle Income Property Trust, Inc. to NAREIT FFO for the periods presented:


Reconciliation of GAAP net (loss) income to NAREIT FFO	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Net (loss) income attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders (1)	$	(19,252)	$	(10,122)	$	7,076	$	(36,875)
Real estate depreciation and amortization (1)	26,337		21,122		74,608		63,211
Loss (gain) on disposition of property and unrealized gain on investment in unconsolidated real estate affiliate (1)	2,795		2,648		(30,512)		13,090


NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders	$	9,880	$	13,648	$	51,172	$	39,426
Weighted average shares outstanding, basic and diluted	189,887,181		169,289,415		181,981,691		170,707,171
NAREIT FFO per share, basic and diluted	$	0.05	$	0.08	$	0.28	$	0.23

________

(1) Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates.

We believe AFFO is useful to investors because it provides supplemental information regarding the performance of our portfolio over time.

The following table presents a reconciliation of NAREIT FFO to AFFO for the periods presented:


Reconciliation of NAREIT FFO to AFFO	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
NAREIT FFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders	$	9,880	$	13,648	$	51,172	$	39,426
Straight-line rental income (1)	(1,576)		(748)		(3,205)		(919)
Amortization of above- and below-market leases (1)	(812)		(674)		(2,392)		(2,032)
Amortization of net discount on assumed debt (1)	(58)		(27)		(175)		(81)
(Gain) loss on derivative instruments and extinguishment or modification of debt (1)	(812)		2,516		(2,428)		8,820
Adjustment for investments accounted for under the fair value option (2)	872		153		1,571		1,528
Net unrealized change in fair value of investment in marketable securities (1)	1,699		—		1,699		—
Performance fees (1)	14,050		—		14,050		—
Acquisition expenses (1)	17		33		(582)		2,114
Adjustment for DST Program properties (3)	(2,051)		(281)		(5,185)		(463)
AFFO attributable to Jones Lang LaSalle Income Property Trust, Inc. Common Stockholders	$	21,209	$	14,620	$	54,525	$	48,393
Weighted average shares outstanding, basic and diluted	189,887,181		169,289,415		181,981,691		170,707,171
AFFO per share, basic and diluted	$	0.11	$	0.09	$	0.30	$	0.28

________

(1) Excludes amounts attributable to noncontrolling interests and includes our ownership share of both consolidated properties and unconsolidated real estate affiliates.

(2) Represents the normal and recurring AFFO reconciling adjustments for the NYC Retail Portfolio and Single-Family Rental Portfolio.

(3) Adjustments to reflect the AFFO attributable to the Company for DST Program properties. Prior periods adjusted to conform to current period presentation.

NAV as of September 30, 2021

The following table provides a breakdown of the major components of our NAV as of September 30, 2021:


	September 30, 2021
Component of NAV	Class A Shares		Class M Shares		Class A-I Shares		Class M-I Shares		Class D Shares		Total
Real estate investments (1)	$	2,008,748	$	744,744	$	190,322	$	969,207	$	157,250	$	4,070,271
Debt	(910,905)		(337,718)		(86,305)		(439,505)		(71,308)		(1,845,741)
Other assets and liabilities, net	122,918		45,572		11,646		59,307		9,623		249,066
Estimated enterprise value premium	None assumed		None assumed		None assumed		None assumed		None assumed		None assumed
NAV	$	1,220,761	$	452,598	$	115,663	$	589,009	$	95,565	$	2,473,596
Number of outstanding shares	96,013,268		35,541,455		9,074,648		46,244,259		7,513,281
NAV per share	$	12.71	$	12.73	$	12.75	$	12.74	$	12.72

________

(1)The value of our real estate investments was greater than the historical cost by 4.3% as of September 30, 2021.

The following table provides a breakdown of the major components of our NAV as of December 31, 2020:


	December 31, 2020
Component of NAV	Class A Shares		Class M Shares		Class A-I Shares		Class M-I Shares		Class D Shares		Total
Real estate investments (1)	$	1,464,376	$	582,651	$	157,468	$	544,201	$	81,029	$	2,829,725
Debt	(472,476)		(187,990)		(50,807)		(175,584)		(26,144)		(913,001)
Other assets and liabilities, net	48,023		19,107		5,165		17,846		2,658		92,799
Estimated enterprise value premium	None assumed		None assumed		None assumed		None assumed		None assumed		None assumed
NAV	$	1,039,923	$	413,768	$	111,826	$	386,463	$	57,543	$	2,009,523
Number of outstanding shares	89,671,096		35,612,156		9,616,299		33,247,001		4,957,915
NAV per share	$	11.60	$	11.62	$	11.63	$	11.62	$	11.61

________

(1)The value of our real estate investments was greater than the historical cost by 2.6% as of December 31, 2020.

The increase in NAV per share from December 31, 2020 to September 30, 2021, was related to a net increase of 6.7% in the value of our portfolio. Property operations for the nine months ended September 30, 2021 had an insignificant impact on NAV as dividends declared offset property operations for the period. Our NAV for the different share classes is reduced by normal and recurring class-specific fees and offering and organization costs.

The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of September 30, 2021:


	Industrial		Office		Residential		Retail		Other (1)		Total Company
Exit capitalization rate	4.79	%	5.59	%	4.78	%	5.50	%	6.25	%	5.08	%
Discount rate/internal rate of return (IRR)	5.66		6.38		6.07		6.39		7.80		6.07
Annual market rent growth rate	3.16		2.81		3.14		2.65		3.07		2.99
Holding period (years)	10.00		10.00		10.00		10.00		21.98		10.10

________

(1) Other includes two standalone parking garages. South Beach Parking Garage is subject to a ground lease and the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.

The following are key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate investments as of December 31, 2020:


	Industrial		Office		Residential		Retail		Other (1)		Total Company
Exit capitalization rate	5.44	%	5.72	%	5.09	%	5.56	%	6.25	%	5.43	%
Discount rate/internal rate of return (IRR)	6.00		6.50		6.35		6.38		7.78		6.30
Annual market rent growth rate	2.96		2.80		3.03		2.50		3.13		2.83
Holding period (years)	10.00		10.00		10.00		10.00		21.81		10.15

________

(1) Other includes Chicago and South Beach parking garages. South Beach Parking Garage is subject to a ground lease, the appraisal incorporates discounted cash flows over its remaining lease term and therefore does not utilize an exit capitalization rate.

While we believe our assumptions are reasonable, a change in these assumptions would impact the calculation of the value of our real estate investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our real estate investment value:


Input		September 30, 2021		December 31, 2020
Discount Rate - weighted average	0.25% increase	(2.0)	%	(2.0)	%
Exit Capitalization Rate - weighted average	0.25% increase	(3.1)	%	(2.9)
Annual market rent growth rate - weighted average	0.25% decrease	(1.6)	%	(1.5)

The fair value of our mortgage notes and other debt payable was estimated to be approximately $27,738 and $43,959 higher than the carrying values at September 30, 2021 and December 31, 2020, respectively. The NAV per share would have decreased by $0.09 and $0.26 per share at September 30, 2021 and December 31, 2020, respectively, if we were to have included the fair value of our mortgage notes and other debt payable in our methodology to determine NAV.

The selling commission and dealer manager fee are offering costs and are recorded as a reduction of capital in excess of par value. Selling commissions are paid on the date of sale of our common stock. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee. Dealer manager fees payable are included in accrued offering costs on our Consolidated Balance Sheets. Dealer manager fees payable as of September 30, 2021 and December 31, 2020 were $125,123 and $105,770, respectively.

The following table reconciles stockholders' equity per our Consolidated Balance Sheet to our NAV:


	September 30, 2021
Stockholders' equity under GAAP	$	1,593,381
Adjustments:
Accrued dealer manager fees (1)	122,546
Organization and offering costs (2)	516
Unrealized real estate appreciation (3)	388,436
Accumulated depreciation, amortization and other (4)	368,717
NAV	$	2,473,596

________

(1) Accrued dealer manager fees represents the accrual for future dealer manager fees for Class A, Class M and Class A-I shares. We accrue all future dealer manager fees up to the ten percent regulatory limit on the date of sale of our common stock as an offering cost. For NAV calculation purposes, dealer manger fees are accrued daily, on a continuous basis equal to 1/365th of the stated fee.

(2) The Advisor advanced organization and offering costs on our behalf through September 30, 2021. Such costs are reimbursed to the Advisor ratably over 36 months. Under GAAP, organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, such costs are recognized as a reduction to NAV ratably over 36 months.

(3) Our investments in real estate are presented under historical cost in our GAAP Consolidated Financial Statements. As such, any increases in the fair market value of our investments in real estate are not included in our GAAP results. For purposes of determining our NAV, our investments in real estate are recorded at fair value.

(4) We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of determining our NAV. Additionally, we make other fair value adjustments to our NAV to account for differences with historical cost GAAP; an example would be straight-line rent revenue.

Limitations and Risks

As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete. Our valuation methodology may not result in the determination of the fair value of our net assets as our mortgage notes and other debt payable are valued at cost. Different parties with different assumptions and estimates could derive a different NAV per share. Accordingly, with respect to our NAV per share, we can provide no assurance that:

•a stockholder would be able to realize this NAV per share upon attempting to resell his or her shares;

•we would be able to achieve for our stockholders the NAV per share upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio or merging with another company; or

•the NAV per share, or the methodologies relied upon to estimate the NAV per share, will be found by any regulatory authority to comply with any regulatory requirements.

Furthermore, the NAV per share was calculated as of a particular point in time. The NAV per share will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities and attributes specific to the properties and leases within our portfolio.

Liquidity and Capital Resources

Our primary uses and sources of cash are as follows:

Uses

Sources

Short-term liquidity and capital needs such as:

•

Operating cash flow, including the receipt of distributions of our share of cash flow produced by our unconsolidated real estate affiliates and fund investment

•

Interest payments on debt

•

Distributions to stockholders

•

Proceeds from secured loans collateralized by individual properties

•

Fees payable to our Advisor

•

Minor improvements made to individual properties that are not recoverable through expense recoveries or common area maintenance charges to tenants

•

Proceeds from our Revolving Credit Facility

•

Sales of our shares

•

General and administrative costs

•

Sales of real estate investments

•

Costs associated with capital raising in our continuous public offering, private offering and DST Program

•

Proceeds from our private offering

•

Other Company level expenses

•

Draws from lender escrow accounts

•

Lender escrow accounts for real estate taxes, insurance, and capital expenditures

•

Sales of beneficial interests in the DST Program

•

Fees payable to our Dealer Manager

Longer-term liquidity and capital needs such as:

•

Acquisitions of new real estate investments

•

Expansion of existing properties

•

Tenant improvements and leasing commissions

•

Debt repayment requirements, including both principal and interest

•

Repurchases of our shares pursuant to our share repurchase plan

•

Fees payable to our Advisor

•

Fees payable to our Dealer Manager

The sources and uses of cash for the nine months ended September 30, 2021 and 2020 were as follows:


	Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020		$ Change
Net cash provided by operating activities	$	64,492	$	51,558	$	12,934
Net cash used in investing activities	(915,027)		(107,692)		(807,335)
Net cash provided by financing activities	978,168		30,157		948,011

Net cash provided by operating activities increased by $12,934 for the nine months ended September 30, 2021 as compared to the same period in 2020. The increase in cash from operating activities is primarily due to new acquisitions as well as increased rent collections from several tenants primarily in our retail segment.

Net cash used in investing activities increased by $807,335 for the nine months ended September 30, 2021 as compared to the same period in 2020. The increase was primarily related to increased acquisitions made during the nine months ended September 30, 2021 as compared to the same period in 2020, offset partially by the cash received from the sale of South Seattle Distribution Center in the first quarter of 2021.

Net cash provided by financing activities increased by $948,011 for the nine months ended September 30, 2021 as compared to the same period in 2020. The change is primarily related to a $599,923 net proceeds from mortgage note payables and net draws on our Credit Facility in addition to a $236,568 increase in stock issuance during the nine months ended September 30, 2021 as compared to the same period in 2020. Additionally, less cash was used for repurchases of common stock during the nine months ended September 30, 2021 as compared to the same period in 2020.

Financing

We have relied primarily on fixed-rate financing, locking in what were favorable spreads between real estate income yields and mortgage interest rates and have tried to maintain a balanced schedule of debt maturities. We also use interest rate derivatives to manage our exposure to interest rate movements on our variable rate debt. The following consolidated debt table provides information on the outstanding principal balances and the weighted average interest rates at September 30, 2021 and December 31, 2020:


	Consolidated Debt
	September 30, 2021				December 31, 2020
	Principal Balance		Weighted Average Interest Rate		Principal Balance		Weighted Average Interest Rate
Fixed	$	1,242,624	3.32	%	$	871,043	3.53	%
Variable	347,392		1.70		—		—
Total	$	1,590,016	2.96	%	$	871,043	3.53	%

Covenants

At September 30, 2021, we were in compliance with all debt covenants.

Other Sources

On July 6, 2018, our Current Public Offering registration statement was declared effective with the SEC (Commission File No. 333-222533) to register up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. We intend to offer shares of our common stock on a continuous basis for an indefinite period of time by filing a new registration statement before the end of each three-year offering period, subject to regulatory approval. We intend to use the net proceeds from the Current Public Offering, which are not used to pay the fees and other expenses attributable to our operations, to (1) grow and further diversify our portfolio by making investments in accordance with our investment strategy and policies, (2) repay indebtedness incurred under various financing instruments and (3) fund repurchases under our share repurchase plan.

On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. Proceeds from our Private Offering will be used for the same corporate purposes as the proceeds of our public offerings. We will reserve the right to terminate the Private Offering at any time and to extend the Private Offering term to the extent permissible under applicable law.

On October 16, 2019, we through our operating partnership, initiated the DST Program to raise up to $500,000, which our board of directors increased to $1,000,000 on August 10, 2021, in private placements exempt from registration under the Securities Act, as amended, through the sale of beneficial interests to accredited investors in specific DSTs holding real properties, which may be sourced from our real properties or from third parties.

On June 4, 2021, we filed a Registration Statement on Form S-11 with the SEC (Commission File No. 333-256823) to register our Third Extended Public Offering of up to $3,000,000 in any combination of shares of our Class A, Class M, Class A-I and Class M-I common stock, consisting of up to $2,700,000 of shares offered in our primary offering and up to $300,000 in shares offered pursuant to our distribution reinvestment plan. As of November 10, 2021, the Third Extended Public Offering has not been declared effective. Proceeds from our Third Extended Public Offering will be used for the same corporate purposes as the proceeds of the Current Public Offering.

Contractual Cash Obligations and Commitments

From time to time, we enter into contingent agreements for the acquisition and financing of properties. Such acquisitions and financings are subject to satisfactory completion of due diligence or meeting certain leasing or occupancy thresholds.

We are subject to fixed ground lease payments on South Beach Parking Garage of $100 per year until September 30, 2021 and these payments will increase every five years thereafter by the lesser of 12% or the cumulative CPI over the previous five year period. We are also subject to a variable ground lease payment calculated as 2.5% of revenue. The lease expires September 30, 2041 and has a ten-year renewal option.

Off Balance Sheet Arrangements

At September 30, 2021, we had approximately $110 in an outstanding letter of credit that is not reflected on our balance sheet. We have no other off balance sheet arrangements.

Distributions to Stockholders

To remain qualified as a REIT for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and distribute at least 90% of ordinary taxable income to stockholders.

The following factors, among others, will affect operating cash flow and, accordingly, influence the decisions of our board of directors regarding distributions:

•scheduled increases in base rents of existing leases;

•changes in minimum base rents and/or overage rents attributable to replacement of existing leases with new or renewal leases;

•changes in occupancy rates at existing properties and procurement of leases for newly acquired or developed properties;

•necessary capital improvement expenditures or debt repayments at existing properties;

•ability of our tenants to pay rent as a result of the impact of COVID-19 on their financial condition; and

•our share of distributions of operating cash flow generated by the unconsolidated real estate affiliates, less management costs and debt service on additional loans that have been or will be incurred.

We anticipate that operating cash flow, cash on hand, proceeds from dispositions of real estate investments or refinancings will provide adequate liquidity to conduct our operations, fund general and administrative expenses, fund operating costs and interest payments and allow distributions to our stockholders in accordance with the REIT qualification requirements of the Internal Revenue Code of 1986, as amended.


Item 3.			Quantitative and Qualitative Disclosures About Market Risk.

We are subject to market risk associated with changes in interest rates in terms of our variable-rate debt and the price of new fixed-rate debt for refinancing of existing debt. We manage our interest rate risk exposure by obtaining fixed-rate loans where possible as well as by entering into interest rate cap and swap agreements. As of September 30, 2021, we had consolidated debt of $1,589,935. Including the $5,009 net debt discount on assumed debt and debt issuance costs, we have consolidated debt of $1,584,926 at September 30, 2021. We also entered into interest rate swap agreements on $190,000 of debt, which cap the LIBOR rate at between 1.4% and 2.6%. A 0.25% movement in the interest rate on the $347,392 of variable-rate debt would have resulted in a $868 annualized increase or decrease in consolidated interest expense and cash flow from operating activities.

We are subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair market value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At September 30, 2021, the fair value of our consolidated debt was estimated to be $27,738 higher than the carrying value of $1,589,935 If treasury rates were 0.25% higher at September 30, 2021, the fair value of our consolidated debt would have been $9,262 higher than the carrying value.


Item 4.			Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on management’s evaluation as of September 30, 2021, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting to date as a result of most of the employees of our Advisor and its affiliates working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize the impact to their design and operating effectiveness.

PART II

OTHER INFORMATION


Item 1.			Legal Proceedings.


Item 1A.			Risk Factors.

Except as disclosed in "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, there have been no material changes to the risk factors previously disclosed under "Item 1A. Risk Factors "2020 Form 10-K.


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

Issuer Purchases of Equity Securities

Our share repurchase plan limits repurchases during any calendar quarter to shares with an aggregate value (based on the repurchase price per share on the day the repurchase is effected) of 5% of the combined NAV of all classes of shares as of the last day of the previous calendar quarter, which means that in any 12-month period, we limit repurchases to approximately 20% of our total NAV. If the quarterly volume limitation is reached on or before the third business day of a calendar quarter, repurchase requests during the next quarter will be satisfied on a stockholder by stockholder basis, which we refer to as a “per stockholder allocation,” instead of a first-come, first-served basis. Pursuant to the per stockholder allocation, each of our stockholders would be allowed to request repurchase at any time during such quarter of a total number of shares not to exceed 5% of the shares of common stock the stockholder held as of the end of the prior quarter. The per stockholder allocation requirement will remain in effect for each succeeding quarter for which the total repurchases for the immediately preceding quarter exceeded four percent of our NAV on the last business day of such preceding quarter. If total repurchases during a quarter for which the per stockholder allocation applies are equal to or less than four percent of our NAV on the last business

day of such preceding quarter, then repurchases will again be first-come, first-served for the next succeeding quarter and each quarter thereafter.

During the three months ended September 30, 2021, we repurchased 2,358,010 shares of common stock under the share repurchase plan.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (1)
July 1 - July 31, 2021	518,450	$	12.09	518,450	—
August 1 - August 31, 2021	654,712	12.30		654,712	—
September 1 - September 30, 2021	1,184,848	12.69		1,184,848	—
Total	2,358,010	$	12.45	2,358,010	—

________

(1) Repurchases are limited as described above.

Unregistered Sales of Equity Securities

On March 3, 2015, we commenced the Private Offering of up to $350,000 in shares of our Class D common stock with an indefinite duration. No Class D shares were issued during the three months ended September 30, 2021.


Item 3.			Defaults Upon Senior Securities.

Not applicable.


Item 4.			Mine Safety Disclosures.

Not applicable.


Item 5.			Other Information.

None.


Item 6.			Exhibits.


Exhibit No.						Description

10.1*						Purchase and Sale Agreement for Single-Family Rental Portfolio, dated August 5, 2021, between LIPT SFR Portfolio, LLC and GVI RH JV HoldCo, LLC.

31.1*						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS*						XBRL Instance Document

101.SCH*						XBRL Schema Document

101.CAL*						XBRL Calculation Linkbase Document

101.DEF*						Definition Linkbase Document

101.LAB*						XBRL Labels Linkbase Document

101.PRE*						XBRL Presentation Linkbase Document

104*						Cover Page Intereactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

__________

* Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, Jones Lang LaSalle Income Property Trust, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			JONES LANG LASALLE INCOME PROPERTY TRUST, INC.

Date:	November 10, 2021	By:	/s/ C. Allan Swaringen
			C. Allan Swaringen
			President, Chief Executive Officer


			JONES LANG LASALLE INCOME PROPERTY TRUST, INC.

Date:	November 10, 2021	By:	/s/ Gregory A. Falk
			Gregory A. Falk
			Chief Financial Officer and Treasurer

LIMITED LIABILITY COMPANY INTEREST PURCHASE AND SALE AGREEMENT


TABLE OF CONTENTS						Page

ARTICLE 1 CERTAIN DEFINITIONS						2
1.1 Certain Definitions						2
ARTICLE 2 SALE OF INTERESTS						3
2.1 The Interests						3
2.2 Purchase Price						3
2.3 Diligence Information						3
2.4 Intentionally Omitted.						3
2.5 Closing						3
2.6 Closing Deliveries and Closing Actions						4
2.7 Purchaser’s Conditions to Closing						5
2.8 Seller’s Conditions to Closing						5
ARTICLE 3 SELLER’S REPRESENTATIONS AND WARRANTIES						6
3.1 Organization; Validity and Execution						6
3.2 No Conflict.						6
3.3 Ownership of Interests						6
3.4 Organization; Organizational Document						7
3.5 RHJV Agreement						7
3.6 Loan Documents and Trust Documents						7
3.7 No Rights in Others						8
3.8 Consents						8
3.9 Financial Statements						8
3.10 Assets; No Undisclosed Liabilities						8
3.11 No Bankruptcy						9
3.12 Tax Matters						9
3.13 No Litigation						9
3.14 Employees						9
3.15 Intentionally Omitted						9
3.16 ERISA						10
3.17 OFAC						10
3.18 Major Contracts						10
ARTICLE 4 PURCHASER’S REPRESENTATIONS AND WARRANTIES						11
4.1 Organization; Validity and Execution						11
4.2 No Conflict						11
4.3 Consents						11
4.4 No Bankruptcy						11
4.5 OFAC						12
ARTICLE 5 LIMITATION ON LIABILITY						12
5.1 AS-IS; Limitation of Liability						12
5.2 Attorney Costs						14


ARTICLE 6 BROKERAGE						14
6.1 Brokers						14
6.2 Survival						14
ARTICLE 7 MISCELLANEOUS						14
7.1 Modification or Amendments						14
7.2 Entire Agreement						14
7.3 Applicable Law and Severability						15
7.4 Arbitration						15
7.5 Successor and Assigns						15
7.6 Further Assurances						15
7.7 Captions						15
7.8 Separate Counterparts						15
7.9 No Obligation to Third Parties						15
7.10 Notices						15
7.11 Costs						16
7.12 Computation of Time						16
7.13 Confidentiality; Press Releases						16
7.14 Tax Matters						16
7.15 Intentionally Omitted						18
7.16 SEC Filings; S-X 3-14 Audit.						18
7.17 Survival						18
ARTICLE 8						18
8.1 Escrow Agreement						18

LIMITED LIABILITY COMPANY INTEREST PURCHASE AND SALE AGREEMENT

THIS LIMITED LIABILITY COMPANY INTEREST PURCHASE AND SALE

AGREEMENT (this “Agreement”), dated as of August 5, 2021 (“Effective Date”), is made and entered into by and among each of the sellers listed on Exhibit C to this Agreement (“VI Seller” and “Co-Invest Seller” and collectively, on a joint and several basis, “Seller”) and the purchaser listed on Exhibit C to this Agreement (“Purchaser”). Escrow Agent joins herein as escrow agent and for the purposes set forth herein. Seller and Purchaser are sometimes referred to herein collectively as the “Parties” and individually as a “Party.”

Recitals:

A.VI Seller and Co-Invest Seller each own fifty percent (50%) of the limited liability company interests in GVI RH JV Investor, LLC, a Delaware limited liability company (the “Company”), such that Seller collectively owns one hundred percent (100%) of the limited liability company interests in the Company, which is the owner of ninety-five percent (95%) of the limited liability company interests in RH Joint Ventures, LLC (“RHJV”), which directly or indirectly owns a portfolio of 4,038 single family rental homes located in various markets in the United States as set forth on Exhibit A attached hereto (each, a “Property”).

B.VI Seller and Co-Invest Seller each desire to sell twenty-four and one-half percent (24.5%) of the limited liability company interests in the Company such that Seller collectively desires to sell forty-nine percent (49%) of the limited liability company interests in the Company (the “Interests”) to Purchaser, and Purchaser desires to acquire the Interests, in each case subject to the terms and conditions set forth below, such that following the Closing contemplated under this Agreement, Seller shall collectively own fifty-one percent (51%) (the “Retained Interest”) and Purchaser shall own forty-nine percent (49%) of the limited liability company interests in the Company.

C.Concurrently with the Closing, Seller and Purchaser shall enter into an amended and restated limited liability company agreement of the Company in form to be agreed to by the Parties pursuant to this Agreement.

Agreement:

NOW, THEREFORE, in consideration of the respective representations, warranties, and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1 CERTAIN DEFINITIONS

1.1 Certain Definitions. Capitalized terms used in this Agreement shall have the meaning ascribed to such term on Schedule 1.1 attached hereto.

ARTICLE 2 SALE OF INTERESTS

2.1The Interests. Subject to the terms and conditions of this Agreement, at the Closing (as hereinafter defined), (a) Seller shall sell, transfer and deliver all of Seller’s interest in and to the Interests to Purchaser, free and clear of any Liens (as hereinafter defined), and (b) Purchaser shall purchase all of Seller’s interest in and to the Interests from Seller, free and clear of any Liens. Notwithstanding anything in this Agreement or the JV Agreement to the contrary, Seller is not selling and Purchaser is not purchasing any interest in those properties listed on Schedule 2.1 attached hereto (the “Excluded Houses”). The Excluded Houses may be sold in Seller’s sole and absolute discretion at any time, including after Closing, and any such sale shall not affect the Purchase Price payable under this Agreement. Any and all proceeds from the sale of any Excluded Houses that are distributed by RHJV to the Company shall belong solely to Seller and shall be distributed as a special distribution by the Company solely to Seller.

2.2Purchase Price. Except as otherwise provided in this Agreement, it is the intent of Seller and Purchaser that all items of income and expense attributable to the Company prior to the Closing Date inure to Seller, and that all items of income and expense attributable to the Company on and after the Closing Date inure to Purchaser and Seller in accordance with the JV Agreement. In consideration for the transfer of the Interests to Purchaser, Purchaser shall pay the Purchase Price to Seller on the Closing Date.

(a)The Purchase Price shall be delivered by Purchaser to Escrow Agent by wire transfer of immediately available funds no later than 2:00 p.m. Central Time on the Closing Date.

(b)In the event that any errors in the calculation of Working Capital made at Closing are discovered after Closing, and upon the final accounting of any figures which are based on estimates at Closing, the Parties shall promptly, but in all events no later than 120 days after the end of the calendar year in which the Closing occurs, re-adjust the subject amounts, with such payments to be made between the Parties as are necessary to correct the errors or to effect the reconciliations.

2.3Diligence Information. Seller has delivered to Purchaser through an electronic website or drop-box accessible via the website link set forth on Schedule 2.3 (the “Data Room”), for Purchaser’s review, material information and the documents concerning the Company, RHJV, the Subsidiaries and/or the Properties to the extent such information or documents are in Seller’s, reasonable control or possession, including, without limitation, the documents listed in the index of the Data Room, historical financial and operating statements, management agreements, capital budgets, organization charts and documentation, material loan and financing documents and budgets (the “Diligence Information”).

2.4Intentionally Omitted.

2.5Closing. The closing of the transactions contemplated herein (the “Closing”) shall, provided the conditions precedent described in Sections 2.7 and 2.8 have been satisfied or waived in writing by the Party for whose benefit such conditions precedent exists, occur on the Effective Date (the “Closing Date”).

2.6.Closing Deliveries and Closing Actions.

(a)Seller Deliveries. Seller acknowledges and agrees that as conditions precedent to Purchaser’s obligation to consummate the Closing, Seller shall have executed and delivered to Purchaser the following, as of the Closing:

(i)The assignment of limited liability company interests substantially in the form attached hereto as Exhibit B (the “Assignment Agreement”);

(ii)The formation, operating and other organizational and government documents and agreements of the Company, RHJV and the Subsidiaries (each as are existing as of such date or as the same have been amended to date) listed on Schedule 2.6 (the “Organizational Documents”);

(iii)The JV Agreement;

(iv)An executed IRS Form W-9 from Seller;

(v)A settlement statement in form and substance satisfactory to Purchaser and Seller setting forth the closing adjustments and prorations as provided herein (the “Settlement Statement”), executed by Seller;

(vi)A certification by Seller that its representations and warranties in this Agreement are, subject to Section 2.7(b), true and correct in all material respects as of the Closing Date; and

(vii)Any additional documents or instruments that are customary for like-transactions, that are required by any state in which a Property is located or that Purchaser or Escrow Agent may reasonably require for the consummation of the transaction contemplated by this Agreement without the imposition of any additional obligations or liabilities.

(b)Purchaser Deliveries. Purchaser acknowledges and agrees that as a condition precedent to Seller’s obligation to consummate the Closing, Purchaser shall have executed and/or delivered to Seller the following as of the Closing:

(i)The Assignment Agreement;

(ii)The JV Agreement;

(iii)The Purchase Price;

(iv)The Settlement Statement, executed by Purchaser;

(v)A certification by Purchaser that its representations and warranties in this Agreement are, subject to Section 2.8(b), true and correct in all material respects as of the Closing Date; and

(vi)Any additional documents or instruments that are customary for like-transactions, that are required by any state in which a Property is located or that Seller or Escrow Agent may reasonably require for the consummation of the transaction contemplated by this Agreement without the imposition of any additional obligations or liabilities.

2.7Purchaser’s Conditions to Closing. Purchaser’s obligation to close under this Agreement shall be subject to and conditioned upon the fulfillment of the following conditions precedent:

(a)All of the documents required to be delivered by Seller to Purchaser pursuant to the terms hereof, either at the Closing or otherwise, shall have been delivered;

(b)Each of the representations, warranties and covenants of Seller contained herein shall be true and correct on and as of the Closing Date;

(c)Seller shall not be in default under this Agreement (beyond all notice and

cure periods);

(d)The parties to the RHJV Agreement shall have released their signatures to

the amendment to the RHJV Agreement attached hereto as Schedule 2.7 hereof (the “RHJV Amendment”).

(e)Neither Seller nor the Company shall be a debtor in any bankruptcy proceeding nor shall Seller nor the Company have been in the last six (6) months a debtor in any bankruptcy proceeding

(f)Intentionally Omitted; and

(g)There shall not be pending any litigation or any threatened litigation, which, if determined adversely, would restrain the consummation of any of the transactions contemplated by this Agreement or declare illegal, invalid or nonbinding any of the covenants or obligations of Seller.

2.8Seller’s Conditions to Closing. Seller’s obligation to close under this Agreement shall be subject to and conditioned upon the fulfillment of the following conditions precedent:

(a)All of the documents and funds required to be delivered by Purchaser to Seller at the Closing pursuant to the terms and conditions hereof shall have been delivered;

(b)Each of the representations, warranties and covenants of Purchaser contained herein shall be true in all material respects on and as of the Closing Date; and

(c)Purchaser shall have complied with, fulfilled and performed in all material respects each of the covenants, terms and conditions to be complied with, fulfilled or performed by Purchaser hereunder.

ARTICLE 3

SELLER’S REPRESENTATIONS AND WARRANTIES

Seller hereby represents and warrants as of the Closing Date to Purchaser as to itself, the Interests and where applicable, the Company, RHJV and the Subsidiaries:

3.1Organization; Validity and Execution.

(a)Seller, the Company, RHJV and the Subsidiaries are each duly formed, validly existing and in good standing under the laws of their respective jurisdictions of organization or formation and in each jurisdiction where authorized to do business and have all necessary power and authority to carry on their respective business as is now being conducted.

(b)Seller has full power and authority, and has taken or will take all actions necessary, to execute, deliver and perform its obligations under this Agreement and any related documents, instruments or agreements that may be necessary to fulfill its obligations and consummate the transactions contemplated hereunder and thereunder, including, without limitation, the Assignment Agreement and the JV Agreement (collectively, the “Seller Transaction Documents”). This Agreement has been, and each of the other Seller Transaction Documents to which Seller is a party will, at the time of its execution, have been duly authorized, executed and delivered by Seller, and, when executed and delivered by Seller will constitute Seller’s legally valid and binding obligation, enforceable against Seller in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization and other similar laws affecting rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

3.2No Conflict. The execution, delivery and performance by Seller of each of the Seller Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, (i) does not conflict with or result in a violation of, or breach of, or constitute a default or potential default under, any law or administrative regulation (including any anti-bribery, anti- corruption or taxation laws) or any of the terms, conditions, or provisions of any judgment or decree applicable to the Company or Seller; (ii) does not conflict with or result in a violation of, or breach of, or constitute a default or potential default under provisions of the organizational documents of Seller or the Company; and (iii) does not constitute or result in the breach of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation, acceleration, amendment of, or loss of any benefit with respect to, any contract, agreement, deed, bond, note, resolution, indenture, mortgage, deed of trust, or other agreement or instrument to which the Company or Seller is a party or by which the Company or Seller is bound.

3.3Ownership of Interests. Seller has not directly or indirectly assigned, transferred or conveyed any of its limited liability company interests in the Company to any person or entity nor has it entered into any agreement (other than this Agreement) to do so. Seller has not granted to any person (other than to Purchaser pursuant to this Agreement) any right to purchase (and it has not entered into any binding obligation to sell) the debt and/or equity interests or any other ownership or participation interest in the Company. Seller has good and legal title to the Interests and owns all limited liability company interests in the Company, beneficially and of record, free

and clear of any liens (including negative liens), mortgage, security interest, pledge, attachment, claim, charge, option, hypothecation, right of pre-emption, power of sale, or any other third party right of any kind or an agreement, arrangement or obligation to create any of the foregoing, any levy or other charge or encumbrance whatsoever (each a “Lien”). Except for the Interests and the Retained Interest, there are no other membership interests or securities (debt, hybrid, or equity) of any other nature whatsoever issued or issuable by the Company. No portion of the limited liability company interests in the Company has ever been certificated.

3.4Organization; Organizational Documents. The chart depicted on Schedule 3.4 (the “Organizational Chart”) depicts the organizational structure as of the Effective Date and, except as shown on the Organizational Chart, the Company owns no direct or indirect interest in any entity. The Organizational Documents are in full force and effect and Seller has provided to Purchaser true, correct and complete copies of the Organizational Documents in Seller’s possession or control. Seller has complied in all material respects with all of the terms of the Organizational Documents. Except as set forth on Schedule 2.6, there are no other formation, operating and/or other organizational and governing documents relating to the Interests and the Company.

3.5RHJV Agreement. The RHJV Agreement is in full force and effect and Seller has provided to Purchaser true, correct and complete copies of the RHJV Agreement in Seller’s possession or control. Seller has not received or delivered any notices of default under the RHJV Agreement and to Seller’s actual knowledge, no default exists that is uncured under the RHJV Agreement. Except as set forth on Schedule 2.6, there are no other formation, operating and/or other organizational and governing documents relating to RHJV.

3.6Loan Documents and Trust Documents.

(a)The Loan Documents and Trust Documents are in full force and effect and Seller has provided to Purchaser true, correct and complete copies of the material Loan Documents and Trust Documents in Seller’s possession or control. None of Seller, the Company, or to Seller’s actual knowledge, RHJV or the Subsidiaries have received or delivered any notices of default under any of the Loan Documents or Trust Documents and to Seller’s actual knowledge, no party to any Loan Document or Trust Document is in default in any material respect under any of the Loan Documents or Trust Documents such that the Lender or any other party thereto would have the right to deliver a notice of default or other similar notice under such documents. For the purposes of the first sentence of this Section 3.6, “material” shall mean documents relating to or setting forth the economic terms of the Loan Documents and the Trust Documents (e.g., principal, interest and maturity date), the collateral, cash management, including deposit account control agreements, guarantees and other similar documentation, but excluding mortgages and lien instruments that are directly related to a Property.

(b)To Seller’s knowledge, the Trust REMIC (as defined in the Trust Documents) was formed in accordance with applicable legal requirements and the Trust REMIC continues to qualify as a real estate mortgage investment conduit in accordance with Sections 860D-860G of the Code.

(c)To Seller’s knowledge, RHJV and RHJV MOA, LLC have complied with all legal requirements imposed on the “sponsor of a securitization transaction” as set forth in Regulation RR, 17 C.F.R. Part 246 (the “Credit Risk Retention Rules”), and, to Seller’s knowledge, the transactions contemplated by this Agreement shall not cause either RHJV or RHJV MOA, LLC to violate any provision of the Credit Risk Retention Rules.

3.7No Rights in Others. The Company has not granted to any party, other than Purchaser pursuant to this Agreement, any right of first offer, right of first refusal, right to purchase, or other preemptive or preferential right with respect to the Interests or any other direct or indirect ownership interests in the Company.

3.8Consents. No consent, approval, exemption or authorization is required to be obtained from, no notice is required to be given to and no filing is required to be made with, any person or entity (including, without limitation, any governmental authority or any direct or indirect equity owner of Seller, or Operator Member, or any party to the Trust Documents) by Seller or the Company which has not been obtained, given or made on or prior to the date hereof, in order to authorize or permit the consummation of the transactions contemplated by this Agreement and the other Seller Transaction Documents.

3.9Financial Statements. Seller has provided Purchaser with true, correct and complete copies of the year to date financials of the Company and RHJV (to the extent received by Seller from the Operator Member) for calendar years 2020 and 2021 (the “Financial Statements”), copies of which are included in the Data Room. The Financial Statements are the financial statements that Seller relies on in the operation of its business and for internal accounting purposes.

3.10Assets; No Undisclosed Liabilities.

(a)Other than assets set forth on the Financial Statements, the sole assets of the Company are its interests in RHJV and the Subsidiaries and its indirect interest in the Properties. The only assets of RHPOC Equity Owner, LLC is its membership interest in Borrower, its indirect interest in the Properties and assets derived from its direct or indirect interest in Borrower or the Properties. The only asset of RHJV Depositor, LLC is its interest in the Trust Documents and any indemnifications for the benefit of RHJV Depositor, LLC provided in connection with the securitization pursuant to the Trust Documents. The sole assets of RHJV MOA, LLC are its interest in the Trust Documents, the Class H Certificates of the AMSR 2020-SFR4 Trust and a five percent (5%) risk retention interest in the securitization pursuant to the Trust Documents.

(b)The sole assets of Borrower are its ownership interest in the Properties.

(c)Except for liabilities (i) reflected or reserved on the Financial Statements,

(ii)incurred in the ordinary course of business (including by the direct owners of the Properties),

(iii)reflected in the Loan Documents and/or the Trust Documents, (iv) disclosed in the Diligence Information or otherwise disclosed in writing by Seller or (v) relating to the Properties (including without limitation, title matters, property condition matters, structural or environmental issues, and any property contracts entered into in connection with the ownership, management and

maintenance of the Properties), none of the Company, RHJV or the Subsidiaries have any liabilities.

3.11No Bankruptcy None of Seller, the Company, RHJV or the Subsidiaries have (i) made a general assignment for the benefit of creditors, (ii) filed a petition for voluntary bankruptcy or filed a petition or answer seeking reorganization or any arrangement or composition, extension or readjustment of Seller’s, the Company’s, RHJV’s or the Subsidiaries’ indebtedness, (iii) consented, in any creditor’s proceeding, to the appointment of a receiver or trustee of Seller, the Company, RHJV or the Subsidiaries or any of their property or any part thereof, or (iv) been named as a debtor in an involuntary bankruptcy proceeding or received a written notice threatening the same.

3.12Tax Matters.

(a)The Company and to Seller’s knowledge, RHJV and the Subsidiaries, have prepared and duly filed, or caused to be prepared and duly filed, with the appropriate taxing authorities all federal, state and local income and other material Tax returns, information returns, statements, forms, filings and reports (each a “Tax Return” and, collectively, the “Tax Returns”) required to be filed with respect to the Company or RHJV, as applicable, and all such Tax Returns are true, correct and complete in all material respects. The Company and to Seller’s knowledge, RHJV, has paid all Taxes owed or payable by the Company or RHJV, as applicable, (whether or not shown on a Tax Return), including Taxes which the Company or RHJV, as applicable, is obligated to withhold.

(b)None of Seller, the Company or to Seller’s knowledge, RHJV or the Subsidiaries, have received a written notice that it is currently the subject of a tax audit or examination, and no tax audit or examination is currently threatened by any taxing authority.

(c)None of Seller, the Company or to Seller’s knowledge, RHJV or the Subsidiaries, have received from any taxing authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other such written notice which has not been satisfied by payment or been withdrawn.

(d)Seller makes the additional representations and warranties regarding itself, the Company, RHJV and the Subsidiaries as set forth on Schedule 3.12 attached hereto.

3.13No Litigation. There is no action, suit or proceeding pending or threatened against Seller, the Company, RHJV or the Subsidiaries in either case with respect to or affecting the Interests, the Company, RHJV or the Subsidiaries, as applicable, or the transactions contemplated by this Agreement. There are no outstanding orders, writs, injunctions or decrees of any governmental authority against or affecting Seller, the Company, the Interests, RHJV, the Subsidiaries or the transactions contemplated by this Agreement.

3.14Employees. None of the Company, RHJV nor the Subsidiaries have and never have had any employees.

3.15Intentionally Omitted.

3.16.ERISA. None of Seller, the Company, RHJV nor the Subsidiaries are an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), which is subject to Title I of ERISA, or a “Plan” as defined in Code Section 4975; (b) the assets of Seller, the Company, RHJV and the Subsidiaries, as of Closing, do not constitute “plan assets” of one or more such plans for purposes of Title I of ERISA or Code Section 4975; and (c) none of Seller, the Company, RHJV nor the Subsidiaries are a “governmental plan” within the meaning of Section 3(32) of ERISA, and the assets of Seller, the Company, RHJV and the Subsidiaries do not constitute plan assets of one or more such plans.

3.17.OFAC. None of Seller, the Company, RHJV nor the Subsidiaries have engaged in any dealings or transactions, directly or indirectly, (i) with any person appearing on the U.S. Treasury Department’s OFAC list of prohibited countries, territories, “specifically designated nationals or “blocked person” (each, a “Prohibited Person”) (which lists can be accessed at the following web address: http://www.ustreas.gov/offices/enforcement/ofac/), including the making or receiving of any contribution of funds, goods or services to or for the benefit of any such Prohibited Person, (ii) in contravention of any U.S., international or other money laundering regulations or conventions, including, without limitation, the United States Bank Secrecy Act, the United States Money Laundering Control Act of 1986, the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Trading with the Enemy Act (50 U.S.C. §1 et seq., as amended), or any foreign asset control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto, (iii) in contravention of Executive Order No. 13224 dated September 24, 2001 issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended or supplemented from time to time (“Anti-Terrorism Order”) or on behalf of terrorists or terrorist organizations, including those persons or entities that are included on any relevant lists maintained by the United Nations, North Atlantic Treaty Organization, Organization of Economic Cooperation and Development, Financial Action Task Force, U.S. Office of Foreign Assets Control, U.S. Securities & Exchange Commission, U.S. Federal Bureau of Investigation, U.S. Central Intelligence Agency, U.S. Internal Revenue Service, or any country or organization, all as may be amended from time to time, or (iv) any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempting to violate, any of the prohibitions set forth in (a) the Foreign Corrupt Practices Act, (b) the U.S. mail and wire fraud statutes, (c) the Travel Act, (d) any similar or successor statutes or (e) any regulations promulgated under the foregoing statutes. None of Seller, the Company, RHJV nor the Subsidiaries (x) are or plans to be conducting any business or engaging in any transaction with any person appearing on the U.S. Treasury Department’s Office of Foreign Assets Control list of restrictions and prohibited persons or (y) is a person described in Section 1 of the Anti-Terrorism Order, and, none of Seller, the Company, RHJV nor the Subsidiaries have engaged in any dealings or transactions, or otherwise been associated with any such person.

3.18.Major Contracts. The Company is not a party to or otherwise bound by, any contract with a term of more than one (1) year that is not terminable upon thirty (30) days’ notice without penalty and having an annual monetary obligation in excess of $250,000.00.

ARTICLE 4

PURCHASER’S REPRESENTATIONS AND WARRANTIES

Purchaser hereby represents and warrants to Seller as follows as of the Closing Date:

4.1Organization; Validity and Execution.

(a)Purchaser is duly formed, validly existing and in good standing under the laws of its jurisdiction of organization or formation and in each jurisdiction where authorized to do business and has all necessary power and authority to carry on its business as is now being conducted.

(b)Purchaser has full power and authority, and has taken all action necessary, to execute, deliver and perform its obligations under this Agreement and any related documents, instruments or agreements that may be necessary to fulfill its obligations hereunder, including, without limitation, the Assignment Agreement and the JV Agreement (collectively, the “Purchaser Transaction Documents”). This Agreement has been, and each of the other Purchaser Transaction Documents to which Purchaser is a party will, at the time of its execution, have been duly authorized, executed and delivered by Purchaser, and, when executed and delivered by Purchaser will constitute Purchaser’s legally valid and binding obligation, enforceable against Purchaser in accordance with its terms.

4.2No Conflict. The execution, delivery and performance by Purchaser of this Agreement and each of the Purchaser Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, (i) does not conflict with or result in a violation of, or breach of, or constitute a default or potential default under, any law or administrative regulation (including any anti-bribery or corruption laws) or any of the terms, conditions, or provisions of any judgment, decree applicable to Purchaser; (ii) does not conflict with or result in a violation of, or breach of, or constitute a default or potential default under provisions of the organizational documents of Purchaser; and (iii) does not constitute or result in the breach of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation, acceleration, amendment of, or loss of any benefit with respect to, any contract, agreement, deed, bond, note, resolution, indenture, mortgage, deed of trust, or other agreement or instrument to which Purchaser is a party or by which Purchaser is bound.

4.3Consents. No consent, approval, exemption or authorization is required to be obtained from, no notice is required to be given to and no filing is required to be made with, any person or entity (including, without limitation, any governmental authority) by Purchaser which has not been obtained, given or made on or prior to the date hereof, in order to authorize or permit the consummation of the transactions contemplated by this Agreement and the other Purchaser Transaction Documents.

4.4No Bankruptcy. Purchaser has not (i) made a general assignment for the benefit of creditors, (ii) filed a petition for voluntary bankruptcy or filed a petition or answer seeking reorganization or any arrangement or composition, extension or readjustment of Purchaser’s indebtedness, (iii) consented, in any creditor’s proceeding, to the appointment of a receiver or

trustee of Purchaser, its property or any part thereof, or (iv) been named as a debtor in an involuntary bankruptcy proceeding or received a written notice threatening the same.

4.5OFAC. Purchaser has not engaged in any dealings or transactions, directly or indirectly, (i) with any person appearing on the U.S. Treasury Department’s OFAC list of prohibited countries, territories, “specifically designated nationals or “blocked person” (each, a “Prohibited Person”) (which lists can be accessed at the following web address: http://www.ustreas.gov/offices/enforcement/ofac/), including the making or receiving of any contribution of funds, goods or services to or for the benefit of any such Prohibited Person, (ii) in contravention of any U.S., international or other money laundering regulations or conventions, including, without limitation, the United States Bank Secrecy Act, the United States Money Laundering Control Act of 1986, the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Trading with the Enemy Act (50 U.S.C. §1 et seq., as amended), or any foreign asset control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto, (iii) in contravention of Executive Order No. 13224 dated September 24, 2001 issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended or supplemented from time to time (“Anti-Terrorism Order”) or on behalf of terrorists or terrorist organizations, including those persons or entities that are included on any relevant lists maintained by the United Nations, North Atlantic Treaty Organization, Organization of Economic Cooperation and Development, Financial Action Task Force, U.S. Office of Foreign Assets Control, U.S. Securities & Exchange Commission, U.S. Federal Bureau of Investigation, U.S. Central Intelligence Agency, U.S. Internal Revenue Service, or any country or organization, all as may be amended from time to time, or (iv) any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempting to violate, any of the prohibitions set forth in (a) the Foreign Corrupt Practices Act, (b) the U.S. mail and wire fraud statutes, (c) the Travel Act, (d) any similar or successor statutes or (e) any regulations promulgated under the foregoing statutes. Purchaser

(x)is not and does not plan to be conducting any business or engaging in any transaction with any person appearing on the U.S. Treasury Department’s Office of Foreign Assets Control list of restrictions and prohibited persons and (y) is not a person described in Section 1 of the Anti- Terrorism Order, and, Purchaser has not engaged in any dealings or transactions, or otherwise been associated with any such person.

ARTICLE 5

LIMITATION ON LIABILITY

5.1AS-IS; Limitation of Liability.

(a)Other than the representations and warranties expressly made by Seller in Article 3 and any other document delivered by Seller to Purchaser hereunder in connection with the Closing, the Interests are being sold on an “as-is”, “where-is” basis and without any representation or warranty.

(b)Except for the representations, warranties, covenants and agreements expressly provided in this Agreement, Purchaser, on its own behalf and on behalf of each of its direct or indirect affiliates, parent and subsidiary entities, successors, assigns, partners, managers,

members, employees, officers, directors, trustees, shareholders, counsel, representatives and agents (each a “Purchaser Releasing Party”), waives, effective as of the Closing, its and each Purchaser Releasing Party’s right to recover from, and forever releases and discharges, effective as of the Closing, Seller and Seller’s direct or indirect affiliates, parent and subsidiary entities, successors, assigns, partners, managers, members, employees, officers, directors, trustees, shareholders, counsel, representatives and agents (the “Seller’s Indemnified Parties”), from any and all demands, claims (including, without limitation, causes of action in tort), legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen (collectively, “Claims”), that exist or may arise on account of or in any way connected with the Interests or the Company.

(c)Except for the representations, warranties, covenants and agreements expressly provided in this Agreement, Seller on its own behalf and on behalf of each of its direct or indirect affiliates, parent and subsidiary entities, successors, assigns, partners, managers, members, employees, officers, directors, trustees, shareholders, counsel, representatives and agents (each a “Seller Releasing Party”) waives, effective as of the Closing, its and each Seller Releasing Party’s right to recover from, and forever releases and discharges, effective as of the Closing, Purchaser and Purchaser’s direct or indirect affiliates, parent and subsidiary entities, successors, assigns, partners, managers, members, employees, officers, directors, trustees, shareholders, counsel, representatives and agents (the “Purchaser’s Indemnified Parties”; and together with Seller’s Indemnified Parties, as applicable, the “Indemnified Parties”) from any and all Claims that exist or may arise on account of or in any way be connected with the Interests, or the Company.

(d)All representations and warranties in this Agreement made by either Party shall survive for the applicable Survival Period, and subject to the terms of this Agreement, each Party hereby agrees to indemnify, defend and hold harmless the other Party and its Indemnified Parties from and against any and all Claims that actually arise as a result of a breach of such representations and warranties. If written notice of any claim is delivered by either Party to the other Party within the applicable Survival Period, then all rights and remedies with respect to the matters which are the subject of such claim shall survive until full and final resolution of such claim and full payment of any amounts owed by the applicable Party as a result thereof. Except for such provisions that expressly survive the Closing or the termination of this Agreement, none of the terms and provisions of this Agreements shall survive the Closing or the termination of this Agreement, and all of the terms and provisions of this Agreement (other than those that expressly survive the Closing) shall be merged into the Assignment Agreement at Closing and shall not survive the Closing and no Party hereto shall have any liability hereunder after the Closing in respect of such provisions that do not survive the Closing. Notwithstanding any other provision of this Agreement to the contrary, Purchaser agrees that in no event shall any liability of Seller to Purchaser under this Agreement exceed an amount equal to the applicable Cap.

(e)In the event that Seller breaches any of its representations or warranties under Article 3 and Purchaser had actual knowledge of such breach and Purchaser nevertheless elects to proceed to Closing, then Purchaser shall be deemed to have waived any of its rights in connection therewith and Seller shall not have any liability in connection therewith.

(f)UNDER NO CIRCUMSTANCES MAY SELLER OR PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH EACH PARTY SPECIFICALLY WAIVES, FROM THE OTHER PARTY FOR ANY BREACH BY A PARTY OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS AGREEMENT.

(g)Purchaser acknowledges that this Agreement is entered into by Seller, and Purchaser agrees that none of Seller’s Indemnified Parties shall have any personal liability under this Agreement or any document executed in connection with the transactions contemplated by this Agreement. Seller acknowledges that this Agreement is entered into by Purchaser, and Seller agrees that none of Purchaser’s Indemnified Parties shall have any personal liability under this Agreement or any document executed in connection with the transactions contemplated by this Agreement.

(h)This Section 5.1 shall survive the Closing or the earlier termination of this

Agreement

5.2Attorney Costs. If either Purchaser or Seller brings any suit or other proceeding with respect to the subject matter or the enforcement of this Agreement, the prevailing Party (as determined by the court, arbitrator or other authority before which such suit or proceeding is commenced), in addition to such other relief as may be awarded, shall be entitled to recover reasonable attorneys' fees actually incurred from the other Party. The provisions of this Section

5.2 shall survive the Closing or any termination of this Agreement.

ARTICLE 6 BROKERAGE

6.1Brokers. Seller and Purchaser each represent and warrant to the other that, it has not dealt with any broker or finder in connection with the transaction described herein. Each Party hereby agrees to indemnify, defend and hold the other Party harmless from and against any and all claims, causes of action, losses, costs, expenses, damages or liabilities, including reasonable attorney’s fees and disbursements, which such other Party may sustain, incur or be exposed to, by reason of any claim or claims by any broker, finder or other person for fees, commissions or other compensation arising out of the negotiation of this transaction if such claim or claims are based in whole or in part on dealings or agreements with the indemnifying Party.

6.2Survival. The provisions of this Article 6 shall survive any termination of this Agreement, and, if not so terminated, the Closing.

ARTICLE 7

MISCELLANEOUS

7.1Modification or Amendments. No amendment, change or modification of this Agreement shall be valid unless in writing and signed by all Parties hereto.

7.2Entire Agreement. This document constitutes the entire understanding and agreement of the Parties with respect to the subject matter of this Agreement, and any and all

prior agreements, understandings or representations, if any, are hereby terminated and canceled in their entirety and are of no further force or effect.

7.3Applicable Law and Severability. This Agreement shall be governed by the laws of the State of Delaware. Any provision herein held to be unenforceable shall be deemed severable and the remaining Agreement shall continue in full force and effect.

7.4Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity of this Agreement, including the determination of the scope or applicability of arbitration, will be determined by arbitration in Chicago, Illinois before one arbitrator. The arbitration will be administered by JAMS pursuant to JAMS’s Streamlined Arbitration Rules and Procedures. Judgment on the award may be entered in any court having jurisdiction. This Section does not preclude the parties hereto from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. Any provision herein held to be unenforceable shall be deemed severable and the remaining Agreement shall continue in full force and effect.

7.5Successor and Assigns. Except as provided in the immediately following sentence, neither Seller nor Purchaser may assign its rights or obligations under this Agreement without the prior written consent of other Party. All of the terms and provisions contained herein shall inure to the benefit of and shall be binding upon the Parties and their respective heirs, personal representatives and permitted successors and assigns.

7.6Further Assurances. Each of the Parties shall execute and deliver any and all additional papers, documents, and other assurances, and shall do any and all acts and things reasonably necessary in connection with the performance of their obligations hereunder and to carry out the intent of the Parties hereto.

7.7Captions. The captions appearing at the commencement of the Sections hereof are descriptive only and for convenience in reference. Should there be any conflict between any such caption and the Section at the head of which it appears, the Section and not such caption shall control and govern in the construction of this document.

7.8Separate Counterparts. This document may be executed in one or more separate counterparts, each of which, when so executed shall be deemed to be an original. Such counterparts shall, together, constitute and be one and the same instrument. The signature of any Party to any counterpart, electronic (scanned) signature, facsimile or photocopy thereof, may be appended to any other counterpart and when so appended shall constitute an original.

7.9No Obligation to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate either of the Parties hereto, to any person or entity other than each other.

7.10Notices. Any and all notices, demands or other communications required or desired to be given hereunder by any Party shall be in writing and shall be validly given or made to another Party if (a) served personally, (b) mailed by a reputable overnight courier such as Federal Express, or (c) sent via email. If such notice, demand or other communication is served personally, notice shall be conclusively deemed given on the day notice is received. If such notice, demand or other communication is sent by overnight courier, notice shall conclusively be

deemed given on the Business Day next following the deposit thereof with the courier. If such notice, demand or other communication is sent by email, notice shall conclusively be deemed given upon delivery to the parties set forth on Schedule 7.10.

Any Party may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other Party or Parties hereto.

7.11Costs. Each Party hereto agrees to pay its own respective legal fees and the costs of its third party professionals in connection with the transaction contemplated by this Agreement.

7.12Computation of Time. Whenever the last day for the exercise of any right hereunder or discharge of any duty hereunder shall fall upon a day that is not a Business Day, the party having such right or duty may exercise such right or discharge such duty on the next succeeding day which is a Business Day.

7.13Confidentiality; Press Releases. Subject to Purchaser’s rights set forth in Section 7.16, each Party shall keep the terms of this Agreement, and any non-public information exchanged in connection with this Agreement, including the Diligence Information, confidential except for

(1) disclosure to such Party’s affiliates, its constituent entities (including direct and indirect owners), and their respective officers, employees, advisors, agents, actual and prospective investors and lenders, legal counsel, accountants, consultants, advisors, title companies, surveyors and other contractors; provided, that the Party making the disclosure shall (a) provide such information only to those persons who need such information for purposes of proceeding with the potential transactions contemplated by this Agreement, and (b) instruct the recipient to keep the information confidential, (2) disclosures such Party determines to be necessary to consummate the transactions, (3) disclosures such Party determines to be necessary in order to fulfill the disclosure obligations of such Party or its affiliates imposed by law or legal process so long as such Party provides the other Party with a reasonable opportunity to obtain a restraining order or take other protective action, and (4) disclosures by a Party of information that is available to such Party from any other source not subject to any confidentiality restrictions. In the event this Agreement is terminated for any reason, Purchaser shall immediately return or destroy (consistent with Purchaser’s internal document retention policies) any copies of the Diligence Information provided by Seller and confirm in writing to Seller its full return or destroy thereof. Any press release related to this Agreement or the transactions contemplated hereunder shall in each instance require the prior written approval of Purchaser and Seller.

7.14Tax Matters.

(a)Transfer Taxes. Seller shall be responsible for one hundred percent (100%) of all conveyance fees, recording charges and transfer, documentary, sales, use, stamp, registration and other taxes arising from the purchase and sale of the Interests, and Seller shall prepare and file all necessary Tax Returns and other documentation in connection with such Taxes and the Purchaser shall cooperate as necessary in filing any such Tax Returns.

(b)Tax Certificates. Purchaser and Seller agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce, or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

(c)Tax Treatment. The parties hereto intend that the payment by Purchaser of the Purchase Price in exchange for the Interests be characterized as a purchase and sale of partnership interests for U.S. income Tax Purposes. The Purchaser, the Company and the Seller shall file all Tax Returns and information reports in a manner consistent with this Section 7.14(c) and shall not take, or cause to be taken, any action or position that would be inconsistent with or prejudice the tax treatment described in this Section 7.14(c), except pursuant to a final “determination” (as defined in Section 1313(a) of the Code or corresponding provision of state, local or foreign law).

(d)Allocation of Purchase Price. The Seller and the Purchaser agree that the Purchase Price and any liabilities treated as assumed (plus other relevant items) shall be allocated among the assets of the Company consistent with the fair market values of such assets, in accordance with Section 741 and Section 751 of the Code and the Treasury Regulations thereunder and the principles set forth in Schedule 7.14(d), for all purposes (including Tax and financial accounting) as shown on an allocation schedule (the “Allocation Schedule”) prepared by the Purchaser and delivered to the Seller within 90 days following the final determination of Closing Working Capital in accordance with this Agreement for Seller’s review and comment. Seller shall submit any comments to Purchaser in writing within thirty (30) days of receiving the Allocation Schedule. Purchaser shall incorporate all reasonable comments of Seller to the Allocation Schedule. For the avoidance of doubt, to the extent that the Purchase Price is allocated to the Company’s interests in RHJV, such amount shall be further allocated to the assets of RHJV and its subsidiaries in a manner consistent with this Section 7.14(d). The Purchaser, the Company and the Seller shall file all Tax Returns and information reports in a manner consistent with this Section 7.14(d) and shall not take, or cause to be taken, any action or position that would be inconsistent with or prejudice this Section 7.14(d), except pursuant to a final “determination” (as defined in Section 1313(a) of the Code or corresponding provision of state, local or foreign law). Any adjustments to the Purchase Price shall be allocated in a manner consistent with the Allocation Schedule.

(e)Section 754 Elections. The parties acknowledge and agree that it is their intention that the Company, RHJV, and any subsidiary of RHJV that is treated as a partnership for

U.S. federal income Tax purposes shall, to the extent an election under Section 754 of the Code is not already in effect with respect to RHJV or any such subsidiary, make a timely and valid election under Section 754 of the Code with respect to the taxable year that includes the Closing, in each case at Purchaser’s expense.

(f)Pre-Closing Taxes. Seller shall pay to the Company all Pre-Closing Taxes by the due date for the filing of the applicable Tax Return. “Pre-Closing Taxes” means: (a) any Taxes of the Company, RHJV or any of its subsidiaries relating to Tax periods that ends on or before the Closing and any and all portions of Straddle Periods ending on the Closing Date (determined in accordance with Section 7.14(g)) (including any Taxes relating to a Pre-Closing

Tax Period payable under the Partnership Tax Audit Rules); (b) any and all Taxes of the Company, RHJV or any of its subsidiaries arising in connection with the transactions contemplated by this Agreement (including any Taxes relating to a Pre-Closing Tax Period payable under the Partnership Tax Audit Rules); (c) Taxes described in Section 7.14(a); (d) any payments required to be made after the Closing Date under any Tax allocation, Tax sharing agreement, Tax indemnification agreement or other similar contract to which the Company, RHJV or any of their subsidiaries was obligated, or was a party, on or prior to the Closing Date; in each case together with any out of pocket fees and expenses (including reasonable attorneys’ and accountants’ fees) incurred in connection therewith.

(g)Straddle Periods. In the case of Taxes that are payable with respect to a taxable period that begins before and ends after the Closing Date (each such period, a “Straddle Period”), the portion of any such Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement shall be: (A) in the case of Taxes based upon, or related to, income, receipts, profits, wages, capital or net worth, or imposed in connection with the sale, transfer or assignment of property, deemed equal to the amount which would be payable if the taxable year ended with the Closing Date; and (B) in the case of other Taxes, deemed to be the amount of such Taxes for the entire period multiplied by a fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

(h)Intentionally Omitted.

7.15Intentionally Omitted.

7.16SEC Filings; S-X 3-14 Audit. Seller and Purchaser acknowledge and agree that, notwithstanding any other provision of this Agreement to the contrary, Purchaser may (a) prepare and file with the United States Security and Exchange Commission (“SEC”) any and all forms required to be filed by Purchaser in connection with this Agreement, including, but not limited to, an SEC Form 8-K; and (b) engage Seller’s auditor (the “S-X 3-14 Auditor”) to conduct an SEC regulation S-X Section 3-14 Audit (the “S-X 3-14 Audit”) of certain operating revenues and expenses with respect to the Interest and the Properties within sixty (60) days after the Effective Date. Seller acknowledges that the foregoing permits Purchaser to file with the SEC a copy of the body of this Agreement and any such filing may occur within four (4) Business Days after the Effective Date. In addition, Seller agrees to cooperate in good faith with Purchaser, at Purchaser’s sole cost and expense, to provide the S-X 3-14 Auditor with reasonable access during business hours to Seller’s books and records relating to the Interests and the Properties as reasonably required to complete any such S-X 3-14 Audit. All such information shall be provided on as as-is, where-is basis without any representation or warranty.

7.17Survival. This Article 7 shall survive the termination of this Agreement and, if not so terminated, the Closing.

ARTICLE 8

8.1Escrow Agreement.

(a)On the Closing Date, Escrow Agent shall hold the Purchase Price and make delivery of the Purchase Price to the Party entitled thereto under the terms of this Agreement and

in accordance with any written instructions received from Seller and Purchaser. The tax identification numbers of the Parties shall be furnished to Escrow Agent upon request.

(b)The Parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, and that Escrow Agent shall not be deemed to be the agent of any of the Parties and shall not be liable for any act or omission on its part unless taken or suffered in bad faith in willful disregard of this Agreement or involving gross negligence or fraud. Seller and Purchaser severally (on a 50/50 basis) shall indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorney’s fees, incurred in connection with the performance of Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith, in willful disregard of this Agreement or involving gross negligence or fraud on the part of the Escrow Agent.

(c)The Parties shall deliver to Escrow Agent an executed copy of this Agreement. Escrow Agent shall execute the signature page for Escrow Agent attached hereto which shall confirm Escrow Agent’s agreement to comply with the terms of Seller’s closing instruction letter delivered at the Closing and the provisions of this Section 8; provided, however, that (a) Escrow Agent’s signature hereon shall not be a prerequisite to the binding nature of this Agreement on Purchaser and Seller, and the same shall only become fully effective upon execution and delivery by Purchaser and Seller, and (b) the signature of Escrow Agent will not be necessary to amend any provision of this Agreement other than this Section 8 and then only to the extent affecting Escrow Agent.

(d)The provisions of this Section 8 shall survive any termination of this Agreement, and, if not so terminated, the Closing.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Limited Liability Company Interest Purchase and Sale Agreement as of the Effective Date.

SELLER:


GEM VI RA HOLDINGS, LLC, a Delaware limited liability company

By:			/s/ Jonathan C. Romick
			Name: Jonathan C. Romick
			Title: Authorized Signatory


GEM REALTY SFR CO-INVEST, L.P., a Delaware limited partnership

By:			GEM Realty Managers VI, L.P., its general partner

By:			GEM Realty Capital, Inc., its general partner

By:			/s/ Jonathan C. Romick
			Name: Jonathan C. Romick
			Title: Secretary

PURCHASER:


LIPT SFR PORTFOLIO, LLC,a Delaware limited liability company

By:			/s/ Sean Meehan
			Name: Sean Meehan
			Title: Vice President

(Signature Page to Limited Liability Company Interest Purchase Agreement)

The undersigned agrees to perform as Escrow Agent in accordance with this Agreement.


BCHH, Inc.

By:			/s/ Charles Marino
			Name: Charles Marino
			Title: President

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, C. Allan Swaringen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jones Lang LaSalle Income Property Trust, Inc.;

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 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 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.

Date: November 10, 2021



/s/ C. ALLAN SWARINGEN
C. Allan Swaringen
President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory A. Falk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jones Lang LaSalle Income Property Trust, Inc.;

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.

Date: November 10, 2021



/s/ GREGORY A. FALK
Gregory A. Falk
Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jones Lang LaSalle Income Property Trust, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, C. Allan Swaringen, in my capacity as Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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



/s/ C. ALLAN SWARINGEN
C. Allan Swaringen
President and Chief Executive Officer

November 10, 2021

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jones Lang LaSalle Income Property Trust, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory A. Falk, in my capacity as Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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



/s/ GREGORY A. FALK
Gregory A. Falk
Chief Financial Officer

November 10, 2021