Inland Real Estate Income Trust Explores Strategic Alternatives

The company reviews potential sale and liquidity options while navigating financial pressures and evolving retail trends.

March 06, 2025

Navigating Uncertainty

Inland Real Estate Income Trust is weighing its next move. The company is in the middle of a strategic review that could lead to a sale or another liquidity event. At the same time, it’s managing financial pressures, a changing retail landscape, and the impact of rising interest rates.

Inland has engaged financial advisors to explore potential transactions, but there’s no guarantee of a sale or merger. Market conditions—including interest rates and real estate valuations—will play a key role in determining the outcome.

While this process unfolds, Inland has suspended both its distribution reinvestment plan (DRP) and share repurchase program (SRP). With no public market for its stock, investors currently have limited options for liquidity.

Financial Pressures in a Shifting Market

The company has posted net losses in recent years under GAAP, reflecting the broader pressures on the retail real estate sector. Its portfolio remains 93% occupied, but shifting consumer behavior and the rise of e-commerce continue to challenge tenants. Several large retailers have vacated spaces or reduced their rent obligations, citing financial difficulties.

On the debt side, Inland carries $175 million in variable-rate loans that are directly exposed to interest rate fluctuations. The company also has a $475 million credit facility, with financial covenants that could limit flexibility if economic conditions shift further. Rising costs—from insurance premiums to property taxes—add another layer of complexity.

Regulatory and Structural Considerations

As a REIT, Inland must distribute at least 90% of its taxable income to shareholders to maintain its tax advantages. If it fails to meet these requirements, it could face additional tax liabilities.

The company is also externally managed, meaning its Business Manager and Real Estate Manager operate under an affiliate of its sponsor, Inland Real Estate Investment Corporation (IREIC). This structure raises potential conflicts of interest, as management fees remain a fixed obligation regardless of the company’s financial performance.

What Comes Next

The retail real estate market continues to evolve, and Inland’s strategic review reflects the challenges of operating in this space. Grocery-anchored properties provide a degree of stability, but broader economic pressures remain.

If a sale or merger does not materialize, Inland may look at other paths, such as:

• Resuming asset sales


• Exploring alternative capital sources


• Adjusting its long-term portfolio strategy

For now, the company is keeping its options open, with decisions likely to be shaped by market conditions in the months ahead.