Invesco Real Estate Income Trust Inc.

11/07/2025 | Press release | Distributed by Public on 11/07/2025 14:18

Quarterly Report for Quarter Ending SEPTEMBER 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this quarterly report on Form 10-Q, or this "Quarterly Report," we refer to Invesco Real Estate Income Trust Inc. and its consolidated subsidiaries as "we," "us," "our Company," or "our," unless we specifically state otherwise or the context indicates otherwise. We refer to our external manager, Invesco Advisers, Inc., as our "Adviser," and we refer to the indirect parent company of our Adviser, Invesco Ltd. together with its consolidated subsidiaries (which does not include us), as "Invesco."
The following discussion should be read in conjunction with our condensed consolidated financial statements and the accompanying notes to our condensed consolidated financial statements, which are included in Item 1 of this Quarterly Report, as well as the information contained in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC").
Forward Looking Statements
This Quarterly Report may include statements that constitute "forward-looking statements" within the meaning of the United States securities laws and the Private Securities Litigation Reform Act of 1995, and such statements are intended to be covered by the safe harbor provided by the same. These forward-looking statements may include statements about possible or assumed future results of our business, investment strategies, financial condition, liquidity, results of operations, distributions, repurchases, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "intend," "project," "forecast" or similar expressions and future or conditional verbs such as "will," "may," "could," "should," and "would," and any other statement that necessarily depends on future events, we intend to identify forward-looking statements, although not all forward-looking statements may contain such words.
Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are difficult to predict and are generally beyond our control. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. You should not place undue reliance on these forward-looking statements. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. We caution you not to rely unduly on any forward-looking statements and urge you to carefully consider the factors described under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Report and our Annual Report on Form 10-K. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
We are a Maryland corporation formed in October 2018. We invest primarily in stabilized, income-oriented commercial real estate in the United States. To a lesser extent, we also originate and acquire private real estate debt and invest in real estate-related securities. We own, and expect to continue to own, all or substantially all of our assets through Invesco REIT Operating Partnership L.P. ("INREIT OP" or "Operating Partnership"), of which we are the sole general partner.
We are externally managed and advised by our Adviser, a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd., an independent global investment management firm. Our Adviser utilizes the personnel and global resources of Invesco Real Estate, the real estate investment center of Invesco, to provide investment management services to us. We qualified to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2020. To maintain our REIT qualification, we must meet a number of organizational and operational requirements, including that we are generally required to distribute at least 90% of our REIT taxable income to our stockholders annually. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income (determined without regard to our net capital gain and dividends-paid deduction) to stockholders and maintain our qualification as a REIT. We operate our business in a manner that permits our exclusion from the definition of "Investment Company" under the Investment Company Act of 1940, as amended (the "Investment Company Act").
As of September 30, 2025, we own or have invested in 64 properties. See "Investment Portfolio-Real Estate" below for additional information on these investments. As of September 30, 2025, we also own real estate-related securities, have an investment in a commercial loan and have invested in an affiliated fund which invests primarily in mortgage loans that are collateralized by commercial and residential real estate throughout the United States.
Public Offering
In May 2021, we commenced our initial public offering of up to $3.0 billion in shares of common stock. In November 2024, our initial public offering terminated and we commenced our follow-on public offering of up to $3.0 billion, consisting of up to $2.4 billion in shares in our primary offering (the "Primary Offering") and up to $600.0 million in shares under our distribution reinvestment plan (collectively, the "Offering"). We are offering to sell any combination of five classes of shares of our common stock, Class T shares, Class S shares, Class D shares, Class I shares and Class E shares in the Offering, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and dealer manager fees and different ongoing stockholder servicing fees. The purchase price per share for each class of our common stock sold in the Offering will vary and will generally equal our prior month's net asset value ("NAV") per share for such class, as determined monthly, plus any applicable upfront selling commissions and dealer manager fees. We intend to continue selling shares in our follow-on public offering on a monthly basis. As of November 7, 2025, we have received aggregate gross proceeds of $235.4 million from the Offering. We intend to continue selling shares on a monthly basis.
Private Offerings
In addition to the Offering, we are conducting several private offerings of our common stock (the "Private Offerings"). As of November 7, 2025, we have received gross proceeds of $607.3 million in the Private Offerings.
In August 2022, our board of directors authorized management to initiate, through the Operating Partnership, a program (the "DST Program") to issue and sell up to a maximum aggregate offering amount of $3.0 billion of beneficial interests ("Interests") in specific Delaware statutory trusts (the "DSTs") holding real properties (the "DST Properties"). These Interests will be issued and sold to "accredited investors," as that term is defined under Regulation D promulgated by the SEC under the Securities Act of 1933, as amended (the "Securities Act") in private placements exempt from registration pursuant to Section 4(a)(2) of the Securities Act (the "DST Offerings"). Under the DST Program, each DST Property may be sourced from our real properties or from third parties, will be held in a separate DST, and will be leased back by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement is guaranteed by the Operating Partnership, which has a fair market value purchase option (the "FMV Option") giving it the right, but not the obligation, to acquire the interests in the applicable DST from the investors any time after two years from the closing of the applicable DST offering in exchange for units of the Operating Partnership ("OP Units") or cash. After a one-year holding period, investors who acquire OP Units under the FMV Option 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.
The DST Program gives us the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Certain affiliates of the Adviser receive fees in connection with the sale of the Interests and the management of the DSTs. We intend to use the net offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, reduce our borrowings, repay indebtedness, fund the repurchase of shares of all classes of our common stock under our share repurchase plan and for other corporate purposes. We commenced our DST Program in February 2023. As of November 7, 2025, we have raised $194.0 million net proceeds from our DST Program.
Factors Affecting Operating Results
Our results of operations are affected by a number of factors and depend on the rental income generated by the properties that we acquire or lend on, the timing of lease expirations, operating expenses, income or loss from unconsolidated entities, general market conditions and the competitive environment for real estate assets. Of these factors, changing macroeconomic landscape, interest rates, capital flows and transaction activity had the most direct impacts on our performance and financial condition during the third quarter of 2025.
Market Conditions
Our business is affected by conditions in the financial markets and economic conditions in the United States and to a lesser extent, elsewhere in the world. Inflation and economic trend data, along with policy shifts with a new administration, will ultimately determine if and when interest rates decline. For the time being, secured borrowing costs for core and core plus real estate remain in the five to six percent range, which will inform how investors underwrite value and their conviction in required growth. Our investment decisions today are further colored by a divergence in sector fundamentals, impacts of recent changes to U.S. trade policies and the resulting impacts to both near-term and long-term consumer demand. Our real estate portfolio is comprised of tangible, income-generating assets, the cash flows of which are less directly impacted by fluctuations in public markets. New trade policies may cause construction costs to increase, which makes owning existing real estate below replacement cost attractive and a defensive place for capital preservation. This could create attractive entry points and investment opportunities, further emphasizing the importance to prioritize investment-level execution to generate outperformance.
Rental Property Operating Results
We generate rental property income primarily from rental revenue received by the properties that we acquire. The amount of rental revenue depends upon a number of factors, including our ability to enter into leases with above or at market value rents and rent collection, which is determined primarily by each current and future tenant's financial condition and ability to make rent payments to us on time. Rental property operating expenses include real estate taxes, property insurance, repairs and maintenance, property management fees, utilities and other costs associated with owning real estate.
Our investments are diversified across sectors, including student-housing, multifamily, self-storage, industrial and healthcare. With our pipeline of new investments, ample liquidity and low leverage, we believe we have a unique opportunity to access private real estate at an inflection point. While market volatility and certain fundamental factors have affected and may continue to affect the commercial real estate market and our performance, we believe there are positive long-term fundamentals within our portfolio and benefits from our recent portfolio repositioning. In addition, we believe that demand will continue for Section 1031 investment products, supporting our DST Program.
Q3 2025 Highlights
Operating Results
•We declared monthly net distributions totaling $9.5 million for the three months ended September 30, 2025. The details of the average annualized distributions rates and total returns are shown in in the following table:
Class T Class S Class D Class I Class E Class N Class S-PR Class K-PR
Average Annualized Distribution Rate(1)(4)
5.5% 5.5% 6.1% 6.3% 5.9% 6.0% 6.1 % 6.1 %
Year-to-Date Total Return, without upfront selling commissions(2)
1.9% 1.9% 2.2% 2.4% 3.1% 3.1% 1.9 % 1.9 %
Year-to-Date Total Return, assuming maximum upfront selling commissions(2)
(1.7)% (1.7)% 0.7% 2.4% 3.1% 3.1% (1.7) % 1.9 %
Inception-to-Date Total Return, without upfront selling commissions(2)(3)
4.1% 4.2% 4.4% 4.7% 6.1% 7.7% 1.9 % 1.9 %
Inception-to-Date Total Return, assuming maximum upfront selling commissions(2)(3)
3.3% 3.4% 4.0% 4.7% 6.1% 7.7% (1.7) % 1.9 %
(1)The annualized distribution rate is calculated as the current month's distribution annualized and divided by the prior month's NAV, which is inclusive of all fees and expenses. The percent shown is the average annualized distribution rate for the three months ended September 30, 2025.
(2)Total return is calculated as the change in NAV per share during the respective periods plus any distributions per share declared in the period and assumes any distributions are reinvested in accordance with our distribution reinvestment plan. Returns for periods longer than one year are annualized.
(3)The inception date was June 1, 2021 for Class T, S and D shares; May 21, 2021 for Class I shares; May 14, 2021 for Class E shares; September 28, 2020 for Class N shares and June 30, 2025 for Class S-PR and K-PR shares.
Capital Activity
•During the three months ended September 30, 2025, we raised $11.6 million of net proceeds from the sale of our common stock and $52.4 million of net proceeds from the DST Program.
Investments
•We purchased $14.5 million and sold $29.6 million in real estate-related securities bringing our total investment in real estate-related securities to $42.8 million.
•During the three months ended September 30, 2025, we acquired two industrial real estate properties for a total purchase price of $77.8 million, inclusive of acquisition-related costs. These industrial property acquisitions include a property in Mebane, North Carolina and Fort Pierce, Florida, both providing long-term durable income and income growth supported by weighted average lease terms of approximately nine and six years, respectively, and contractual rent escalations. These industrial properties are strategically located along major logistics corridors, serving as key distribution hubs in the Southeast and Florida.
•During the three months ended September 30, 2025, we also acquired a multifamily apartment community in Las Vegas, Nevada, and a portfolio of three manufactured housing communities in the Tucson and Phoenix, Arizona Metropolitan Statistical Areas for a total purchase price of $58.4 million, inclusive of acquisition-related costs. These residential investments reflect our focus on acquiring assets in markets with growing populations and declining levels of new supply.
Financings
•On July 25, 2025, we entered into a loan amendment to the existing Revolving Credit Facility. The amendment extended the maturity date to July 23, 2027 with an option to extend the maturity date to July 21, 2028, subject to certain conditions. The amendment also provides us the ability to request increases in aggregate commitments up to $250.0 million and modified pricing that borrowings under the Revolving Credit Facility carry interest at a rate equal to SOFR plus an applicable margin that is based on our leverage ratio.
Investment Portfolio
Summary of Portfolio
The following chart summarizes the allocation of our investment portfolio based on fair value as of September 30, 2025:
Investment Allocation (1)
The following charts describe the diversification of our investments in real estate based on fair value as of September 30, 2025:
Property Type (2)
Geography (3)
(1)Investment allocation is measured as the asset value of each investment category (real estate property investments, private real estate debt, real estate-related securities or cash) against the total asset value of all investment categories, excluding the value of any third-party interests in such assets. Real estate investments include our direct property investments, unconsolidated investments and our interest in retail properties through INREIT's interest in ITP Investments LLC. See "-Real Estate" below for additional information on these investments. Totals may not sum to 100% due to rounding.
(2)Property Type weighting is measured as the asset value of real estate investments for each sector category (Healthcare, Industrial, Office, Multifamily, Grocery-Anchored Retail, Self-Storage, Student Housing, Private Real Estate Debt, Other) against the total asset value of all real estate investments, excluding the value of any third-party interests in such real estate investments. The Other segment includes non-controlling interests in retail properties through our interest in ITP Investments LLC and our investments in manufactured housing communities. Totals may not sum to 100% due to rounding.
(3)Geography weighting excludes the asset value of any investments in private real estate debt, real estate-related securities or cash and is measured as the asset value of direct real estate properties and unconsolidated investments for each geographical category (East, Midwest, South, West) against the total asset value of all real estate property investments. Totals may not sum to 100% due to rounding.
As of September 30, 2025, we owned interests in 64 properties, which we acquired for a total purchase price of $1.0 billion, inclusive of closing costs. Our diversified portfolio of income producing assets consists of healthcare, office, industrial, self-storage, multifamily, student housing and grocery-anchored retail properties, as well as real estate debt investments, concentrated in growth markets across the United States.
The following table provides a summary of our real estate portfolio as of September 30, 2025:
Segment Number of
Properties 		Sq. Feet /
Units /Beds 		Occupancy
Rate
Gross Asset
Value
($ in thousands)(1)
Segment
Revenue
($ in thousands)(2)
Percentage of
Total Segment
Revenue(3)
Industrial 14 2,354,967 sq. ft. 84% $ 293,723 $ 11,981 20%
Healthcare 20 1,030,397 sq. ft. 94% 168,161 2,190 4%
Multifamily 3 739 units 95% 168,203 12,477 21%
Student Housing 1 833 beds 92% 115,830 10,449 17%
Self-Storage 8 462,520 sq. ft. 87% 81,070 5,326 9%
Grocery-Anchored Retail 1 122,225 sq. ft. 100% 60,200 4,271 7%
Office 1 80,980 sq. ft. 100% 27,900 2,194 4%
Other(4)
16 4,080,786 sq. ft. /
256 units 		94% 69,672 4,382 6%
Total 64 $ 984,759 $ 53,270 88%
(1)Based on fair value as of September 30, 2025. Gross Asset Value consists of $773.0 million of our allocable share of consolidated real estate properties and $211.7 million of our allocable share of the gross real estate value held by unconsolidated entities, in each case excluding the value of any third-party interests in such real estate investments. See "-Real Estate" below for additional information on these investments.
(2)Segment revenue is presented for the nine months ended September 30, 2025. Healthcare and Other segment revenue includes income from unconsolidated entities.
(3)The Percentage of Total Segment Revenue does not equal 100% as it does not include real estate debt and real estate-related securities. See the tables below for the remainder of our segment revenue.
(4)The full amount of the Other segment is comprised of non-controlling interests we own in retail properties through our interest in ITP Investments LLC and our investments in manufactured housing communities. See "-Real Estate" below for additional information on these investments.
The following table provides a summary of our real estate debt as of September 30, 2025:
Segment Number of
Instruments
Fair
Value
($ in thousands)(1)
Segment
Revenue
($ in thousands)(2)
Percentage of
Total Segment
Revenue(3)
Real Estate Debt 3 $ 55,162 $ 4,592 8%
(1)Based on fair value as of September 30, 2025. The Fair Value includes an investment in a commercial mortgage, the investment in an affiliated debt fund and unconsolidated preferred equity. See "-Real Estate Debt" below for additional information on these investments.
(2)Segment revenue is presented for the nine months ended September 30, 2025. The Real Estate Debt segment revenue includes income from unconsolidated entities as a result of the San Simeon Holdings LLC ("San Simeon Preferred Equity") investment, income from commercial loans and income from the investment in an affiliated fund.
(3)The Percentage of Total Segment Revenue does not equal 100% as it does not include the real estate portfolio and real estate-related securities.
The following table provides a summary of our real estate-related securities as of September 30, 2025:
Segment Number of
Instruments
Fair
Value
(in thousands)(1)
Segment
Revenue
(in thousands)(2)
Percentage of
Total Segment
Revenue(3)
Real Estate-Related Securities 23 $ 42,787 $ 2,226 4%
(1)Based on fair value as of September 30, 2025. The Fair Value includes investments in liquid real estate-related securities consisting of investments in commercial mortgage backed securities ("CMBS") and preferred stock of REITs. See "-Investments in Real Estate-Related Securities" below for additional information on these investments.
(2)Segment revenue is presented for the nine months ended September 30, 2025. The Real Estate-Related Securities segment revenue includes the gain (loss) from real estate-related securities, net.
(3)The Percentage of Total Segment Revenue does not equal 100% as it does not include the real estate portfolio and real estate debt.
Real Estate
The following table provides information regarding our portfolio of real estate as of September 30, 2025:
Segment and Investment Number of Properties Location(s) Acquisition Date(s) Ownership Interest Sq. Feet /
Units /Beds 		Occupancy
Industrial:
13034 Excelsior(5)
1 Norwalk, CA December 2020 100% 53,527 sq. ft. 100%
5201 Industry(5)
1 Pico Rivera, CA December 2020 100% 40,480 sq. ft. 100%
Meridian Business 940(2)(5)
1 Aurora, IL September 2021 100% 257,542 sq. ft. 100%
Capital Park 2919(2)(5)
1 Grove City, OH January 2022 100% 378,283 sq. ft. 100%
3101 Agler Road(2)(5)
1 Columbus, OH March 2022 100% 160,000 sq. ft. 100%
Earth City 13330(2)
1 Earth City, MO March 2022 95% 542,600 sq. ft. 42%
International Business 4535 1 Charlotte, NC July 2024 100% 61,200 sq. ft. 100%
NJ Exit 5 Industrial Portfolio 5 Lumberton, NJ December 2024 95% 384,335 sq. ft. 86%
Buckhorn Industrial 1 Mebane NC August 2025 100% 265,000 sq. ft. 100%
Interstate Commerce 1 Fort Pierce, FL September 2025 100% 212,000 sq. ft. 100%
Total Industrial 14 2,354,967 sq. ft.
Multifamily:
Everly Roseland(3)
1 Roseland, NJ April 2022 57% 360 units 96%
Elan at Bluffview 1 Dallas, TX November 2024 100% 181 units 97%
Fleetwood Apartments 1 Las Vegas, NV August 2025 93% 198 units 90%
Total Multifamily 3 739 units
Student Housing:
The Carmin(6)
1 Tempe, AZ December 2021 59% 833 beds 92%
Total Student Housing 1 833 beds
Healthcare:
Sunbelt Medical Office Portfolio(1)
20 CA, CO, FL, TN, TX September 2020 / December 2020 / February 2021 42.5% 1,030,397 sq. ft. 94%
Total Healthcare 20 1,030,397 sq. ft.
Self-Storage:
River Road Storage(5)
1 Salem, OR September 2021 100% 76,034 sq. ft. 88%
South Loop Storage(5)
1 Houston, TX September 2021 100% 66,981 sq. ft. 89%
University Parkway Storage(5)
1 Winston-Salem, NC April 2022 100% 52,275 sq. ft. 89%
Bend Self-Storage Portfolio(5)
2 Bend, OR June 2022 100% 62,805 sq. ft. 91%
Clarksville Self-Storage Portfolio(5)
3 Clarksville, TN July 2022 100% 204,425 sq. ft. 86%
Total Self-Storage 8 462,520 sq. ft.
Grocery-Anchored Retail:
Cortlandt Crossing 1 Mohegan Lake, NY February 2022 100% 122,225 sq. ft. 100%
Total Grocery-Anchored Retail 1 122,225 sq. ft.
Office:
Willows Commerce 9805 1 Redmond, WA December 2020 100% 80,980 sq. ft. 100%
Total Office 1 80,980 sq. ft.
Other:
Retail GP Fund(4)
12
Various(4)
Various(4)
4.5% - 9.0%
4,080,786 sq. ft. 100%
Tanner Road MHC 1 Houston, TX May 2025 100% 85 units 100%
Arizona MHC Portfolio 3 Tucson, AZ September 2025 100% 171 units 90%
Total Other 16
Total Investment Properties 64
(1)We hold our interest in the Sunbelt Medical Office Portfolio through a 50% ownership interest in a joint venture with Invesco U.S. Income Fund L.P., an affiliate of Invesco, (the "Invesco JV"). The Invesco JV holds an 85% ownership interest in a joint venture with a third-party. We account for our investment using the equity method of accounting. The dates of acquisition and aggregate purchase price in the table above reflect the dates of our investments and the total amount of our investment in the Invesco JV.
(2)Meridian Business 940, Capital Park 2919, 3101 Agler and Earth City 13330 were previously presented as Midwest Industrial Portfolio. In April 2025, we purchased the remaining 5% interest of the Meridian Business 940, Capital Park 2919 and 3101 Agler properties, in which we previously had a 95% ownership interest, from our joint venture partner.
(3)We hold our interest in Everly Roseland through a 60% consolidated ownership interest in Everly Roseland Co-Invest, a co-investment between INREIT OP and Invesco Real Estate Atlas US Everly LLC ("Atlas US"), an affiliate of Invesco. Invesco Global Property Plus Fund ("IGP+"), the majority owner in Atlas US, owns more than 10% of our outstanding common stock as of the date of this Report. The Everly Roseland Co-Invest holds a 95% consolidated ownership interest in a joint venture with a third-party.
(4)We hold an 85% ownership interest in a joint venture, ITP Investments LLC ("ITP LLC"). ITP LLC has a 90% interest in PT Co-GP Fund, LLC ("Retail GP Fund"), which was formed to invest in retail properties through non-controlling general partner interests. The ownership interest and aggregate purchase price in the table above reflects ITP LLC's ownership interest and the total amount paid by ITP LLC to obtain non-controlling general partner interests in the retail properties. The properties were acquired over several transactions from October 2021 to June 2024 and are located throughout the United States.
(5)These properties are held through our DST Program as of September 30, 2025 and have been consolidated in our condensed consolidated balance sheets. Any profits interest due to the third-party investors in the DST Program are reported within non-controlling interests in consolidated joint ventures in our condensed consolidated balance sheets.
(6)In February 2025, we sold a 40% indirect leasehold interest in The Carmin student housing property to an unaffiliated third party. Our new consolidated ownership interest is 59%.
Lease Expirations
The following schedule details the expiring leases at our consolidated office, industrial, and grocery-anchored retail properties, as well as our unconsolidated healthcare properties by annualized base rent and square footage as of September 30, 2025. The table below excludes our self-storage, multifamily and student housing properties as substantially all leases at such properties expire within 12 months.
Year Number of
Expiring Leases
Annualized
Base Rent (in thousands)(1)(2)
% of Total
Annualized Base
Rent Expiring
Square
Feet(2)
% of Total Square
Feet Expiring
2025 (remaining) 22 $ 1,206 4% 61,024 2%
2026 42 3,344 10% 338,689 13%
2027 32 2,579 8% 328,780 13%
2028 38 2,565 8% 80,959 3%
2029 35 5,678 17% 531,530 21%
2030 29 2,992 9% 187,996 7%
2031 13 1,016 3% 118,347 5%
2032 13 749 2% 22,867 1%
2033 8 273 1% 12,924 1%
2034 15 3,238 10% 323,200 13%
Thereafter 36 8,896 28% 572,798 21%
Total 283 $ 32,536 100% 2,579,114 100%
(1)Annualized base rent is determined from the annualized September 30, 2025 base rent per leased square foot of the applicable year and excludes tenant recoveries, straight-line rent and above-market and below-market lease amortization.
(2)Annualized base rent and square feet are presented at our pro rata share.
Real Estate Debt
We hold an investment in San Simeon Preferred Equity. San Simeon Preferred Equity owns San Simeon Apartments, a 431 unit multifamily property in Houston, Texas which is 94% occupied. Our investment is structured as a preferred membership interest, and we account for our investment in the San Simeon Apartments using the equity method of accounting. At September 30, 2025, our total equity investment was $29.8 million.
We have an investment in Invesco Commercial Mortgage Income - U.S. Fund, L.P. ("CMI"), an affiliate of Invesco managed by our Adviser, which invests primarily in mortgage loans that are collateralized by commercial and residential real estate throughout the United States. As of September 30, 2025, our investment in CMI was $13.2 million.
The following table summarizes our investment in a commercial loan as of September 30, 2025 and December 31, 2024:
Current Principal Balance Fair Value
in thousands Origination Date Loan Type
Interest Rate(1)
Periodic Payment Terms September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 Maturity Date
5805 N Jackson Gap Loan 1/20/2023 Mezzanine 12.48% Interest only $ 12,245 $ 13,007 $ 12,213 $ 12,996 2/9/2026
(1)Represents the interest rate as of September 30, 2025. The loan earns interest at Secured Overnight Financing Rate ("SOFR") plus a spread.
We elected the fair value option and, accordingly, there are no capitalized origination costs or fees associated with the loans.
Investments in Liquid Real Estate-Related Securities
The following table details our investments in real estate-related securities as of September 30, 2025 and December 31, 2024:
September 30, 2025
in thousands Principal Balance Unamortized Premium (Discount)
Amortized Cost / Cost(1)
Unrealized Gain (Loss), Net Fair Value Period-end Weighted Average Yield Weighted-Average Maturity Date
Non-agency CMBS $ 41,741 $ (1,370) $ 40,371 $ 368 $ 40,739 6.87 % 4/22/2028
Preferred stock of REITs N/A N/A 1,975 73 2,048 6.20 % N/A
Total $ 41,741 $ (1,370) $ 42,346 $ 441 $ 42,787
December 31, 2024
in thousands Principal Balance Unamortized Premium (Discount)
Amortized Cost / Cost(1)
Unrealized Gain (Loss), Net Fair Value Period-end Weighted Average Yield Weighted-Average Maturity Date
Non-agency CMBS $ 52,377 $ (1,553) $ 50,824 $ 49 $ 50,872 6.81 % 1/14/2027
Common stock of REITs N/A N/A 5,543 56 5,600 4.41 % N/A
Total $ 52,377 $ (1,553) $ 56,367 $ 105 $ 56,472
(1)For non-agency CMBS, the amount presented represents amortized cost. For preferred and common stock of REITs, the amount presented represents cost.
Results of Operations
The following table sets forth the results of our operations:
Three Months Ended September 30, $ Change Nine Months Ended September 30, $ Change
in thousands 2025 2024 2025 2024
Revenues
Rental revenue $ 15,672 $ 14,694 $ 978 $ 45,088 $ 43,746 $ 1,342
Income from commercial loans 391 1,012 (621) 1,176 3,282 (2,106)
Other revenue 1,215 813 402 3,245 2,218 1,027
Total revenues 17,278 16,519 759 49,509 49,246 263
Expenses
Rental property operating 6,836 6,554 282 19,173 18,972 201
General and administrative 725 2,180 (1,455) 5,324 4,943 381
Management fee - related party 776 515 261 2,089 1,478 611
Performance participation interest - related party (8) - (8) - - -
Depreciation and amortization 7,612 5,733 1,879 21,821 17,676 4,145
Total expenses 15,941 14,982 959 48,407 43,069 5,338
Other income (expense), net
Income (loss) from unconsolidated entities, net 14 (952) 966 506 129 377
Gain (loss) on real estate-related securities, net 976 1,631 (655) 2,226 3,386 (1,160)
Income (loss) from investment in affiliated fund, net 225 200 25 922 1,356 (434)
Gain (loss) on derivative instruments, net 182 (1,382) 1,564 (455) 888 (1,343)
Unrealized gain (loss) on commercial loans 23 36 (13) (22) 146 (168)
Debt extinguishment charges - - - (485) - (485)
Interest income 607 484 123 2,093 1,259 834
Interest expense (4,254) (6,196) 1,942 (12,739) (18,269) 5,530
Other income (expense), net (130) 180 (310) (293) (309) 16
Total other income (expense), net (2,357) (5,999) 3,642 (8,247) (11,414) 3,167
Net income (loss) attributable to Invesco Real Estate Income Trust Inc. $ (1,020) $ (4,462) $ 3,442 $ (7,145) $ (5,237) $ (1,908)
Dividends to preferred stockholders $ - $ - $ - $ - $ (4) $ 4
Issuance and redemption costs of redeemed preferred stock - - - - (24) 24
Net (income) loss attributable to non-controlling interests in consolidated joint ventures (437) 987 (1,424) (741) 1,484 (2,225)
Net (income) loss attributable to non-controlling interest in INREIT OP - 15 (15) (55) 57 (112)
Net income (loss) attributable to common stockholders $ (1,457) $ (3,460) $ 2,003 $ (7,941) $ (3,724) $ (4,217)
Rental Revenue, Other Revenue and Rental Property Operating Expenses
Our rental revenue primarily consists of fixed contractual base rent from our tenants and is recognized on a straight-line basis over the non-cancelable terms of the related leases. Our rental property operating expenses generally include the costs of ownership of real estate, including insurance, utilities, real estate taxes and repair and maintenance expense. Rental revenue increased by $1.0 million, other revenue increased by $0.4 million and rental property operating expenses increased by $0.3 million forthe three months ended September 30, 2025 as compared to the same period in 2024.Rental revenue increased by $1.3 million, other revenue increased by $1.0 million and rental property operating expenses increased by $0.2 million forthe nine months ended September 30, 2025 as compared to the same period in 2024.For the three and nine months ended, rental revenue, other revenue and property operating expenses increased due to the acquisition of thirteen new properties in the last twelve months. Additionally, for the three and nine months ended, the increase in other revenue is due to an increase in interests sold in our DST Program in 2025 driving an increase in the organizational and offering expense reimbursements and closing cost reimbursements that we receive.
Income from Commercial Loans and Unrealized Gain (Loss) on Commercial Loans
During the three and nine months ended September 30, 2025, income from commercial loans decreased $0.6 million and $2.1 million, respectively, compared to the three and nine months endedSeptember 30, 2024. This is due to the maturity and repayment of the Blue Grass commercial loan in September 2024. For the three months ended September 30, 2025, unrealized gain on commercial loans decreased by approximately $13,000 compared to the three months ended September 30, 2024. For the nine months ended September 30, 2025, we recorded an unrealized loss of approximately$22,000 on commercial loans compared to an unrealized gain on commercial loans of $0.1 million for the nine months ended September 30, 2024. Changes for both of the comparable periods were driven by changes to the interest rate environment as compared to 2024.
General and Administrative
During the three months ended September 30, 2025, general and administrative expenses decreased $1.5 million compared to the three months ended September 30, 2024. The decrease was primarily due to the reimbursement agreed to be issued from the Adviser for expenses incurred by us for third-party support for our DST Program. During the nine months ended September 30, 2025, general and administrative expenses increased $0.4 million compared to the nine months ended September 30, 2024.The increase was primarily due to higher corporate level expenses related to the growth of our DST Program. We receive reimbursements from interests sold for costs incurred to start up each DST Offering as described in the increase in Other Revenue above.
Management Fee - Related Party
During the three and nine months ended September 30, 2025, the management fee increased $0.3 million and $0.6 million, respectively, compared to the three and nine months ended September 30, 2024 due to an additional management fee payable to the Adviser from interests sold in our DST Program.
Performance Participation Interest - Related Party
During the three and nine months ended September 30, 2025, the performance participation interest decreased approximately $8,000 as the hurdles were no longer met and the accrual was released as of September 30, 2025. There was no performance participation interest accrual for the three and nine months ended September 30, 2024.
Depreciation and Amortization
During the three and nine months ended September 30, 2025, depreciation and amortization increased $1.9 million and $4.1 million, respectively, compared to the three and nine months ended September 30, 2024 primarily due to the acquisition of thirteen properties in the last twelve months.
Income (Loss) from Unconsolidated Entities, Net
During the three and nine months ended September 30, 2025, income from unconsolidated entities increased $1.0 million and $0.4 million, respectively, compared to the three and nine months ended September 30, 2024.For the three months ended, the increase is primarily due to an increase in net income at Vida JV LLC due to unrealized gains from derivatives. For the nine months ended, the increase is primarily due to the sale of two investments in the Retail GP Fund in the last twelve months.
Gain (Loss) on Real Estate-Related Securities, Net
During the three and nine months ended September 30, 2025, our gains on real estate-related securities decreased by approximately $0.7 million and $1.2 million, respectively, compared to the three and nine months ended September 30, 2024. The decrease was primarily due to market fluctuations on CMBS holdings.
Income (Loss) from Investment in Affiliated Fund, Net
During the three months ended September 30, 2025, income from investment in affiliated fund was consistent with the three months ended September 30, 2024. During the nine months ended September 30, 2025, income from investment in affiliated fund decreased by $0.4 million compared to the nine months ended September 30, 2024. The decrease is primarily due to a decrease in net investment income caused by partial redemptions and distributions which decreased our investment and unrealized loss allocations of the fund.
Gain (Loss) on Derivative Instruments, Net
During the three months ended September 30, 2025, we recorded a gain on derivative instruments of $0.2 million compared to a loss on derivative instruments of $1.4 million for the three months ended September 30, 2024. The change is primarily due to unrealized gains in the current period offset by a decrease in contractual interest received from the derivative instruments due to expired and terminated contracts. During the nine months ended September 30, 2025, we recorded a loss on derivative instruments of $0.5 million compared to a gain on derivative instruments of $0.9 million for the nine months ended September 30, 2024. The change is a result of cumulative unrealized losses in 2025 compared to 2024 and a decrease in contractual interest received from the derivative instruments due to expired and terminated contracts.
Debt Extinguishment Charges
During the nine months ended September 30, 2025, we incurred debt extinguishment charges of $0.5 million from the early repayment of the mortgage notes secured by The Carmin and Midwest Industrial Portfolio properties. We did not incur any debt extinguishment charges in the three months ended September 30, 2025 or the three and nine months ended September 30, 2024.
Interest Income
During the three and nine months ended September 30, 2025, interest income increased by $0.1 million and $0.8 million, respectively, compared to the three and nine months ended September 30, 2024. The increase was primarily due to a higher average cash balance in 2025 compared to 2024.
Interest Expense
During the three and nine months ended September 30, 2025, interest expense decreased $1.9 million and $5.5 million, respectively, compared to the three and nine months ended September 30, 2024. The decreaseis primarily due to the repayment of the mortgage associated with a property sold in 2024 and the repayment of the mortgage related to the Midwest Industrial Portfolio that was paid off in April 2025.
Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution
We believe funds from operations ("FFO") is a meaningful non-GAAP measure. Our condensed consolidated financial statements are presented in accordance with GAAP under historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments will decrease evenly over a set time period. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as net income or loss (computed in accordance with GAAP), excluding (i) gains or losses from sales of depreciable real property, (ii) impairment write-downs on depreciable real property, plus (iii) real estate-related depreciation and amortization and (iv) similar adjustments for non-controlling interests and unconsolidated entities.
We also believe that adjusted FFO ("AFFO") is a meaningful non-GAAP measure of our operating results. AFFO further adjusts FFO to reflect the performance of our portfolio by adjusting for items we believe are not directly attributable to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income, (ii) amortization of capitalized tax abatements, (iii) amortization of above- and below-market lease intangibles, (iv) amortization of deferred financing costs, (v) organization expenses advanced by the Adviser, as well as repayment of those expenses, (vi) unrealized losses (gains) from changes in fair value of financial instruments, (vii) non-cash share based compensation awards and amortization of unvested restricted stock awards, (viii) non-cash performance participation interest or other non-cash incentive compensation even if repurchased by us, (ix) debt extinguishment charges and (x) similar adjustments for non-controlling interests and unconsolidated entities. We may add additional adjustments from FFO to arrive at AFFO as appropriate.
We also believe FAD is a meaningful non-GAAP measure that provides useful information for considering our operating results and certain other items relative to the amount of our distributions by removing the impact of certain non-cash items from our operating results. FAD is calculated as AFFO excluding (i) realized losses (gains) on investments in financial instruments and (ii) management fees paid in shares of our common stock or INREIT OP units even if repurchased by us, and including deductions for (a) recurring tenant improvements, leasing commissions, and other capital projects, (b) stockholder servicing fees paid during the period, (c) certain operating expenses advanced by the Adviser, as well as repayment of those expenses, (d) accrued preferred return from preferred membership interest, (e) accrued preferred return from preferred equity investment, (f) accrued property incentive fees and (g) similar adjustments for non-controlling interests and unconsolidated entities. FAD is not indicative of cash available to fund our cash needs and does not represent cash flows from operating activities in accordance with GAAP, as it excludes adjustments for working capital items and actual cash receipts from interest income recognized on investments in commercial loans. Cash flows from operating activities in accordance with GAAP would generally be adjusted for such items. Furthermore, FAD is adjusted for stockholder servicing fees and recurring tenant improvements, leasing commissions and other capital expenditures, which are not considered when determining cash flows from operating activities in accordance with GAAP.
FFO, AFFO, and FAD should not be considered to be more relevant or accurate than the GAAP methodology in calculating net income (loss) or in evaluating our operating performance. In addition, FFO, AFFO, and FAD should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO, AFFO, and FAD are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. In addition, our methodology for calculating AFFO and FAD may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported AFFO and FAD may not be comparable to the AFFO and FAD reported by other companies.
The following table presents a reconciliation of FFO, AFFO and FAD to net income (loss) attributable to our stockholders:
Three Months Ended September 30, Nine Months Ended September 30,
in thousands 2025 2024 2025 2024
Net income (loss) attributable to our stockholders $ (1,457) $ (3,460) $ (7,941) $ (3,724)
Adjustments to arrive at FFO:
Real estate depreciation and amortization 7,612 5,733 21,821 17,676
Amount attributed to unconsolidated entities for real estate depreciation and amortization 2,192 2,754 6,924 7,203
Amount attributed to non-controlling interests for real estate depreciation and amortization (2,161) (613) (3,017) (1,900)
Amount attributed to unconsolidated entities for net gain on disposition of real estate (79) - (419) (106)
FFO attributable to our stockholders 6,107 4,414 17,368 19,149
Adjustments to arrive at AFFO:
Straight-line rental income (118) (160) (450) (498)
Amortization of capitalized tax abatement(1)
42 42 125 125
Amortization of above-market and below-market lease intangibles (438) (47) (1,305) (158)
Amortization of deferred financing costs 428 368 1,175 993
Debt extinguishment charges - - 485 -
Unrealized losses (gains) from changes in the fair value of financial instruments(2)
172 1,323 1,270 (393)
Non-cash share based compensation awards 51 19 176 57
Non-cash performance participation interest (8) - - -
Amount attributed to unconsolidated entities for unrealized losses (gains) on fair value of financial instruments 1,033 1,594 2,098 2,847
Amount attributed to unconsolidated entities for above adjustments 89 12 220 (47)
Amount attributed to non-controlling interests for above adjustments 1,107 (661) 582 (456)
AFFO attributable to our stockholders 8,465 6,904 21,744 21,619
Adjustments to arrive at FAD:
Non-cash management fee 776 515 2,089 1,478
Recurring tenant improvements, leasing commissions and other capital expenditures(3)
(788) (268) (644) (605)
Accrued preferred return from preferred membership interest (315) (295) (923) (868)
Accrued preferred return from preferred equity investment (87) (91) (259) (263)
Stockholder servicing fees (52) (47) (148) (129)
Recurring capital expenditures attributed to unconsolidated entities(3)
(221) (105) (1,801) (1,293)
Recurring capital expenditures attributed to non-controlling interests(3)
195 (50) 985 -
Realized (gains) losses on financial instruments(4)
(96) 621 933 2,009
Accrued property incentive fees - (464) (92) 203
FAD attributable to our stockholders $ 7,877 $ 6,720 $ 21,884 $ 22,151
(1)We obtained a tax abatement in conjunction with our purchase of the 3101 Agler property with an expiration date of December 31, 2031. We are amortizing the tax abatement over its remaining useful life as a component of property operating expenses in the condensed consolidated statements of operations. As of September 30, 2025, accumulated amortization of the capitalized tax abatement was $0.6 million.
(2)Unrealized losses (gains) from changes in fair value of financial instruments primarily relates to mark-to-market changes on our investments in real estate-related securities, investment in affiliated fund, investments in commercial loans and derivatives.
(3)Recurring capital expenditures are required to maintain our investments. Capital expenditures exclude underwritten tenant improvements, leasing commissions and capital expenditures with useful lives over 10 years.
(4)Realized (gains) losses on financial instruments relates to the sale of real estate related securities, realized (gains) losses from derivative instruments and realized (gains) losses from our investment in affiliated fund.
Net Asset Value
We calculate NAV in accordance with the valuation guidelines approved by our board of directors. We calculate our NAV for each class of shares based on the net asset values of our investments (including loans and real estate-related securities), the addition of any other assets (such as cash on hand), and the deduction of any liabilities (including mortgages, other indebtedness, the allocation/accrual of any performance participation to Invesco REIT Special Limited Partner L.L.C. (the "Special Limited Partner") and the deduction of any stockholder servicing fees specifically applicable to such class of shares). NAV is not a measure used under GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV will differ from GAAP. You should not consider NAV to be equivalent to stockholders' equity or any other GAAP measure.
The following table reconciles stockholders' equity under GAAP per our condensed consolidated balance sheets to our NAV:
in thousands September 30, 2025 December 31, 2024
Stockholders' equity $ 77,000 $ 102,268
Adjustments:
Class N redeemable common stock(1)
440,723 425,178
Unrealized net real estate and borrowings appreciation (depreciation)(2)
(23,915) (27,036)
Accumulated depreciation and amortization(3)
132,367 108,062
Organization costs, offering costs and certain operating expenses(4)
12,000 12,000
Redeemable non-controlling interests attributable to INREIT OP(5)
- 2,018
Accrued stockholder servicing fee(6)
2,550 2,490
Impairment of investments in real estate(7)
6,182 6,182
Straight-line rent receivable(8)
(8,013) (7,399)
Purchase and sale of interest in consolidated joint ventures(9)
(17,020) -
Other 355 744
NAV $ 622,229 $ 624,507
(1)MassMutual's Class N shares have been classified as redeemable common stock, which is not a component of stockholders' equity on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q, because MassMutual has the contractual right to redeem the shares under certain circumstances. MassMutual's redemption rights are not transferable. We include the value of these shares as a component of our NAV.
(2)Our investments in real estate are presented under historical cost in our condensed consolidated financial statements in this Quarterly Report on Form 10-Q. Additionally, our mortgage notes, revolving credit facility and financing obligation ("Borrowings") are presented at their carrying value in our condensed consolidated financial statements. As such, any increases or decreases in the fair market value of our investments in real estate or our Borrowings are not included in our condensed consolidated financial statements. For purposes of determining our NAV, our investments in real estate and our Borrowings are recorded at fair value.
(3)We depreciate our investments in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization, including depreciation and amortization related to our investments in unconsolidated entities, is excluded for purposes of determining our NAV.
(4)The Adviser advanced all of our operating expenses on our behalf through December 31, 2021.Beginning January 2022 and ceasing September 2022, we began ratably reimbursing the Adviser over 60 months for the operating expenses incurred prior to December 31, 2021 and will recommence reimbursements to the Adviser following the earlier of (1) the date our NAV reaches $1.0 billion and (2) December 31, 2027.
The Adviser advanced all of our organization and offering expenses (other than upfront selling commissions, dealer manager fees and ongoing stockholder servicing fees) incurred through December 31, 2022. We will reimburse the Adviser for all of our advanced expenses ratably over 60 months following the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027.
Under GAAP, organization and operating costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred. For NAV, all such costs will be recognized as a reduction to NAV as they are reimbursed ratably over 60months. The adjustment presented represents the difference between the organization costs, offering costs and certain operating expenses advanced by the Adviser and the amount that has been reimbursed to the Adviser.
(5)The Class E units in the Operating Partnership held by the Special Limited Partner have been classified as redeemable non-controlling interest, which is not a component of stockholders' equity on our condensed consolidated balance sheets in this Quarterly Report on Form 10-Q. We include the value of these units as a component of our NAV. These Class E units are classified as redeemable non-controlling interest in the Operating Partnership on our condensed consolidated balance sheets because the Special Limited Partner has the contractual right to redeem the units under certain circumstances.
(6)Accrued stockholder servicing fee represents the accrual for the cost of the stockholder servicing fee for Class T, Class S and Class D shares. Under GAAP, we accrued the full cost of the stockholder servicing fee payable over the life of each share (assuming such share remains outstanding the length of time required to pay the maximum stockholder servicing fee) as an offering cost at the time we sold the Class T, Class S and Class D. For purposes of calculating NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis when such fee is paid.
(7)We record impairment of investments in real estate in accordance with GAAP. Any impairment recorded for GAAP is excluded for purposes of determining our NAV.
(8)We record straight-line rent in accordance with GAAP. Any resulting straight-line rent receivable or liability is excluded for purposes of determining our NAV.
(9)Under GAAP, contributions or distributions where there is an addition or reduction in the parent's ownership interest and control is maintained are based on the carrying value of the property at the time of the transaction. Therefore, contributions or distributions from non-controlling interests in the property may not equal total consideration received or paid. For purposes of determining our NAV, contributions or distributions from non-controlling interests are equal to total consideration received or paid.
The following table provides a breakdown of the major components of our total NAV as of September 30, 2025 and December 31, 2024:
in thousands, except share/unit data
Components of NAV September 30, 2025 December 31, 2024
Investments in real estate $ 928,931 $ 774,238
Investments in unconsolidated entities 146,669 148,905
Investments in real estate-related securities 42,787 56,472
Investment in commercial loan 12,212 12,996
Investment in affiliated fund 13,224 21,675
Cash and cash equivalents 39,385 48,820
Restricted cash 3,222 4,883
Other assets 3,523 4,395
Mortgage notes, revolving credit facility and financing obligation, net (312,581) (336,291)
Subscriptions received in advance (1,740) (835)
Other liabilities (21,670) (18,921)
Management fee payable (528) (359)
Accrued stockholder servicing fees (17) (16)
Non-controlling interests in joint-ventures (231,188) (91,455)
Net asset value $ 622,229 $ 624,507
Number of outstanding shares/units 22,923,723 22,676,865
The following table provides a breakdown of our total NAV and NAV per share/unit by class as of September 30, 2025:
in thousands, except share/unit data
NAV Per Share/Unit Class T Shares Class S Shares Class D Shares Class I Shares Class E Shares Class N Shares Class S-PR Shares Class K-PR Shares
Operating Partnership Units(1)
Total
Net asset value $ 7,397 $ 12,577 $ 13,477 $ 105,190 $ 35,428 $ 412,547 $ 23,742 $ 11,871 $ - $ 622,229
Number of outstanding shares/units 284,652 482,866 518,266 4,023,077 1,267,800 15,028,719 878,895 439,448 - 22,923,723
NAV Per Share/Unit as of September 30, 2025
$ 25.9867 $ 26.0471 $ 26.0037 $ 26.1466 $ 27.9447 $ 27.4506 $ 27.0135 $ 27.0135 $ -
(1)Includes the limited partnership interest of the Operating Partnership held by the Special Limited Partner.
Our real estate properties are valued by an independent advisor using a discounted cash flow methodology. The following table summarizes the weighted averages of the key unobservable inputs used in the September 30, 2025 valuations:
Property Type Discount Rate Exit Capitalization Rate
Healthcare 7.3% 5.8%
Office 9.0% 7.3%
Industrial 8.0% 5.9%
Self-Storage 7.6% 5.8%
Multifamily 7.6% 5.5%
Student Housing 7.8% 5.8%
Retail 8.4% 7.3%
These assumptions are determined by Capright and reviewed by the Adviser. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:
Input Hypothetical
Change 		Healthcare
Investment
Values 		Office
Investment
Values 		Industrial
Investment
Values 		Self-Storage
Investment
Values 		Multifamily
Investment
Values 		Student Housing
Investment
Values 		Retail
Investment
Values
Discount Rate (weighted average) 0.25% decrease +1.9% +1.8% +2.0% +1.9% +1.9% +1.9% +1.8%
Discount Rate (weighted average) 0.25% increase (1.9)% (1.7)% (1.9)% (1.8)% (1.9)% (1.8)% (1.8)%
Exit Capitalization Rate (weighted average) 0.25% decrease +2.8% +2.1% +2.9% +2.7% +2.9% +2.7% +1.9%
Exit Capitalization Rate (weighted average) 0.25% increase (2.6)% (1.9)% (2.7)% (2.5)% (2.7)% (2.5)% (1.8)%
Distributions
We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Code. Distributions are at the discretion of our board of directors and include a review of earnings, cash flow, liquidity and capital resources.
The net distribution varies for each class based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor.
The table below details the net distribution for each of our share classes for the nine months ended September 30, 2025:
Declaration Date Class T
Shares 		Class S
Shares 		Class D
Shares 		Class I
Shares 		Class E
Shares 		Class N
Shares 		Class S-PR Shares Class K-PR Shares
January 31, 2025 $ 0.1310 $ 0.1295 $ 0.1361 $ 0.1395 $ 0.1395 $ 0.1395 $ - $ -
February 28, 2025 0.1296 0.1281 0.1341 0.1372 0.1372 0.1372 - -
March 31, 2025 0.1310 0.1290 0.1361 0.1395 0.1395 0.1395 - -
April 30, 2025 0.1298 0.1277 0.1347 0.1380 0.1380 0.1380 - -
May 30, 2025 0.1311 0.1290 0.1362 0.1395 0.1395 0.1395 - -
June 30, 2025 0.1197 0.1197 0.1326 0.1380 0.1380 0.1380 0.1380 0.1380
July 31, 2025 0.1207 0.1206 0.1340 0.1395 0.1395 0.1395 0.1395 0.1395
August 31, 2025 0.1207 0.1207 0.1340 0.1395 0.1395 0.1395 0.1395 0.1395
September 30, 2025 0.1198 0.1198 0.1326 0.1380 0.1380 0.1380 0.1380 0.1380
Total $ 1.1334 $ 1.1241 $ 1.2104 $ 1.2487 $ 1.2487 $ 1.2487 $ 0.5550 $ 0.5550
For the three and nine months ended September 30, 2025, we declared distributions of $9.5 million and $28.3 million, respectively. For the three and nine months ended September 30, 2024, we declared distributions of $9.3 million and $27.5 million, respectively.
The following tables summarizes our distributions declared during the three and nine months ended September 30, 2025 and 2024:
Three Months Ended
September 30, 2025 September 30, 2024
in thousands Amount Percentage Amount Percentage
Distributions
Payable in cash $ 3,633 38 % $ 3,755 40 %
Reinvested in shares 5,847 62 % 5,524 60 %
Total distributions $ 9,480 100 % $ 9,279 100 %
Sources of Distributions
Cash flows from operating activities $ 9,480 100 % $ 6,883 74 %
Distributions of capital from investments in unconsolidated entities(1)
- - % 2,334 25 %
Offering proceeds(3)
- - % 62 1 %
Total sources of distributions $ 9,480 100 % $ 9,279 100 %
Cash flows from operating activities $ 13,184 $ 6,883
Funds from Operations(2)
$ 6,107 $ 4,414
Nine Months Ended
September 30, 2025 September 30, 2024
in thousands Amount Percentage Amount Percentage
Distributions
Payable in cash $ 11,000 39 % $ 11,209 41 %
Reinvested in shares 17,265 61 % 16,256 59 %
Total distributions $ 28,265 100 % $ 27,465 100 %
Sources of Distributions
Cash flows from operating activities $ 20,573 73 % $ 13,628 50 %
Distributions of capital from investments in unconsolidated entities(1)
6,720 24 % 5,612 20 %
Offering proceeds(3)
972 3 % 1,479 5 %
Financing proceeds - - % 6,746 25 %
Total sources of distributions $ 28,265 100 % $ 27,465 100 %
Cash flows from operating activities $ 20,573 $ 13,628
Funds from Operations(2)
$ 17,368 $ 19,149
(1)Represents distributions received from equity method investments that are classified as cash flows from investing activities. These equity method investments currently include our interest in a joint venture through which we own our interest in the Sunbelt Medical Office Portfolio, our preferred membership interest in San Simeon Preferred Equity, which owns a multifamily property, and our interest in a joint venture through which we hold our interests in a fully integrated retail platform operating company and non-controlling interests we own in twelve retail properties. Distributions received from equity method investments are classified as either cash flows from operating or investing activities based on the cumulative earnings approach. See Note 2 - "Summary of Significant Accounting Policies" to our consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2024 for additional details on the cumulative earnings approach. In addition, this amount represents distributions from our investment in an affiliated fund. The distributions received from this investment are classified as investing activities.
(2)See "-Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution" above for description of Funds from Operations ("FFO"), for reconciliation of FFO to GAAP net income (loss) attributable to INREIT stockholders and for considerations on how to review this metric.
(3)Offering proceeds represents distributions reinvested in shares of our common stock at the shareholders election through our distribution reinvestment plan.
Liquidity and Capital Resources
Liquidity
Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock under our share repurchase plan, to pay our offering costs and operating fees and expenses and to pay interest on our borrowings. We will obtain the funds required to purchase investments and conduct our operations from the net proceeds of our Private Offerings, our Offering, DST Program and any future offerings we may conduct (collectively, the "Capital Raising Programs"), from secured and unsecured borrowings from banks and other lenders and from net cash provided by operating activities. Generally, cash needs for items other than asset acquisitions are met from operations, and cash needs for asset acquisitions are funded by our Capital Raising Programs and debt financings. However, there may be a delay between the sale of our shares and our purchase of assets that could result in a delay in the benefits to our stockholders, if any, of returns generated from our investment operations.
Our target leverage ratio is approximately 50% to 60%. As used herein, "leverage ratio" is measured by dividing (x) the sum of the Company's consolidated property-level debt, entity-level debt and debt-on-debt, net of cash and restricted cash, by (y) the asset value of the Company's real estate investments, private real estate debt investments and equity in the Company's real estate-related securities portfolio (in each case measured using the greater of fair market value and cost), including the Company's net investment in unconsolidated investments. For purposes of determining the asset value of the Company's real estate investments, the Company includes the asset value of the DST Properties due to the master lease structure, including the Company's fair market value purchase option. The leverage ratio calculation does not include (i) indebtedness incurred in connection with funding a deposit in advance of the closing of an investment, (ii) indebtedness incurred as other working capital advances, (iii) indebtedness on the Company's real estate securities investments or (iv) the pro rata share of debt within the Company's unconsolidated investments. Further, the refinancing of any amount of existing indebtedness will not be deemed to constitute incurrence of new indebtedness for purposes of the leverage ratio calculation so long as no additional amount of net indebtedness is incurred in connection therewith (excluding the amount of transaction expenses associated with such refinancing). Our charter prohibits us from borrowing more than 300% of our net assets, which approximates borrowing 75% of the cost of our investments. We may exceed this limit if a majority of our independent directors approves each borrowing in excess of the limit and we disclose the justification for doing so to our stockholders.
If we are unable to raise substantial funds in the Offering or Private Offerings, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make. Further, we have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in the Offering and Private Offerings. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.
The Adviser and its affiliates provide us with our management team, including our officers and appropriate support personnel. The Adviser or the Adviser's affiliates may provide us services that would otherwise be performed by third parties. In such event, we will reimburse the Adviser or the Adviser's affiliate the cost of performing such services provided that such reimbursements will not exceed the amount that would be payable if such services were provided by a third party in an arms-length transaction.
The Adviser advanced all of our operating expenses on our behalf through December 31, 2021.Beginning January 2022 and ceasing September 2022, we began ratably reimbursing the Adviser over 60months for the operating expenses incurred prior to December 31, 2021 and will recommence reimbursements to the Adviser following the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. As of September 30, 2025 and December 31, 2024, we have $5.4 million due to the Adviser for advanced operating expenses that are recorded as a component of due to affiliates on our condensed consolidated balance sheets.
The Adviser advanced all of our organization and offering expenses (other than upfront selling commissions, dealer manager fees, and ongoing stockholder servicing fees) incurred through December 31, 2022. We will begin reimbursing the Adviser for advanced organization and offering expenses upon the earlier of (1) the date that our NAV reaches $1.0 billion and (2) December 31, 2027. We will reimburse the Adviser for all of our advanced expenses ratably over 60 months following such date. As of September 30, 2025 and December 31, 2024, we have $6.8 million due to the Adviser for advanced organization and offering expenses that are recorded as a component of due to affiliates on our condensed consolidated balance sheets.
InJanuary 2022, we began reimbursing the Adviser on a quarterly basis for operating expenses incurred subsequent to December 31, 2021. As of September 30, 2025 and December 31, 2024, we have $2.5 million and $4.9 million, respectively, due to the Adviser for operating expenses. The amount due to the Adviser is recorded as a component of due to affiliates on our condensed consolidated balance sheets.
In January 2023, we began reimbursing the Adviser on a quarterly basis for organization and offering expenses incurred subsequent to December 31, 2022. As of September 30, 2025 and December 31, 2024, we have $3.2 million and $1.4 million, respectively, due to the Adviser for organization and offering expenses that are recorded as a component of due to affiliates on our condensed consolidated balance sheets.
Under our charter, we may reimburse the Adviser, at the end of each fiscal quarter, for total operating expenses paid by the Adviser. However, we may not reimburse the Adviser at the end of any fiscal quarter for total operating expenses (as defined in our charter) that, in the four consecutive fiscal quarters then ended, exceed the greater of 2% of average invested assets or 25% of net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of our assets for that period (the "2%/25% Guidelines").
We may reimburse the Adviser for expenses in excess of the 2%/25% Guidelines if a majority of our independent directors determines that such excess expenses (an "Excess Amount") are justified based on unusual and non-recurring factors. Operating expenses for the four consecutive fiscal quarters ended September 30, 2025 did not exceed the charter-imposed limitation.
MassMutual committed to purchase $400.0 million of Class N common stock in our Class N Private Offering and fully met its commitment as of December 31, 2022.
Beginning January 1, 2026 and continuing until we have repurchased $200.0 million of MassMutual shares, we are required to repurchase MassMutual shares on a monthly basis, subject to thresholds based on monthly net offering proceeds. In any month, MassMutual may choose to waive our obligation to repurchase shares. We are required to limit repurchases to ensure that the aggregate NAV of MassMutual shares is at least $50.0 million.
Beginning January 1, 2026, MassMutual holds the right to request that we repurchase MassMutual shares on a monthly basis, subject to thresholds based on monthly net offering proceeds and the Company's NAV. This right to request that we repurchase MassMutual shares is in addition to the requirement to repurchase MassMutual shares described in the preceding paragraph. We will not be required to repurchase (1) in any calendar year, more than $150.0 million of MassMutual shares or (2) in any calendar month, MassMutual shares with an aggregate repurchase price equal to more than 100% of the net proceeds to us from the sale of shares of our common stock during such month.
Capital Resources
INREIT OP has a Revolving Credit Facility with Bank of America, N.A. ("Bank of America"), which was amended on July 25, 2025. The following is a summary of the Revolving Credit Facility:
$ in thousands
Maximum Facility Size(3)
Principal Outstanding Balance
Indebtedness Interest Rate
Maturity Date(2)
September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024
Revolving Credit Facility
S + applicable margin(1)
7/21/2028 $ 250,000 $ 150,000 $ 25,000 $ -
(1)The term "S" refers to the relevant floating benchmark rate, SOFR. Borrowings under the Revolving Credit Facility carry interest at a rate equal to (i) SOFR, (ii) SOFR with an interest period of one, three or six-months, or (iii) a Base Rate, where the base rate is the highest of (a) federal funds rate plus 0.5%, (b) the rate of interest as publicly announced by Bank of America as its "prime rate", (c) SOFR with an interest period of one month plus 1.0%, or (d) 1.0%, in each case, plus an applicable margin that is based on our leverage ratio. The weighted-average interest rate for the three and nine months ended September 30, 2025 was 5.75%. The weighted-average interest rate for the three and nine months ended September 30, 2024 was 7.08% and 7.10%, respectively.
(2)The maturity date presented is the extended maturity date. The amendment extended the maturity date from September 5, 2025 to July 23, 2027 and grants an option to extend the term to July 21, 2028, subject to certain conditions.
(3)With the amendment, the aggregate commitment is $100.0 million with an ability to request increases up to $250.0 million in aggregate commitments. The available borrowing capacity is determined by our unencumbered property borrowing base calculation. As of September 30, 2025, we had $45.0 million of available borrowing capacity. With the amendment, the unused commitment fee was modified to be 0.25% if usage is less than 50.0% and 0.15% if usage is greater than or equal to 50.0% that accrues on the daily amount by which the aggregate commitments exceed the total outstanding balance of the Revolving Credit Facility.
As of September 30, 2025, we were in compliance with all loan covenants in our revolving credit facility agreement.
The following table summarizes certain characteristics of our mortgage notes that are secured by our properties:
in thousands Principal Balance Outstanding
Indebtedness
Interest Rate(1)
Initial Maturity Date
Extended Maturity Date(5)
Maximum Principal Amount September 30, 2025 December 31, 2024
The Carmin
S + 1.75%(2)
3/5/2026 3/5/2032 $ 84,000 84,000 65,500
Cortlandt Crossing 3.13% 3/1/2027 N/A $ 39,660 39,660 39,660
Everly Roseland
S + 1.45%(3)
4/28/2027 4/28/2029 $ 113,500 111,658 111,441
Midwest Industrial Portfolio
4.44% and S + applicable margin(4)
7/5/2027 N/A $ 70,000 - 70,000
Total mortgages payable 235,318 286,601
Deferred financing costs, net (692) (1,335)
Mortgage notes payable, net $ 234,626 $ 285,266
(1)The term "S" refers to the relevant floating benchmark rate, SOFR.
(2)In February 2025, we sold a 40% indirect leasehold interest in The Carmin student housing property and refinanced the mortgage note secured by the property. Proceeds from the new secured mortgage note were partially used to repay the existing mortgage. We incurred debt extinguishment charges of approximately $34,000 in connection with the refinancing of the mortgage note. The weighted-average interest rate for the three and nine months ended September 30, 2025 was 6.06% and 6.07%, respectively. The weighted-average interest rate for the three and nine months ended September 30, 2024 was 7.09% and 7.08%, respectively.
(3)The weighted-average interest rate for the three and nine months ended September 30, 2025 was 5.77% and 5.89%, respectively. The weighted-average interest rate for the three and nine months ended September 30, 2024 was 6.75% and 6.77%, respectively.
(4)In April 2025, we repaid the mortgage note secured by Meridian Business 940, Capital Park 2919, 3101 Agler and Earth City 13330 (collectively the "Midwest Industrial Portfolio") in connection with our buyout of the joint venture partner. We incurred debt extinguishment charges of $0.5 million from the early repayment of the mortgage note. The mortgage note secured by these properties and bore interest at two rates. Of the $70.0 million principal balance, $35.0 million bore interest at a fixed rate of 4.44%, and $35.0 million bore interest at a floating rate of the greater of (a) 2.20% or (b) the sum of 1.70% plus SOFR. The weighted-average interest rate of the combined $70.0 million principal balance for the nine months ended September 30, 2025 was 5.39%. There was no weighted-average interest rate for the three months ended September 30, 2025 as the mortgage note was fully in repaid in April 2025. The weighted-average interest rate of the combined $70.0 million principal balance for the three and nine months ended September 30, 2024 was 5.71% and 5.73%, respectively.
(5)We may elect to extend the maturity date upon meeting certain conditions, which may include payment of a non-refundable extension fee.
As of September 30, 2025, we were in compliance with all loan covenants in our mortgage notes.
In connection with the sale and leaseback of The Carmin property, as of September 30, 2025 we hold a financing obligation on our condensed consolidated balance sheets of $54.0 million, net of debt issuance costs.
See Note 10 - "Borrowings" to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our borrowing arrangements.
Other potential future sources of capital include incremental secured or unsecured financings from banks or other lenders and proceeds from the sale of assets. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures. We have not yet identified any sources for these types of financings.
At September 30, 2025, we had cash and cash equivalents of $39.4 million and restricted cash of $3.2 million. Our restricted cash consists of subscriptions received in advance, amounts in escrow for taxes and insurance related to mortgages at certain properties and security deposits.
We currently have no deposits or lines of credit with community or regional banking organizations, as such terms are defined by the Federal Reserve. The commercial loan we hold is a mezzanine loan for which the senior loan is held by a community or regional banking organization and in this case the senior loan is fully funded with no future funding obligation. Our Adviser and its affiliates use a formal bank monitoring program to seek to ensure a comprehensive and disciplined approach for the selection and ongoing monitoring of the financial institutions with whom funds and companies managed by our Adviser and its affiliates, such as our Company, do business. All financial institutions with which we do business must be initially approved by Invesco's treasurer and are subject to ongoing monitoring.
Capital Uses
During periods when we are selling more shares than we are repurchasing, we primarily use our capital to acquire our investments, which we also fund with other capital resources. During periods when we are repurchasing more shares than we are selling, we primarily use our capital to fund repurchases. During the months ended July 31, 2025, August 31, 2025 and September 30, 2025, we received repurchase requests below the applicable repurchase limits under our Share Repurchase Plan and fulfilled all repurchase requests.
Our operating expenses include, among other things, the management fee we pay to the Adviser and the performance participation allocation that INREIT OP pays to the Special Limited Partner, both of which will impact our liquidity to the extent the Adviser or the Special Limited Partner elects to receive such payments in cash, or subsequently redeem shares or OP units previously issued to them. To date, the Adviser and the Special Limited Partner have both always elected to be paid in shares or OP units, resulting in a non-cash expense.
Forward-Looking Statements Regarding Liquidity
We believe that with respect to liquidity, we are well positioned with $84.4 million of immediate liquidity as of September 30, 2025, comprised of $45.0 million of undrawn capacity on our Revolving Credit Facility and $39.4 million of cash and cash equivalents. In addition, we hold $42.8 million in investments in real estate-related securities that could be liquidated to satisfy any potential liquidity requirements.
Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash:
Nine Months Ended September 30,
in thousands 2025 2024
Cash flows provided by (used in) operating activities $ 20,573 $ 13,628
Cash flows provided by (used in) investing activities (120,561) (1,744)
Cash flows provided by (used in) financing activities 89,536 24,394
Net increase (decrease) in cash and cash equivalents and restricted cash $ (10,452) $ 36,278
Operating Activities
Cash flows provided by operating activities of $20.6 million for the nine months ended September 30, 2025 consists of our net loss of $7.1 million adjusted for non-cash items and changes in assets and liabilities. The change in our assets and liabilities is primarily due to the timing of cash receipts and cash payments, including amounts we owe our affiliates.
Investing Activities
Cash flows used in investing activities increased $118.8 million during the nine months ended September 30, 2025 compared to the corresponding period in 2024 primarily due to the acquisitions of real estate in 2025.
Financing Activities
Cash flows provided by financing activities increased $65.1 million for the nine months ended September 30, 2025 compared to the corresponding period in 2024 primarily due to an increase in contributions from non-controlling interests primarily related to DST proceeds of $105.8 million and cash proceeds from the sale of an interest in The Carmin of $17.0 million. These increases were partially offset by a change in net borrowing activity of $26.4 million, a decrease in net proceeds and repurchases of common stock of $26.1 million and cash paid in connection with the buyout of our joint venture partner in the Midwest Industrial Portfolio of $1.5 million.
Critical Accounting Policies and Estimates
There have been no significant changes to our critical accounting policies and estimates that are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Pending Accounting Pronouncements
There have been no significant changes to the status of our adoption of the recently issued accounting pronouncement that is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Invesco Real Estate Income Trust Inc. published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 20:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]