SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Inland Real Estate Income Trust, Inc. – ‘424B3’ on 1/30/15

On:  Friday, 1/30/15, at 5:24pm ET   ·   Accession #:  892626-15-26   ·   File #:  333-176775

Previous ‘424B3’:  ‘424B3’ on 1/7/15   ·   Next:  ‘424B3’ on 2/5/15   ·   Latest:  ‘424B3’ on 10/9/15

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 1/30/15  Inland RE Income Trust, Inc.      424B3                  1:3.1M                                   Elec Filing Sys… Svcs/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Ireit - Supplement No 26 - 1/30/15                  HTML   1.45M 

Filed pursuant to 424(b)(3)
Registration No. 333-176775

SUPPLEMENT NO. 26
DATED JANUARY 30, 2015
TO THE PROSPECTUS DATED APRIL 16, 2014
OF INLAND REAL ESTATE income TRUST, INC.

This Supplement No. 26 supplements certain information contained in our prospectus dated April 16, 2014, as described below. This Supplement No. 26 should be read together with our prospectus and supersedes and replaces all prior supplements to the prospectus. Unless otherwise defined in this Supplement No. 26, capitalized terms used in this Supplement No. 26 have the same meanings as set forth in the prospectus.

TABLE OF CONTENTS

S-1

Summary OVERVIEW

Status of the Offering

This public offering commenced on October 18, 2012. On February 7, 2014, we satisfied our minimum offering requirement in Pennsylvania, and accordingly, we have satisfied our minimum offering requirements in all states and all of IREIC’s subscription proceeds have been released from the escrow account maintained by our third-party escrow agent.

Through January 26, 2015, we have sold approximately 44.1 million shares of our common stock in our “best efforts” offering and approximately 0.7 million shares of our common stock through our distribution reinvestment plan, or DRP, resulting in aggregate gross proceeds of approximately $445.5 million. As of January 26, 2015, approximately 105.9 million shares of our common stock remain available for sale in our “best efforts” offering, and approximately 29.3 million shares of our common stock remain available for issuance through our DRP. We reserve the right to reallocate the shares of common stock we are offering between our “best efforts” offering and our DRP.

Extension of Our Initial Public Offering

On June 10, 2014, our board of directors approved an extension of the termination date of this public offering from October 18, 2014 to October 16, 2015, provided that the offering will be terminated if all 150.0 million shares of our common stock are sold before this date (subject to our right to reallocate shares offered pursuant to our DRP for sale in our primary offering). Accordingly, all references to the termination of this offering are revised to state that this offering will terminate on October 16, 2015, unless further extended by our board of directors as permitted by the rules of the Securities and Exchange Commission, or SEC. Under the rules of the SEC, in some circumstances we may be allowed to continue our offering until as late as April 15, 2016. In many states, we will need to renew the registration statement or file a new registration statement to continue our offering for this extended period. We may terminate our offering at any time.

Our Portfolio of Real Estate Assets

Investments in Real Properties

As of January 26, 2015, we, directly or indirectly, owned fee simple interests in 31 retail properties. The following is a summary of our consolidated real property investments (dollar amounts stated in millions, except for per square foot amounts):

Our Debt Obligations

The following table summarizes the material terms of any outstanding loans that we or our subsidiaries have obtained or assumed at closing (dollar amounts stated in millions):

The loan documents for each of these mortgages payable contain customary affirmative, negative and financial covenants, agreements, representations, warranties and borrowing conditions, all as set forth in the loan documents. The loan documents also contain various customary events of default.

Significant Tenants and Lease Expirations

For the nine months ended September 30, 2014, approximately 9.5% and 8.3% of our consolidated rental revenue was generated from leases with Dolgencorp, LLC, a subsidiary of Dollar General Corporation, and L.A. Fitness, respectively.

The following table lists, on an aggregate basis, all of the scheduled lease expirations over each of the years ending December 31, 2014 through 2023 for our portfolio as of September 30, 2014, and the approximate rentable square feet represented by the applicable lease expirations, assuming no exercise of renewal options or early termination rights.

Distributions

We began paying distributions to stockholders of record during each day of December 2012. Because 2012 was a leap year, the December 2012 monthly distributions were equal to a daily amount of $0.001639344 per share per day. Beginning on January 1, 2013, the distributions paid and declared are equal to a daily amount of $0.001643836 per share per day. We currently pay distributions based on daily record dates, payable monthly in arrears. During the three months ended September 30, 2014 and 2013, we declared distributions totaling $3,583,521 and $335,964, respectively. During the nine months ended September 30, 2014 and 2013, we declared cash distributions totaling $6,872,233 and $567,870, respectively. There can be no assurance that any such distribution will continue to be paid to stockholders. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

A summary of the distributions declared, distributions paid, cash flows from operations and net offering proceeds through September 30, 2014 follows:

The following table shows the sources for the payment of distributions to common stockholders for the periods indicated: 

The following table compares cumulative distributions paid to cumulative net loss (in accordance with GAAP) for the period from August 24, 2011 (date of inception) through September 30, 2014:

We have also paid distributions to each stockholder of record between September 30, 2014 and December 31, 2014. A portion of the monies used to pay these distributions were funded from the net proceeds of our “best efforts” offering. On December 15, 2014, our board of directors declared distributions payable to stockholders of record each day beginning on the close of business on January 1, 2015 through the close of business on January 31, 2015, and on January 19, 2015, our board of directors declared distributions payable to stockholders of record each day beginning on the close of business on February 1, 2015 through the close of business on February 28, 2015. A portion of the monies needed to pay our January 2015 and February 2015 distributions may be funded from the net proceeds of our “best efforts” offering. The distributions paid and declared are equal to a daily amount of $0.001643836 per share per day, which if paid each day for a 365-day period, would equal a 6.0% annualized rate based on a purchase price of $10.00 per share. Distributions declared for each day of the month of January will be paid no later than February 6, 2015, and distributions declared for each day of the month of February will be paid no later than March 6, 2015.

We intend to continue paying distributions for future periods in the amounts and at times as determined by our board. We anticipate that some or all of the monies needed to pay future distributions will be funded from the net proceeds of our “best efforts” offering until we make investments that generate sufficient cash flow from operations to fully pay distributions. See also “Risk Factors — Risks Related to Our Business — The amount and timing of distributions, if any, may vary. We may pay distributions from sources other than cash flow from operations, including the net offering proceeds of this offering.” and “— To date, we have not generated sufficient cash flow from operations to pay distributions, and, therefore, we have paid, and may continue to pay, distributions from the net proceeds of our “best efforts” offering, which reduces the amount of cash we ultimately have to invest in assets, negatively impacting the value of our stockholders’ investment, and is dilutive to our stockholders.”

We have estimated our taxable income to be approximately $3 million for the tax year ended December 31, 2014, which makes a portion of distributions we paid during that year taxable as ordinary dividends, as discussed below under “Distributions – Tax Allocation.” The taxable income primarily was triggered by our disciplined investment philosophy.  At times, this philosophy may result in a longer period to deploy capital into new properties, which may result in reduced depreciation expense in the year of acquisition and, as a consequence, increased taxable income in that year.  In order to provide our stockholders with cash to assist in the payment of their potential tax liability due to our 2014 taxable income, our sponsor, IREIC, will make a contribution to us of approximately $3 million.  This amount will be paid by us to stockholders of record as of January 30, 2015, in the form of a special cash distribution on or about February 28, 2015.

Distributions — Tax Allocation

For the year ended December 31, 2014, we paid distributions of approximately $10,597,000. For income tax purposes only, 69.02% of the distributions were treated as nondividend distributions, 30.98% were treated as ordinary dividends and none are capital gains. The following table denotes the allocation of the monthly distributions paid in 2014 for income tax purposes only. You are advised to consult with your tax advisor about the specific tax treatment of distributions paid by us in 2014. All amounts are stated in dollars per share.

For the year ended December 31, 2013, we paid distributions of approximately $998,000. For income tax purposes only, 100% of the distributions were treated as nondividend distributions and none were treated as ordinary dividends or capital gain. The following table denotes the allocation of the monthly distributions paid in 2013 for income tax purposes only. You are advised to consult with your tax advisor about the specific tax treatment of distributions paid by us in 2013. All amounts are stated in dollars per share.

Share Repurchases

We have adopted a share repurchase program.  See “Distribution Reinvestment Plan and Share Repurchase Program – Share Repurchase Program” for more information about the program. A summary of our repurchases during the nine months ended September 30, 2014 and the full fiscal year ended December 31, 2013 follows:

Compensation Paid To Affiliates of IREIC

Set forth below is a summary of the most significant fees and expenses that we have incurred as well as paid or reimbursed to affiliates of IREIC such as Inland Securities, our Business Manager and our Real Estate Managers and their respective affiliates, including the ancillary service providers, for the nine months ended September 30, 2014 and the year ended December 31, 2013.

Expenses

Our charter requires that we monitor our expenses on a trailing 12-month basis, and states that our “total operating expenses” will be deemed to be excessive if, at the end of any quarter, they exceed for the prior trailing 12-month period, the greater of 2% of our “average invested assets” or 25% of our “net income,” each as defined in our charter. For the trailing 12 months ended September 30, 2014, our “total operating expenses” as a percentage of “average invested assets” and “net loss” were approximately 1.2% and 309%, respectively.

Selected Financial Data

The following table shows our selected financial data relating to our consolidated historical financial condition and results of operations. This selected financial data should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes appearing in our Quarterly Report on Form 10-Q for the period ended September 30, 2014 and our Annual Report on Form 10-K for the year ended December 31, 2013, as incorporated by reference into this prospectus.

Prospectus Summary

The following disclosure supersedes and replaces the fourth bullet point in the left column of the second paragraph on the cover page of the prospectus.

The following is inserted into the section of the prospectus captioned “Prospectus Summary” after the subsection titled “Terms of the Offering,” which is on page 15 of the prospectus, and in the section of the prospectus captioned “Investment Objectives and Policies” after the subsection titled “Focus on “Core” Real Estate Assets,” which is on page 104 of the prospectus.

Market Update for the Quarterly Period Ended September 30, 2014

On October 29, 2014, the Federal Open Market Committee of the Federal Reserve Board (“Federal Reserve”) announced an end to the bond buying stimulus program known as quantitative easing signaling that the Federal Reserve believes the U.S. economy is growing at a measured but sustained pace and that the need for continued stimulus has diminished. These actions and comments suggest that the Federal Reserve will eventually return to a normalized monetary policy. However, the Federal Reserve has provided no clear indication as to when it will raise interest rates.

Real estate pricing is generally influenced by market interest rates. However, the movements are not simultaneous and pricing generally lags behind interest rate adjustments for a period of time. Because part of our business strategy is to utilize debt to finance a portion of our real estate assets, we may be challenged in finding appropriately priced real estate during periods of rapidly rising interest rates.

Today’s economic environment continues to be characterized by historically low interest rates which may start to decrease capitalization rates for commercial properties. Commercial property prices have nearly recovered to 2007 values in many sectors. Although mild, we believe that the economy is moving from recovery status toward an expansionary cycle. Demographic trends are also favorable. In the past four years the population of the United States has grown, but there has been very little new real estate development during this period of time. While tenants recently have had pricing power over property owners, we believe we have reached an inflection point where that pricing power related to tenant leases will return to the property owner due to supply and demand considerations.

Our management team continues to believe that we can produce better risk adjusted returns by investing in multi-tenant necessity-based retail shopping centers than other types of commercial real estate. Multi-tenant retail assets tend to be relatively stable, yet they allow for growth opportunities in a recovering market. A needs-based shopping center usually consists of a large anchor tenant, like a supermarket, that draws patrons to the property along with a number of supporting tenants in smaller shop space. The anchor generally has a long-term lease that stabilizes cash flow to the property. The eight properties purchased during the nine months ended September 30, 2014, were multi-tenant retail properties.

Our general experience tells us that a period of economic expansion can translate into rising rental rates and consequently, increases in the net operating income (“NOI”) of a property, particularly at multi-tenant retail properties due to a higher instance of lease roll-over as the smaller tenants typically have shorter leases (usually between 1-3 years). In comparison to properties with longer leases, this provides significantly more opportunities to capture increases in rental rates and NOI at a rate above inflation. By capturing NOI growth rates above inflation, real value is added to a property. As of September 30, 2014, we own 12 single-tenant properties and 10 multi-tenant properties with average lease expirations of 13 years and 7 years, respectively.

In addition we believe that:

Although retail was slower than other property types to rebound from the recession, we believe the delayed recovery provides us with an ideal opportunity to acquire properties at attractive capitalization or “cap” rates. We continue to evaluate other property types such as multifamily or office properties but we believe retail offers attractive risk-adjusted returns.

Although our investment mandate as outlined within our prospectus allows us to acquire single tenant properties along with any core property in the four types of commercial real estate described in our prospectus, given the compelling case outlined above, our focus will primarily be on the acquisition of grocery-anchored shopping centers falling generally into the category of neighborhood retail centers.

We may also evaluate power, regional and super-regional centers along with lifestyle centers. We believe that neighborhood centers ranging in size from 30,000 to 150,000 square feet typically feature retailers that provide need-based items and are usually anchored by grocery stores, drug stores, discount department stores, apparel stores and electronics stores. We further believe neighborhood centers produce stable cash flows from tenants who typically experience relatively consistent demand for their goods and services.

Power centers typically feature open-air retail space and contain three or more “big box” retailers and various small retailers. Because of cash flow volatility in this sector due to big box lease terminations, we believe this property type may present purchase opportunities at higher cap rates as the “big box” retailers reposition their business model into a smaller store format which are typically coupled with a higher rent per square foot. Regional centers are typically between 400,000 and 800,000 square feet in size with at least two anchor stores. Super-regional centers are typically at least 800,000 square feet in size and have at least three anchor stores and are designed to be the dominant shopping center for a large geographic area. In both of these cases, we intend to focus on “core” regional or super-regional centers to allow us to diversify by geographic location and tenant mix. Finally, lifestyle centers, which tend to be geared to shoppers with higher disposable incomes, may allow us to participate in the economic expansion at a better level than the sectors aimed at every day necessities. These centers typically provide open-air retail space that combine mixed-use commercial development, including dining and entertainment, with boutique stores.

While our focus has been the multi-tenant retail sector, we will continue to monitor other property types and segments. Should our view change, we will adjust our acquisition targets accordingly.

The following should be added at the end of the question, “In what types of properties will the company invest?” contained in the section of the prospectus captioned “Questions and Answers About the Offering,” which is on page 1 of the prospectus.

“To date we have focused on acquiring retail properties. We believe these properties continue to outperform other property types. We will continue to focus on retail properties unless and until the returns from other property types exceed those that we believe are available from investing in retail.”

Summary Risk Factors

The following summary risk factor supersedes and replaces the similar summary risk factor contained in the section of the prospectus captioned “Prospectus Summary — Summary Risk Factors,” which begins on page 17 of the prospectus.

or contributions from our Business Manager or IREIC or from the cash retained by us in the case that our Business Manager defers, accrues or waives all, or a portion, of its business management fee or its right to be reimbursed for certain expenses. A deferral, accrual or waiver of any fee owed to our Business Manager will have the effect of increasing cash flow from operations for the relevant period because we do not have to use cash to pay any fee or reimbursement which was deferred, accrued or waived during the relevant period. Any fee or reimbursement that was deferred or accrued, or any amounts advanced, that we later pay or reimburse, will have the effect of reducing cash flow from operations for the applicable period in which we pay or reimburse these amounts. We will not, however, be required to pay interest on any fee or reimbursement that was previously deferred or accrued. Neither our Business Manager nor IREIC has any obligation to provide us with advances or contributions, and our Business Manager is not obligated to defer, accrue or waive any portion of its business management fee or reimbursements. Further, there is no assurance that these other sources will be available to fund distributions.

The following section supersedes and replaces the sections of the prospectus captioned “Prospectus Summary - Dedicated Acquisitions Capability,” and “Prospectus Summary – Allocation of Investment Opportunities,” which are on page 20 of the prospectus, and “Conflicts of Interest - Dedicated Acquisitions Capability,” and “Conflicts of Interest – Allocation of Investment Opportunities,” which are on page 100 of the prospectus.

Investment Approval and Allocation Policies and Procedures

We will rely on the real estate professionals employed by IREA and other affiliates of our sponsor to source potential investments in properties, real estate-related assets and other investments in which we may be interested. Our sponsor maintains an investment committee that reviews each potential investment and determines whether an investment is acceptable for acquisition. Our Business Manager will not recommend any investments for us unless the investment is approved for consideration in advance by our sponsor’s investment committee.

In determining whether an investment is suitable, the investment committee considers investment objectives, portfolio and criteria of all programs currently advised by the sponsor or its affiliates (collectively referred to as the “Programs”). Other factors considered by the investment committee may include cash flow, the effect of the acquisition on portfolio diversification, the estimated income or unrelated business tax effects of the purchase, policies relating to leverage, regulatory restrictions and the capital available for investment. Once an investment has been approved for consideration by our sponsor’s investment committee, the Programs are advised and provided an opportunity to acquire the investment.

IREA does not currently have an obligation to first present potential investment opportunities to certain public or private programs sponsored by IREIC or IPCC based on contractual rights of first refusal. Rather, if more than one of the Programs is interested in acquiring an investment, our sponsor’s allocation committee determines which Program is ultimately awarded the right to pursue the investment. The allocation committee is responsible for facilitating the investment allocation process and could face conflicts of interest in doing so. From time to time, other Programs may compete with us with respect to certain investments that we may want to acquire. Many investment opportunities that are suitable for us may also be suitable for another Program. In the event that an investment opportunity becomes available that is considered suitable for both us and another Program, then the Program that has had the longest period of time elapse since it was offered an investment is first offered the investment by the allocation committee. Our board of directors will determine, at least annually, whether the method for allocating investment opportunities is applied fairly to us.

We are presently unable to determine how our status as a relatively new company will impact our ability to obtain investment opportunities. On the one hand, we will likely have a greater amount of funds available for new investments during our initial offering, as compared to other Programs that have completed their capital raising. On the other hand, we may not benefit from the allocation policy if we have capital which cannot be deployed until additional investment opportunities become available to us. In addition, the economic recovery may cause the other Programs to receive new capital to invest, thereby creating a queue of Programs seeking new investments.

As a result of the formation of the sponsor’s investment and allocation committees, Lou Quilici resigned from our Business Manager and rejoined IREA. Mr. Quilici has subsequently retired.

RISK FACTORS

The following risk factor is inserted into the section of the prospectus captioned “Risks Related to Conflicts of Interest,” which begins on page 62 of the prospectus.

Inland Securities signed a Letter of Acceptance, Waiver and Consent with FINRA. Any further action, proceeding or litigation with respect to compliance with the Letter of Acceptance, Waiver and Consent, or with respect to similar allegations by FINRA relating to future conduct, could adversely affect our dealer manager.

In August 2014, Inland Securities submitted a Letter of Acceptance, Waiver and Consent, or “AWC,” to FINRA, the self-regulatory organization that oversees broker dealers, for the purpose of proposing a settlement of certain rule violations alleged by FINRA. Without admitting or denying the findings, Inland Securities consented to an entry of findings of certain violations of FINRA Rules, including those related to its due diligence obligations in connection with its activities as placement agent to two private placement offerings. FINRA accepted the AWC on August 27, 2014. In connection with the AWC, Inland Securities consented to a fine of $40,000, and agreed to (1) retain an independent consultant to review its written supervisory procedures, and (2) revise its written supervisory procedures as recommend by the independent consultant. Inland Securities intends to fully comply with the terms and conditions of the AWC. Although Inland Securities has never before been the subject of any FINRA action and although no complaints have been received regarding the two private placement programs, to the extent any action would be taken against Inland Securities in connection with its compliance with the AWC, or if future violations of FINRA rules are alleged, Inland Securities could be adversely affected.

CAPITALIZATION

This section is inserted into the prospectus directly following “Cautionary Note Regarding Forward-Looking Statements.”

The following table sets forth our historical capitalization as of September 30, 2014 and December 31, 2013. The information set forth in the following table should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes appearing in our Quarterly Report on Form 10-Q for the period ended September 30, 2014 and our Annual Report on Form 10-K for the year ended December 31, 2013, as incorporated by reference into this prospectus (dollar amounts stated in thousands, except share and per share amounts).

*Net of offering costs.

DILUTION

This section is inserted into the prospectus directly following “Capitalization.”

Our net tangible book value as of September 30, 2014 was approximately $244.4 million, or $7.77 per share.  If you invest in our common stock, your interest will be diluted to the extent of the difference between the price per share you pay and the net tangible book value per share immediately after this offering. Net tangible book value per share is calculated by subtracting our total tangible liabilities from our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of shares of common stock issued and outstanding.  After giving effect to the sale by us of 150 million shares of common stock offered in the “best efforts” portion of this offering at an offering price of $10.00 per share and 30 million shares of common stock issuable pursuant to our DRP at an offering price of $9.50 per share, our net tangible book value as of September 30, 2014 would have been approximately $1.6 billion, or $8.96 per share. This represents an immediate increase in the net tangible book value of $1.19, or 15.3%, per share to our existing stockholders and an immediate and substantial dilution in net tangible book value of $(0.96), or (9.7)%, per share to new investors.  If you pay reduced selling commissions and fees or no fees, you will suffer less dilution.

The following table illustrates this per share dilution:

(1) This figure assumes that we received net proceeds of approximately $1.3 billion from our “best efforts” offering, after deducting the payment of selling commissions, the marketing contribution and issuer costs, and net proceeds of $285.0 million from our DRP.  We do not pay selling commissions, the marketing contribution or issuer costs in connection with shares of common stock issued through our DRP.

ESTIMATED USE OF PROCEEDS

The following disclosure supersedes and replaces footnote 7 to the “Estimated Use of Proceeds” table on page 74 of the prospectus.

PRIOR PERFORMANCE OF IREIC-SPONSORED ENTITIES

This section is inserted into the prospectus directly following “Estimated Use of Proceeds.”

During the ten year period ended September 30, 2014, IREIC and its affiliates sponsored three other REITs and 143 real estate exchange private placement programs, which altogether have raised more than $18.3 billion from over 344,000 investors in offerings for which Inland Securities has served as dealer manager. During this period, the three REITs, RPAI, Inland American and Inland Diversified, raised approximately $15.1 billion in the aggregate from approximately 326,000 investors. These REITs all have or had investment objectives similar to ours in that they seek or sought to invest in real estate to preserve and protect investor capital, to pay sustainable and predictable distributions to stockholders and to realize long-term capital appreciation. The monies raised by these IREIC-sponsored REITs represent, during the ten year period, approximately 95% of the aggregate amount raised in offerings for which Inland Securities has served as dealer manager, approximately 99% of the aggregate number of investors, approximately 95% of properties purchased and approximately 93% of the aggregate cost of the properties purchased by the prior programs sponsored by IREIC and its affiliates.

We pay fees to, and reimburse expenses incurred by, Inland Securities and our Business Manager, Real Estate Managers, TIREG and their affiliates, as described in more detail in the section of this prospectus captioned “Compensation Table.” The other REITs previously sponsored by IREIC have similarly compensated IREIC and each of their respective business managers, real estate managers and affiliates.

The following discussion and the Prior Performance Tables, included in the prospectus as Appendix A, provide information on the prior performance of the real estate programs sponsored by IREIC for the applicable periods. Past performance is not necessarily indicative of future performance.

Summary Information

The following table provides aggregate summarized information concerning public prior programs sponsored by IREIC or its affiliates during the applicable ten year period for each program sponsored by IREIC, and is qualified in its entirety by reference to the introductory discussion above and the detailed information appearing in the Prior Performance Tables in Appendix A. For purposes of these tables and the narrative information contained herein, we consider a program to be closed at the earlier of the time when affiliates of IREIC are no longer serving as the business manager, the program lists its shares of common stock for trading on a national exchange, sells all or substantially all of its assets or merges with a third party and is not the surviving entity in that merger. The information set forth in this table, and in the narrative that follows, represents capital raised by these prior programs only through offerings for which Inland Securities has served as dealer manager and, where noted, through their respective distribution reinvestment plans.

WE ARE NOT, BY INCLUDING THIS TABLE, IMPLYING THAT WE WILL HAVE RESULTS COMPARABLE TO THOSE REFLECTED IN THE TABLE BECAUSE OUR YIELD ON INVESTMENTS, CASH AVAILABLE FOR DISTRIBUTION AND OTHER FACTORS MAY BE SUBSTANTIALLY DIFFERENT. ACQUIRING OUR SHARES WILL NOT GIVE YOU ANY INTEREST IN ANY PRIOR PROGRAM.

During the applicable three years ended with the last full quarter prior to the completion of the program: (i) Inland American purchased 62 properties and (ii) Inland Diversified purchased 11 properties. Upon written request, you may obtain, without charge, a copy of the most recent Form 10-K annual report filed with the Securities and Exchange Commission by any of these REITs. We will provide exhibits to each such Form 10-K upon payment of a reasonable fee for copying and mailing expenses.

The following table details the percentage of properties located in the following regions in the United States based on gross carrying value.

Programs of Our Sponsor

The information set forth below relates to two of the three public REITs set forth above that have been sponsored by IREIC, the Company’s sponsor, in the last ten years.

Retail Properties of America, Inc., or RPAI, was formed by IREIC in March 2003. Prior to March 2012, RPAI was named Inland Western Retail Real Estate Trust, Inc. RPAI was formed to own and operate shopping centers as well as office and industrial properties. As of September 30, 2007, the last full quarter prior to the time that RPAI internalized the functions performed by the business manager, RPAI’s portfolio was comprised of 305 retail operating properties with approximately 46.2 million square feet of gross leasable area. As of September 30, 2007, RPAI had issued 452,463,000 shares of common stock in its offerings.

RPAI completed its initial public offering on March 22, 2005 and completed its follow-on offering on September 9, 2005. RPAI sold a total of 250,000,000 shares of its common stock through its “best efforts” offering. On April 5, 2012, RPAI’s Class A Common Stock began trading on the NYSE under the symbol “RPAI.”

Inland American Real Estate Trust, Inc., or Inland American, was formed in October 2004. Inland American historically focused on acquiring and managing a diversified portfolio of commercial real estate, including primarily retail, lodging and student housing properties in the United States. As of December 31, 2013, the last full quarter prior to the time that Inland American internalized the functions performed by the business manager, Inland American’s portfolio was comprised of 227 properties representing 17.0 million square feet of retail space, 19,337 hotel rooms, 8,290 student housing beds and 7.3 million square feet of non-core space, which consists primarily of office and industrial properties.

Inland American completed its initial public offering on July 31, 2007 and completed its follow-on offering on April 6, 2009. Inland American sold a total of approximately 790.2 million shares of its common stock through its “best efforts” offering.

Inland American has previously reported that it has learned that the SEC is conducting a non-public, formal, fact-finding investigation (the “SEC Investigation”) to determine whether there have been violations of certain provisions of the federal securities laws regarding the business manager fees, property management fees, transactions with affiliates, timing and amount of distributions paid to the investors, determination of property impairments, and any decision regarding whether Inland American might become a self-administered REIT. Inland American has not been accused of any wrongdoing by the SEC and it has been informed by the SEC that the existence of this investigation does not mean that the SEC has concluded that anyone has broken the law or that the SEC has a negative opinion of any person, entity, or security. Inland American also stated that it has been cooperating fully with the SEC.

Inland American noted that it cannot reasonably estimate the timing of the investigation, nor can it predict whether or not the investigation might have a material adverse effect on the business.

Inland American has disclosed that it also received related demands (“Derivative Demands”) by stockholders to conduct investigations regarding claims that Inland American’s officers, its board of directors, its former business manager, and affiliates of its former business manager (the “Inland American Parties”) breached their fiduciary duties to Inland American in connection with the matters disclosed above that are subject to the SEC Investigation. The first Derivative Demand claims that the Inland American Parties (i) falsely reported the value of Inland American’s common stock until September 2010; (ii) caused Inland American to purchase shares of its common stock from stockholders at prices in excess of their value; and (iii) disguised returns of capital paid to stockholders as REIT income, resulting in the payment of fees to its former business manager for which it was not entitled. The three stockholders in that demand contend that legal proceedings should seek recovery of damages in an unspecified amount allegedly sustained by Inland American. The second Derivative Demand by another stockholder makes similar claims and further alleges that the Inland American Parties (i) caused Inland American to engage in transactions that unduly favored related parties, (ii) falsely disclosed the timing and amount of distributions, and (iii) falsely disclosed whether Inland American might become a self-administered REIT. Inland American also received a letter from another stockholder that fully adopts and joins in the first Derivative Demand, but makes no additional demands on Inland American to perform an investigation or pursue claims.

Upon receiving the first of the Derivative Demands, the full board of directors responded by authorizing Inland American’s independent directors to investigate the claims contained in the first Derivative Demand, any subsequent stockholder demands, as well as any other matters the independent directors see fit to investigate, including matters related to the SEC Investigation. Pursuant to this authority, the independent directors have formed a special litigation committee that is comprised solely of independent directors to review and evaluate the matters referred by the full board to the independent directors, and to recommend to the full board any further action as is appropriate. The special litigation committee is investigating these claims with the assistance of independent legal counsel and will make a recommendation to the board after the committee has completed its investigation.

On March 21, 2013, counsel for the stockholders who made the first Derivative Demand filed a derivative lawsuit in the Circuit Court of Cook County, Illinois, on behalf of Inland American. The case has been stayed pending completion of the special litigation committee’s investigation. Inland American has disclosed that it cannot reasonably estimate the timing of the special litigation committee investigation or the Derivative Demands, nor can it predict whether or not the special litigation committee investigation or Derivative Demands might have a material adverse effect on its business.

On April 26, 2013, two of Inland American’s stockholders filed a putative class action in the United States District Court for the Northern District of Illinois against Inland American, and current members and one former member of Inland American’s board of directors (“the Defendants”). The complaint sought damages on behalf of plaintiffs and similarly situated individuals who purchased additional shares in Inland American pursuant to its distribution reinvestment plan on or after March 30, 2009. Plaintiffs allege that the Defendants breached their fiduciary duties to plaintiffs and to members of the putative class by inflating the yearly estimated share price announced by Inland American and by selling shares in the distribution reinvestment plan to plaintiffs and members of the putative class at those allegedly inflated prices. On November 18, 2013, the class action complaint was dismissed with prejudice for failing to state a claim that would entitle the plaintiffs to relief. The Court disagreed with the plaintiffs’ allegations, noting in its memorandum opinion and order that Inland American’s public disclosures fully described the manner in which the board estimated share value for Inland American’s stock sold through the distribution reinvestment plan. The Court entered judgment in favor of the Defendants. The plaintiffs appealed the judgment. As of February 26, 2014, the parties entered into a settlement agreement whereby the plaintiffs agreed to dismiss their appeal in exchange for a cash settlement from Inland American. Inland American has disclosed that it believes that the amount of this settlement is not material, and is less than the amount the Defendants would have incurred in defending the appeal.

Inland American previously identified certain distribution and stockholder reimbursement practices that may have caused certain dividends to be treated as preferential dividends, which cannot be used to satisfy the requirement that it distribute at least 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain, to its stockholders (the “90% Distribution Requirement”). Inland American has also identified the ownership of certain assets that may have violated a REIT qualification requirement that prohibits a REIT from owning “securities” of any one issuer in excess of 5% of the REIT’s total assets at the end of any calendar quarter (the “5% Securities Test”). In order to provide greater certainty with respect to Inland American’s qualification as a REIT, management concluded that it was in the best interest of Inland American and its stockholders to request closing agreements from the IRS for both Inland American and MB REIT (Florida), Inc. (“MB REIT”), of which

Inland American owns substantially all of the outstanding capital stock and which Inland American consolidates for financial purposes, with respect to such matters. On September 9, 2014, Inland American and MB REIT entered into closing agreements with the IRS that resolved favorably certain matters related to Inland American’s and MB REIT’s qualifications as REITs for federal income tax purposes.  Inland American's former business manager reimbursed Inland American and MB REIT for the penalty payments required under the closing agreements.

Liquidity of Prior Programs

Each of the three REITs previously sponsored by IREIC in the past ten years disclosed in its prospectus the time at which it anticipated its board would consider listing, liquidating or selling its assets individually, but none of these REITs specified a date or time period at which the REIT might be liquidated. The following summary sets forth both the dates on which these REITs anticipated considering a liquidity event and the dates on which the liquidity events occurred, if ever.

On March 12, 2014, Inland American agreed with its business manager to terminate its business management agreement, hired all of its business manager’s employees, and acquired the assets necessary to conduct the functions previously performed by its business manager. As a result, Inland American now directly employs its executive officers and the other former employees of the business manager and will no longer pay a fee or reimburse expenses to its business manager. As the first step in taking over management of all of its real estate assets (except its lodging properties, which are managed by third parties), Inland American hired certain employees from its property managers; assumed responsibility for performing significant property management activities for its industrial, office and retail properties, including property-level accounting, lease administration, leasing, marketing and construction functions; and amended its property management agreements to reduce its property management fees as a result of its assumption of such responsibilities. As the second step, on December 31, 2014, Inland American expects to take over the remaining property management functions performed by the property managers, terminate its property management agreements, hire the remaining property manager employees and acquire the assets necessary to conduct the remaining functions performed by the property managers.

Inland American’s shares of common stock are not listed on a national securities exchange. On May 1, 2014, Inland American announced that it has accepted for purchase in its tender offer, 60,665,233 shares of its common stock at a purchase price (without brokerage commissions) of $6.50 per share for an aggregate cost of approximately $394.3 million, excluding fees and expenses relating to the offer and paid by Inland American. As of June 30, 2014, the final number of shares repurchased, allowing for corrections, was 60,761,166 for a final aggregate cost of $394.9 million.

On August 11, 2014, Xenia Hotels and Resorts, Inc. (“Xenia”), a wholly-owned subsidiary of Inland American, formerly known as Inland American Lodging Group, Inc., filed a preliminary registration statement on Form 10 with the SEC related to its potential Spin-Off into a new, publicly-traded lodging REIT (the “Spin-Off”). If the proposed Spin-Off is consummated, Xenia would become a self-managed REIT and apply to list its shares of common stock on the New York Stock Exchange. The Spin-Off is subject to the satisfaction of several conditions, including the listing of Xenia’s common stock on the New York Stock Exchange, the SEC declaring effective the registration statement on Form 10, which occurred on January 20, 2015, and the ability of Inland American’s board of directors to abandon or modify the Spin-Off.

MANAGEMENT

Board of Directors

On September 12, 2014, our board voted to increase the size of our board of directors from five to seven members and appointed Bernard J. Michael and Mitchell A. Sabshon to fill the two vacancies created thereby. Neither Mr. Michael nor Mr. Sabshon has been, or as of the date of this supplement, is expected to be, named to serve on any committee of our board of directors.

The following supersedes the disclosure contained in the first paragraph of the section of the prospectus captioned “Management – Board of Directors” on page 75 of the prospectus and other related disclosures throughout the prospectus.

We operate under the direction of our board of directors, which is responsible for managing and controlling our business. The board has retained IREIT Business Manager & Advisor, Inc. to serve as our Business Manager and to manage our day-to-day operations. Our charter and bylaws provide that the number of our directors may be established by a majority of the entire board of directors but may not be more than eleven. We have seven members on our board of directors. The charter further provides that at, or prior to, the commencement of this offering, the majority of our directors must be “independent,” except for a period of up to sixty days after the death, removal or resignation of an independent director, pending the election of that independent director’s successor. For purposes of our charter, an “independent director” is a director who is not, and within the last two years has not been, directly or indirectly associated with IREIC or the Business Manager by virtue of: (1) an ownership of an interest in IREIC, the Business Manager or any of their affiliates; (2) employment by IREIC, the Business Manager or any of their affiliates; (3) service as an officer or director of IREIC, the Business Manager or any of their affiliates; (4) performance of services, other than as a director, for us; (5) service as a director or trustee of more than three REITs sponsored by IREIC or managed by the Business Manager; or (6) a material business or professional relationship with IREIC, the Business Manager or any of their affiliates. For purposes of determining whether or not the business or professional relationship is material, the aggregate gross revenue derived by the independent director from us, IREIC, the Business Manager and their affiliates will be deemed material per se if it exceeds 5% of the independent director’s: (a) annual gross revenue, derived from all sources, during either of the prior two years; or (b) net worth, on a fair market value basis during the prior two years.

Our Directors and Executive Officers

The following supplements the disclosures contained in the section of the prospectus captioned “Management – Our Directors and Executive Officers,” which begins on page 76 of the prospectus.

The following table sets forth information with respect to our directors and executive officers.

Bernard J. Michael has been an independent director since September 2014. Mr. Michael is a managing partner and founding member of AWH Partners, LLC, a privately held real estate investment, development and management firm formed by alumni of The Blackstone Group and The Related Companies. Since 2010, AWH has completed in excess of $400 million of hotel investments, and are managing or have completed hotel redevelopment projects totaling more than $100 million. In early 2012, AWH acquired Lane Hospitality, which it rebranded as Spire Hospitality, a top-tier national hospitality platform formed in 1980.

Mr. Michael has over 25 years of experience as a real estate attorney working on sophisticated real estate transactions across all asset classes for some of the world's largest property owners, developers and lenders. Prior to founding AWH Partners, Mr. Michael was the founder and senior partner of Michael, Levitt & Rubenstein, LLC, a law firm focusing on real estate sales, acquisitions, development, leasing and financing. Mr. Michael and his team worked on some of the largest transactions in New York City, including the development of Time Warner Center and the Hudson Yards projects for The Related Companies. In addition, Mr. Michael and his firm represented developers on major multi-family, retail, office and hospitality projects in China, Saudi Arabia, and in most major cities across the United States.

Prior to forming Michael Levitt, Mr. Michael was a partner in the Real Estate Group at Proskauer Rose, LLP. Prior to that Mr. Michael was an attorney at Weil, Gotschal & Manges and Shea & Gould. Mr. Michael is a graduate of Brown University and New York University School of Law. He is the father of three daughters and currently lives in New Rochelle, NY. 

Mitchell A. Sabshon has served as a director since September 2014, as our chief executive officer since April 2014 and as a director of our Business Manager since November 2013. Mr. Sabshon is also currently the chief executive officer, president and a director of IREIC, positions he has held since late 2013. Mr. Sabshon has also served as a director of IPCC since September 2013 and a director of Inland Securities Corporation since January 2014. Prior to joining IREIC in August 2013, Mr. Sabshon served as executive vice president and chief operating officer of Cole Real Estate Investments, Inc. from November 2010 to June 2013. In this role, he was responsible for finance, asset management, property management, leasing and high yield portfolio management. He also worked on a broad range of initiatives across the Cole Real Estate Investments organization, including issues pertaining to corporate and portfolio strategy, product development and systems. Prior to joining Cole Real Estate Investments in November 2010, Mr. Sabshon served as managing partner and chief investment officer of EndPoint Financial LLC, an advisory firm providing acquisition and finance advisory services to equity investors, from 2008 to 2010. Mr. Sabshon was a licensed person with The OBEX Group from April 2009 through November 2009. Mr. Sabshon served as chief investment officer and executive vice president of GFI Capital Resources Group, Inc., a national owner-operator of multifamily properties, from 2007 to 2008. Prior to joining GFI, Mr. Sabshon served with Goldman Sachs & Company from 2004 to 2007 and from 1997 to 2002 in several key strategic roles, including president and chief executive officer of Goldman Sachs Commercial Mortgage Capital and head of the Insurance Client Development Group. From 2002 to 2004, Mr. Sabshon was executive director of the U.S. Institutional Sales Group at Morgan Stanley. Mr. Sabshon held various positions at Lehman Brothers Inc. from 1991 to 1997, including as senior vice president in the Real Estate Investment Banking Group. Prior to joining Lehman Brothers, Mr. Sabshon was an attorney in the Corporate Finance and Real Estate Structured Finance groups of Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Sabshon received his J.D. from Hofstra University School of Law and a B.A. from George Washington University.

Catherine L. Lynch has served as our chief financial officer since April 2014. Ms. Lynch joined Inland in 1989 and has been a director of The Inland Group since June 2012. She serves as the treasurer and secretary (since January 1995), the chief financial officer (since January 2011) and a director (since April 2011) of IREIC and as a director (since July 2000) and chief financial officer and secretary (since June 1995) of Inland Securities. She has served as a director of the IREIT business manager since August 2011. Ms. Lynch also has served as a director and treasurer of Inland Investment Advisors, Inc. since June 1995, as a director and treasurer of Inland Institutional Capital Partners, Inc. since May 2006, as treasurer of Inland Capital Markets Group, Inc. since January 2008 and as a director of Inland Private Capital Corporation since May 2012. Ms. Lynch worked for KPMG Peat Marwick LLP from 1980 to 1989. Ms. Lynch received her bachelor degree in accounting from Illinois State University in Normal. Ms. Lynch is a certified public accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. Ms. Lynch also is registered with FINRA as a financial operations principal.

Committees of our Board of Directors

The following information is inserted immediately after the section of the prospectus captioned “Management - Committees of Our Board of Directors – Audit Committee,” which is on page 80 of the prospectus.

Nominating and Corporate Governance Committee

Our board of directors has formed a nominating and corporate governance committee consisting of three of our independent directors, Ms. Henry and Messrs. Daniels and Davis. The members of the committee will nominate a chairman of the committee. The nominating and corporate governance committee will be responsible for (1) identifying individuals qualified to serve on the board of directors and recommending that the board of directors select a slate of director nominees for election by the stockholders at the annual meeting; (2) developing and recommending to the board of directors a set of corporate governance policies and principles and periodically reevaluating such policies and guidelines for the purpose of suggesting amendments to them if appropriate; and (3) overseeing an annual evaluation of the board of directors and each of the committees of the board of directors. The nominating and corporate governance committee will consider director nominees submitted by stockholders. Our nominating and corporate governance committee will operate pursuant to a written charter to be adopted by the board of directors. The charter will be posted on our web site, www.inlandincometrust.com.

Inland Affiliated Companies

The following discussion updates the discussion contained in the section of our prospectus captioned “Management – Inland Affiliated Companies,” which begins on page 81 of the prospectus.

Our sponsor, Inland Real Estate Investment Corporation, or IREIC, is an affiliate of The Inland Real Estate Group, Inc., or “TIREG,” which is wholly owned by The Inland Group, Inc. The first Inland entity was formed by a group of Chicago schoolteachers in 1967, and incorporated the following year. TIREG and its affiliates are still centered in the Chicago metropolitan area. Over the past forty-five years, TIREG’s affiliates have experienced significant growth and now make up a fully-integrated group of legally and financially separate companies that have been engaged in diverse facets of real estate providing property management, leasing, marketing, acquisition, disposition, development, redevelopment, renovation, construction, finance, investment products and other related services. IREIC, our Business Manager and TIREG are part of The Inland Real Estate Group of Companies, Inc.

The Inland Real Estate Group of Companies was the 2009 and 2014 winner, in the category including 1,000+ employees, of the annual Torch Award for Marketplace Ethics, awarded by the Better Business Bureau serving Chicago & Northern Illinois (the “BBB”). The award is given to companies that the BBB identifies as exemplifying ethical business practices. We note, however, that these rankings do not indicate, and should not be relied upon as to, how we may perform in the future.

As of September 30, 2014, Inland affiliates or related parties had raised more than $20.5 billion from investment product sales to over 480,000 investors, many of whom have invested in more than one product. Inland has sponsored 678 programs, including 662 private limited partnerships, limited liability companies and Delaware statutory trusts, ten public limited partnerships and six non-listed REITs, as of September 30, 2014.

As of September 30, 2014, Inland affiliates or related parties cumulatively had 1,449 employees, owned properties in forty-nine states and managed assets with a book value exceeding $14 billion. As of September 30, 2014, Inland was responsible for managing approximately 52.5 million square feet of commercial properties located in forty-eight states, as well as 3,758 multi-family units. IREA, another affiliate of IREIC, has extensive experience in acquiring real estate for investment. Over the years, through IREA and other affiliates, Inland has acquired more than 3,369 properties.

As of September 30, 2014, IREIC or its subsidiaries were the general partner of limited partnerships and the general manager of limited liability companies which owned in excess of 608 acres of pre-development land in the Chicago area, as well as over 1.26 million square feet of real property.

Inland Institutional Capital Partners Corporation specializes in identifying institutional joint ventures and large scale investment opportunities for the real estate companies and REITs that are part of The Inland Real Estate Group of Companies, Inc. Since 2005, Inland Institutional Capital Partners has facilitated the completion of transactions with a value in excess of $10.5 billion. Inland Institutional Capital Partners is an SEC registered investment advisor.

Inland Real Estate Brokerage & Auctions, Inc., since 2000, has completed more than $1.25 billion in commercial real estate sales and leases and has been involved in the sale of more than 8,500 multi-family units and the sale and lease of over 130 million square feet of commercial property. As of September 30, 2014, another Inland affiliate, Inland Mortgage Brokerage Corporation, had originated more than $1.25 billion in financing including loans to third parties and affiliated entities. Another affiliate, Inland Commercial Mortgage Corporation, had originated more than $2.05 billion in financing as of September 30, 2014. As of September 30, 2014, Inland Mortgage Servicing Corporation serviced a loan portfolio with a face value equal to approximately $1.5 billion.

Our Business Manager

The following section supersedes and replaces the section of the prospectus captioned “Management – Our Business Manager,” which begins on page 84 of the prospectus.

Our Business Manager, IREIT Business Manager & Advisor, Inc., is an Illinois corporation and a wholly owned subsidiary of IREIC. The Business Manager conducts its activities at its principal executive office at 2901 Butterfield Road in Oak Brook, Illinois.

The following table sets forth information regarding its executive officers and directors. The biographies of Mr. Goodwin, Ms. Lynch, Mr. Sabshon, Ms. McGuinness, Ms. Matlin, Mr. Lichterman and Ms. Hrtanek are set forth above under “– Our Directors and Executive Officers.”

Timothy D. Hutchison has served as a director of our Business Manager since November 2012 and a director of Management Corp. since July 2012. Mr. Hutchison joined The Inland Real Estate Group, Inc. as vice president of The Inland Services Group, Inc. in November 2005. In April 2010, he was promoted to president of The Inland Services Group, Inc., overseeing the shared service operation which is responsible for human resources, information technology, risk management, marketing and communications and other support functions. In April 2012, Mr. Hutchison was named to the additional position of chief operating officer for The Inland Real Estate Group, Inc. Prior to joining Inland, Mr. Hutchison was deputy building commissioner for the City of Chicago Department of Buildings where he oversaw administrative operations as well as occupancy inspections. He also served as an assistant to the mayor in the office of Mayor Richard M. Daley and as finance director for the City’s Department of Aviation, where he focused on the financing of the capital improvement programs for O’Hare International and Midway Airports.

Since 2007, Mr. Hutchison has served as a director of Pan American Bank in Chicago and is a member of its audit committee and chairman of the IT committee. Mr. Hutchison received his bachelor degree from the University of Illinois — Urbana-Champaign in economics.

Inland Securities Corporation

The following section supersedes and replaces the section of the prospectus captioned “Management – Inland Securities Corporation,” which begins on page 96 of the prospectus.

Inland Securities Corporation, our dealer manager, was formed in 1984 and is registered under the applicable federal and state securities laws as a securities broker-dealer throughout the United States. Since being formed, Inland Securities has served as the dealer manager in connection with offering investment products sponsored by IREIC. Inland Securities has not rendered dealer manager services to anyone other than affiliates of TIREG or programs sponsored by IREIC. Inland Securities is a member firm of FINRA. See “Conflicts of Interest” for additional discussion regarding Inland Securities.

The following table sets forth information about the directors and principal officers of Inland Securities. The biographies of Mr. Sabshon, Ms. Lynch and Ms. Matlin are set forth above under “– Our Directors and Executive Officers” in this section.

Curtis R. Shoch is the National Sales Director and interim president of Inland Securities. Mr. Shoch previously served as a senior vice president from March 2013 to July 2014. In 2000, Mr. Shoch began his career with Inland Securities as an external wholesaler and in 2004 he served as the first vice president of the Coastal Region Sales Team. Mr. Shoch received his bachelor degree from College of Lynchburg, Virginia with a B.S. in marketing and a concentration in Finance. Mr. Shoch holds Series 7, 24 and 63 licenses with FINRA.

Shawn Vaughan is a senior vice president of Inland Securities, which he joined in 2000. Mr. Vaughan began his career with Inland Securities in 2000 as an external wholesaler. In August 2011, Mr. Vaughan was promoted to the Broker Dealer Relations Team, and in March 2013 Mr. Vaughan was promoted to senior vice president. Prior to joining Inland Securities, he was assistant vice president at Wells Real Estate Funds. Mr. Vaughan began his career in financial services in 1994 with a financial planning firm. He holds Series 7 and 63 licenses with FINRA, and his CFP designation.

CONFLICTS OF INTEREST

The following disclosure supplements the section captioned “Conflicts of Interest,” which begins on page 98 of the prospectus.

In August 2014, Inland Securities submitted a Letter of Acceptance, Waiver and Consent, or “AWC,” to FINRA, the self-regulatory organization that oversees broker dealers, for the purpose of proposing a settlement of certain alleged rule violations. Without admitting or denying the findings, Inland Securities consented to an entry of findings of certain violations of FINRA Rules, including those related to its due diligence obligations in connection with its activities as placement agent to two private placement offerings. FINRA accepted the AWC on August 27, 2014. In connection with the AWC, Inland Securities consented to a fine of $40,000, and agreed to (1) retain an independent consultant to review its written supervisory procedures, and (2) revise its written supervisory procedures as recommended by the independent consultant. Inland Securities intends to fully comply with the terms and conditions of the AWC.

Inland Securities has been in the securities business for thirty years, and has not received any complaints regarding the two private placement programs and has never before been the subject of any FINRA disciplinary actions, proceedings or fines. Inland Securities believes that the matter will not have a material adverse effect on it or its business. In addition, Inland Securities is not aware of any negative impact, and does not expect the FINRA settlement to have any negative impact, on the investors in any programs, including Inland Real Estate Income Trust, for which Inland Securities has served or is serving as dealer manager or placement agent.

PRINCIPAL STOCKHOLDERS

This section is inserted into the prospectus directly following “Conflicts of Interest.”

Stock Owned by Certain Beneficial Owners and Management

The following table sets forth information as of January 23, 2015 regarding the number and percentage of shares beneficially owned by each director, each executive officer, all directors and executive officers as a group, and any person known to us to be the beneficial owner of more than 5% of our outstanding shares of common stock. Beneficial ownership includes outstanding shares and shares which are not outstanding that any person has the right to acquire within sixty days after the date of this table.

DESCRIPTION OF REAL ESTATE ASSETS

Investments in Real Estate Assets

This section has been inserted into the prospectus following the section captioned “Investment Objectives and Policies,” which begins on page 102 of the prospectus.

Recent Acquisitions

MidTowne Shopping Center. On May 13, 2014, we, through IREIT Little Rock MidTowne, L.L.C. and IREIT Little Rock MidTowne II, L.L.C. (the “MidTowne Subsidiaries”), each a wholly owned subsidiary formed for this purpose, acquired a fee simple interest in a 126,288 square foot retail center known as MidTowne Shopping Center, located in Little Rock, Arkansas. The property is located across the street from the Park Avenue Shopping Center which we acquired on February 21, 2014. We purchased this property from IMI MRLR LLC and IMI MTLR II LLC, both unaffiliated third parties, for approximately $41.45 million in cash, plus closing costs. The seller had previously entered into a purchase agreement with IREIT Business Manager & Advisor, LLC, our Business Manager, which was assigned to us by our Business Manager on April 21, 2014. At closing we assigned the purchase agreement to the MidTowne Subsidiaries. We funded the purchase price at the closing with proceeds from our offering. We paid our Business Manager an acquisition fee of $621,750 based on the purchase price of approximately $41.45 million. We funded the acquisition fee from offering proceeds.

Among the items we considered in determining to acquire MidTowne Shopping Center included, but were not limited to, the following, determined as of the closing date:

As of September 30, 2014, MidTowne Shopping Center was 95.6% occupied and leased to 22 tenants. The weighted-average remaining lease term for the tenants occupying the property is approximately five years. There is one tenant occupying greater than 10% of the total gross leasable area of the property.

The Container Store, a national specialty retail store, leases 23,565 square feet, or approximately 18.7% of the total gross leasable area of the property, and pays annual rent in an amount based on their gross sales. The Container Store’s lease expires in February 2019, and there are three five-year renewal options, which may be exercised at the option of The Container Store as set forth in the lease. The other tenants leasing at least 10,000 square feet are Pottery Barn (11,000 square feet) and Ulta Salon, Cosmetics & Fragrance, Inc. (10,434 square feet).

The following table lists, on an aggregate basis, all of the scheduled lease expirations over each of the years ending December 31, 2014 through 2023, and the approximate rentable square feet represented by the applicable lease expirations, at the property as of September 30, 2014.

(1) Total annual base rental income is not included for the 41,065 square feet leased to The Container Store, Pottery Barn and Williams Sonoma expiring in 2019 due to annual rent is based on tenant gross sales.

The table below sets forth certain historical information with respect to the occupancy rate at the property, expressed as a percentage of total gross leasable area, and the average effective annual base rent per square foot.

We believe that the property is suitable for its intended purpose and adequately covered by insurance. We do not intend to make significant renovations or improvements in the foreseeable future. As of September 30, 2014, there were three competitive shopping centers located within approximately three miles of the property. As of September 30, 2014, within a three mile radius of the property the population was over 73,000, with an average household income of approximately $63,000 per year.

Real estate taxes assessed for the fiscal year ended December 31, 2013, were approximately $227,500. The amount of real estate taxes assessed was calculated by multiplying the property’s assessed value by a tax rate of approximately 7.01%. We calculate depreciation expense for federal income tax purposes by using the straight-line method. For federal income tax purposes, we depreciate buildings and land improvements based upon estimated useful lives of 40 and 5 to 20 years, respectively.

Lakeside Crossing Shopping Center. On May 23, 2014, we, through IREIT Lynchburg Lakeside, L.L.C. (the “Lakeside Subsidiary”), a wholly owned subsidiary formed for this purpose, acquired a fee simple interest in a 66,906 square foot newly constructed grocery-anchored retail center known as Lakeside Crossing Shopping Center, located in Lynchburg, Virginia. We purchased this property from Lakeside Crossing Lynchburg, LLC, an unaffiliated third party, for approximately $19.82 million in cash, plus closing costs, of which approximately $16.97 million was funded at the initial closing and $1.13 million was funded at an earnout closing on July 10, 2014. Additional vacant spaces adjacent to the property totaling 4,200 square feet are subject to earnout closings aggregating $1.72 million. Closing costs for the initial closing and earnout closing were $149,793. We paid our Business Manager an acquisition fee of $254,513 for the initial closing, $17,002 for the earnout closing and may pay up to approximately $25,785 for the other remaining earnout closings, based on a maximum purchase price of approximately $19.82 million. The seller had previously entered into a purchase agreement with IREA which IREA assigned to the Lakeside Subsidiary at closing. We funded 50% of the purchase price paid at the initial closing and 100% of the purchase price paid at the earnout closing with proceeds from our offering. We funded the remainder of the purchase price paid at the initial closing with a loan secured by the property. The terms of the loan are discussed below under “— Financing Transactions.”

Among the items that we considered in determining to acquire Lakeside Crossing Shopping Center included, but were not limited to, the following, determined as of the closing date:

As of September 30, 2014, Lakeside Crossing Shopping Center was 100% occupied and leased to 13 tenants. The weighted-average remaining lease term for the tenants occupying the property is approximately eight years. There were two tenants occupying greater than 10% of the total gross leasable area of the property.

Fresh Market, a grocery store, leases 20,900 square feet, or approximately 31.2% of the total gross leasable area of the property, and pays annual base rent of $292,600, or approximately 23.6% of total annual base rent of the property. Fresh Market’s lease expires on September 30, 2023, and there are six five-year renewal options, which may be exercised at the option of Fresh Market as set forth in the lease. Fresh Market’s lease also provides that it may terminate the lease upon thirty days’ written notice in the event that: (i) the Virginia Department of Transportation designs and constructs an expansion of the Lynchburg Expressway that provides for southbound-only traffic along Old Forest Road and northbound-only traffic immediately to the east of the Lakeside Crossing Shopping center without providing for northbound and southbound access from Whitehall Road onto the Lynchburg Expressway; and (ii) Fresh Market can demonstrate their gross sales during a certain defined period of time decreased by at least 10%. Petco, a national pet store chain, leases 12,500 square feet, or approximately 18.7% of the total gross leasable area and pays $225,000, or approximately 18.2% of total annual base rent of the property. Petco’s lease expires on November 30, 2023, and there are three five-year renewal options, which may be exercised at the option of Petco as set forth in the lease. The other tenants leasing at least 2,000 square feet are Mattress Warehouse, Panera, US Cellular, Massage Envy, and Zoe’s Kitchen.

Vacant spaces adjacent to the property totaling 4,200 square feet are subject to earnout closings aggregating $1.72 million. We are not obligated to pay these contingent portions of the purchase price unless space, which not leased at the time of acquisition, is later leased within the time limits and parameters as defined in the purchase agreement. The earnout payments are based on a predetermined formula and applied to rental income we receive over an 18-month period starting from the closing date. If at the end of the time period, the earnout spaces are not leased, occupied and rent producing, we will have no further obligation to pay any additional purchase price consideration. The total consideration which may be earned by the seller is subject to final determination and the total amount is included in the purchase price disclosed above.

The following table lists, on an aggregate basis, all of the scheduled lease expirations over each of the years ending December 31, 2014 through 2023, and the approximate rentable square feet represented by the applicable lease expirations, at the property as of September 30, 2014.

The table below sets forth certain historical information with respect to the occupancy rate at the property, expressed as a percentage of total gross leasable area, and the average effective annual base rent per square foot.

* The first year of occupancy was 2013.

We believe that the property is suitable for its intended purpose and adequately covered by insurance. We do not intend to make significant renovations or improvements in the foreseeable future. As of September 30, 2014, there were four competitive shopping centers located within approximately three miles of the property. As of September 30, 2014, within a five mile radius of the property the population was over 89,000 and the average household income within the same radius was over $47,000.

Real estate taxes assessed for the fiscal year ended December 31, 2014, were approximately $166,500. The amount of real estate taxes assessed was calculated by multiplying the property’s assessed value by a tax rate of 1.11%. We calculate depreciation expense for federal income tax purposes by using the straight-line method. For federal income tax purposes, we depreciate buildings and land improvements based upon estimated useful lives of 40 and 5 to 20 years, respectively.

Dogwood Festival Shopping Center. On June 27, 2014, we, through IREIT Flowood Dogwood, L.L.C. (the “Dogwood Subsidiary”), a wholly owned subsidiary formed for this purpose, acquired a fee simple interest in a 187,610 square foot retail center known as Dogwood Festival Shopping Center, located in Flowood, Mississippi. We purchased this property from Dogwood Festival, L.L.C., an unaffiliated third party, for approximately $48.7 million, plus closing costs. Closing costs were $184,068. We paid our Business Manager an acquisition fee of $730,553. The seller had previously entered into a purchase agreement with our Business Manager which our Business Manager assigned to the Dogwood Subsidiary at closing. We funded 50% of the purchase price paid at the closing with proceeds from our offering. We funded the remainder of the purchase price paid at the closing with a loan secured by the property. The terms of the loan are discussed below under “— Financing Transactions.”

The items that we considered in determining to acquire Dogwood Festival Shopping Center included, but were not limited to, the following, determined as of the closing date:

As of September 30, 2014, Dogwood Festival Shopping Center was 94.5% occupied and 97.8% leased to 35 tenants. The weighted-average remaining lease term for the tenants occupying the property is approximately five years. There are three tenants occupying greater than 10% of the total gross leasable area of the property. TJ Maxx, a major clothes retailer, leases 25,000 square feet, or approximately 13.3% of the total gross leasable area of the property, and pays annual base rent of $225,000, or approximately 7.2% of total annual base rent of the property based on leases in place as of September 30, 2014. TJ Maxx’s lease expires on August 31, 2020, and there are four five-year renewal options with escalating rents, which may be exercised at the option of TJ Maxx as set forth in the lease. HomeGoods, a home furnishing store, leases 23,116 square feet, or approximately 12.3% of the total gross leasable area of the property, and pays annual base rent of $242,718, or approximately 7.7% of total annual base rent of the property based on leases in place as of September 30, 2014, HomeGoods’ lease expires on August 31, 2023, and there are four five-year renewal options with escalating rents, which may be exercised at the option of HomeGoods as set forth in the lease. Old Navy, a major clothes retailer, leases 20,151 square feet, or approximately 10.7% of the total gross leasable area of the property, and pays annual base rent of $248,260, or approximately 7.9% of total annual base rent of the property based on leases in place as of September 30, 2014. Old Navy’s lease expires on April 30, 2023, and there are no renewal options. The other tenants leasing at least 2,000 square feet are Encore, Gap, Hibbett Sporting Goods, Lerner New York, Men’s Warehouse, Ann Taylor Loft, Lane Bryant, American Eagle Outfitters, Victoria’s Secret, Chico’s, Aéropostale, Lynn’s Hallmark Shop, The Children’s Place, Justice, Belk Offices, Mattress Firm, AT&T Mobility, Bath and Body Works, Soma Intimates, Gymboree, Celebrity Trends and Motherhood Maternity.

The following table lists, on an aggregate basis, all of the scheduled lease expirations over each of the years ending December 31, 2014 through 2023 and the approximate rentable square feet represented by the applicable lease expirations at the property as of September 30, 2014.

The table below sets forth certain historical information with respect to the occupancy rate at the property, expressed as a percentage of total gross leasable area and the average effective annual base rent per square foot.

We believe that the property is suitable for its purpose and adequately covered by insurance. We do not intend to make significant renovations or improvements in the foreseeable future. As of September 30, 2014, there were three competitive shopping centers located within approximately three and five miles of the property. As of September 30, 2014, within a three and five mile radius of the property the population was approximately 18,000 and 67,000, respectively, and the average household income within the same radii was over $73,000 and $76,000, respectively.

Real estate taxes assessed for the fiscal year ended December 31, 2013, were approximately $263,480. The amount of real estate taxes assessed was equal to the property’s assessed value multiplied by a tax rate of 10.97%. We calculate depreciation expense for federal income tax purposes by using the straight-line method. For federal income tax purposes, we depreciate buildings and land improvements based upon estimated useful lives of 40 and 5 to 20 years, respectively.

Pick ‘n Save Shopping Center. On July 11, 2014, we, through IREIT WEST BEND MAIN, L.L.C. (the “Pick ‘n Save Subsidiary”), a wholly owned subsidiary formed for this purpose, acquired a fee simple interest in a 86,800 square foot grocery-anchored retail center known as Pick ‘n Save Shopping Center, located in West Bend, Wisconsin. We purchased this property from South Main Center, Inc., an unaffiliated third party, for approximately $24.0 million in cash, plus closing costs, of which approximately $19.1 million was funded at the initial closing. As described below, the acquisition is subject to an earnout component to the purchase price, meaning we did not pay approximately $4.88 million of the purchase price of the property at closing, although we will own the entire property. Closing costs were $70,867. We paid our Business Manager an acquisition fee of $286,838 for the initial closing and may pay up to approximately $73,000 for the earnout closings, based on a maximum purchase price of $24.0 million. The seller had previously entered into a purchase agreement with IREA which IREA assigned to the Pick ‘n Save Subsidiary at closing. We funded 100% of the purchase price with proceeds from our offering.

The items that we considered in determining to acquire Pick ‘n Save Shopping Center included, but were not limited to, the following, determined as of the closing date:

As of September 30, 2014, Pick ‘n Save Shopping Center was 92.9% occupied and leased to five tenants. The weighted-average remaining lease term for the tenants occupying the property is approximately 16 years. There is one tenant occupying greater than 10% of the total gross leasable area of the property. Pick ‘n Save, a grocery store, leases 69,886 square feet, or approximately 81% of the total gross leasable area of the property, and pays annual base rent of approximately $1,118,000, or approximately 79% of total annual base rent of the property based on leases in place as of September 30, 2014. Pick ‘n Save’s lease expires on December 31, 2031, and there are four five-year renewal options with escalating rents, which may be exercised at the option of Pick ‘n Save as set forth in the lease. The other tenants leasing at least 2,000 square feet are PNC Bank (ground lease), Aspen Dental and Cherry Berry.

The acquisition is subject to an earnout component to the purchase price, meaning we did not pay approximately $4.88 million of the purchase price of the property at closing, although we will own the entire property. We are not obligated to pay this contingent portion of the purchase price unless within 24 months from the acquisition date: (i) 6,154 square feet of existing vacant space, which was not leased at the time of acquisition, is leased; and (ii) an additional 10,682 square feet is developed and leased by the seller. The earnout payment is based on a predetermined formula and applied to rental income on the date of acquisition. If at the end of the time period, the earnout space is not leased, occupied and rent producing, we will have no further obligation to pay any additional purchase price consideration and will retain ownership of the entire property. The total consideration which may be earned by the seller is subject to final determination.

The following table lists, on an aggregate basis, all of the scheduled lease expirations over each of the years ending December 31, 2014 through 2023 and the approximate rentable square feet represented by the applicable lease expirations at the property as of September 30, 2014.