Inland Real Estate Income Trust (INRE) 10-Q 13 Nov 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	9 Months Ended
	Sep. 30, 2014	Nov. 10, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Inland Real Estate Income Trust, Inc.	'
Entity Central Index Key	'0001528985	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Non-accelerated Filer	'
Entity Public Float	'	$0
Entity Common Stock, Shares Outstanding	'	34,954,973
Document Fiscal Period Focus	'Q3	'
Document Fiscal Year Focus	'2014	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Investment properties:	'	'
Land	$52,492,471	$12,422,471
Building and other improvements	209,995,742	45,904,767
Total	262,488,213	58,327,238
Less accumulated depreciation	-4,230,250	-808,145
Net investment properties	258,257,963	57,519,093
Cash and cash equivalents	122,111,783	26,634,384
Investment in unconsolidated entity	185,812	107,126
Accounts and rents receivable	1,162,526	141,705
Acquired lease intangibles, net	25,494,234	5,854,829
Deferred loan fees, net	1,229,172	351,095
Other assets	2,121,374	630,291
Total assets	410,562,864	91,238,523
Liabilities:	'	'
Mortgages and notes payable	127,060,918	32,530,344
Accounts payable and accrued expenses	2,472,432	811,431
Distributions payable	1,446,264	304,863
Acquired below market lease intangibles, net	5,888,566	759,964
Deferred investment property acquisition obligations	3,189,376	723,237
Due to related parties	3,712,854	3,155,648
Prepaid rent and other liabilities	2,769,719	200,098
Total liabilities	146,540,129	38,485,585
Stockholders equity:	'	'
Preferred stock	0	0
Common stock	31,466	6,746
Additional paid in capital	280,138,947	57,735,337
Accumulated distributions and net loss	-15,605,409	-4,989,145
Accumulated other comprehensive loss	-542,269	0
Total stockholders equity	264,022,735	52,752,938
Total liabilities and stockholders equity	$410,562,864	$91,238,523

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Common stock, shares authorized	1,460,000,000	1,460,000,000
Common stock, issued and outstanding	31,465,968	6,745,615
Offering costs of additional paid in capital	$33,268,170	$8,994,299

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income:	'	'	'	'
Rental income	$4,863,173	$605,943	$9,082,090	$1,818,377
Tenant recovery income	1,147,269	86,738	2,168,631	274,703
Other property income	32,136	0	36,290	0
Total income	6,042,578	692,681	11,287,011	2,093,080
Expenses:	'	'	'	'
Property operating expenses	817,142	39,519	1,492,746	133,670
Real estate tax expense	665,591	76,869	1,232,164	226,833
General and administrative expenses	470,383	398,274	1,288,409	1,243,736
Acquisition related costs	1,020,021	29,809	4,384,100	82,315
Business management fee	441,290	52,437	215,010	156,969
Depreciation and amortization	2,634,957	249,346	4,857,970	748,972
Total expenses	6,049,384	846,254	13,470,399	2,592,495
Operating loss	-6,806	-153,573	-2,183,388	-499,415
Interest expense	-917,659	-244,005	-1,679,342	-1,214,248
Interest income	21,696	0	40,013	0
Equity in earnings of unconsolidated entity	86,147	1,912	78,686	5,782
Net loss	-816,622	-395,666	-3,744,031	-1,707,881
Net loss per common share, basic and diluted	($0.03)	($0.18)	($0.24)	($1.35)
Weighted average number of common shares outstanding, basic and diluted	23,733,441	2,221,493	15,326,661	1,265,383
Comprehensive loss:	'	'	'	'
Net loss	-816,622	-395,666	-3,744,031	-1,707,881
Unrealized loss on derivatives	229,696	0	-542,269	0
Comprehensive loss	($586,926)	($395,666)	($4,286,300)	($1,707,881)

Consolidated_Statement_Of_Equi

Consolidated Statement Of Equity (Unaudited) (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Distributions And et Loss	Accumulated Other Comprehensive Loss	Total
Balance (in shares) at Dec. 31, 2013	6,745,615	'	'	'	'
Balance at Dec. 31, 2013	$6,746	$57,735,337	($4,989,145)	$0	$52,752,938
Distributions declared	0	0	-6,872,233	0	-6,872,233
Proceeds from offering	24,424	243,160,626	0	0	243,185,050
Proceeds from offering (in shares)	24,424,482	'	'	'	'
Offering costs	0	-24,273,871	0	0	-24,273,871
Proceeds from distribution reinvestment plan	304	2,889,464	0	0	2,889,768
Proceeds from distribution reinvestment plan (in shares)	304,186	'	'	'	'
Shares repurchased	-8	-76,626	0	0	-76,634
Shares repurchased (in shares)	-8,315	'	'	'	'
Discount on shares to related parties	0	64,017	0	0	64,017
Unrealized loss on derivatives	0	0	0	-542,269	-542,269
Sponsor contribution	0	640,000	0	0	640,000
Net loss	0	0	-3,744,031	0	-3,744,031
Balance at Sep. 30, 2014	$31,466	$280,138,947	($15,605,409)	($542,269)	$264,022,735
Balance (in shares) at Sep. 30, 2014	31,465,968	'	'	'	'

Statements_of_Cash_Flows_Unaud

Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:	'	'
Net loss	($3,744,031)	($1,707,881)
Depreciation and amortization	4,857,970	748,972
Amortization of loan fees	135,429	195,844
Amortization of acquired above and below market leases, net	-16,828	-18,266
Straight-line rental income	-188,138	-8,605
Discount on shares issued to related parties	64,017	366,859
Equity in (earnings) loss of unconsolidated entity	-78,686	-5,782
Other non-cash adjustments	39,923	'
Changes in assets and liabilities:	'	'
Accounts payable and accrued expenses	633,483	-54,227
Accounts and rents receivable	-832,683	-134,774
Due to related parties	570,967	174,719
Prepaid rent and other liabilities	706,423	-108,294
Other assets	84,955	-472,542
Net cash flows provided by (used in) operating activities	2,232,801	-1,023,977
Cash flows from investing activities:	'	'
Purchase of investment properties	-214,530,013	0
Capital expenditures	-15,235	-243,745
Investment in unconsolidated entity	0	-100,000
Other assets, net of master lease payments	-618,222	-9,668
Net cash flows used in investing activities	-215,163,470	-353,413
Cash flows from financing activities:	'	'
Proceeds from offering	243,185,050	26,930,643
Proceeds from the distribution reinvestment plan	2,889,768	204,756
Share repurchases	-76,634	0
Payment of offering costs	-24,171,470	-3,122,742
Distributions paid	-5,730,828	-445,282
Sponsor contribution	640,000	0
Due to related parties, net	377	-60,721
Deferred investment property acquisition obligation payments	-1,845,263	0
Proceeds from mortgages and notes payable	94,530,574	0
Payment of mortgages and notes payable	0	-15,406,717
Payment of loan costs	-1,013,506	-8,181
Net cash flows provided by financing activities	308,408,068	8,091,756
Net increase in cash and cash equivalents	95,477,399	6,714,366
Cash and cash equivalents at beginning of the period	26,634,384	2,237,050
Cash and cash equivalents, at end of period	122,111,783	8,951,416
Supplemental disclosure of cash flow information:	'	'
Land	40,070,000	0
Building and improvements	164,108,651	0
Acquired in place lease intangibles	17,848,489	0
Acquired above market lease intangibles	3,353,780	0
Acquired below market lease intangibles	-5,404,414	0
Deferred investment property acquisition obligations	-4,210,772	0
Assumed liabilities, net	-1,235,721	'
Purchase of investment properties	214,530,013	0
Cash paid for interest	1,480,457	1,065,485
Supplemental schedule of non-cash investing and financing activities:	'	'
Distributions payable	1,446,264	136,381
Accrued offering costs payable	403,208	267,060
Accrued capital expenditures	$0	$72,257

General

General	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
General	'
	The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Readers of this Quarterly Report should refer to the audited consolidated financial statements of Inland Real Estate Income Trust, Inc. (which may be referred to as the “Company,” “we,” “us,” or “our”) for the year ended December 31, 2013, which are included in the Company’s 2013 Annual Report, as certain footnote disclosures contained in such audited consolidated financial statements have been omitted from this Quarterly Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for the fair presentation have been included in this Quarterly Report.

Organization

Organization	9 Months Ended
	Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
Organization	'
	(1)  Organization
	Inland Real Estate Income Trust, Inc. was formed on August 24, 2011 to acquire and manage a diversified portfolio of commercial real estate investments located in the United States. To date, the Company has focused on acquiring retail properties. The Company entered into a Business Management Agreement (the “Agreement”) with IREIT Business Manager & Advisor, Inc. (the “Business Manager”), an affiliate of Inland Real Estate Investment Corporation (the “Sponsor”), to be the Business Manager to the Company. The Company is authorized to sell up to 150,000,000 shares of common stock at $10 each in an initial public “best efforts” offering (the “Offering”) which commenced on October 18, 2012 and to issue 30,000,000 shares at $9.50 each issuable pursuant to the Company’s distribution reinvestment plan (“DRP”).
	The Company provides the DRP to facilitate investment in the Company’s shares and the Share Repurchase Program (“SRP”) to provide limited liquidity for stockholders.
	The Company will allow stockholders to purchase additional shares from the Company by automatically reinvesting distributions through the DRP, subject to certain share ownership restrictions. Such purchases under the DRP will not be subject to selling commissions or the marketing contribution and due diligence expense allowance, and are made at a price of $9.50 per share.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The Company is authorized to purchase shares from stockholders who purchased their shares from us or received their shares through a non-cash transfer and who have held their shares for at least one year under the SRP, if requested, if the Company chooses to repurchase them. Subject to funds being available, the Company will limit the number of shares repurchased during any calendar year to 5% of the number of shares outstanding on December 31st of the previous calendar year. Funding for the SRP will come from proceeds the Company receives from the DRP. In the case of repurchases made upon the death of a stockholder or qualifying disability, as defined in the SRP, the Company is authorized to use any funds to complete the repurchase, and neither the one year holding period, the limit regarding funds available from the DRP nor the 5% limit will apply. The SRP will immediately terminate if the Company’s shares become listed for trading on a national securities exchange. In addition, the Company’s board of directors, in its sole direction, may at any time amend, suspend or terminate the SRP.
	At September 30, 2014, the Company owned 22 retail properties totaling 1,326,386 square feet. At September 30, 2014, the portfolio had weighted average physical occupancy of 96.7% and economic occupancy of 98.2%. Economic occupancy excludes square footage associated with an earnout component. At the time of acquisition, certain properties have an earnout component to the purchase price, meaning the Company did not pay a portion of the purchase price at closing related to certain vacant spaces, although it may own the entire property. The Company is not obligated to settle this contingent purchase price obligation unless the seller obtains leases for the vacant space within the time limits and parameters set forth in the applicable acquisition agreement.

Summary_Of_Significant_Account

Summary Of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2014
Accounting Policies [Abstract]	'
Summary Of Significant Accounting Policies	'
	(2)  Summary of Significant Accounting Policies
	General
	The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
	Reclassification
	Certain reclassifications were made to the 2013 financial statements to conform to the 2014 consolidated financial statement presentation.
	Consolidation
	The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries. Wholly owned subsidiaries generally consist of limited liability companies (LLCs). All intercompany balances and transactions have been eliminated in consolidation.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	Each property is owned by a separate legal entity which maintains its own books and financial records and each entity’s assets are not available to satisfy the liabilities of other affiliated entities, except as otherwise disclosed in note 6.
	Offering and Organization Costs
	Costs associated with the Offering are deferred and charged against the gross proceeds of the Offering upon closing. Formation and organizational costs were expensed as incurred.
	Partially-Owned Entities
	The Company will consolidate the operations of a joint venture if the Company determines that it is either the primary beneficiary of a variable interest entity (VIE) or has substantial influence and control of the entity. The primary beneficiary is the party that has the ability to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses and the right to receive the returns from the VIE that would be significant to the VIE. There are significant judgments and estimates involved in determining the primary beneficiary of a VIE or the determination of who has control and influence of the entity. When the Company consolidates an entity, the assets, liabilities and results of operations will be included in our consolidated financial statements.
	In instances where the Company determines that we are not the primary beneficiary of a VIE or the Company does not control the joint venture but can exercise influence over the entity with respect to its operations and major decisions, the Company will use the equity method of accounting. Under the equity method, the operations of a joint venture will not be consolidated with the Company’s operations but instead our share of operations will be reflected as equity in earnings (loss) of unconsolidated entity on our consolidated statements of operations and other comprehensive loss. Additionally, the Company’s net investment in the joint venture will be reflected as investment in unconsolidated entity on the consolidated balance sheets.
	Cash and Cash Equivalents
	The Company considers all demand deposits, money market accounts and all short term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The account balance may periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	Acquisitions
	Upon acquisition, the Company determines the total purchase price of each property, which includes the estimated contingent consideration to be paid or received in future periods, if any. The Company allocates the total purchase price of properties based on the fair value of the tangible and intangible assets acquired and liabilities assumed based on Level 3 inputs, such as comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions, from a third party appraisal or other market sources.
	Certain of the Company’s properties included earnout components to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The Company is not obligated to settle the contingent portion of the purchase price unless space which was vacant at the time of acquisition is later leased by the seller within the time limits and parameters set forth in the related acquisition agreements. The earnout payments are based on a predetermined formula applied to rental income received. The earnout agreements have a limited obligation period from the date of acquisition, as defined. If at the end of the time period certain space has not been leased, occupied and rent producing, the Company will have no further obligation to pay additional purchase price consideration and will retain ownership of that entire property. Based on its best estimate, the Company has recorded a liability for the potential future earnout payment using estimated fair value at the date of acquisition using Level 3 inputs including market rents ranging from $14.00 to $31.00 per square foot, probability of occupancy ranging from 0% to 100% based on leasing activity and utilizing a discount rate of 8.00% to 8.25%. The Company has recorded this earnout amount as additional purchase price of the related property and as a liability included in deferred investment property acquisition obligations on the accompanying consolidated balance sheets. The liability increases as the anticipated payment date draws near based on a present value; such increases in the liability are recorded as amortization expense on the accompanying consolidated statements of operations and other comprehensive loss. The Company records changes in the underlying liability assumptions to acquisition related costs on the accompanying consolidated statements of operations and other comprehensive loss.
	The portion of the purchase price allocated to acquired above market lease value and acquired below market lease value are amortized on a straight-line basis over the term of the related lease as an adjustment to rental income. For below market lease values, the amortization period includes any renewal periods with fixed rate renewals. Amortization pertaining to the above market lease value of $150,238 and $0 for the three months ended September 30, 2014 and 2013, respectively, and $258,984 and $0 for the nine months ended September 30, 2014 and 2013, respectively, was recorded as a reduction to rental income. Amortization pertaining to the below market lease value of $181,083 and $5,906 for the three months ended September 30, 2014 and 2013, respectively, and $275,812 and $18,266 for the nine months ended September 30, 2014 and 2013, respectively, was recorded as an increase to rental income.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The portion of the purchase price allocated to acquired in-place lease value is amortized on a straight-line basis over the acquired leases’ weighted average remaining term. The Company incurred amortization expense pertaining to acquired in-place lease intangibles of $708,651 and $56,318 for the three months ended September 30, 2014 and 2013, respectively, and $1,303,880 and $170,572 for the nine months ended September 30, 2014 and 2013, respectively.
	The portion of the purchase price allocated to customer relationship value is amortized on a straight-line basis over the weighted average remaining lease term. As of September 30, 2014, no amount has been allocated to customer relationship value.
	The following table summarizes the Company’s identified intangible assets and liabilities as of September 30, 2014 and December 31, 2013:
			September 30,			December 31,
			2014			2013
	Intangible assets:
	Acquired in-place lease value		$	23,629,833		$	5,781,344
	Acquired above market lease value			3,664,919			311,139
	Accumulated amortization			-1,800,518			-237,654
	Acquired lease intangibles, net		$	25,494,234		$	5,854,829
	Intangible liabilities:
	Acquired below market lease value		$	6,189,099		$	784,685
	Accumulated amortization			-300,533			-24,721
	Acquired below market lease intangibles, net		$	5,888,566		$	759,964
	As of September 30, 2014, the weighted average amortization periods for acquired in-place leases, above market lease intangibles and below market lease intangibles are 9, 7 and 12 years, respectively.
	Estimated amortization of the respective intangible lease assets and liabilities as of September 30, 2014 for each of the five succeeding years and thereafter is as follows:
				Acquired			Above		Below
				In-Place			Market		Market
				Leases			Leases		Leases
		2014 (remainder of year)		$	696,501		$	151,926	$	-185,305
		2015			2,786,006			593,560		-718,921
		2016			2,786,006			585,993		-696,201
		2017			2,786,006			484,897		-619,184
		2018			2,786,006			406,744		-516,951
		Thereafter			10,247,774			1,182,815		-3,152,004
		Total		$	22,088,299		$	3,405,935	$	-5,888,566
	Impairment of Investment Properties
	The Company assesses the carrying values of its respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of the assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. In order to review its assets for recoverability, the Company considers current market conditions, as well as its intent with respect to holding or disposing of the asset. If the Company’s analysis indicates that the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, the Company recognizes an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third party appraisals, where considered necessary (Level 3 inputs).
	The Company estimates the future undiscounted cash flows based on management’s intent as follows: (i) for real estate properties that the Company intends to hold long-term, including land held for development, properties currently under development and operating buildings, recoverability is assessed based on the estimated future net rental income from operating the property and termination value; and (ii) for real estate properties that the Company intends to sell, including land parcels, properties currently under development and operating buildings, recoverability is assessed based on estimated proceeds from disposition that are estimated based on future net rental income of the property and expected market capitalization rates, less sale costs.
	The use of projected future cash flows is based on assumptions that are consistent with our estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However, assumptions and estimates about future cash flows, including comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions which impact the discounted cash flow approach to determining value, are complex and subjective. Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analysis could impact these assumptions and result in future impairment charges of the real estate properties.
	During the three and nine months ended September 30, 2014 and 2013, the Company incurred no impairment charges.
	INLAND REAL ESTATE INCOME TRUST, INC.
(a Maryland Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Capitalization and Depreciation
Real estate acquisitions are recorded at cost less accumulated depreciation. Improvement and betterment costs are capitalized, and ordinary repairs and maintenance are expensed as incurred.
Transactional costs in connection with the acquisition of real estate properties accounted for as business combinations are expensed as incurred.
Depreciation expense is computed using the straight-line method. Building and improvements are depreciated based upon estimated useful lives of 30 years and 5-15 years for furniture, fixtures and equipment and site improvements.
Tenant improvements are amortized on a straight-line basis over the shorter of the life of the asset or the term of the related lease as a component of depreciation and amortization expense. Leasing fees are amortized on a straight-line basis over the term of the related lease as a component of depreciation and amortization expense.
Cost capitalization and the estimate of useful lives require judgment and include significant estimates that can and do change.
Depreciation expense was $1,868,538 and $193,028 for the three months ended September 30, 2014 and 2013, respectively, and $3,422,105 and $578,400 for the nine months ended September 30, 2014 and 2013, respectively.
Deferred Loan Fees
Direct financing costs are deferred and amortized on a straight-line basis, which approximates the effective interest method, over the term, or anticipated repayment date, of the related agreements as a component of interest expense.
Fair Value Measurements
The Company has estimated fair value using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.
INLAND REAL ESTATE INCOME TRUST, INC.
(a Maryland Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The Company defines fair value based on the price that it believes would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
	Level 1 −		Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
	Level 2 −		Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
	Level 3 −		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
Revenue Recognition
The Company commences revenue recognition on its leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of, or controls the physical use of, the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded by the Company under the lease are treated as lease incentives which reduce revenue recognized over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes. The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment.
INLAND REAL ESTATE INCOME TRUST, INC.
(a Maryland Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the accompanying consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally will be greater than the cash collected in the early years and will decrease in the later years of a lease. The Company periodically reviews the collectability of outstanding receivables. Allowances are taken for those balances that the Company deems to be uncollectible, including any amounts relating to straight-line rent receivables.
Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. The Company does not expect the actual results to materially differ from the estimated reimbursement.
The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and amounts due are considered collectible. Upon early lease termination, the Company provides for gains or losses related to unrecovered intangibles and other assets.
As a lessor, the Company defers the recognition of contingent rental income, such as percentage rent, until the specified target that triggered the contingent rental income is achieved.
REIT Status
The Company has qualified and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2013. As a result, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its taxable income (subject to certain adjustments) to its stockholders. The Company will monitor the business and transactions that may potentially impact its REIT status. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal (including any applicable alternative minimum tax) and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.
INLAND REAL ESTATE INCOME TRUST, INC.
(a Maryland Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Derivatives
The Company uses derivative instruments, such as interest rate swaps, primarily to manage exposure to interest rate risks inherent in variable rate debt. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. The Company’s interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and market rate on the settlement date. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board, or the FASB, issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, or ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the company’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company does not expect the adoption of ASU 2014-08 to have a material effect on the Company’s consolidated financial statements.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Acquisitions	'
	(3)  Acquisitions
	2014 Acquisitions
	Date		Property Name		Location		Property	Square		Purchase
	Acquired						Type	Footage		Price
	1st Quarter
	2/21/14		Park Avenue Shopping Center (1)		Little Rock, AR		Multi-tenant Retail	69,381		$	23,367,587
	2/27/14		North Hills Square		Coral Springs, FL		Multi-tenant Retail	63,829			11,050,000
	2nd Quarter
	4/8/14		Mansfield Pointe		Mansfield, TX		Multi-tenant Retail	148,529			28,100,000
	5/13/14		MidTowne Shopping Center		Little Rock, AR		Multi-tenant Retail	126,288			41,450,000
	5/23/14		Lakeside Crossing (1)		Lynchburg, VA		Multi-tenant Retail	62,706			16,967,503
	6/27/14		Dogwood Festival		Flowood, MS		Multi-tenant Retail	187,610			48,688,846
	3rd Quarter
	7/11/14		Pick N Save Center (1)		West Bend, WI		Multi-tenant Retail	86,800			19,122,560
	8/4/14		Harris Plaza (1)		Layton, UT		Multi-tenant Retail	123,890			27,019,238
								869,033		$	215,765,734
		-1	There is an earnout component associated with the acquisition which is not included in the purchase price (note 11).
	During the nine months ended September 30, 2014, the Company acquired, through its wholly owned subsidiaries, the properties listed above for an aggregate purchase price of $215,765,734. The Company financed a portion of these acquisitions by borrowing $94,530,574.
	The Company incurred $1,020,021 and $29,809 during the three months ended September 30, 2014 and 2013, respectively, and $4,384,100 and $82,315 during the nine months ended September 30, 2014 and 2013, respectively, of acquisition, dead deal and transaction related costs, including underlying liability assumptions to acquisition related costs, that were recorded in acquisition related costs in the consolidated statements of operations and other comprehensive loss related to both closed and potential transactions. These costs include third party due diligence costs such as appraisals, environmental studies, and legal fees as well as acquisition fees and time and travel expense reimbursements to the Sponsor and its affiliates. For properties acquired during the nine months ended September 30, 2014, the Company recorded revenue of $6,976,460 and property net income of $1,126,473, which excludes expensed acquisition related costs.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The following table presents certain additional information regarding the Company’s acquisitions during the nine months ended September 30, 2014. The amounts recognized for major assets acquired and liabilities assumed as of the acquisition date are as follows:
	Property Name		Land			Buildings and		Acquired			Acquired		Deferred
						Improvements		Lease			Below		Investment
								Intangibles			Market		Property
											Lease		Acquisition
											Intangibles		Obligations
													(note 11)
	Park Avenue Shopping Center		$	5,500,000		$	16,365,112	$	2,972,500		$	-120,291	$	-1,349,734
	North Hills Square			4,800,000			5,493,151		815,870			-59,021		–
	Mansfield Pointe			5,350,000			20,002,000		3,550,362			-802,362		–
	MidTowne Shopping Center			8,810,000			29,698,674		4,369,101			-1,427,775		–
	Lakeside Crossing			1,460,000			16,998,581		1,483,036			-214,340		-2,759,774
	Dogwood Festival			4,500,000			41,865,000		3,746,782			-1,422,936		–
	Pick N Save Center			3,150,000			14,282,926		1,790,898			–		-101,264
	Harris Plaza			6,500,000			19,403,207		2,473,720			-1,357,689		–
	Total		$	40,070,000		$	164,108,651	$	21,202,269		$	-5,404,414	$	-4,210,772
	The following condensed pro forma consolidated financial statements for the three and nine months ended September 30, 2014 and 2013 include pro forma adjustments related to the acquisitions and related financings for such acquisitions during 2014 considered material to the consolidated financial statements which were made for Park Avenue Shopping Center, North Hills Square, Mansfield Pointe, MidTowne Shopping Center, Lakeside Crossing, Dogwood Festival, Pick N Save Center and Harris Plaza which are presented assuming the acquisition occurred on January 1, 2013 excluding acquisition related costs.
	The following condensed pro forma financial information is not necessarily indicative of what the actual results of operations of the Company would have been assuming the 2014 acquisitions had been consummated as of January 1, 2013, nor does it purport to represent the results of operations for future periods.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
			For the three months ended September 30, 2014
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	6,042,578			349,842		6,392,420
	Net income (loss)		$	-816,622			821,991		5,369
	Net income (loss) per common share,		$	-0.03					0.00
	basic and diluted
	Weighted average number of common			23,733,441					31,465,968
	shares outstanding, basic and diluted
			For the three months ended September 30, 2013
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	692,681			4,298,813		4,991,494
	Net income (loss)		$	-395,666			654,328		258,662
	Net income (loss) per common share,		$	-0.18					0.01
	basic and diluted
Weighted average number of common			2,221,493					31,465,968
shares outstanding, basic and diluted
INLAND REAL ESTATE INCOME TRUST, INC.
(a Maryland Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
		For the nine months ended September 30, 2014
		Historical			Pro Forma		As Adjusted
					Adjustments		(unaudited)
					(unaudited)
Total income		$	11,287,011			7,701,809		18,988,820
Net income (loss)		$	-3,744,031			4,028,145		284,114
Net income (loss) per common share,		$	-0.24					0.01
basic and diluted
Weighted average number of common			15,326,661					31,465,968
shares outstanding, basic and diluted
		For the nine months ended September 30, 2013
		Historical			Pro Forma		As Adjusted
					Adjustments		(unaudited)
					(unaudited)
Total income		$	2,093,080			11,739,393		13,832,473
Net income (loss)		$	-1,707,881			461,544		-1,246,337
Net loss per common share,		$	-1.35					-0.04
basic and diluted
Weighted average number of common			1,265,383					31,465,968
shares outstanding, basic and diluted
The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude $954,928 and $4,219,294, respectively, of acquisition related costs recorded during such periods.

Investment_In_Unconsolidated_E

Investment In Unconsolidated Entity	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Investment In Unconsolidated Entity	'
	(4)  Investment in Unconsolidated Entity
	The Company is a member of a limited liability company formed as an insurance association captive (the “Insurance Captive”), which is wholly-owned by the Company, Inland Real Estate Corporation, Inland American Real Estate Trust, Inc. and Retail Properties of America, Inc., and serviced by an affiliate of the Business Manager, Inland Risk and Insurance Management Services, Inc. This entity is considered a variable interest entity as defined in U.S. GAAP and the Company is not considered to be the primary beneficiary; however, the Company can exercise significant influence. Therefore, this investment is accounted for utilizing the equity method of accounting. The Company’s risk of loss is limited to its investment and the Company is not required to fund additional capital to the entity. Effective June 30, 2014, Inland Diversified Real Estate Trust, Inc. withdrew from the Insurance Captive.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The Company entered into an agreement and paid $100,000 in exchange for a membership interest in the Insurance Captive. The Company’s share of net income from its investment is based on the ratio of each member’s premium contribution to the venture. The Company was allocated income of $86,147 and $1,912 for the three months ended September 30, 2014 and 2013, respectively, and $78,686 and $5,782 for the nine months ended September 30, 2014 and 2013, respectively.

Operating_Leases

Operating Leases	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Operating Leases	'
	(5)  Operating Leases
	Minimum lease payments to be received under operating leases, including ground leases, as of September 30, 2014 for the years indicated, assuming no expiring leases are renewed, are as follows:
			Minimum Lease
			Payments
		2014 (remainder of year)	$	4,712,457
		2015		18,720,949
		2016		18,275,669
		2017		16,057,223
		2018		14,332,601
		Thereafter		68,092,242
		Total	$	140,191,141
	The remaining lease terms range from less than one year to 18 years. Most of the revenue from the Company’s properties consists of rents received under long-term operating leases. Some leases require the tenant to pay fixed base rent paid monthly in advance, and to reimburse the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the Company and recoverable under the terms of the lease. Under these leases, the Company pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid. Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed base rent as well as all costs and expenses associated with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the consolidated statements of operations and other comprehensive loss. Under leases where all expenses are paid by the Company, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in tenant recovery income on the consolidated statements of operations and other comprehensive loss.

Mortgages_And_Notes_Payable

Mortgages And Notes Payable

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

'

Mortgages And Notes Payable

'

(6)  Mortgages and Notes Payable

As of September 30, 2014 and December 31, 2013, the Company had the following mortgages and notes payable outstanding:

Maturity Date

Property Name

Stated Interest

Principal

Principal

Notes

Rate Per Annum

Balance at

Balance at

September 30,

December 31,

2014

2013

1-May-27

Dollar General Portfolio Phase I - five properties

4.31%

$

3,340,450

$

3,340,450

27-Dec-15

Newington Fair Shopping Center

3 month LIBOR + 3.25% subject to a minimum rate of 3.50%

9,790,000

9,790,000

(a)

1-Oct-27

Dollar General Portfolio Phase II - seven properties

4.35%

4,140,000

4,140,000

23-Dec-18

Wedgewood Commons Shopping Center

Daily LIBOR + 1.90%

15,259,894

15,259,894

(b)

28-Mar-19

North Hills Square

Daily LIBOR + 1.80%

5,525,000

–

(b),(c)

7-May-19

Mansfield Pointe

Daily LIBOR + 1.80%

14,200,000

–

(b),(d)

8-May-19

Park Avenue Shopping Center

Daily LIBOR + 1.75%

11,683,793

–

(b),(e)

22-May-19

Lakeside Crossing

Daily LIBOR + 1.95%

8,483,751

–

(b),(f)

1-Jul-19

Dogwood Festival

Daily LIBOR + 1.75%

24,351,750

–

(b),(g)

5-Jul-19

MidTowne Shopping Center

Daily LIBOR + 1.95%

20,725,000

–

(b),(h)

31-Jul-19

Pick N Save Center

Daily LIBOR + 1.60%

9,561,280

–

(b),(i)

Total

$

127,060,918

$

32,530,344

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

(a)

The three month LIBOR rate at September 30, 2014 was 0.23%.  On October 14, 2014, the Company repaid the loan in full, including any unpaid interest.

(b)

The daily LIBOR rate at September 30, 2014 was 0.16%.

(c)

The loan requires monthly payments of interest only until March 28, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 4.02% beginning in year two through maturity.

(d)

The loan requires monthly payments of interest only until May 7, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.90% beginning in year two through maturity.

(e)

The loan requires monthly payments of interest only until May 8, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.90% beginning in year two through maturity.

(f)

The loan requires monthly payments of interest only until May 22, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.95% beginning in year two through maturity.

(g)

The loan requires monthly payments of interest only until July 1, 2019 when all principal and unpaid interest is due.  Prior to January 1, 2017, the loan may not be prepaid in whole or in part.  Thereafter, the loan may be prepaid with a prepayment premium of 2% of the principal amount from January 1, 2017 through July 1, 2017, 1% of the principal amount from July 2, 2017 through July 1, 2018 and at par anytime after July 1, 2018.  The Company entered into a swap which fixed the interest rate at 3.597%.

(h)

The loan requires monthly payments of interest only until July 5, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 4.06% beginning in year two through maturity.

(i)

The loan requires monthly payments of interest only until July 31, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a swap which fixed the interest rate at 3.54%.

The principal amount of mortgage loans outstanding as of September 30, 2014 was $127,060,918 and had a weighted average interest rate of 2.69% per annum. All of the Company’s mortgage loans are secured by first mortgages on real estate assets.

The mortgage loans require compliance with certain covenants, such as debt service ratios, investment restrictions and distribution limitations. As of September 30, 2014, all of the mortgages were current in payments and the Company was in compliance with such covenants.

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table shows the scheduled maturities of mortgages and notes payable as of September 30, 2014 for the next five years and thereafter:

Mortgages and

Notes Payable

2014 (remainder of year)

$

–

2015

9,790,000

2016

–

2017

–

2018

15,259,894

Thereafter

102,011,024

Total

$

127,060,918

The Company estimates the fair value of its total debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying value of the Company’s mortgage debt was $127,060,918 and $32,530,344 as of September 30, 2014 and December 31, 2013, respectively, and its estimated fair value was $127,438,000 and $32,555,000 as of September 30, 2014 and December 31, 2013, respectively.

Interest Rate Swap Agreements

The Company entered into interest rate swaps to fix certain of its floating LIBOR based debt under variable rate loans to a fixed rate to manage its risk exposure to interest rate fluctuations. The Company will generally match the maturity of the underlying variable rate debt with the maturity date on the interest swap. For the three and nine months ended September 30, 2014 and 2013, the Company recorded interest expense of $(152) and $0 and $71,278 and $0, respectively, related to interest rate swaps.

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table summarizes the Company’s interest rate swap contracts outstanding as of September 30, 2014.

Date

Effective

Maturity

Pay

Receive

Notional

Fair Value at

Entered

Date

Date

Fixed

Floating

Amount

September 30,

Rate

Rate Index

2014

28-Mar-14

March 1,2015

March 28, 2019

1 month

$

5,525,000

$

-88,474

2.22%

LIBOR

8-May-14

5-May-15

7-May-19

2.10%

1 month

14,200,000

-101,696

LIBOR

23-May-14

1-May-15

8-May-19

2.00%

1 month

8,483,751

-26,454

LIBOR

6-Jun-14

1-Jun-15

22-May-19

2.15%

1 month

11,683,793

-90,183

LIBOR

26-Jun-14

5-Jul-15

5-Jul-19

2.11%

1 month

20,725,000

-67,669

LIBOR

27-Jun-14

1-Jul-14

1-Jul-19

1.85%

1 month

24,351,750

-147,006

LIBOR

31-Jul-14

31-Jul-14

31-Jul-19

1.94%

1 month

9,561,280

-92,065

LIBOR

Total

$

94,530,574

$

-613,547

The table below presents the fair value of the Company’s cash flow hedges as well as their classification on the consolidated balance sheets as of September 30, 2014 and December 31, 2013.

30-Sep-14

31-Dec-13

Balance Sheet

Fair Value

Balance Sheet

Fair Value

Location

Location

Derivatives designated as cash flow hedges:

Interest rate swaps

Other liabilities

$

613,547

Other liabilities

$

–

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statement of operations and other comprehensive loss (“OCL”) for the three and nine months ended September 30, 2014 and 2013.

Three months ended

Nine months ended

30-Sep

30-Sep

Derivatives in Cash Flow Hedging Relationships

2014

2013

2014

2013

Amount of Income (Loss) Recognized in OCL on Derivative (Effective Portion)

$

229,696

$

–

$

-542,269

$

–

Amount of Income (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)

$

–

$

–

$

–

$

–

Amount of Income (Loss) Recognized in Income on Derivative (Ineffective Portion)

$

152

$

–

$

-38

$

–

Three months ended

Nine months ended

30-Sep

30-Sep

Derivatives Not Designated as Hedging Instruments

2014

2013

2014

2013

Amount of Loss Recognized in Income on Derivative (Ineffective Portion)

$

–

$

–

$

-71,240

$

–

Fair_Value_Financial_Instrumen

Fair Value Financial Instruments	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Fair Value Financial Instruments	'
	(7)  Fair Value Financial Instruments
	In some instances, certain of the Company’s assets and liabilities are required to be measured or disclosed at fair value according to a fair value hierarchy pursuant to relevant accounting literature. This hierarchy ranks the quality and reliability of the inputs used to determine fair values, which are then classified and disclosed in one of three categories. The fair value hierarchy consists of three broad levels, which are described within Note 2.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their classifications within the fair value hierarchy levels.
	For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:
		Fair Value Measurements at September 30, 2014
		Quoted Prices in		Significant		Significant
		Active Markets		Other		Unobservable
		for Identical		Observable		Inputs
		Assets		Inputs		(Level 3)
		(Level 1)		(Level 2)
	Description
	Derivative interest rate instruments	$	–	$	-613,547	$	–
	Total liabilities	$	–	$	-613,547	$	–
	The fair value of derivative instruments was estimated based on data observed in the forward yield curve which is widely observed in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the counterparty's nonperformance risk in the fair value measurements which utilizes Level 3 inputs, such as estimates of current credit spreads. The Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative and therefore has classified this in Level 2 of the hierarchy.

IncomeTax

IncomeTax	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
IncomeTax	'
	(8)  Income Tax
	The Company had no uncertain tax positions as of September 30, 2014 and December 31, 2013. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of September 30, 2014. The Company has no interest or penalties relating to income taxes recognized in the consolidated statements of operations and other comprehensive loss for the three and nine months ended September 30, 2014 and 2013. As of September 30, 2014, returns for the calendar years 2013, 2012 and 2011 remain subject to examination by U.S. and various state and local tax jurisdictions.

Distributions

Distributions	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Distributions	'
	(9)  Distributions
	The Company currently pays distributions based on daily record dates, payable in arrears the following month. The distributions that the Company currently pays are equal to a daily amount of $0.001643836, per share based upon a 365-day period. During the three months ended September 30, 2014 and 2013, the Company declared distributions totaling $3,583,521 and $335,964, respectively. During the nine months ended September 30, 2014 and 2013, the Company declared distributions totaling $6,872,233 and $567,870, respectively.

Earnings_Loss_Per_Share

Earnings Loss Per Share	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Earnings Loss Per Share	'
	(10)  Earnings (Loss) per Share
	Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus potential common shares issuable upon exercising options or other contracts. As of September 30, 2014 and 2013, the Company did not have any dilutive common share equivalents outstanding.

Commitments_And_Contingencies

Commitments And Contingencies	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Commitments And Contingencies	'
	(11)  Commitments and Contingencies
	Five of the Company’s properties had earnout components relating back to the time the properties were acquired. The maximum potential earnout payment was $4,643,170 at September 30, 2014, in the aggregate for all five properties.
	The table below presents the change in the Company’s earnout liability for the nine months ended September 30, 2014 and 2013.
		For the nine months ended
		September 30,
		2014		2013
	Earnout liability-beginning of period	$	723,237	$	–
	Increases:
	Acquisitions		4,210,772		–
	Amortization expense		131,985		–
	Decreases:
	Earnout payments		-1,867,561		–
	Other:
	Adjustments to acquisition related costs		-9,057		–
	Earnout liability – end of period	$	3,189,376	$	–
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The Company may be subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the consolidated financial statements of the Company.

Segment_Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Segment Reporting	'
	(12)  Segment Reporting
	The Company has one reportable segment as defined by U.S. GAAP for the three and nine months ended September 30, 2014 and 2013.
	Concentration of credit risk with respect to accounts receivable currently exists due to the small number of tenants currently comprising the Company's rental revenue. The concentration of revenues for these tenants increases the Company's risk associated with nonpayment by these tenants. In an effort to reduce risk, the Company performs ongoing credit evaluations of its larger tenants.
	For the nine months ended September 30, 2014, approximately 9.5% of the Company’s rental revenue was generated by twelve properties leased to Dolgencorp, LLC, a subsidiary of Dollar General Corporation, and approximately 8.3% of the Company’s rental revenue was generated by one location leased to L.A. Fitness.

Transactions_With_Related_Part

Transactions With Related Parties	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Transactions With Related Parties	'
	(13)  Transactions with Related Parties
	The Company is party to an agreement with an LLC formed as an insurance association captive which is wholly-owned by the Company, Inland Real Estate Corporation, Inland American Real Estate Trust, Inc., and Retail Properties of America, Inc. The entity is included in the Company’s disclosure of Investment in Unconsolidated Entity (note 4) and is included in investment in unconsolidated entity in the accompanying consolidated balance sheets.
	The Company owns 1,000 shares of common stock in the Inland Real Estate Group of Companies with a recorded value of $1,000 at September 30, 2014 and December 31, 2013. This amount is included in other assets in the accompanying consolidated balance sheets.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	The following table summarizes the Company’s related party transactions for the three and nine months ended September 30, 2014 and 2013. Certain compensation and fees payable to the Business Manager for services to be provided to the Company are limited to maximum amounts.
				Three months ended				Nine months ended				Amount Unpaid as of
				30-Sep				30-Sep
				2014		2013		2014		2013		September 30,		December 31,
												2014		2013
	General and administra-	(a)		$	120,531	$	70,822	$	284,594	$	190,045	$	95,267	$	76,158
	tive reimbursements
	Affiliate share purchase	(b)			23,217		111,667		64,017		366,859		–		–
	discounts
	Total general and			$	143,748	$	182,489	$	348,611	$	556,904	$	95,267	$	76,158
	administrative expenses
	Acquisition related costs	(c)		$	919,474	$	26,373	$	3,731,439	$	41,578	$	1,381,061	$	1,044,214
	Offering costs	(d)			14,498,064		1,495,671		23,297,022		2,381,695		165,236		178,996
	Sponsor non-interest bearing advances	(e)			–		–		–		–		1,630,000		1,630,000
	Real estate management fees	(f)			212,190		20,617		390,956		59,967		–		–
	Business management fee	(g)			441,290		52,437		215,010		156,969		441,290		226,280
	Sponsor contribution	(h)			140,000		–		640,000		–		–		–
	(a)		The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses of the Business Manager and its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations and other comprehensive loss. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	(b)		The Company established a discount stock purchase policy for related parties and related parties of the Business Manager that enables the related parties to purchase shares of common stock at $9.00 per share. The Company sold 64,017 shares to related parties during the nine months ended September 30, 2014.
	(c)		The Company will pay the Business Manager or its affiliates a fee equal to 1.5% of the “contract purchase price,” as defined, of each asset acquired.  The Business Manager and its related parties are also reimbursed for acquisition and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition of real estate assets, regardless of whether the Company acquires the real estate assets, subject to limits, as defined.  Such costs are included in acquisition related costs in the accompanying consolidated statements of operations and other comprehensive loss.  Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	(d)		A related party of the Business Manager receives selling commissions equal to 7.0% of the sale price for each share sold and a marketing contribution equal to 3.0% of the gross offering proceeds from shares sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company also reimburses a related party of the Business Manager and the soliciting dealers for bona fide, out-of-pocket itemized and detailed due diligence expenses in amounts up to 0.5% of the gross offering proceeds.  The expenses are reimbursed from amounts paid or re-allowed to these entities as a marketing contribution.  The Company will reimburse the Sponsor, its affiliates and third parties for costs and other expenses of the Offering that they pay on the Company’s behalf, in an amount not to exceed 1.5% of the gross offering proceeds from shares sold in the “best efforts” offering.  The Company does not pay selling commissions or the marketing contribution or reimburse issuer costs in connection with shares of common stock issued through the DRP. Offering costs are offset against the stockholders’ equity accounts.  Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	(e)		As of September 30, 2014 and December 31, 2013, the Company incurred $33,297,019 and $9,023,148 of offering and organization costs, respectively, of which $1,630,000 was advanced by the Sponsor. Our Business Manager or its affiliates will pay or reimburse any organization or offering costs, including any issuer costs, that exceed 11.5% of the gross offering proceeds from shares sold in the “best efforts” offering over the life of the Offering.  This advance is included in due to related parties in the accompanying consolidated balance sheets.
	(f)		For each property that is managed by Inland National Real Estate Services, LLC, or its affiliates, collectively the Real Estate Managers, the Company will pay a monthly real estate management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and up to 3.9% of the gross income from any other property type. Each Real Estate Manager will determine, in its sole discretion, the amount of the fee with respect to a particular property, subject to the limitations. For each property that is managed directly by one of the Real Estate Managers or its affiliates, the Company will pay the Real Estate Manager a separate leasing fee based upon prevailing market rates applicable to the geographic market of that property. Further, in the event that the Company engages its Real Estate Managers to provide construction management services for a property, the Company will pay a separate construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project.  The Company also will reimburse each Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses and benefits of persons performing services for the Real Estate Managers and their affiliates except for the salaries, bonuses and benefits of persons who also serve as an executive officer of any of the Real Estate Managers.
	(g)		The Company will pay the Business Manager an annual business management fee equal to 0.65% of its “average invested assets,” as defined in the business management agreement, payable quarterly in an amount equal to 0.1625% of its average invested assets as of the last day of the immediately preceding quarter.  “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter.  For the nine months ended September 30, 2014, the Business Manager was entitled to a business management fee in the amount equal to $874,700, of which $433,410 was permanently waived.  In the three months ended March 31, 2014, the Business Manager also permanently waived business management fees of $226,280 incurred for the year ended December 31, 2013, which was included as a reduction of due to related parties in the accompanying consolidated balance sheets as of December 31, 2013.
	(h)		For the three and nine months ended September 30, 2014, the Sponsor contributed $140,000 and $640,000 to the Company.  Our Sponsor has not received, and will not receive, any additional shares of our common stock for making this contribution.  There is no assurance that our Sponsor will continue to contribute any additional monies.

Subsequent_Events

Subsequent Events	9 Months Ended
	Sep. 30, 2014
Subsequent Events [Abstract]	'
Subsequent Events	'
	(14)  Subsequent Events
	The board of directors of the Company declared distributions payable to stockholders of record each day beginning on the close of business on October 1, 2014 through the close of business on December 31, 2014. Distributions were declared in a daily amount equal to $0.001643836 per share, which based upon a 365-day period, equates to $0.60 or a 6% annualized rate based on a purchase price of $10.00 per share. Distributions are paid monthly in arrears, as follows:
	•		In October 2014, total distributions declared for the month of September 2014 were paid in the amount equal to $1,446,466, of which $702,604 was paid in cash and $743,862 was reinvested through the Company’s DRP, resulting in the issuance of an additional 78,301 shares of common stock.
	•		In November 2014, total distributions declared for the month of October 2014 were paid in the amount equal to $1,665,131, of which $809,062 was paid in cash and $856,069 was reinvested through the Company’s DRP, resulting in the issuance of an additional 90,113 shares of common stock.
	On October 14, 2014, the Company paid off in full, including accrued interest, the outstanding mortgage loan of $9,790,000 associated with the Newington Fair property.
	On November 5, 2014, the Company acquired a fee simple interest in a 119,981 square foot multi-tenant retail center. The center is shadow anchored by Walmart and the major tenants include Ross Dress for Less and Marshalls. The Company purchased this property from an unaffiliated third party for approximately $13,600,000, of which $12,200,000 was funded at the initial close, plus closing costs.
	The following table provides information regarding the total shares sold in our offering as of November 10, 2014:
		Shares		Gross Offering		Commissions	Proceeds to Us,
				Proceeds		and Fees	Before Expenses
				($) (1)		($) (2)	($) (3)
	From our Sponsor in connection	20,000.000			200,000	–		200,000
	with our formation:
	Shares sold in the offering:	34,429,944.777			342,017,586	31,758,794		310,258,792
	Shares sold pursuant to our	523,234.521			4,970,728	–		4,970,728
	distribution reinvestment plan:
	Shares purchased pursuant to	-18,205.81			-171,300	–		-171,300
	our share repurchase program:
	Total:	34,954,973.484			347,017,013	31,758,794		315,258,219
	-1		Gross proceeds received by us as of the date of this table for shares sold to investors pursuant to accepted subscription agreements.
	-2		Inland Securities Corporation serves as dealer manager of the Offering and is entitled to receive selling commissions and certain other fees, as discussed further in the prospectus for the “best efforts” offering dated October 18, 2012 as the same may be supplemented from time to time.
	-3		Organization and offering expenses, excluding commissions, will not exceed 1.5% of the gross offering proceeds. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses.

Summary_Of_Significant_Account1

Summary Of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2014
Accounting Policies [Abstract]	'
Intangible assets and liabilities for the period	'
			September 30,			December 31,
			2014			2013
	Intangible assets:
	Acquired in-place lease value		$	23,629,833		$	5,781,344
	Acquired above market lease value			3,664,919			311,139
	Accumulated amortization			-1,800,518			-237,654
	Acquired lease intangibles, net		$	25,494,234		$	5,854,829
	Intangible liabilities:
	Acquired below market lease value		$	6,189,099		$	784,685
	Accumulated amortization			-300,533			-24,721
	Acquired below market lease intangibles, net		$	5,888,566		$	759,964
Amortization of the respective intangible lease assets and liabilities	'
				Acquired			Above		Below
				In-Place			Market		Market
				Leases			Leases		Leases
		2014 (remainder of year)		$	696,501		$	151,926	$	-185,305
		2015			2,786,006			593,560		-718,921
		2016			2,786,006			585,993		-696,201
		2017			2,786,006			484,897		-619,184
		2018			2,786,006			406,744		-516,951
		Thereafter			10,247,774			1,182,815		-3,152,004
		Total		$	22,088,299		$	3,405,935	$	-5,888,566

Acquisitions_Tables

Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Current year acquisition data	'
	Date		Property Name		Location		Property	Square		Purchase
	Acquired						Type	Footage		Price
	1st Quarter
	2/21/14		Park Avenue Shopping Center (1)		Little Rock, AR		Multi-tenant Retail	69,381		$	23,367,587
	2/27/14		North Hills Square		Coral Springs, FL		Multi-tenant Retail	63,829			11,050,000
	2nd Quarter
	4/8/14		Mansfield Pointe		Mansfield, TX		Multi-tenant Retail	148,529			28,100,000
	5/13/14		MidTowne Shopping Center		Little Rock, AR		Multi-tenant Retail	126,288			41,450,000
	5/23/14		Lakeside Crossing (1)		Lynchburg, VA		Multi-tenant Retail	62,706			16,967,503
	6/27/14		Dogwood Festival		Flowood, MS		Multi-tenant Retail	187,610			48,688,846
	3rd Quarter
	7/11/14		Pick N Save Center (1)		West Bend, WI		Multi-tenant Retail	86,800			19,122,560
	8/4/14		Harris Plaza (1)		Layton, UT		Multi-tenant Retail	123,890			27,019,238
								869,033		$	215,765,734
		-1	There is an earnout component associated with the acquisition which is not included in the purchase price (note 11).
Additional information regarding the Company's acquisitions during the year	'
	Property Name		Land			Buildings and		Acquired			Acquired		Deferred
						Improvements		Lease			Below		Investment
								Intangibles			Market		Property
											Lease		Acquisition
											Intangibles		Obligations
													(note 11)
	Park Avenue Shopping Center		$	5,500,000		$	16,365,112	$	2,972,500		$	-120,291	$	-1,349,734
	North Hills Square			4,800,000			5,493,151		815,870			-59,021		–
	Mansfield Pointe			5,350,000			20,002,000		3,550,362			-802,362		–
	MidTowne Shopping Center			8,810,000			29,698,674		4,369,101			-1,427,775		–
	Lakeside Crossing			1,460,000			16,998,581		1,483,036			-214,340		-2,759,774
	Dogwood Festival			4,500,000			41,865,000		3,746,782			-1,422,936		–
	Pick N Save Center			3,150,000			14,282,926		1,790,898			–		-101,264
	Harris Plaza			6,500,000			19,403,207		2,473,720			-1,357,689		–
	Total		$	40,070,000		$	164,108,651	$	21,202,269		$	-5,404,414	$	-4,210,772
Condensed pro forma financial information related to the acquisition and financing during the period indicated	'
			For the three months ended September 30, 2014
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	6,042,578			349,842		6,392,420
	Net income (loss)		$	-816,622			821,991		5,369
	Net income (loss) per common share,		$	-0.03					0.00
	basic and diluted
	Weighted average number of common			23,733,441					31,465,968
	shares outstanding, basic and diluted
			For the three months ended September 30, 2013
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	692,681			4,298,813		4,991,494
	Net income (loss)		$	-395,666			654,328		258,662
	Net income (loss) per common share,		$	-0.18					0.01
	basic and diluted
	Weighted average number of common			2,221,493					31,465,968
	shares outstanding, basic and diluted
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
			For the nine months ended September 30, 2014
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	11,287,011			7,701,809		18,988,820
	Net income (loss)		$	-3,744,031			4,028,145		284,114
	Net income (loss) per common share,		$	-0.24					0.01
	basic and diluted
	Weighted average number of common			15,326,661					31,465,968
	shares outstanding, basic and diluted
			For the nine months ended September 30, 2013
			Historical			Pro Forma		As Adjusted
						Adjustments		(unaudited)
						(unaudited)
	Total income		$	2,093,080			11,739,393		13,832,473
	Net income (loss)		$	-1,707,881			461,544		-1,246,337
	Net loss per common share,		$	-1.35					-0.04
	basic and diluted
	Weighted average number of common			1,265,383					31,465,968
	shares outstanding, basic and diluted

Operating_Leases_Tables

Operating Leases (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Minimum lease payments to be received under operating leases	'
			Minimum Lease
			Payments
		2014 (remainder of year)	$	4,712,457
		2015		18,720,949
		2016		18,275,669
		2017		16,057,223
		2018		14,332,601
		Thereafter		68,092,242
		Total	$	140,191,141

Mortgages_And_Notes_Payable_Ta

Mortgages And Notes Payable (Tables)

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

'

Mortgages and notes payable

'

Maturity Date

Property Name

Stated Interest

Principal

Principal

Notes

Rate Per Annum

Balance at

Balance at

September 30,

December 31,

2014

2013

1-May-27

Dollar General Portfolio Phase I - five properties

4.31%

$

3,340,450

$

3,340,450

27-Dec-15

Newington Fair Shopping Center

3 month LIBOR + 3.25% subject to a minimum rate of 3.50%

9,790,000

9,790,000

(a)

1-Oct-27

Dollar General Portfolio Phase II - seven properties

4.35%

4,140,000

4,140,000

23-Dec-18

Wedgewood Commons Shopping Center

Daily LIBOR + 1.90%

15,259,894

15,259,894

(b)

28-Mar-19

North Hills Square

Daily LIBOR + 1.80%

5,525,000

–

(b),(c)

7-May-19

Mansfield Pointe

Daily LIBOR + 1.80%

14,200,000

–

(b),(d)

8-May-19

Park Avenue Shopping Center

Daily LIBOR + 1.75%

11,683,793

–

(b),(e)

22-May-19

Lakeside Crossing

Daily LIBOR + 1.95%

8,483,751

–

(b),(f)

1-Jul-19

Dogwood Festival

Daily LIBOR + 1.75%

24,351,750

–

(b),(g)

5-Jul-19

MidTowne Shopping Center

Daily LIBOR + 1.95%

20,725,000

–

(b),(h)

31-Jul-19

Pick N Save Center

Daily LIBOR + 1.60%

9,561,280

–

(b),(i)

Total

$

127,060,918

$

32,530,344

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

(a)

The three month LIBOR rate at September 30, 2014 was 0.23%.  On October 14, 2014, the Company repaid the loan in full, including any unpaid interest.

(b)

The daily LIBOR rate at September 30, 2014 was 0.16%.

(c)

The loan requires monthly payments of interest only until March 28, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 4.02% beginning in year two through maturity.

(d)

The loan requires monthly payments of interest only until May 7, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.90% beginning in year two through maturity.

(e)

The loan requires monthly payments of interest only until May 8, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.90% beginning in year two through maturity.

(f)

The loan requires monthly payments of interest only until May 22, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 3.95% beginning in year two through maturity.

(g)

The loan requires monthly payments of interest only until July 1, 2019 when all principal and unpaid interest is due.  Prior to January 1, 2017, the loan may not be prepaid in whole or in part.  Thereafter, the loan may be prepaid with a prepayment premium of 2% of the principal amount from January 1, 2017 through July 1, 2017, 1% of the principal amount from July 2, 2017 through July 1, 2018 and at par anytime after July 1, 2018.  The Company entered into a swap which fixed the interest rate at 3.597%.

(h)

The loan requires monthly payments of interest only until July 5, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a one year forward swap which fixed the interest rate at 4.06% beginning in year two through maturity.

(i)

The loan requires monthly payments of interest only until July 31, 2019 when all principal and unpaid interest is due.  The loan may be prepaid in whole or in part at any time, at par.  The Company entered into a swap which fixed the interest rate at 3.54%.

Scheduled maturities of mortgages and notes payable

'

Mortgages and

Notes Payable

2014 (remainder of year)

$

–

2015

9,790,000

2016

–

2017

–

2018

15,259,894

Thereafter

102,011,024

Total

$

127,060,918

Interest rate swap contracts outstanding

'

Date

Effective

Maturity

Pay

Receive

Notional

Fair Value at

Entered

Date

Date

Fixed

Floating

Amount

September 30,

Rate

Rate Index

2014

28-Mar-14

March 1,2015

March 28, 2019

1 month

$

5,525,000

$

-88,474

2.22%

LIBOR

8-May-14

5-May-15

7-May-19

2.10%

1 month

14,200,000

-101,696

LIBOR

23-May-14

1-May-15

8-May-19

2.00%

1 month

8,483,751

-26,454

LIBOR

6-Jun-14

1-Jun-15

22-May-19

2.15%

1 month

11,683,793

-90,183

LIBOR

26-Jun-14

5-Jul-15

5-Jul-19

2.11%

1 month

20,725,000

-67,669

LIBOR

27-Jun-14

1-Jul-14

1-Jul-19

1.85%

1 month

24,351,750

-147,006

LIBOR

31-Jul-14

31-Jul-14

31-Jul-19

1.94%

1 month

9,561,280

-92,065

LIBOR

Total

$

94,530,574

$

-613,547

Cash flow hedges and their classification

'

30-Sep-14

31-Dec-13

Balance Sheet

Fair Value

Balance Sheet

Fair Value

Location

Location

Derivatives designated as cash flow hedges:

Interest rate swaps

Other liabilities

$

613,547

Other liabilities

$

–

INLAND REAL ESTATE INCOME TRUST, INC.

(a Maryland Corporation)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statement of operations and other comprehensive loss (“OCL”) for the three and nine months ended September 30, 2014 and 2013.

Three months ended

Nine months ended

30-Sep

30-Sep

Derivatives in Cash Flow Hedging Relationships

2014

2013

2014

2013

Amount of Income (Loss) Recognized in OCL on Derivative (Effective Portion)

$

229,696

$

–

$

-542,269

$

–

Amount of Income (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)

$

–

$

–

$

–

$

–

Amount of Income (Loss) Recognized in Income on Derivative (Ineffective Portion)

$

152

$

–

$

-38

$

–

Three months ended

Nine months ended

30-Sep

30-Sep

Derivatives Not Designated as Hedging Instruments

2014

2013

2014

2013

Amount of Loss Recognized in Income on Derivative (Ineffective Portion)

$

–

$

–

$

-71,240

$

–

Fair_Value_Financial_Instrumen1

Fair Value Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Assets and liabilities measured at fair value	'
		Fair Value Measurements at September 30, 2014
		Quoted Prices in		Significant		Significant
		Active Markets		Other		Unobservable
		for Identical		Observable		Inputs
		Assets		Inputs		(Level 3)
		(Level 1)		(Level 2)
	Description
	Derivative interest rate instruments	$	–	$	-613,547	$	–
	Total liabilities	$	–	$	-613,547	$	–

Commitments_And_Contingencies_

Commitments And Contingencies (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Change in the Company's earnout liability for the period indicated	'
		For the nine months ended
		September 30,
		2014		2013
	Earnout liability-beginning of period	$	723,237	$	–
	Increases:
	Acquisitions		4,210,772		–
	Amortization expense		131,985		–
	Decreases:
	Earnout payments		-1,867,561		–
	Other:
	Adjustments to acquisition related costs		-9,057		–
	Earnout liability – end of period	$	3,189,376	$	–

Transactions_With_Related_Part1

Transactions With Related Parties (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Transactions with related parties	'
				Three months ended				Nine months ended				Amount Unpaid as of
				30-Sep				30-Sep
				2014		2013		2014		2013		September 30,		December 31,
												2014		2013
	General and administra-	(a)		$	120,531	$	70,822	$	284,594	$	190,045	$	95,267	$	76,158
	tive reimbursements
	Affiliate share purchase	(b)			23,217		111,667		64,017		366,859		–		–
	discounts
	Total general and			$	143,748	$	182,489	$	348,611	$	556,904	$	95,267	$	76,158
	administrative expenses
	Acquisition related costs	(c)		$	919,474	$	26,373	$	3,731,439	$	41,578	$	1,381,061	$	1,044,214
	Offering costs	(d)			14,498,064		1,495,671		23,297,022		2,381,695		165,236		178,996
	Sponsor non-interest bearing advances	(e)			–		–		–		–		1,630,000		1,630,000
	Real estate management fees	(f)			212,190		20,617		390,956		59,967		–		–
	Business management fee	(g)			441,290		52,437		215,010		156,969		441,290		226,280
	Sponsor contribution	(h)			140,000		–		640,000		–		–		–
	(a)		The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses of the Business Manager and its related parties relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations and other comprehensive loss. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	(b)		The Company established a discount stock purchase policy for related parties and related parties of the Business Manager that enables the related parties to purchase shares of common stock at $9.00 per share. The Company sold 64,017 shares to related parties during the nine months ended September 30, 2014.
	(c)		The Company will pay the Business Manager or its affiliates a fee equal to 1.5% of the “contract purchase price,” as defined, of each asset acquired.  The Business Manager and its related parties are also reimbursed for acquisition and transaction related costs of the Business Manager and its related parties relating to the Company’s acquisition of real estate assets, regardless of whether the Company acquires the real estate assets, subject to limits, as defined.  Such costs are included in acquisition related costs in the accompanying consolidated statements of operations and other comprehensive loss.  Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	INLAND REAL ESTATE INCOME TRUST, INC.
	(a Maryland Corporation)
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
	(unaudited)
	(d)		A related party of the Business Manager receives selling commissions equal to 7.0% of the sale price for each share sold and a marketing contribution equal to 3.0% of the gross offering proceeds from shares sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company also reimburses a related party of the Business Manager and the soliciting dealers for bona fide, out-of-pocket itemized and detailed due diligence expenses in amounts up to 0.5% of the gross offering proceeds.  The expenses are reimbursed from amounts paid or re-allowed to these entities as a marketing contribution.  The Company will reimburse the Sponsor, its affiliates and third parties for costs and other expenses of the Offering that they pay on the Company’s behalf, in an amount not to exceed 1.5% of the gross offering proceeds from shares sold in the “best efforts” offering.  The Company does not pay selling commissions or the marketing contribution or reimburse issuer costs in connection with shares of common stock issued through the DRP. Offering costs are offset against the stockholders’ equity accounts.  Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets.
	(e)		As of September 30, 2014 and December 31, 2013, the Company incurred $33,297,019 and $9,023,148 of offering and organization costs, respectively, of which $1,630,000 was advanced by the Sponsor. Our Business Manager or its affiliates will pay or reimburse any organization or offering costs, including any issuer costs, that exceed 11.5% of the gross offering proceeds from shares sold in the “best efforts” offering over the life of the Offering.  This advance is included in due to related parties in the accompanying consolidated balance sheets.
	(f)		For each property that is managed by Inland National Real Estate Services, LLC, or its affiliates, collectively the Real Estate Managers, the Company will pay a monthly real estate management fee of up to 1.9% of the gross income from any single-tenant, net-leased property, and up to 3.9% of the gross income from any other property type. Each Real Estate Manager will determine, in its sole discretion, the amount of the fee with respect to a particular property, subject to the limitations. For each property that is managed directly by one of the Real Estate Managers or its affiliates, the Company will pay the Real Estate Manager a separate leasing fee based upon prevailing market rates applicable to the geographic market of that property. Further, in the event that the Company engages its Real Estate Managers to provide construction management services for a property, the Company will pay a separate construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the project.  The Company also will reimburse each Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses and benefits of persons performing services for the Real Estate Managers and their affiliates except for the salaries, bonuses and benefits of persons who also serve as an executive officer of any of the Real Estate Managers.
	(g)		The Company will pay the Business Manager an annual business management fee equal to 0.65% of its “average invested assets,” as defined in the business management agreement, payable quarterly in an amount equal to 0.1625% of its average invested assets as of the last day of the immediately preceding quarter.  “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities and consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter.  For the nine months ended September 30, 2014, the Business Manager was entitled to a business management fee in the amount equal to $874,700, of which $433,410 was permanently waived.  In the three months ended March 31, 2014, the Business Manager also permanently waived business management fees of $226,280 incurred for the year ended December 31, 2013, which was included as a reduction of due to related parties in the accompanying consolidated balance sheets as of December 31, 2013.
	(h)		For the three and nine months ended September 30, 2014, the Sponsor contributed $140,000 and $640,000 to the Company.  Our Sponsor has not received, and will not receive, any additional shares of our common stock for making this contribution.  There is no assurance that our Sponsor will continue to contribute any additional monies.

Subsequent_Events_Tables

Subsequent Events (Tables)	9 Months Ended
	Sep. 30, 2014
Subsequent Events [Abstract]	'
Distributions paid in arrears for the period indicated	'
	•		In October 2014, total distributions declared for the month of September 2014 were paid in the amount equal to $1,446,466, of which $702,604 was paid in cash and $743,862 was reinvested through the Company’s DRP, resulting in the issuance of an additional 78,301 shares of common stock.
	•		In November 2014, total distributions declared for the month of October 2014 were paid in the amount equal to $1,665,131, of which $809,062 was paid in cash and $856,069 was reinvested through the Company’s DRP, resulting in the issuance of an additional 90,113 shares of common stock.
Total shares sold in the offering detail	'
		Shares		Gross Offering		Commissions	Proceeds to Us,
				Proceeds		and Fees	Before Expenses
				($) (1)		($) (2)	($) (3)
	From our Sponsor in connection	20,000.000			200,000	–		200,000
	with our formation:
	Shares sold in the offering:	34,429,944.777			342,017,586	31,758,794		310,258,792
	Shares sold pursuant to our	523,234.521			4,970,728	–		4,970,728
	distribution reinvestment plan:
	Shares purchased pursuant to	-18,205.81			-171,300	–		-171,300
	our share repurchase program:
	Total:	34,954,973.484			347,017,013	31,758,794		315,258,219
	-1		Gross proceeds received by us as of the date of this table for shares sold to investors pursuant to accepted subscription agreements.
	-2		Inland Securities Corporation serves as dealer manager of the Offering and is entitled to receive selling commissions and certain other fees, as discussed further in the prospectus for the “best efforts” offering dated October 18, 2012 as the same may be supplemented from time to time.
	-3		Organization and offering expenses, excluding commissions, will not exceed 1.5% of the gross offering proceeds. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses.

Acquisitions_Details_Narrative

Acquisitions (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements	'	'	'	'
Purchase price of properties acquired during the period	'	'	$215,765,734	'
Financed portion of the properties acquired during the period	'	'	94,530,574	'
Incurred expenses related to the acquisition, dead deal and transaction related costs	1,020,021	29,809	4,384,100	82,315
Recorded revenue related to the property acquired during the period	'	'	6,976,460	1,126,473
Property net income (loss) related to the property acquired during the period	$954,928	'	$4,219,294	'

Investment_In_Unconsolidated_E1

Investment In Unconsolidated Entity (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements	'	'	'	'
Company's share of net income from its membership interest in the Insurance Captive	$86,147	$1,912	$78,686	$5,782

Distributions_Details_Narrativ

Distributions (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements	'	'	'	'
Declared cash distributions	$3,583,521	$335,964	$6,872,233	$567,870