| Item 1.01 | Entry into a Material Definitive Agreement. |
Amended and Restated Advisory Agreement
On January 25, 2023, Invesco Real Estate Income Trust Inc. (the “Company”), Invesco REIT Operating Partnership LP (the “Operating Partnership”) and Invesco Advisers, Inc. (the “Adviser”) entered into the Amended and Restated Advisory Agreement (the “Advisory Agreement”). The Advisory Agreement amends and restates the prior version of the agreement to, among other things, facilitate the initiation and management, through the Operating Partnership, of a program (the “DST Program”), to issue and sell beneficial interests (the “Interests”) in specific Delaware statutory trusts (the “DSTs”) holding real properties (the “DST Properties”) in private placements exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “DST Offerings”). Under the DST Program, each DST Property may be sourced from the Company’s real properties or from third parties, will be held in a separate DST, and will be leased back by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement will be guaranteed by the Operating Partnership, which will retain a fair market value purchase option (the “FMV Option”) giving it the right, but not the obligation, to acquire the Interests in the applicable DST from the investors any time after two years from the closing of the applicable DST Offering in exchange for units of the Operating Partnership (“OP Units”) or cash. After a one-year holding period, investors who acquire OP Units pursuant to the FMV Option generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at the Company’s sole discretion, shares of the Company’s common stock, cash or a combination of both.
The Advisory Agreement amends the calculation of the management fee in connection with the DST Program. As amended, the Company will pay the Adviser a management fee equal to 1.0% of the net asset value (“NAV”) for the Company’s Class T shares, Class S shares, Class D shares and Class I shares, per annum payable monthly, plus commencing January 16, 2030, 1.0% of NAV of shares of Class N common stock, per annum payable monthly, plus 1.0% per annum payable monthly of the total consideration received by the Company or its affiliate for selling Interests to third-party investors, net of up-front fees and expense reimbursements payable out of gross sale proceeds from the sale of such Interests and any proceeds from any loans secured directly or indirectly by the DST Properties, and subject to the FMV Option with respect to each DST Property.
The Advisory Agreement provides that the Company will reimburse the Adviser for any organization and offering expenses related to the DST Program that exceed $825,000.
Amended and Restated Limited Partnership Agreement
On January 25, 2023, in connection with the DST Program, the Company, on behalf of itself as general partner and on behalf of the limited partners thereto, entered into the Amended and Restated Limited Partnership Agreement of Invesco REIT Operating LP (the “Operating Partnership Agreement”). The Operating Partnership Agreement amends the prior limited partnership agreement of the Operating Partnership to, among other things, facilitate the issuance of OP Units in exchange for beneficial interests in DSTs in the event the Operating Partnership elects to exercise its FMV Option and the participation of such OP Units in the Company’s distribution reinvestment plan (the “DRIP”).
The Operating Partnership Agreement authorizes the Operating Partnership to issue OP Units designated as one of three new classes of OP Units, specifically Class T-1 Units, Class S-1 Units, and Class D-1 Units and provides that such classes may be converted to Class I Units in the event the aggregate selling commissions, dealer manager fees, and investor servicing fees paid by the Company or the Operating Partnership with respect to such Class T-1 Units, Class S-1 Units, and Class D-1 Units and the Interests for which such OP Units were exchanged, reach a fee limit, if any, set forth in the applicable selling agreement between the DST Dealer Manager (defined below) and participating broker-dealer that sold such Interests in a DST Offering. The Operating Partnership Agreement provides that investor servicing fees payable with respect to a particular class of OP Units will be specially allocated to that class OP Units. The amount of the ongoing investor servicing fee, if any, payable in connection with OP Units shall be set forth in the applicable selling agreement, and (i) for Class T-1 Units will be up to 0.85% per annum of the NAV of such Class T-1 Units, consisting of advisor stockholder servicing fee of 0.65% per annum and a dealer stockholder servicing fee of 0.20% per annum; (ii) for Class S-1 Units, will be up to 0.85% per annum of the NAV of such Class S-1 Units; and (iii) for Class D-1 Units will be up to 0.25% per annum of the NAV of such Class D-1 Units. All or a portion of the investor servicing fee may be reallowed to participating broker-dealers.
DST Dealer Manager Agreement
On January 25, 2023, in connection with the DST Program, Invesco Real Estate Exchange LLC, an indirect wholly owned subsidiary of the Company (the “DST Sponsor”) and, solely with respect to its obligations with respect to OP Unit investor servicing fees, the Operating Partnership entered into the DST Dealer Manager Agreement (the “DST Dealer Manager Agreement”) with Invesco Distributors, Inc. (the “DST Dealer Manager”), pursuant to which the DST Dealer Manager will serve as the dealer manager for the DST Offerings on a “best efforts” basis. Under the DST Dealer Manager Agreement, the DST Sponsor may pay to the DST Dealer Manager upfront selling commissions of up to 5.0% of the price per Interest sold, upfront dealer manager fees of up to 1.0% of the price per Interest sold and placement fees of up to 1.0% of the price per Interest sold, some or all of which may be waived or reallowed to participating broker-dealers. In addition, the DST Dealer Manager may receive an ongoing investor servicing fee of 0.25% per annum of the price per Interest sold.
